By Abubakar D. Sani, Esq.
![image](/2020/10/lawreport.jpg")
![image](/2021/05/store.Nairalaw.jpg")
Introduction
![image](/2021/01/payne-alex.jpg")
The charges reportedly filed by the Economic and Financial
Crimes Commission against the former Minister of Petroleum
Resources, Mrs. Diezani Allison-Madueke appear to be potentially
undermined by their seeming inconsistency with certain provisions
of the 1999 Constitution. This is because (if news reports of those
alleged charges are to be believed), all but one of them might be
problematic, necessitating – possibly – their re-think by the
prosecution. I will presently elaborate, but first, a brief
over-view of the charges.
According to media reports, the 13-count charge filed on the
14th day of November, 2018, accused the former Minister
as follows:-
- Count 1: That on the 20th
day of November, 2011, she took possession of the sum of
US$20 million dollars, allegedly the proceeds of corruption,
contrary to Section 15(2)(d) of the Money Laundering
Prohibition Act 2011 as amended in 2012, and punishable
under Section 15(3)
- Count 2: That, sometime between
February 2012 and June 2012, she took possession
of US$17.5million, allegedly the proceeds of corruption, contrary
to and punishable under the same provisions of the Money
Laundering Act, as amended.
- Count 3: That sometime in September
2013, she acquired a property in Banana Island, Lagos
through a proxy, valued at US$37.5million, allegedly the proceeds
of corruption, contrary and punishable under the same provisions of
the same law as in Counts 1 and 2 above.
- Count 4: That on or about the
4th day of June 2012, she took
possession of the sum of N650million, which was allegedly the
proceeds of corruption, contrary to and punishable under the
aforesaid provisions of the Money Laundering Act, as amended.
- Count 5: That on or about the
4th day of June 2012, she acquired
certain property in Abuja, through proxies, valued at N650million,
which consideration was allegedly the proceeds of corruption,
contrary to and punishable under the self-same provisions of the
same law as in the previous counts.
- Count 6: That, sometime in May,
2012, she took possession of the sum of N937million,
allegedly the proceeds of corruption, contrary to and punishable
under the same provisions of the MLP Act, as amended.
- Count 7: That sometime in May,
2012, she acquired certain properties in Yaba, Lagos,
through proxies, valued at the sum of N973million, which sum was
allegedly the proceeds of corruption, contrary to and punishable
under the same provisions of the MLP Act.
- Count 8: That sometime in May
2012 she allegedly took possession of the sum of
N928million which was the proceeds of corruption, contrary to and
punishable under the same provisions of the MLP Act, as amended, as
the previous charges.
- Count 9: That sometime in May
2012, she allegedly acquired certain landed properties in
Port Harcourt, Rivers state with the sum of N928million which fund
was the proceeds of corruption, contrary to and punishable under
the same provisions of the MLP Act, as amended.
- Count 10: That sometime January
2011, she took possession of the sum of N805million,
allegedly the proceeds of corruption, contrary to and punishable
under the same provisions of the MLP Act, as amended.
- Count 11: That sometime in May
2012 she acquired certain landed properties in Ikoyi,
Lagos, through proxies, valued at N805million.
- Count 12: That, sometime between
January 2011 and December 2011, she took
possession of the sum of US$2.2million, allegedly the proceeds of
corruption, contrary to and punishable under the same provisions of
the MLP Act.
- Count 13: That, sometime between
January, 2011 and December, 2011, she acquired a
certain landed property in Old Government Reservation Area, Port
Harcourt, through proxies, with the sum of US$2.2million which was
allegedly the proceeds of corruption contrary to and punishable
under the same provisions of Sections 15(2)(d) and 15(3),
respectively, of the MLP Act, as amended.
What About the Law?
