An Analysis of the Rights And Privileges Of Foreign Diplomats and Foreigners Under Nigerian Law…

Ibrahim Mohammed Majidadi is a Senior Associate at Path Solicitors LLP and also holds a Masters Degree in International Affairs and Diplomacy.

INTRODUCTION

The Black’s Law Dictionary 11^th Edition by Bryan A. Garner defined a Diplomat as: “someone who officially represents a government in a foreign country; specific., a representative of one sovereign state at the capital or court of another.”

A Diplomat is someone who is sent by his home country or goes to a foreign country on a temporary basis. They include non career diplomats who go for conferences or a staff of an international Organisation [which countries constitute the membership]. Equally, the domestic and official staff of diplomats are covered by most privileges accorded diplomats they are attached to and treated as diplomats.

While a foreigner in simple terms is someone who is not a citizen of the country he is visiting, working or residing at the moment. 

While both diplomats and foreigners [other than diplomats] are not Nigerian citizens, they enjoy a different set of rights under the law, and have limitations to the said rights.

The intent of this article is to discuss the rights and privileges that a diplomat and Foreigner [Expatriates, foreigners married to Nigerians etc] enjoy and the limitation to those benefits, duties and responsibilities assigned to them. 

RIGHT AND PRIVILEGES OF A DIPLOMAT UNDER THE [DIPA], 2004

In Nigeria, the law that regulates diplomatic rights and privileges is The Diplomatic Immunities and Privileges Act Cap D9 Vol 5 LFN 2004. [herein referred to [DIPA] which was judicially corroborated and held as such by the supreme court in the case of A.R.C. V Fantaye [1986] 3 NWLR [part 32] 811. which is the locus classicus in Diplomatic rights and immunities.The brief facts of the case is that the appellant is a corporation carrying on re-insurance business in Nigeria while the respondent is a civil engineering company incorporated in Nigeria. By a written contract between the parties, the respondent agreed with the appellant to construct the appellant’s head office building at Victoria Island, Lagos for a tentative sum of US $6,234,989.66. One of the clauses in the agreement provides that the parties agreed to subject themselves to the jurisdiction of the High Court of Lagos in the resolution of any dispute arising from the contract. 

the case has since then laid and explained certain principles enshrined in the DIPA.

DIPA confers diplomatic immunities and privileges to natural and artificial persons under the law. The natural persons here are the people occupying diplomatic positions while artificial persons are International Organisations whose members are countries and as such the organisations become clothed with diplomatic immunities.

For clarity I will categorise the Immunities and privileges vis-à-vis the beneficiaries provided for under the DIPA as captured in the act:

1. Immunities and privileges of foreign envoys, consular officers Chief representative of a commonwealth country [and their family members, domestic and official staff [sections 1-10 of the DIPA]
2. Immunities and privileges of international organizations [Sections 11-16 DIPA]
3. Persons conferred with Consular Immunity.
4. International Organisations[UN and related agencies, AU, EU etc]

The rights, privileges and protections the DIPA provides are:

1. Immunity against suit and legal process: this immunity protects diplomats, their official and domestic staff and the family members of the diplomats and their staff from any legal action which may be instituted against them in any Nigerian court of law and any other legal issues or process against them. This was given life in the case of  Noah V British High Commissioner suit No. S.C. 79/1980;(1980) 12 N.S.C.C 265 at 266 where Pr Fatai CJN held thus “it is my view…….that such an action against a foreign envoy in Nigeria shall be void”.  in that case an action against the British High Commissioner in Nigeria was brought before the supreme court, the court held such as null and void and dismissed it.
2. Inviolability of residence or office and archives: this prohibits the residence and office and documents and luggage of diplomats from any enforcement action, search and surveillance etc by customs, immigration, police or any law enforcement and also prohibits searching their baggage at airport or sea or any channel of entry or exit from Nigeria.
3. Exemption from direct taxes, duty, rate, levy, stamp duty and other charges: Diplomats and persons entitled to diplomatic protections are exempted from taxes on official items imported or exported and other direct taxes.
4. Body corporate status
5. Exemption of duty chargeable on estate upon death
6. Exemption of instrument or document made for or relating to the appointment of an executor or administrator or to the administration or distribution of estate from stamp duty. 
7. Exemption of goods from any duty chargeable under the law relating to customs and excise.
8. immunity from personal arrest or detention while exercising functions during journey to and from places of meeting.
9. Immunity from seizure of personal baggage and inviolability of all papers and documents while exercising functions.
10. Immunity from legal process of every kind in respect of words spoken or written and all acts done by representatives of Organizations conferred with immunity in their capacity as such or in exercise of their functions.
11. Another distinguishing rights of a diplomat which differentiate them from foreigners is that a diplomat can not be denied entry into the receiving country  or hindered by any immigartion law.

