Gabisal Nigeria Limited & Anor V. Nigeria Deposit Insurance Corporation (Ndic) (2008)
LawGlobal-Hub Lead Judgment Report
ADAMU JAURO, J.C.A.
This is an appeal against a part of the ruling of the Federal High Court sitting in Lagos delivered on 11th day of October 2000 by Hon. Justice R. A. Kasim in suit No. FHC/L/FBC/186/99.
The facts of the case giving rise to this appeal are as follows:
The respondent as liquidator of Allied Bank of Nigeria Plc. filed an application in the Lagos Zone of the Failed Banks Tribunal to recover the sum of N10, 612,167.96 with interest, being loan outstanding against the appellant’s granted by the Bank before the revocation of its Banking Licence, The application was filed in the registry of the Tribunal on the 9th February, 1998, under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (hereinafter called Failed Banks Decree). Upon the promulgation of the Tribunal (Certain Consequential Amendments, Etc) Decree NO.62 of 1999, pending cases in the Failed Banks Tribunals were transferred to the Federal High Court.
As a consequence of the transfer of this case to the Federal High Court, the appellants filed a preliminary objection challenging the competence of the action, and urged the court to dismiss same for want of jurisdiction. The preliminary objection was premised on two grounds, namely:-
(1). The Federal High Court lacks jurisdiction to entertain the claim and
(2). The plaintiff/respondent has no locus standi to institute and maintain this action.
The preliminary objection was filed on the 3rd day of March, 2000. In its ruling delivered on 13th October, 2000 the court held that the preliminary objection succeeds in part in that the court cannot try civil matters between an individual customer and his bankers arising from ordinary banking transaction based on Section 251(1)(d) of the 1999 Constitution. The court further held that the respondent has the locus standi to institute the suit under Section 425(1)(a) of Companies and Allied Matters Act and it had jurisdiction to entertain the matter under Section 251 (1)( e) of the 1999 Constitution.
Dissatisfied with the ruling, the appellants filed in this appeal against part of the ruling to the effect that the Federal High Court has jurisdiction to entertain the claim and the respondent has locus to institute the suit. The notice of appeal dated 28th May, 2001 was filed the same day pursuant to an order of this court for extension of time to appeal granted on 16th May 2001. The notice of appeal was anchored on four grounds, and the said grounds shorn of their particulars are hereby reproduced thus:-
“(1). The learned trial Judge erred in law when he held that the Federal High Court has jurisdiction to entertain the Plaintiffs/Respondents claim by virtue of Section 251(1)(e) of the 1999 Constitution.
(2). The learned trial Judge erred in law when he refused or otherwise failed to give effect to the provisions of the TRIBUNALS (CERTAIN CONSEQUEN TRIAL AMENDMENTS ETC) DECREE No. 62 of 1999 (particularly Section 2(i) and (3) which were urged upon the court.
(3). The learned trial judge erred in law when he held that the Plaintiff/Respondent has locus standi to institute the suit under Section 425(1)(a) of the Companies and Allied Matters Act (Cap. 459) 1990.
(4). The learned trial judge erred in law when he held that the Plaintiff/Respondent is not obliged by law to react to sub paragraphs 5(a) and (b) in the Defendants/Applicants supporting affidavit since according to the said teamed trial judge, the contents therein are issues of law”.
In compliance with the rules of this court, briefs were filed and exchanged by the learned counsel representing the parties in this appeal. On the 9th April, 2008 being the date fixed for hearing the appeal, C. C. Dike Esq for the appellant applied to withdraw his reply brief. The said application was granted and the appellant’s reply brief struck out. Thereafter learned counsel identified his appellant brief dated 29th January 2003 and filed on 30th January 2003 and adopted same as his arguments in this appeal. Learned counsel further stated that there are 4 grounds of appeal, out of which 4 issues were distilled and urged the court to allow the appeal. In opposing the appeal, O. J. Kolawole Esq for the respondents adopted his brief of argument dated 16th January, 2004 and filed on 20th January 2004. Learned counsel cited an additional authority in support of his submissions namely NDIC V. OKEM ENTERPRISES LTD & ANOR (2004) All FWLR (Pt. 210) 1176 ratio 6. In concluding learned counsel urged this court to dismiss the appeal of the appellant as lacking in merit.
The appellants in their brief of argument distilled 4 issues for determination from the 4 grounds of appeal filed. The four issues are hereby reproduced thus:
“(1). Whether the claim of the Respondent in the lower court is a claim “arising from the operation” of the Companies & Allied Matters Act? (Ground One)
(2). Whether every action by a Liquidator is maintainable by the Liquidator in the Federal High Court. (Ground 3).
(3). Whether by the provisions of the Tribunal (Certain Consequential Amendments etc) Decree No. 62 of 1999, both offences and civil matters pending before the dissolved Failed Banks Tribunal were transferred to the Federal High Court? (Ground 2).
(4). Whether the contents of paragraphs in an affidavit stating that a court has no jurisdiction and that a party lacks locus standi cannot be taken as admitted if not denied by the other party (Ground 4).
The respondents on their part also formulated four issues for determination which arc almost identical to the issues formulated by the appellants.
Having meticulously studied the arguments proferred in the respective briefs of argument vis a vis the record of proceedings, I am of the view that resolving this appeal is very simple and straight forward. The only live issue in this appeal is “Whether the Federal High court has jurisdiction to entertain the action which is the subject matter of this appeal”. Hence I will proceed to consider and determine this appeal on this lone issue. In the process of resolving the issue of jurisdiction, a brief consideration will also be made on the aspect of locus standi of the respondent.
