On disputes related to banks, banking business and bank customers in Nigeria
By Oliver Azi
Just like the continuous beat of the heart makes the body alive, so does the jurisdiction of a court gives life to the court. Beyond its inherent jurisdiction, the statutory jurisdiction of a court enables the court to adjudicate on matters brought before it. However, where such matter rape the court offs its jurisdiction, it becomes an onerous burden for the court to proceed on such matter—for it is dead on arrival.
The Court in this legal treaty to be considered, are two: federal high court “FHC” and state high court “SHC”. However, knowing the federal capital territory, have being defined in plethora of cases to be a state within the context of the law, then the High Court of the Federal Capital Territory falls within the context of the state high court. To give salvation to this position, the provision of section 255 of the 1999 Constitution of the Federal Republic of Nigeria (As amended) “CFRN 1999 or 1999 Constitution” provides for the creation of the high court of the Federal Capital Territory “HC-FCT”. The tenor, scheme and wordings of the apex law read that: “(1) There shall be a High Court of the Federal Capital Territory, Abuja”.
On jurisdiction of the court, the law reads that:
Jurisdiction (1) Subject to the provisions of section 251 and any other provisions of this Constitution and in addition to such other jurisdiction as may be conferred upon it by law, the High Court of the Federal Capital Territory, Abuja shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue or to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect of an offence committed by any person.
By the tune of phrase, this provision posits that; the jurisdiction lies largely on the provision of section 251 CFRN 1999. So therefore, wisdom demands that a reproduction of the relied section be reproduced here. However, for the want of space, it will not be reproduced but summarized. The provision of section 251 CFRN 1999 deals with the jurisdiction of the federal high court and so, it is implied that; if there are anything not so provided by the jurisdiction of the federal high court, the high court of the federal capital territory will have jurisdiction (on anything so listed). This is quite similar to the provision of section 272 (1) CFRN 1999 which is the provision for the State High Court.
Having cleared this, the focal point of this work dwell on the jurisdiction as it relates to banks and companies in Nigeria with respect to the SHC and FHC. The provision of section 251(d) of the 1999 Constitution will be examined here. The said provision which deals with the original jurisdiction of the FHC provides that:
(d) connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures:
Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank;
The letters of the first paragraph is quite clear as it must be stated clearly that; while the FHC has jurisdiction to deal with matters that relates to banks and banking business, such matters is construed to just matters between a bank and a bank or a bank and the Central Bank of Nigeria. Ordinarily, it might appear that by a combined reading of the first and second paragraph, the FHC cannot deal with issues that pertain with banks and its customer; however, plethora of judgments by the court have revealed that both the FHC and SHC has jurisdiction to deal with matters that relates to banks and bank customer.
The appellation of the court in F.B.N PLC v Govt. of Ondo State (2012) 11 NWLR (Pt. 1312) 502 tellingly reveal that:
By virtue of section 251 (1) of the 1999 Constitution, notwithstanding anything contrary contained in the constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters connected with or pertaining to banking, bankers, other financial institutions, including any action between one bank and another, any action by or against the central bank of Nigeria arising from banking, foreign exchange, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures.
However, in ECOBANK V. ANCHORAGE LEISURES LTD & ORS (2018) LPELR-45125(SC) Her lordship, Mary Ukaego Peter-Odili, JSC posit, whilst relaying on an earlier judgment in NDIC v. Okem Ent. Ltd (2004) 10 NWLR (Pt.680) 107 at 221, that:
From the provisions of Section 251 (1) (d) CFRN, the Federal High Court is vested with exclusive jurisdiction in relation to issues pertaining to banks, banking and other financial institutions but when the dispute relates to banker/customer relationship, the jurisdiction is not exclusive and the said jurisdiction is concurrently shared with the Federal High Court and the State High Courts and that of the Federal capital Territory.
