⦿ CASE SUMMARY OF:
Nigeria Deposit Insurance Corporation (Liquidator Of Allied Bank of Nigeria Plc) v. Okem Enterprise Ltd. & Anor. (2004) – SC
by PaulPipAr
⦿ TAG(S)
– Banking;
– Jurisdiction;
– Proviso;
⦿ PARTIES
APPELLANT
Nigeria Deposit Insurance Corporation (Liquidator Of Allied Bank of Nigeria Plc.)
v.
RESPONDENT
1. Okem Enterprises Limited;
2. Chief M. O. Milemigbo;
⦿ CITATION
⦿ COURT
(2004) 10 NWLR (Pt.880)107;
(2004) 18 NSCQR 42;
(2004) LPELR-1999(SC);
⦿ LEAD JUDGEMENT DELIVERED BY:
Uwaifo, J.S.C.
⦿ LAWYERS WHO ADVOCATED
* FOR THE APPELLANT
* FOR THE RESPONDENT
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⦿ FACT (as relating to the issues)
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 The bank’s licence has been revoked by the Central Bank of Nigeria and this led to the NDIC being appointed the liquidator of the bank.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.
The 1st Respondent raised an objection as to the jurisdiction of the Federal High Court.
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.
The 1st Respondent appealed, the Court of Appeal allowed the appeal.
The Appeal to the Supreme Court.
⦿ ISSUE(S)
1. Whether the Court of Appeal was right in its interpretation of the proviso to section 251 (1)( d) of the 1999 Constitution and the effect to be given to Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 in reaching the conclusion that the State High Courts have exclusive jurisdiction in disputes between an individual customer and his bank?
⦿ HOLDING & RATIO DECIDENDI
[APPEAL: ALLOWED]
1. ISSUE 1 WAS RESOLVED IN FAVOUR OF THE APPELLANT BUT AGAINST THE RESPONDENT.
RATIO:
i. Therefore, the proper view of the proviso in section 251(1)(d) of the 1999 Constitution is that the main provision having used the language of exclusive jurisdiction, the proviso then relaxes that exclusiveness given to the Federal High Court therein in a situation in which the issue is a dispute between an individual customer and his bank in respect of transactions between the individual and the bank. In that regard, a State High Court will also have or continue to exercise jurisdiction and this it does concurrently with the Federal High Court. There should be no difficulty in appreciating this.
⦿ REFERENCED
S. 251(1d) of the CFRN 1999;
S. 272(1) of the CFRN 1999;
⦿ SOME PROVISIONS
⦿ RELEVANT CASES
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⦿ NOTABLE DICTA
* PROCEDURAL
I think it is possible that in the process of resolving this issue, arguments proffered by the parties in the consideration of the issues set down by them will be usefully taken into account as may be relevant and appropriate. – Uwaifo, J.S.C. NDIC v. OKEM (2004)
* SUBSTANTIVE
Exclusive jurisdiction has been given to the Federal High Court in all the items mentioned therein, including “banking” in its wide sense as must now be recognised since it is not limited to “banking measures”. Attention must, therefore, be drawn now to the effect which the proviso has on that exclusive jurisdiction in regard to banking in order that it would receive appropriate consideration. This is so because in the absence of that proviso, the jurisdiction ofthe State High Courts would be completely removed. – Uwaifo, J.S.C. NDIC v. OKEM (2004)
As has been observed, section 251(1) of the 1999 Constitution begins with “Notwithstanding anything to the contrary contained in this Constitution” while section 272(1) is specifically made “subject to the provisions of section 251.” When the term “notwithstanding” is used in a section of a statute, it is meant to exclude an impinging or impeding effect of any other provision of the statute or other subordinate legislation so that the said section may fulfill itself. It follows that, as used in section 251(1) of the 1999 Constitution, no provision of that Constitution shall be capable of undermining the said section. – Uwaifo, J.S.C. NDIC v. OKEM (2004)
Plainly, the proviso in question in section 251(1)(d), to put it in simple analysis, says that the Federal High Court will have exclusive jurisdiction in banking matters but when what is involved is individual customer and his bank transaction, the Federal High Court shall not have exclusive jurisdiction. Understandably, that was to recognise the jurisdiction the State High Courts had been exercising in such matters which section 272(1) of the Constitution impliedly preserves. The High Court of a State can only exercise jurisdiction in any aspect of such specified matters to the extent that the proviso in section 251(1)(d) permits. The said proviso cannot be interpreted to have the effect of conferring exclusive jurisdiction on the State High Courts and completely taking away the jurisdiction of the Federal High Court to entertain causes and matters relating to individual customer and bank transactions as was erroneously decided by the court below and unsuccessfully argued before this court by Chief Clarke. – Uwaifo, J.S.C. NDIC v. OKEM (2004)
The object of a proviso is normally to cut down or qualify or create exceptions to or relax in a defined sense the limitations imposed or powers conferred by a section of an enactment or document; or to exclude some possible ground of misinterpretation of its extent, or to modify the main part of a section of a statute to which it relates or to restrain its absoluteness or generality. – Uwaifo, J.S.C. NDIC v. OKEM (2004)
For the avoidance of doubt the conclusion is that under the proviso of section 251(1)(d) of the 1999 Constitution, the Federal High Court has concurrent jurisdiction with States High Courts in the matter stated in the proviso. – Kutigi, J.S.C. NDIC v. OKEM (2004)
What this means is that the jurisdiction conferred upon and exercised by the State High Court hitherto in regard to those specified matters has been removed. The proviso to section 251(1)(d) however exempts any dispute between an individual customer and his bank from the exclusive jurisdiction of the Federal High Court. What this means is this. The proviso has done two things. First, the jurisdiction of the State High Court in transactions involving an individual customer and his bank has been preserved. In the second place, although the Federal High Court has jurisdiction in such disputes, it is not to the exclusion of the State High Court. In other words both courts have concurrent jurisdiction. That is to say that under the proviso to section 251(1)(d) of the 1999 Constitution, the Federal High Court has concurrent jurisdiction with State High Court in transactions involving an individual customer and his bank. – Katsina-Alu, J.S.C. NDIC v. OKEM (2004)
The phrase “this paragraph shall not apply” in the proviso to S. 251(1)(d) means what it says, and that is that the exclusive jurisdiction on matters listed in subsection (1) of S. 251, does not apply to disputes between individual customer and his bank. It does not mean that the Federal High Court shall have no jurisdiction in the simple customer/bank relationship at all. If that was the intention of the law-maker it would have said so expressly by simply providing that the Federal High Court shall have no jurisdiction to hear and determine any such dispute. – Kalgo, J.S.C. NDIC v. OKEM (2004)
It is undoubtedly settled law that an appeal is usually against a ratio and not against an obiter except in cases where the obiter is so closely linked with the ratio as to be deemed to have radically influenced the ratio. – Ejiwunmi, J.S.C. NDIC v. OKEM (2004)
So where a section confers powers, it would be contrary to the ordinary operation of the proviso to give it an effect which would cut down those powers beyond what compliance with the proviso renders necessary. The object of a proviso is normally to cut down or qualify what has been stated before in a section. A proviso does not set out to allocate powers or jurisdiction or to impose limitations or restrictions. Its function is to create exceptions or relax limitations in a defined sense, or to throw light on any ambiguous import in an enactment. – Ejiwunmi, J.S.C. NDIC v. OKEM (2004)
