Fighting Corruption within the Confines of the Law: GTB PLC V. Adedamola (2019) and Its Implications Going Forward

Corruption has been identified as a major reason for underdevelopment of Nigeria and governments at different times, both under the military and democratic dispensations have demonstrated readiness to battle the hydra headed monster. In 2003, the Nigerian state enacted the Economic and Financial Crimes Commission Act as an enabling law to create a body with specialized powers to fight economic and financial crimes.

The Economic and Financial Crimes Commission (EFCC) has, more than any other agency of government in that regards, gained reputation for zero tolerance for corruption. With mandates to fight economic and financial crimes, the EFCC has wide powers especially as relates to money kept with financial institutions by individuals and corporate bodies across Nigeria. Financial institutions in Nigeria, more often than not, have displayed hastiness in cooperating with the EFCC in this regards even at the expense of the protection of their customers’ rights. This may not be unconnected to the fear factor that the mere mention of the EFCC generates across corporate institutions in Nigeria. In the exercise of its enormous powers, the EFCC has many times been accused of high handedness and operating outside the bounds of the law. This has brought the Commission into frosty relationship with many citizens who believe that the Commission has become an agency of persecution rather than prosecution.

This opinion seems to have gained validation in GTB PLC VS MR. AKINSIKU ADEDAMOLA & 2 OTHERS (2019) LPELR-47310(CA). The matter was commenced at the Federal High Court, Lagos by the 1st Respondent, Mr Akinsiku Adedamola (as the Plaintiff) against Guaranty Trust Bank, the EFCC and one Baba Muhammed Azari as 1st, 2nd and 3rd Defendants respectively. The nucleus of the case is that the EFCC directed the Appellant to place restriction on the Respondent’s account due to allegations of laundering proceeds of crimes surrounding the operations of the said account from a person of interest, one Akinsiku Roy. The Appellant alleged that it had no option than to obey the order of the EFCC. The trial court gave judgment in favour of the Respondent. Dissatisfied with the judgement, Appellant brought this appeal to the Court of Appeal where the court also found in favour of the Respondent. The bone of contention was whether a bank can act solely on the unilateral request of EFCC to restrict the movement of fund from an account.

In answering this poser, the court considered the provision of Section 34 (1) of the Economic and Financial Crimes (Establishment) Act, 2004 which states as follows-

Notwithstanding anything contained in any other enactment or law, the chairman of the commission or any officer authorised by him may, if satisfied that the money in the account of a person is made through the commission of an offence under this act or any enactment specified under section 7(2)(a)-(f) of this Act, apply to the court ex-parte for power to issue or instruct the bank examiner or such other appropriate regulatory authority to issue an order as specified in Form B of the Schedule to this Act, addressed to the manager of the bank or any person in control of the financial institution where the account is or believed by him to be or the head of the bank, or other financial institution to freeze the account.

Interpreting the above provision, the Court of Appeal held as follows-

The above provisions are in accord with the decision of the lower court. The Economic and Financial Crimes Commission has no powers to give direct instructions to bank to freeze the Account of a Customer, without an order of court, so doing constitute a flagrant disregard and violation of the rights of a Customer. I must add that, the judiciary has the onerous duty of preserving and protecting the rule of law, the principles of the rule of law are that, both the governor and the governed are subject to the rule of law. The Courts must rise to the occasion, speak and frown against arrogant display of powers by an arm of government. It is in the interest of both government and citizens that laws are respected, as respect for the rule of rules promotes order, peace and decency in all societies, we are not an exception. Our Financial institutions must not be complacent and appear toothless in the face of brazen and reckless violence to the rights of their customers. Whenever there is a specific provision regulating the procedure of doing a particular act, the procedure must be followed. Per Abubakar JCA.

 There is no doubt that the above decision by the Court of Appeal is in accord with the text and spirit of the law. The clear and unambiguous intendment of the law makers in section 34 (1) of the EFCC Act is not to donate extensive powers to the EFCC to, at its accord and behest, freeze individuals’ or businesses’ accounts. Rather, the Commission must at all times, have recourse to the court before such step is be taken. It has been held in plethora of cases of that where the wording of a law is clear and unambiguous, the court must give the law its literal meaning. In view of the unimpeachable nature of the decision in GTB PLC (supra), the Court of Appeal sitting in Ibadan four months later in BOSE OLAGUNJU VS. ECONOMIC AND FINANCIAL CRIMES COMMISSION (2019) LPELR-48461(CA) restated the position of the law when it held that:

“Section 44(1) (K) of the Constitution of the Federal Republic of Nigeria as amended and Section 34 (1) of the Economic and Financial Crimes (Establishment) Act, 2004, the wordings of Section 34 (1) of EFCC Act, 2004 in my view are not capable of any interpretation other that a Court order is a condition precedent for the exercise of the Respondent’s power to freeze an account suspected to harbour proceeds of a crime.  Failure of the Respondent to obtain a Court order prior directives to Heritage Bank to freeze the Appellant’s account is ultra vires its powers and so hold.” Per Folasade Ayodeji Ojo JCA.

The law is settled that where a procedure has been laid down to be followed before an action can be carried out, same must be strictly complied with to be valid. Any action carried out contrary to the requirements of the law is liable to be nullified by the court notwithstanding the good intention behind the said action. See the case of OYAMA VS. AGIBE (2016) ALL FWLR (PT.840) 1274 at 1292 paras E-F where it was held that, “It is trite law that when a legislation prescribe a procedure or method of doing and act, it’s only such procedure or method that is permissible and no other.”  Following the laudable precedent laid in GTB vs. Adedamola, Section 34 (1) of the Economic and Financial Crimes (Establishment) Act, 2004 also came under scrupulous scrutiny of the court in SAVANNAH & CHEMICAL INDUSTRY VS. EFFC & ANOR (2020) LPELR-51398. In the case, it was held thus:

“Under the Act, for the Commission to apply to Court ex parte for power to issue the order, the Chairman must be satisfied that the money in the account was made through the commission of a crime. Again, such satisfaction can only come after investigation has been carried out and not just mere speculation. The Section under reference does not give the unilateral power to the 1st Respondent to give an order to the 2nd Respondent to freeze or place caution on the account of the Appellant. It is not in doubt that the 1st Respondent has powers conferred on it to pass such an instruction to the 2nd Respondent. There is however a caveat placed on the 1st Respondent which it must comply with to make such instruction to be valid and legal. To avoid the abuse of power, the 1st Respondent under the same law it is claiming to have given the order to the 2nd Respondent to place a caution on the Appellant’s account must satisfy two conditions.  One of which is that the Chairman of the 1st Respondent must be satisfied that the money in the account of the Appellant must be proceeds from the commission of crime this is subjective to the Chairman of the Commission. The challenge with this is that if this power is not checked it will be subject to great abuse… Leaving such a power in the hand of a person who does not have the constitutional power to determine what constitute a crime is very dangerous. This is because one of such action can be very damaging. The constitutional powers to determine what constitute a crime is in the Court and not in any one else not matter how highly placed. This is the constitutional power of the Court not even an administrative tribunal and any law that gives that power to any one apart from the court will be contrary to the constitution and declared null and void. See Abacha Vs. FRN (2014) LPELR-22014 (SC). It is to avoid the abuse of that power that the same law mandates the Commission to apply for an ex parte order to freeze the account of a suspect...”

One thread that runs through the three different judgments mentioned above is the obligation placed on every citizen and entity especially government institutions to abide by the rule of law. In PROVOST LAGOS STATE COLLEGE EDUCATION & OTHERS VS. EDUN & OTHERS (2004) 6NWLR (PT.870) 476 at 509 paras. D-F, JUSTICE NIKI TOBI JSC (of blessed memory) held that

 What is the effect of non-compliance with the law? It is settled law that expropriatory statutes which encroach on a person’s proprietary right must be construed fortissimos contra preferentes, i.e strictly against the acquiring authority but sympathetically in favour of the citizen whose proprietary rights are being deprived. Consequently, as against the acquiring authority there must be a strict adherence to the formalities prescribe for the acquisition.”

Therefore, the implication of the precedent laid in GTB v. Adedamola and other cases on the anti-corruption war are as follows:

  • Agency of government must act strictly within the confines on the law in carrying out their activities otherwise it will be all exercise in futility.
  • Corporate organisations and citizens who by the nature of their services are dependable allies in the efforts in reducing pervasive corruption must not be placed in a disadvantageous position by the ultra vires instruction of the police and other anti-corruption agencies.
  • Corporate organisations must ensure that they are not carrying out an illegal order by insisting on, and investigating whether the requirement of the extant laws have been complied with before acting on such.

From the cases cited above, one must commend the activism of the Nigerian Courts in condemning the abuse of power by the EFCC. It is beyond reasonable doubts that the establishing Act of the EFCC which vested in it investigative and prosecutorial power also imposed on it some corollary responsibilities in acting strictly within the confines of the law. While under exigent circumstances, it can be said that the decision of the appellate court will likely slow down the pace at which anti-corruption agencies like the EFFC, can restrict stolen funds from being dissipated (In diem vivere in lege sunt detestabilis: delays in law are hateful) nevertheless, agencies and arms of government established to combat crime in whatever form must constantly remember the trite maxim: Justice rushed is justice crushed.