By way of preamble, it must be stated at the onset that both parties are ad idem on several aspects of this appeal. The amount sought to be recovered from the appellants, was said to have been granted to them as loan by their bankers Allied Bank Nigeria Plc before the revocation of its banking licence and its eventual winding up. It is not in dispute that Allied Bank (Nig) Plc has been liquidated and N.D. i.e. appointed liquidators thereof, pursuant to which they filed in this recovery action. The relationship between the appellants and the bank that granted them the loan was that of a banker and customer.
The contentions of the appellants in respect of this appeal are twofold, namely:-
(i). That by the proviso to Section 251 (1)(d) of the 1999 Constitution, the Federal High Court has no jurisdiction to entertain actions based on banker and customer relationship and
(ii). The NDIC as liquidators are not only confined to filing action in the Federal High Court alone as they could also go to the state High Courts.
Consequent upon the foregoing contentions, learned counsel submitted that it was wrong for the court below to have held that it had jurisdiction based on Section 251(1)(e) of the 1999 Constitution. In support of the above submission learned counsel contended that the transaction giving rise to the suit did not arise pursuant to the operation of Companies and Allied Matters Act 1990.
The learned counsel for the respondent argued per contra, to the effect that the respondents having been appointed liquidators and pursuant to Section 425(1)(a) of Companies and Allied Matters Act 1990, have the locus to institute the action. In support of this submission reference was made to the cases of NDIC V. FMB (1997)2 NWLR (Pt. 490)735 at 752 and FMB V. NDIC (1999)2 SC 44. Furthermore learned counsel contended that the submission by learned counsel for the appellants to the effect that proviso to Section 251(1)(d) of the 1999 Constitution has taken away jurisdiction of Federal High Court in matters of banker/customer relationship is erroneous and seriously misconceived. Learned counsel maintained that the proviso to Section 251(1) (d) of the Constitution has not removed the jurisdiction of the Federal High Court in matters concerning banker/customer relationship. In support of this submission reliance was placed again on the two earlier cases of NDIC V. FMB (1997) supra, FMB V. NDIC (supra) and NDIC V. OKEM ENTERPRISES & ANOR (2004) All FWLR (Pt. 210) 1176 ratio 6 and (2004)10 NWLR (Pt. 880)107. Learned counsel further argued that the Federal High Court has jurisdiction to entertain the suit also by virtue of Section 251(1) (e) of the Constitution, same being a matter relating to the operation of Companies and Allied Matters Act 1990.
A brief consideration will be made as earlier stated in this judgment on the issue of locus standi of the respondent to institute the action. It is not in dispute that Allied Bank (Nig) Plc, had its banking licence revoked by the Central Bank of Nigeria and consequent upon which it was liquidated. Upon its liquidation the respondent herein, Nigeria Deposit Insurance Corporation (NDIC) was appointed the liquidator. The arguments proferred by the appellants and the case of NDIC V. FMBN (1997)2 NWLR (Pt. 490)735 at 757 cited by them supports the fact that a liquidator has the locus standi to file an action on behalf of the company that was liquidated. See also Section 425(1)(a) of the Companies and Allied Matters Act 1990. Consequently, I hold that the respondents have the locus standi to institute this action.
As to the issue of jurisdiction of the Federal High Court to entertain the suit, a convenient starting point will be from an examination of the relationship that existed as at the time the loan was granted. From the claim, in the court below, the appellants as customers were said to have collected the loan from their Bank (Allied Bank (Nig) Plc) during its life time. Consequently it is not in doubt and both parties have agreed that the relationship was that of a banker and customer. That being so is the Federal High Court vested with jurisdiction to entertain matters arising out of a banker/customer relationship? The Supreme Court in NDIC V. OKEM ENTERP. LTD & ANOR (supra) has settled that position. In the said case, the apex court per UWAIFO JSC at p.183 paras E-H held thus:
“The proviso to Section 251(1)(d) of the 1999 Constitution 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. Undoubtedly, that was to recognise the jurisdiction the State High Courts had been exercising in such matters which Section 272(1) of the 1999 Constitution impliedly preserves. The High Court of a State can only exercise jurisdiction in any aspects 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 Courts and entertain causes and matters relating to individual customer and bank transactions”.
See also page 194 paragraphs B-E of the same case where Katsina Alu JSC stated thus:-
“It will be seen clearly that Section 251 (1) (d) confers exclusive jurisdiction on the Federal High Court in specified matters notwithstanding Section 272(1). 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 hank: See Federal Mortgage Bank of Nigeria V. NDIC (1999) 2 NWLR (Pt. 591) 333.”
In view of the foregoing, the jurisdiction of the Federal High Court to entertain matters of banker/customer relationship runs concurrently with a State High under the proviso to Section 251(1)(d) of the 1999 Constitution. See also Societe Bancaire (Nig) Ltd V. De Linch (2004) 11-12 SC 75. In other words the proviso simply removes the exclusiveness of the jurisdiction of the Federal High Court under Section 251(1)(d) of the Constitution, but does not wittle down the jurisdiction of the court to entertain matters under the proviso. As the transaction that gave rise to this action is that of a banker/customer relationship, the lower court was in error to invoke the application of Section 251(1) (e) of the Constitution. The applicable provision as observed above is the proviso to Section 251(1) (d) of the 1999 Constitution.
Consequent upon the foregoing, I hold that the Federal High Court has jurisdiction to entertain this action. The ruling of the lower court delivered on 11th October, 2000 in suit No. FHC/L/FBC/186/99 to the effect that it has jurisdiction to entertain this suit is hereby affirmed. The sole issue for determination is resolved in favour of the respondent. The appeal is bereft of any merit, and it is hereby dismissed.
Costs assessed at N30, 000 is hereby awarded in favour of the respondent against the appellants.
Other Citations: (2008)LCN/2850(CA)
