AMCON LAWS AND COVID-19: THE CALCULATION OF TIME IN THE CORONA VIRUS ERA
– U. S. Odigbo
INTRODUCTION
Asset Management Corporation of Nigeria (AMCON) was established on the 19th July 2010, when the President of the Federal Republic of Nigeria signed the AMCON Act into Law. AMCON was created to be a key stabilizing and re-vitalizing tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy.[1] As a result of global financial crisis and domestic events, the federal government of Nigeria through the operation of Central Bank of Nigeria conceptualized the idea for the establishment of a body that will prevent the looming financial crisis in the country.
The pandemic popularly known as COVID-19 has affected economic growth of the whole world by putting a sudden stop to regular day-to-day activities in every sector. The rapid outbreak of the COVID-19 presents an alarming health crisis that the world is grappling with. In addition to the human impact, there is also significant economic, business and commercial impact being felt globally.[2] Thus, it is necessary to analyze the effect of the standstill caused by the Virus vis-à-vis the provisions and powers provided by the AMCON Act. That is the intent of this paper.
1.0 SALIENT PROVISIONS OF THE AMCON LAWS
1.1 AMCON Act (as amended), 2019
Section 42(2 & 3) provides thus:
“(2) An action shall not be brought or commenced against the Corporation until after the expiration of 90 days notice in writing to the Corporation giving the details of the alleged wrong, date and remedy sought.
(3) If after the expiration of 90 days notice stated in subsection (2) of this section, the Corporation has not responded, the party concerned may issue a writ or other originating process against the Corporation…..”
The import of this provision is a requirement of a 90 day notice to be given to the Corporation before the issuance of originating processes. The 90 days begin to run from the date the written notice is delivered to the Corporation.
Section 51, AMCON Act[3] provides thus:
“Where a debtor fails to comply in full within 90 days with a written demand notice issued by the Corporation requiring the debtor to pay a liquidated sum to the Corporation which the Corporation certifies on the face of the demand notice as being owed by the debtor to the Corporation in connection with an eligible bank asset acquired by the Corporation made by way of originating motion make a receiving order against the debtor……”
This provision means that debtors, after receiving a certified written demand notice to pay a liquidated sum, must comply with said notice within 90 days of receipt otherwise, the debtor shall be declared bankrupt.
Section 52, AMCON Act provides thus:
“Where the debtor that is a body corporate fails to comply in full, within 30 days, with a written demand notice issued by the Corporation requiring the body corporate debtor to pay a liquidated sum to the Corporation which the Corporation certifies on the face of the demand notice as being owed by the body corporate debtor to the Corporation in conection with an eligible bank asset acquired by the Corporation, the court shall , on the application of the Corporation made by way of Originating motion, make a winding-up order against the body corporate debtor…..”
This provision is interpreted to mean that a body corporate debtor, within 30 days of receipt of a certified demand notice from the Corporation, shall pay the demanded liquidated sum otherwise, a winding up order shall be made by the Court on application from the Corporation.
Section 53(3), AMCON Act provides thus:
“Each Court specially designated under subsection (1) shall hear and determine within six months in the case of existing actions, from the date of the coming into effect of this section and in the cased of new actions, within six months from the date of filing of such new action.”
Section 53(5), AMCON Act provides thus:
“The Court of Appeal shall hear and determine all appeals emanating from the courts specifically designated under subsection (1) on an accelerated basis within 60 days and in priority to all other appeals….”
Section 53(6) provides thus:
“The Supreme Court shall hear and determine all appeals emanating from the Court of Appeal in relation to …….within 60 days and in priority to all other appeals…”
1.2 FEDERAL HIGH COURT AMCON Proceedings Rules, 2018
Order 3 Rule 8 of the AMCON Rules provides that an AMCON claim form shall be valid in the first instance for one year from the date of issue. The judge may upon application order a single renewal for a period not exceeding six months. An application for renewal is to be brought before the expiration of the claim form.
Order 3 Rule 11 of the AMCON Rules is to the effect that AMCON originating processes shall be served on the other party within 7 days of its filing, default of which will attract a penalty as prescribed in the schedule to the AMCON Rules. A defendant is entitled to 5 days to reply if any.
Order 3 Rule 13 of AMCON Rules imposes a fine of N5,000 for each day of default in filing memorandum of appearance after 5 days allowed in Order 3 Rule 11(3) of the Rules.
Order 11 rule 1 of the AMCON Rules provides that the court shall, in appropriate cases, grant not more than 21 days to parties within which to explore possibilities of settlement of the dispute.
2.0 THE EFFECT OF COVID-19 ON THE PRACTICABILITY OF THESE PROVISIONS
Force Majeure is defined as an unexpected event such as a war, crime, or an earthquake which prevents someone from doing something that is written in a legal document.[4]
The term ‘force majeure’ has been defined in Black’s Law Dictionary, as ‘an event or effect that can be neither anticipated nor controlled. It is a provision allocating the risk of loss if performance becomes impossible or impracticable, especially as a result of an event that the parties could not have anticipated or controlled.[5]
In the case of Diamond Bank Ltd v. Ugochukwu[6] the Court held per Rhodes-Vivour, JCA, (as he then was) that for force majeure to occur, there must be an event which significantly changes the nature of the rights of the parties that it would be unjust to expect the parties to perform those rights[7].