The above rights and immunities captured in the DIPA are a replica of the Vienna Convention on Diplomatic Relations 1961 which Nigeria has signed and ratified and as such any Nigeria Diplomat on foreign diplomatic missions abroad is entitled to same rights and immunities.

Exceptions To Diplomatic Immunities And Privileges

In as much as Diplomats are entitled to the aforementioned privileges, the privileges have limits and won’t apply where:

1. It is waived as allowed for under sections 2, 5[2] and 7 of the DIPA:

1. a foreign envoy, foreign consular officer or chief representative of a commonwealth country with the consent of the Government of his/her country can waive all protections provided by the DIPA, this was also re-echoed by Muhammad JCA in the case of Oluwalogbon & ors vs Government of United Kingdom & anor [2005] LPELR 11319[CA]
2. Where a foreign envoy, foreign consular officer or chief representative of a commonwealth country waives immunity or inviolability conferred on a member of his official or domestic staff or on a member of his family or of the family of a member of his official staff.

2. Section 10 DIPA excludes Nigerian citizens who are official or domestic staff of a foreign envoy, foreign consular officer or chief representative of a commonwealth country from enjoying any protection conferred under DIPA.
3. Furthermore, Article 32 of the Vienna Convention on Diplomatic Relations which Nigeria is a party to and has ratified, allows for a country sending a Diplomat to waive any rights and or immunity he is entitled to under the convention or the laws of the receiving country.

It is worthy of note that where a waiver is alleged, it must be expressed and a certificate to that effect will serve as conclusive evidence to that effect, this was the position as held by Uthman Mohammed J.C.A in the case of A.R.C V Fantaye supra.

Rights And Privileges Of Foreigners In Nigeria

A foreigner or a non-citizen is someone who is not a citizen of Nigeria. Foreigners here include:

1. Expatriates and Migrants: these are foreign workers in Nigeria either in Government employ, private entities, Multi -National Organisations, Int’l Orgs. [these does not include Diplomats]
2. Non-Nigerians married to Nigerians and non-Nigerian children of Nigerians.
3.  Tourists [those whose sole purpose of being in Nigeria is for holiday and vacation reasons] 
4. Foreign students studying in Nigerian Schools [with the exception of students who are family members of Diplomats in which they will be covered by the Diplomatic rights and immunities].
5. Asylum seekers and Evacuee [those on exile]
6. Refugees and Migrants
7. Aliens and undocumented persons: these are foreigners in Nigeria illegally and as such are subject to deportation unless they are running from war, persecution to which by international Law, Nigeria is liable to consider them.

For the record Non-Nigeria Diplomats are foreigners but the laws applicable to them are different from the above-named foreigners and we have discussed that above.

Generally, foreigners are entitled to certain rights in Nigeria but these rights can vary depending on the category a foreigner falls into, for instance aside the general rights to which all are entitled to, Diplomats can not conduct business or run business except the customary buying of necessities and the usual diplomatic business to which they were sent to Nigeria for.