Section 15(2)(d) of the Money Laundering Act,
as amended, which the former Minister is charged with contravening,
provides as follows:
“Any person or body corporate, in or outside Nigeria, who
directly or indirectly acquires, uses, retains or takes possession
or control of any fund or property (which he/it) (knows)
or reasonably ought to have known that such fund or property is
or forms part of the proceeds of an unlawful act, commits an
offence of money laundering under this Act”
Section 15(3) provides that the punishment for
contravening the provisions of Section 15(2)(d) of the
Act is imprisonment for not less than seven years, but not
more than fourteen years.
Analysis
It can be seen that, with the exception of the 3rd
Count, all the other twelve Counts in the indictment accuse Mrs.
Madueke of committing the acts which allegedly constitute
violations of the MLP Act between January 2011 and
June 2012. The sole exceptions are the acts alleged in Count 3,
which purportedly took place in September 2013. The legal
implication of this will presently be explained.
Legal Status of the Charges
It is not only in movies that – as thespians say – timing is
everything. It is even more so in relation to criminal indictments.
In other words, the date when an offence was allegedly committed is
crucial in determining the guilt or otherwise of the alleged
culprit, having regard to the provisions of Section 36(8)
of the 1999 Constitution, which stipulate, inter
alia, that: “No person shall be held to be guilty of a
criminal offence on account of any act or omission that did not, at
the time it took place, constitute such an offence”.
In the context of the charges against Mrs. Madueke, at the time
she allegedly committed the acts alleged in all but the third count
(between January, 2011 and June, 2012), the provisions of
Section 15(2)(d) of the MLP Act which she
allegedly contravened did not exist; they were not part of the
extant MLP Act, 2011 that was in force at that
time; rather, they were inserted in the amendment thereto, the
Money Laundering (Prohibition) (Amendment) Act,
2012, vide Section 9 thereof, which took
effect on the 21st day of December,
2012.
CBN’s GSI Guidelines and Chronic Bank
Debtors
The circular recently issued by the Central Bank of Nigeria
(CBN) permitting banks to set off the credit balances of customers
against any debts owed by such customers with other banks, seems –
on the face of it – to be long over-due, given its glaring benefits
as a solution to the pervasive incidence of non-performing bank
loans.
However, it is worthwhile to see if it stands up to legal
scrutiny, given that the CBN introduced it purportedly pursuant to
its mandate in Section 2(d) of the CBN Act, 2007,
“to promote a sound financial system” in the country.
The Guidelines stipulate that the Global Standing Instructions
shall be used as a last resort by a creditor-bank – without
recourse to the Borrower – to recover past due obligations, from
the latter, through a direct set-off from the Borrower’s deposits
or investments held in his qualifying accounts with participating
banks.
In order to activate it, customers will be required to submit
certain information (their BVN, the value of the full repayment
amount, the duration of the facility and the repayment account). In
the event of a loan default, the GSI is triggered by the
Creditor-bank activating the mandate, specifying the amount to be
recovered.
Critique
I believe that the initiative overlooks the implications of the
legal relationship between a bank and its customer, which is
essentially contractual. Having regard to the GSI, its legal
background viv-a-vis all the parties involved, in my view,
is the separate contractual relationship which exists between each
bank (the lending bank and the setting-off bank) and the customer,
inter se .
It is trite law that only parties to a contract are bound by it
and no one may enforce it except the parties themselves – even if
the contract was made for the benefit of a third party. This means,
in this context, that any undertaking which a customer gives to a
bank to set off any debt due from him to that bank against any
money which he may have in another bank, is not legally enforceable
against the second bank – unless that bank was a party to the
undertaking.
The apparent answer to this might be that the debtor is estopped
by his undertaking from resisting the set-off. However – just like
contracts – estoppel also applies only to parties or their privies.
I believe that this excludes the second bank, because it is not the
privy of the first bank, either in law or in estate – the only two
(out of the three) categories of privies recognized by law for the
application of the doctrine, which might be applicable in the
circumstances.
I believe that the foregoing raises the question of the legal
status of CBN’s said policy/directive: does it have the force of
law? Can it be justified under any provision of the CBN
Act and/or any other law? Can it displace or override the
contractual relationship between a customer and a bank?