The term “act of God” has endured from ancient law and is said to “comprehend all misfortunes and accidents arising from inevitable necessity which human prudence could not foresee or prevent.”[8] An Act of god is an accident or event that cannot be prevented by ordinary human foresight. The occurrence should normally be a natural one, like flood or earthquake. It exempts a party from strict liability in common law and, by definition, from negligence.
These definitions have the following things in common: lack of possible human foresight, natural occurrence, exemption from liability. From these, it is clear that the pandemic falls squarely under the purview of a force majeure/Act of god. The question arises: what is the effect of this occurrence on legal proceedings and time requirements of the law?
There are no authorities guarding the effects of Force Majeure on statutory limitations and obligations. However, from the meaning and nature of force majeure and its effect on contractual obligations, particularly the effect of the Covid-19 pandemic on all the sectors of the world economy, it is safe to conclude that the Virus will serve to excuse fulfilment of obligations during the periods of lockdown.
The outbreak of COVID-19 has caused the Nigerian legal system to pause significantly. Court sittings have been reduced to accommodate emergency cases and a summary court to hear matters related to offenders of the lockdown orders. This has affected all the provisions of different laws specifying time frames within acts are to be done.
The AMCON laws make several provisions as regards time specifications for mandated acts. These requirements do not presuppose the occurrence of a global pandemic like Corona Virus. Thus, there is no express provision excusing debtors from their obligations. However, drawing from the applications of the principles of Force Majeure in contractual obligations, it is clear that the time constraints may not be practicable.
It is impracticable to expect that provisions with time constraints will have continued to read during the time of the lockdown. For example, where the law prescribes 30 days for an action, it may be impossible to complete said act considering that judicial staff were on hiatus for a period exceeding 30 days thus eliminating the possibility of completing the act. Several sectors of the Nigerian economy have come to a standstill and most corporate organizations in the major cities have had to close down. It will be safe to infer that the application of these time-constraining provisions will pause. These facts create a lacuna which must be fixed to encourage a seamless transition into the COVID-19 era.
It is in light of this that several Courts across Nigeria in the affected states have released practice directions specifying that the period of the lockdown be exempted in computing time for purposes of calculation of time.[9] This exemption is quite necessary being that this eliminates the confusion and chaos that would have erupted where the legal system resumed without some direction as to how to regard the period of lockdown.
Perhaps, the provisions relating to the period of the judicial holiday would have been imported to cure the lacuna thereby applying to mean that the period of lockdown be regarded as a period of holiday which is not computed for purposes of calculating time. However, it is a much preferable solution that the Practice Directions have cured the ambiguity.
CONCLUSION
It is a safe conclusion that the principle of Force Majeure has the same effect on statutory obligations as it does on contractual obligations. Specifically, the Covid-19 pandemic, being that it put a pause on the feasibility of meeting contractual obligations, serves to exempt parties from their obligations during the period of lockdown.
The Practice Directions released by leaders of the Judiciary in affected states mostly exempt the period of lockdown from computation in cases of calculating time. This means that where a statute provides a time frame during which an act must be executed, the period of this lockdown will not be calculated. Thus, the same principle that applies during the Courts’ annual vacation will apply here.
The uncertainty that has risen from this pandemic can be avoided for AMCON matters. The silence of the AMCON legislations on acts of god has left them at the mercy of general court rules and practice directions. This can be cured by the insertion of a Force Majeure and unforeseeable circumstances clause in the AMCON Act and AMCON Practice Directions. This clause should cater to the status of AMCON cases in the event of things like pandemics, natural disasters or other such circumstances. A provision that AMCON cases be considered an emergency and given the highest possible priority in an event where only emergency cases are being entertained should also be included.
Many AMCON cases are time conscious and should be treated with the utmost care. An insertion of these clauses will further emphasize the importance of concluding AMCON cases in good time and will cement the assurance that AMCON cases will proceed despite occurrences such as the pandemic.
[1]About us; available at https://amcon.com.ng/about-us.php accessed on 1st of May, 2020
[2] The KPMG Business Impact Series; available at https://home.kpmg/ng/en/home/insights/2020/04/covid-19–a-business-impact-series.html accessed on 1st May, 2020
[3] Asset Management Corporation of Nigeria (Amendment No. 2) act, 2019
[4]Meaning of Force Majeure; available at https://dictionary.cambridge.org/dictionary/english/force-majeure accessed on 2nd May, 2020
[5] Blacks Law Dictionary
[6] (2008) 1 NWLR (Pt. 1067)
[7] Also see the Case of Globe Spinning Mills Nigeria Plc V. Reliance Textile Industries Limited (2017) LPELR-41433(CA)
[8] COVID-19 Outbreak- An act of god?; available at https://www.alston.com/en/insights/publications/2020/03/is-the-covid-19-outbreak-an-act-of-god/ accessed on 4th May, 2020
[9] High Court of the Federal Capital Territory, Abuja Practice Directions 2020; The 2020 Practice Direction of the High Court of Lagos.
