Powers of the Economic and Financial Crimes Commission to Freeze an Account Suspected to be Involved in Financial Crime; Extent of such Powers

CASE TITLE: UBA PLC v. A-G BENUE STATE & ORS (2022) LPELR-58695(CA)

JUDGMENT DATE: 23RD SEPTEMBER, 2022

PRACTICE AREA: CIVIL PROCEDURE

LEAD JUDGMENT: MUSLIM SULE HASSAN, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on Civil Procedure.

FACTS:

This appeal is against the judgment of the Federal High Court sitting at Makurdi, Benue State, delivered by Hon. Justice M. O. Olajuwon in Suit No. FHC/MKD/CS/46/2018, on the 12th day of February 2019.

On 7/08/2018, the 3rd Respondent by a letter mandated the Appellant and the 4th Respondent to freeze the 2nd Respondent’s accounts domiciled with the respective banks.

The 1st and 2nd Respondents claimed that the 3rd Respondent had no powers to mandate the 2nd Respondent’s accounts with the Appellant and the 4th Respondent to be frozen, and likewise that the Appellant and the 4th Respondent had no basis in complying with the directives of the 3rd Respondent to freeze her accounts domiciled with the respective banks same having not been accompanied by a valid Court order, instituted an action at the trial Court against the Appellant as the 2nd Defendant and the 3rd and 4th Respondents as the 1st and 3rd Defendants at the trial Court.

Upon service of the originating summons, the Appellant filed a counter affidavit of 13 paragraphs and a written address in opposition. The 4th Respondent however denied the allegation of the 1st and 2nd Respondents claiming non-compliance with the directive of the 3rd Respondent directing her to freeze the account of the 2nd Respondent.

The learned trial judge entered judgment for the 1st and 2nd Respondents and awarded general damages of N25,000,000.00 against the Appellant, N50,000,000.00 against the 3rd Respondent and N25,000,000.00 against the 4th Respondent for unlawful interference with the 2nd Respondent’s account. Dissatisfied, the Appellant lodged an appeal at the Court of Appeal.

ISSUES FOR DETERMINATION:

The appeal was determined on the following issues:

“1. Whether the learned trial judge was right in assuming jurisdiction to determine the suit by originating summons in view of the reliefs claimed and the contentious facts put before the Court.

2. Whether issues arising for determination is an originating summons proceedings are solely those in the originating summons, and a Defendant has no right to formulate his own issue for determination.

3. Whether the learned trial judge was right when she held that the 3rd Respondent did not act within the ambit of the law when without a Court order froze the account of the 2nd Respondent pursuant to Section 34 of the EFCC Act.

4. Whether the learned trial judge was right when she found and held that the Appellant ought to have known whether the order to freeze the 2nd Respondent’s account was valid before obeying same.

5. Whether the award of N25, 000,000.00 damages to the 2nd Respondent was right in the absence of evidence in proof.

6. Whether the judgment is not against the weight of evidence.”

DECISION/HELD:

In the final analysis, the appeal succeeded in part issues 1 and 2 were resolved against the Appellant while issues 3, 4, 5, and 6 were resolved in favour of the Appellant.

RATIOS:

• GOVERNMENT AGENCY – ECONOMIC AND FINANCIAL CRIMES COMMISSION – Position of the law as regards the power of the Economic and Financial Crimes Commission to place a stop order or freeze an account suspected to be involved in financial crime; the essence of the said power
• GOVERNMENT AGENCY – ECONOMIC AND FINANCIAL CRIMES COMMISSION – Whether a report on an allegation of an account suspected to be involved in a financial crime can only be sent by financial and designed non-financial institutions to EFCC before the same can exercise its powers in issuing a stop order on the account; whether time runs against the investigation of EFCC on the allegation
• GOVERNMENT AGENCY – ECONOMIC AND FINANCIAL CRIMES COMMISSION – Whether the power of the Economic and Financial Crimes Commission to place a stop order or freeze an account suspected to be involved in financial crime is only exercisable in money laundering cases
• GOVERNMENT AGENCY – ECONOMIC AND FINANCIAL CRIMES COMMISSION – Whether the Economic and Financial Crimes Commission is empowered to freeze the account of a state government suspected to be involved in financial crime
• ACTION – ORIGINATING SUMMON(S) – Circumstance(s) when an originating summons will be appropriate to commence an action
• PRACTICE AND PROCEDURE – ISSUE IN DISPUTE – Principles of law as regards the formulation of issues for determination in a case
• DAMAGES – AWARD OF DAMAGES – Principles governing the award of damages