Written By Abubakar D. Sani, Esq.
By Abubakar D. Sani, Esq.
Introduction
The charges reportedly filed by the Economic and Financial
Crimes Commission against the former Minister of Petroleum
Resources, Mrs. Diezani Allison-Madueke appear to be potentially
undermined by their seeming inconsistency with certain provisions
of the 1999 Constitution. This is because (if news reports of those
alleged charges are to be believed), all but one of them might be
problematic, necessitating – possibly – their re-think by the
prosecution. I will presently elaborate, but first, a brief
over-view of the charges.
According to media reports, the 13-count charge filed on the
14th day of November, 2018, accused the former Minister
as follows:-
- Count 1: That on the 20th
day of November, 2011, she took possession of the sum of
US$20 million dollars, allegedly the proceeds of corruption,
contrary to Section 15(2)(d) of the Money Laundering
Prohibition Act 2011 as amended in 2012, and punishable
under Section 15(3)
- Count 2: That, sometime between
February 2012 and June 2012, she took possession
of US$17.5million, allegedly the proceeds of corruption, contrary
to and punishable under the same provisions of the Money
Laundering Act, as amended.
- Count 3: That sometime in September
2013, she acquired a property in Banana Island, Lagos
through a proxy, valued at US$37.5million, allegedly the proceeds
of corruption, contrary and punishable under the same provisions of
the same law as in Counts 1 and 2 above.
- Count 4: That on or about the
4th day of June 2012, she took
possession of the sum of N650million, which was allegedly the
proceeds of corruption, contrary to and punishable under the
aforesaid provisions of the Money Laundering Act, as amended.
- Count 5: That on or about the
4th day of June 2012, she acquired
certain property in Abuja, through proxies, valued at N650million,
which consideration was allegedly the proceeds of corruption,
contrary to and punishable under the self-same provisions of the
same law as in the previous counts.
- Count 6: That, sometime in May,
2012, she took possession of the sum of N937million,
allegedly the proceeds of corruption, contrary to and punishable
under the same provisions of the MLP Act, as amended.
- Count 7: That sometime in May,
2012, she acquired certain properties in Yaba, Lagos,
through proxies, valued at the sum of N973million, which sum was
allegedly the proceeds of corruption, contrary to and punishable
under the same provisions of the MLP Act.
- Count 8: That sometime in May
2012 she allegedly took possession of the sum of
N928million which was the proceeds of corruption, contrary to and
punishable under the same provisions of the MLP Act, as amended, as
the previous charges.
- Count 9: That sometime in May
2012, she allegedly acquired certain landed properties in
Port Harcourt, Rivers state with the sum of N928million which fund
was the proceeds of corruption, contrary to and punishable under
the same provisions of the MLP Act, as amended.
- Count 10: That sometime January
2011, she took possession of the sum of N805million,
allegedly the proceeds of corruption, contrary to and punishable
under the same provisions of the MLP Act, as amended.
- Count 11: That sometime in May
2012 she acquired certain landed properties in Ikoyi,
Lagos, through proxies, valued at N805million.
- Count 12: That, sometime between
January 2011 and December 2011, she took
possession of the sum of US$2.2million, allegedly the proceeds of
corruption, contrary to and punishable under the same provisions of
the MLP Act.
- Count 13: That, sometime between
January, 2011 and December, 2011, she acquired a
certain landed property in Old Government Reservation Area, Port
Harcourt, through proxies, with the sum of US$2.2million which was
allegedly the proceeds of corruption contrary to and punishable
under the same provisions of Sections 15(2)(d) and 15(3),
respectively, of the MLP Act, as amended.
What About the Law?
Section 15(2)(d) of the Money Laundering Act,
as amended, which the former Minister is charged with contravening,
provides as follows:
“Any person or body corporate, in or outside Nigeria, who
directly or indirectly acquires, uses, retains or takes possession
or control of any fund or property (which he/it) (knows)
or reasonably ought to have known that such fund or property is
or forms part of the proceeds of an unlawful act, commits an
offence of money laundering under this Act”
Section 15(3) provides that the punishment for
contravening the provisions of Section 15(2)(d) of the
Act is imprisonment for not less than seven years, but not
more than fourteen years.