It was further held in that case that the Supreme Court that:
Section 251(1)(d) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), vests the Federal High Court with exclusive Jurisdiction in relation to issues pertaining to banks, banking and other financial institutions. But when the dispute relates to banker/customer relationship; that is between an individual customer and his bank in respect of transactions between the individual customer and the bank, the Jurisdiction is not exclusive. In such a case, the Federal High Court has concurrent Jurisdiction with the State High Courts and the High Court of the Federal Capital Territory. In this case, the relationship between the parties is that of banker/customer. In the circumstance, the appellant’s argument that the Federal High Court lacked Jurisdiction over the suit is erroneous.
This position was similarly held in the case of ECOBANK (NIG) LTD v INTERCONTINENTAL BANK PLC (2012) 4 NWLR (Pt. 1293) 219 where it was held by the Court of Appeal that:
Where a person, whether natural or legal enters into banking transaction or relationship with a bank, any dispute arising therefrom can be ventilated at the State High Court or the Federal High Court as can be gleaned from the proviso to section 251(1)(d) of the 1999 Constitution. In other words, claims made by a bank against its customer and vice-versa clearly fall not just within the Jurisdiction of the State High Court but also within the concurrent Jurisdiction of both the High Court of a State and the Federal High Court. Where there is no banker/customer relationship between the parties, the proviso does not avail a party.
So therefore, exclusive jurisdiction of the FHC lies on matters that deals between the banks and another bank or a bank and the Central Bank of Nigeria; however, where it lies with a bank and bank customer (a bank can be another bank’s customer where such bank makes deposits and thus, becomes a customer), then the “SHC” and “FHC” shares jurisdiction concurrently. This position was similarly adopted by the Supreme Court in F.M.B.N v OLLOH (2002) 9 NWLR (PT. 777) 475
Looking back, the 1979 Constitution had similar import, and was adjudicated in the case of I.T.P.P v U.B.N PLC (2006) 12 NWLR (PT. 995) 483 where it stated that:
The intendment of the proviso to section 230(l)(d) of the 1979 Constitution as amended by Decree 107 of 1993 was to give concurrent Jurisdiction to both the Federal High Court and State High Court in disputes between an individual customer and his bank in respect of transactions between the individual customer and the bank. In the instant case, however, the relationship of banker/customer did not exist so as to vest the Federal High Court with Jurisdiction to adjudicate on the matter.
Hence, the position of the law is clear and it is that: whilst the FHC has exclusive jurisdiction in disputes that relates to a bank or a bank and the Central Bank of Nigeria, its jurisdiction is shared with the state high court in disputes that involves a bank and its customer.
Following closely to the provision of section 251(1) (d) CFRN 1999 is the provision of section 251 (1) (e) that reads:
(e) arising from the operation of the Companies and Allied Matters Act or any other enactment replacing the Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act;
In interpreting this provision in connection with the previous section, Professor A.S Shaakaa, a law teacher at the faculty of law, University of Jos, posited in his book: “Themes on Legal System” that:
Furthermore, it is worthy of note that the exclusive jurisdiction vested in the federal high court under section 251(1)e of the Constitution of the Federal Republic of Nigeria, 1999 as amended, is limited to only disputes arising from the operation of the Companies and Allied Matters Act. In other words, where the dispute relates to regulation, running, management or control of companies, the jurisdiction in respect thereof resides with the Federal High Court exclusively. However, where the disputes pertain to ordinary routine transaction of a company with other persons, the state high court shall be seised of jurisdiction. In fact, once the dispute can be decided without recourse to the Companies and Allied Matters Act, as a basis therefore; the jurisdiction to adjudicate belongs to the state high court.
The Court of Appeal in BABINGTON ASHAYE v E.M.A.G ENT (NIG) LTD (2011) 10 NWLR (PT. 1256) 479 allowed the appellant contention that the matter deal with a simple contract and so the FHC has no jurisdiction to deal with it.
In conclusion the principle of law can be summarized here that; while the FHC has exclusive jurisdiction that deals with Banking business, Banks and Banks or Banks with the Central Bank of Nigeria. However, both the FHC and SHC can adjudicate on issues that deals with banks and bank customer, but where the matter deals with issues that touches on the Companies and Allied Matters Act, the FHC has exclusive jurisdiction to deal with such matters.
Oliver Azi
Law Graduate, Legal Writer, Researcher & Tutor
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