Nigeria Deposit Insurance Corporation (Liquidator Of Allied Bank Of Nigeria Plc.) V. Okem Enterprise Ltd. & Anor (2004)

LAWGLOBAL HUB Lead Judgment Report

UWAIFO, J.S.C. 

The Nigerian Deposit Insurance Corporation (the NDIC) is the liquidator of Allied Bank of Nigeria, PLc. It acts in that capacity in furtherance of its duties under section 28 of the Nigerian Deposit Insurance Corporation Act (the Act) (Cap. 301) Laws of the Federation of Nigeria, 1990 and under other laws, and as may be relevant under the Companies and Allied Matters Act, 1990 (the CAMA). The 1st respondent, Okem Enterprises Nigeria Limited, was said to be a valued customer of the said Allied Bank of Nigeria Plc. (the bank). It maintained various accounts with different branches of the bank.

The 1st respondent obtained credit facilities or loans from the bank. It is alleged that as at 31 January, 1999, the total amount outstanding against the 1st respondent was N284,109,459.59. The bank’s licence has been revoked by the Central Bank of Nigeria and this led to the NDIC being appointed the liquidator of the bank. The NDIC filed an application for the recovery of debt in the

Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribunal (the tribunal) Lagos Zone, on 29 March, 1999 against the 1st respondent and the 2nd – 6th respondents who, at all times material to the action, were the Directors of the 1st respondent. This was done by virtue of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994, (Decree No. 18 of 1994). That Decree was amended by Decree No. 62 of 1999, substituting the Federal High Court for the tribunal. This suit was accordingly taken over by the Federal High Court, Lagos after the inception of the present democratic dispensation, trial by tribunal having been discontinued.

On 16 April, 2000, the respondents filed a notice of objection to the jurisdiction of the Federal High Court to entertain the suit, and sought to have the suit struck out. There were four grounds relied on for the objection, namely, that:

1. The proviso to section 251(1)(d) of the Constitution of the Federal Republic of Nigeria, 1999 repeats the terms of section 230(1)(d) of the 1979 Constitution (as amended by Decree 107 of 1993) and did not vest in the Federal High Court the jurisdiction to determine causes and matters relating to transactions between an individual customer and his bank.
2. The reliefs sought in this suit are matters within the exclusive jurisdiction of the State High Court.
3. All claims made or intended to be made by the plaintiff are a nullity since they are all claims and matters over which the Federal High Court has no jurisdiction.
4. Accordingly, the Federal High Court is devoid of jurisdiction to entertain this suit and the same should therefore be struck out.

In a short but well considered ruling given on 18 December, 2000, Abutu, J. came to the conclusion that in causes and matters between a bank and its individual customer, the Federal High Court and the State High Courts have concurrent jurisdiction. The learned trial Judge overruled the objection.

An appeal was lodged by the defendants against that decision to the Court of Appeal, Lagos Division. Two issues were raised before that court for determination, namely:

“i) Whether the learned trial Judge was right in holding that the present state of the law is that the Federal High Court has concurrent jurisdiction with State High Courts to entertain disputes between banks and their individual customers and thereby assumed jurisdiction to entertain the suit herein.

(ii) Whether the learned trial Judge was correct in the decision that the Federal High Court is vested with jurisdiction to entertain the suit by virtue of the provisions of the Failed Banks Decree as amended by the Tribunals (Certain Consequential Amendments etc) Decree No. 62 of 1999.”

The Court of Appeal on 4 February, 2003, allowed the appeal.

It held that the Federal High Court has no jurisdiction to entertain causes and matters about individual customer and bank relationship.

This is an appeal against that decision. The appellant has set, down four issues for determination as follows:

“1. Whether the court below was right when it restricted itself to the provisions of Decree 107 of 1993 and section 251(1)(d) of the 1999 Constitution in considering whether the position of the law as regards the jurisdiction of the Federal High Court and State High Court in respect of transaction between individual customers and their bank had been altered since the time of the 1979 Constitution.

2. Whether sections 3(1) and 9 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended by Decree No. 62 of 1999) are inconsistent with section 251(1)(d) of the 1999 of the Federal Republic of Nigeria and are therefore unconstitutional, null and void.
3. Whether the 1999 Constitution of the Federal Republic of Nigeria conferred exclusive jurisdiction in ‘disputes between an individual customer and his bank’ on the State High Courts.
4. Whether the suit instituted by the appellant against the respondents herein does not qualify as a suit involving ‘other fiscal measures’ (within the meaning of section 251(1)(d) of the 1999 Constitution) in which the Federal Government is interested as considered in previous decisions of this Honourable Court.”

The respondents have put the issues for determination rather slightly differently as follows: