CBN AND GARNISHEE OF ACCOUNTS OF BANKS: COURT OF APPEAL IN FRESH CONFUSION – WAY FORWARD

On 17 September 2018, in the case of CBN v. Umar [2019] 10 NWLR (Pt. 1679) 75, the Court of Appeal cleared the coast when it held that accounts of banks with the Central Bank of Nigeria (CBN) can be garnisheed without prior consent of the Attorney-General of the Federation. Williams-Dawodu, JCA stated, after a due consideration of the provisions of Section 84(1)(2) and (3) of the Sheriffs and Civil Process Act (SCPA), thus:

The answer with regard to this appeal clearly from the facts in the record shows that, the money is that of the 2nd Respondent/Judgment Debtor, Fidelity Bank. This being the case, the provision of Section 84 cannot come to play as the money does not qualify as public fund. Further, and in my view and humbly, in the circumstance and facts of the instant appeal, the Appellant [CBN] cannot be held, said or found to be a public officer for the invocation of Section 84 of the said Sheriffs and Civil Process Act as it would negate the objective and intendment of the provision by the law makers in the interest of the public and result in total absurdity.

The above beautiful decision was not considered by another panel of the Court of Appeal which recently decided to go in the opposite direction by holding that before garnishee proceedings can be legally commenced against the CBN with respect to accounts of banks, the prior consent of the Attorney-General of the Federation must be sought and obtained. This was in the case of Unity Bank Plc v. Igala Construction Co. Ltd. [2021] 10 NWLR (Pt. 1785) 407 decided on 21 May 2020. Nimpar, JCA held (at pages 446-447):

The import of Section 84 of the Section Sheriffs and Civil Process Act is straightforward that where the fund to be garnisheed is in the custody of a public officer, then the Attorney-General must give a prior consent. The argument of the 1st Respondent that because the Central Bank is a banker’s bank, therefore the issue of consent is unnecessary, is not tenable. The statutory provision did not create that distinction.

In CBN v. Umar (just like in Unity Bank Plc v. Igala Construction Co. Ltd.), the facts bother on attempt to enforce judgment against a commecial bank, Fidelity Bank Plc. In that case, Fidelity Bank Plc was a Judgment Debtor to the tune of over N29 Million. The Judgment Creditor, Alhaji Kolomi Umar, sought to attach the funds belonging to Fidelity Bank by commencing a garnishee proceeding, with CBN as Garnishee. Alhaji Umar obtained a garnishee order nisi (the initial order) against CBN, attaching the Fidelity Bank’s money in its custody. Upon being served with the Order, requiring it to show cause why the Order Nisi should not be made absolute (in the usual procedure), CBN raised a preliminary objection, contending that the Order Nisi was made without jurisdiction as the prior consent of the Attorney-General was not obtained. The trial Court dismissed the contention as baseless. The CBN appealed to the Court of Appeal which also dismissed the appeal without any difficulty.

In Unity Bank Plc v. Igala Construction Co. Ltd., Igala Construction obtained a garnishee Order Nisi against CBN, attaching Unity Bank’s money in its custody. Unity Bank challenged the proceedings on the ground that the prior consent of the Attorney-General was not obtained. The trial Court discountenanced the objection and made the Order absolute. Unity Bank appealed. The Court of Appeal upheld the objection. This time around, CBN didn’t bother to file any objections. Meanwhile, Unity Bank also challenged the garnishee proceedings on the ground that it was not given sufficient notice (14 days) before the hearing of the motion for the garnishee order absolute, in line with Section 83(2) of the SCPA. The Court of Appeal agreed, holding that Unity Bank was entitled to 14 days. This Court of Appeal was right there.

The Confusion

Our problem is with the Court of Appeal’s decision on Attorney-General’s consent. We shall show below how the Court, with respect, erred.

Interestingly, there’s a Supreme Court’s decision where it was held that the CBN is not a public officer for the purposes of Section 84 of the SCPA. This was in the case of CBN v. Interstellar Communications Ltd. & 3 Ors. [2018] 7 NWLR (Pt. 1618) 294. In that case, the Federal Government of Nigeria and the Attorney-General of the Federation were joined as parties to the suit originally commenced against Nigerian Telecommunications Ltd.
(NITEL). The Attorney-General had consented to the money judgment (consent judgment) that led to the garnishee proceedings.

The Supreme Court dismissed the objections of CBN that the prior consent of the Attorney-General must be sought and obtained. The apex Court held that it would be absurd to approve of such argument in the circumstances of the case.

The Court of Appeal in Unity Bank Plc v. Igala Construction Co. Ltd. considered the Supreme Court’s decision and distinguished the facts. This was brilliant. The facts of both cases clearly differ in material respects as shown above. The Court refused to apply the case and maintained its position that the CBN is a public officer for the purpose of Section 84 of the SCPA.

However, the Court of Appeal in Unity Bank Plc v. Igala Construction Co. Ltd., failed to reason along the lines of the compelling decision of Williams-Dawodu, JCA in the earlier case of CBN v. Umar. The Court of Appeal was bound by its earlier decision in CBN v. Umar.

The idea of judicial precedent is that generally, courts are bound by their earlier decisions when considering future cases with similar facts. This is to guarantee certainty in the law. More so, based on the doctrine of stare decisis, lower courts are bound by the decisions of higher courts where the facts are the same. While we do not fault the Court of Appeal for not following CBN v. Interstellar, we fault the Court for not considering CBN v. Umar and the position taken there. Perhaps the decision was not brought to its attention, however, the argument that led to the position in CBN v. Umar was brought before it but the Court wholly discountenanced it.

With the greatest respect, there is no reasonable justification for treating monies belonging to commercial banks in the custody of CBN as public funds. The Court of Appeal had no legal impediment stopping it from holding that the consent of the Attorney-General was not necessary. The Court merely focused on the classification of CBN as a public officer without considering the classification of the funds sought to be attached. Unity Bank Plc’s funds in CBN are not public funds! The consent of the Attorney-General is absolutely unnecessary.

Way Forward

Trial courts are urged to follow the Court of Appeal’s decision in CBN v. Umar, and fortify it with the Supreme Court’s position in CBN v. Interstellar Communications Ltd. Accordingly, the Court of Appeal’s decision in Unity Bank Plc v. Igala Construction should be jettisoned to the extent that it purports to insist on prior consent of the Attorney-General before accounts of banks with CBN can be garnisheed.

Lastly, an amendment of Section 84 of the SCPA to expressly deal with the situation may be considered. It is submitted that such amendment should be in line with the decision of the Court of Appeal in CBN v. Umar and CBN v. Interstellar Communications Ltd.

There should be no clog in the wheel of execution of court judgments against commercial banks by garnishee proceedings in the form of Attorney-General’s consent.



Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has worked with a number of startup tech companies. He tweets @siazubuike.

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