General Rights And Benefits Of Foreigners

1. Right to life: All Foreigners just like Nigerians alike are entitled to Right to Life as guaranteed under the 1999 Nigeria constitution.
2. Protection against arbitrary or unlawful interference with privacy, family, home or correspondence 
3. Right to seek redress in Nigerian courts and all rights connected therein.
4. They can marry anyone of their choice of an opposite gender and start a family or bring their families from abroad [same sex marriage not applicable as it is a crime in Nigeria and unless the foreigners are diplomats covered by Diplomatic immunities if not so the same sex couple even if they have been married in their country prior to coming to Nigeria ,their marriage will be a crime and they will not be recognised as a couple under Nigeria Law and any same sex relationship in Nigeria will be prosecuted]
5. They have the Rights of thought, opinion and conscience and to practice a religion of their choice.
6. They have the Right to transfer money/capital abroad subject to certain Nigerian financial laws and regulations.
7. The Right to own and hold property subject to approval of the land use act and other legislations.
8. The Right to retain their Language, culture and tradition.

Furthermore, so long as foreigners in Nigeria do not interfere with the National security and stability, public safety, public health or morals or the rights and freedoms of others, they are entitled to and granted:

9. The right to leave Nigeria when they wish.
10. The right to freedom of expression and peaceful assembly
11. Freedom of movement and right to choose place of residence within the shores of Nigeria.
12. Right to work safe, decent and healthy working conditions and all labour rights due to foreigners subject to expat quota requirements.
13. Right to health care, social services, education and social security. 

Also, especially as it relates to Refugees, those on exile and Asylum seekers, they are entitled to;

14. Protection from torture or cruel, inhuman or degrading punishment
15. Protection against arbitrary or unlawful expulsion from Nigeria
16. Freedom from compulsory participation in the National Youth Service corps scheme [NYSC] or military enlistment.
17. Protection from being arbitrarily deprived of lawful acquired assets.
18. The right to defend oneself by court action and other legal means from expulsion except where compelling reasons of national security demands otherwise.
19. Protection from being subjected to medical or scientific experimentation without the foreigner’s consent.
20. The foreigner’s right to communicate to and access his/her consulate or diplomatic mission in Nigeria.

While foreigner’s resident in Nigeria for business purposes or other reasons have the aforementioned rights, they also have limitations and what they are not entitled to. Chiefly among limitations are:

1. They are not eligible to participate in Elections as it relates to voting or contesting for public office or forming political parties [they don’t have political rights].
2. Foreigners are barred from holding civil service offices or judicial offices.
3. Foreigners can only open companies subject to provisions of the Companies and Allied matters act and other regulatory provisions
4. Foreign Tourists.
5. Aliens/undocumented persons cannot work or move freely.
6. Children of Nigerians who are not Nigerians are not entitled to the free education scheme of the government, or the National Health Insurance
7. Foreign spouse of a Nigerian is not entitled to the free education scheme of the government, or the National Health Insurance
8. Requires a Visa each time they intend to visit Nigeria and not entitled to the Nigeria Passport.
9. They can be denied entry into Nigeria by Imigration or the Ministry of Foreign Affairs as  provided for under the imigration act 1963 Vol 7 LFN 2004. this was equally discussed in Awolowo V Sarki & the AG Suit No. S.C. 99/1964; (1966) All N.L.R 171 at 175; (1966) 4 N.S.C.C 209 at 211.

REFERENCES

1. Awolowo V Sarki & the AG Suit No. S.C. 99/1964; (1966) All N.L.R 171 at 175; (1966) 4 N.S.C.C 209 at 211.
2. A.R.C. V Fantaye [1986] 3 NWLR [part 32] 811
3. Diplomatic and immunities privileges act Cap D9 Vol 5 LFN 2004
4.  imigration act 1963 Cap 11, Vol 7 LFN 2004
5. Oluwalogbon & ors vs Government of United Kingdom & anor [2005] LPELR 11319[CA]
6. Vienna Convention on Diplomatic Relations 1961
7.  Noah V British High Commissioner suit No. S.C. 79/1980;(1980) 12 N.S.C.C 265 at 266 