Analysis
It can be seen that, with the exception of the 3rd
Count, all the other twelve Counts in the indictment accuse Mrs.
Madueke of committing the acts which allegedly constitute
violations of the MLP Act between January 2011 and
June 2012. The sole exceptions are the acts alleged in Count 3,
which purportedly took place in September 2013. The legal
implication of this will presently be explained.
Legal Status of the Charges
It is not only in movies that – as thespians say – timing is
everything. It is even more so in relation to criminal indictments.
In other words, the date when an offence was allegedly committed is
crucial in determining the guilt or otherwise of the alleged
culprit, having regard to the provisions of Section 36(8)
of the 1999 Constitution, which stipulate, inter
alia, that: “No person shall be held to be guilty of a
criminal offence on account of any act or omission that did not, at
the time it took place, constitute such an offence”.
In the context of the charges against Mrs. Madueke, at the time
she allegedly committed the acts alleged in all but the third count
(between January, 2011 and June, 2012), the provisions of
Section 15(2)(d) of the MLP Act which she
allegedly contravened did not exist; they were not part of the
extant MLP Act, 2011 that was in force at that
time; rather, they were inserted in the amendment thereto, the
Money Laundering (Prohibition) (Amendment) Act,
2012, vide Section 9 thereof, which took
effect on the 21st day of December,
2012.
CBN’s GSI Guidelines and Chronic Bank
Debtors
The circular recently issued by the Central Bank of Nigeria
(CBN) permitting banks to set off the credit balances of customers
against any debts owed by such customers with other banks, seems –
on the face of it – to be long over-due, given its glaring benefits
as a solution to the pervasive incidence of non-performing bank
loans.
However, it is worthwhile to see if it stands up to legal
scrutiny, given that the CBN introduced it purportedly pursuant to
its mandate in Section 2(d) of the CBN Act, 2007,
“to promote a sound financial system” in the country.
The Guidelines stipulate that the Global Standing Instructions
shall be used as a last resort by a creditor-bank – without
recourse to the Borrower – to recover past due obligations, from
the latter, through a direct set-off from the Borrower’s deposits
or investments held in his qualifying accounts with participating
banks.
In order to activate it, customers will be required to submit
certain information (their BVN, the value of the full repayment
amount, the duration of the facility and the repayment account). In
the event of a loan default, the GSI is triggered by the
Creditor-bank activating the mandate, specifying the amount to be
recovered.
Critique
I believe that the initiative overlooks the implications of the
legal relationship between a bank and its customer, which is
essentially contractual. Having regard to the GSI, its legal
background viv-a-vis all the parties involved, in my view,
is the separate contractual relationship which exists between each
bank (the lending bank and the setting-off bank) and the customer,
inter se .
It is trite law that only parties to a contract are bound by it
and no one may enforce it except the parties themselves – even if
the contract was made for the benefit of a third party. This means,
in this context, that any undertaking which a customer gives to a
bank to set off any debt due from him to that bank against any
money which he may have in another bank, is not legally enforceable
against the second bank – unless that bank was a party to the
undertaking.
The apparent answer to this might be that the debtor is estopped
by his undertaking from resisting the set-off. However – just like
contracts – estoppel also applies only to parties or their privies.
I believe that this excludes the second bank, because it is not the
privy of the first bank, either in law or in estate – the only two
(out of the three) categories of privies recognized by law for the
application of the doctrine, which might be applicable in the
circumstances.
I believe that the foregoing raises the question of the legal
status of CBN’s said policy/directive: does it have the force of
law? Can it be justified under any provision of the CBN
Act and/or any other law? Can it displace or override the
contractual relationship between a customer and a bank?
Written By Abubakar D. Sani, Esq.