Court To EFCC: You Have No Power To Investigate Or Recover Civil Contract Debts

A Federal High Court, Ibadan has established that the Economic
and Financial Crimes Commission (EFCC) has no power to arrest
anyone or investigate cases of debt recovery arising from breach of
contract.

Justice J. O. Abdulmalik in an April 1, 2019 damning judgment, a
copy of which was obtained by The Nation, declared that the EFCC
Act 2004 does not empower the commission to arrest, detain anyone
or investigate cases of breach of contract in business
transactions. It held that the commission only has power to arrest,
detain or investigate financial crimes, not civil transactions.

He gave the judgment in a case dragged before him by an
Ibadan-based businessman, Elder Francis Morakinyo Afolabi, through
his lawyer, Mr Joshua Olaniyan, against the commission and five
others. Afolabi dragged the EFCC to court for his arrest, torture
and freezing of his bank account based on a petition submitted on
him by Mr Kehinde Olaniyan who trades under the name Kehinde R.
Olaniyan Nigeria Enterprises over failure to fulfill his own part
of a business transaction worth N14 million with the latter in
2015. The petition was submitted to the Ibadan zonal office of the
commission, upon which it invited Afolabi.

Other respondents are three investigating officers of the
commission and First Bank of Nigeria PLC in whose Afolabi’s Account
was frozen.

The complainant was admitted to bail while his bank account was
frozen pending the completion of its ‘investigations’. But Afolabi
dragged the commission and other respondents to court seeking a
declaration of his arrest and freezing of account illegal as well
as publication of a public apology in two national dailies that are
popular in Ibadan. He also sought N100 million damages against the
six respondents in the case.

Citing the case of Lima versus Mohammed (1999) LPELR-1973
(Supreme Court), the judge declared that “an aggrieved party in a
breach of contract is to seek for civil redress by way of insisting
on actual performance of the contract or seek damages for the
breach.” Justice Abdulmalik pointed out that it has become
fashionable for some Nigerians to use law enforcement agents to
retrieve debts arising from civil transactions instead of
approaching the court to do so, possibly in an attempt to dodge
lawyers’ professional fees.

The judge also held that Afolabi’s fundamental human rights were
breached through his arrest and freezing of his bank account. He,
therefore, awarded N500,000 damages to the applicant but absolved
the bank, stressing that it was under obligation to honour the
request from the EFCC for the account freezing being a commission
empowered to do such. The judge set aside the directive freezing
Afolabi’s bank account.

For justice to be done, the court also held that Mr Olaniyan,
who dragged Afolabi to the EFCC, should publish a public apology in
a national daily whose circulation is popular in Ibadan.

Among the seven issues formulated, six were resolved in favour
of Afolabi. The court held that the commission has no power to
investigate or resolve disputes arising from civil contracts, is
not a debt recovery agency, declared freezing of Afolabi’s bank
account illegal, declared his arrest as a breach of his fundamental
human rights and a form of torture.

He declared: “On issues one, two, three and four of the
applicants, there is no gainsaid that the 1st respondent (EFCC)
does not have the power to resolve or and investigate disputes
arising from contracts or civil transaction. Also, as reiterated in
a plethora of judicial authorities, the 1st respondent is not a
debt recovery agent.”

The judge referred to, among others, Section 6B of the EFCC Act
2004 Laws of Federation of Nigeria which states that the commission
shall be responsible for the investigation of all financial crimes
including advance fee fraud, money laundering, counterfeiting,
illegal charge transfers, future market fraud, fraudulent
encashment or negotiable instruments, computer credit card fraud,
contract scam etc.

He insisted that the transaction between Afolabi and Olaniyan
was civil, pointing out that failure to honour terms of contract
does not amount to a crime. He said it is strictly a civil
transaction that is outside the powers of the commission
irrespective of the garb the commission put on the matter.

“Carefully from the above facts, I do find that irrespective of
the descriptive inventory lexicon employed by the 5th respondent Mr
Kehinde Olaniyan) to title his petition or report to the 1st
respondent, it does not dissipate the facts on the ground from
being that of a civil transaction of contract which has gone
wrong.

“To cushion my point, the 5th respondent’s report to the 1st
respondent can be tantamount to a cry of ‘help me collect my money
from the applicant’. Otherwise, the question will be ‘what does the
5th respondent really want the 1st to 4th respondents to
investigate?’ There is no mystery about the fact, the 5th
respondent supplied applicants goods worth N14,611,820:00 which has
not been paid for…

“The ‘investigation power’ vested on the 1st respondent is in
relation o the commission of a crime, and not a civil transaction,
as simple as recovery of debt. The requisite sections of the E
inimical and Financial Crimes Commission (Est) Act Laws of
Federation of Nigeria 2004 as aforementioned all referred to
instance and occasion of suspicion crime.” He declared.