Power Of Area Council To Allocate Land In Federal Capital Territory Abuja

By Khalid Olalekan Abdulkareem

Introduction

Land has been recognized as a primary source of wealth, social status, and power. It is the basis for shelter, food, and economic activities. Access to land is governed through land tenure systems. Land tenure is the relationship, whether legally or customarily defined, among people, as individuals or groups, with respect to land. In Nigeria, the Land Use Act which was enacted in March, 1978 is presently Nigeria’s highest land administration instrument. The Act Vests all Land compromised in the territory of each State (except land vested in the Federal government or its agencies) solely in the Governor of the State, who would hold such Land in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals and to organisations for residential, agriculture, commercial and other purposes while similar powers with respect to non urban areas are conferred on Local Governments. The Act, by this, abolished the Freehold, that is, the Fee Simple Estate which was previously existing in the Southern Part of the country. Fee simple is a system of ownership of land which grants absolute ownership of land to the owner in perpetuity. The Land Use Act reduced all titles to land to rights of occupancy not exceeding Ninety-Nine (99) years. Therefore, all Freeholders became Lessees of their various state governments and the land will revert back after the expiration of 99 years. This work will focus on the allocation of land in FCT, Abuja and whether the Area Councils have power to allocate land in FCT.

Legal Framework On Land Administration In Nigeria Under The Land Use Act

The main law on land administration in Nigeria is the Land Use Act. The Land Use Act was enacted in 1978. The Act addresses four important issues arising from the former land tenure systems in Nigeria. These are lack of uniformity in the laws governing land-use and ownership in Nigeria; uncontrolled speculation in urban land; access to land rights by Nigerians on equal legal basis; and fragmentation of rural lands arising either from the application of traditional principles of inheritance and/or population growth or the consequent pressure on land. It approaches these issues by proffering three related strategies, namely, the vesting of proprietary rights in land in the State; the granting of usufructuary rights in land to individuals; and the use of an administrative system rather than market forces in the allocation of rights in land. The Land Use Act created a right of occupancy regime in place of the hitherto unrestricted property rights. It vests all lands within a state in the governor but created a two-level management structure; one at the level of the state governor(Urban Area) and the other at the local government level (Rural Area). It also recognized the dichotomy in the existing land rights, which birthed the concept of actual grant and deemed grant of rights of occupancy under the Act. Even though the enactment of Land Use Act with its novel provisions as highlighted above was commendable, it is not without its own shortcomings.

Land Administration In Nigeria

Going by the provisions of section 4 and the Second Schedule to the Constitution of the Federal Republic of Nigeria 1999 (as amended), which excludes land from the listed items in the schedule, land administration falls within the exclusive residual jurisdiction of the States of the federation. This position is further reinforced by the provisions of the Land Use Act, which vests powers to manage lands in the State governors. The Land Use Act, having vested all lands in the state in the governor, provides for three regulatory institutions to manage the administration of land in Nigeria: The National Council of States, the State governors, and the Local Governments. This article will examine the powers given to each of the institution as follows:

The National Council of State

The Land Use Act empowers the National Council of States under Section 46 (1) of the Act to “make regulations for the purpose of carrying into effect the provision of the Act, particularly with regard to the transfer by assignment or otherwise howsoever of any rights of occupancy, including the conditions applicable to the transfer of such rights to persons who are not Nigerians. The Council may also make regulations relating to the terms and conditions upon which special contracts may be made under section 8; the grant of certificates of occupancy under section 9; the grant of temporary rights of occupancy and the method of assessment of compensation for the purposes of section 29 of the Act. To further buttress the regulatory power of the NCS, the Act by virtue of section 46(2) vests regulatory powers in the National Council of States, a body that has no statutory or management powers over the subject matter. No parcel of land is vested in the National Council of States by the Act or by the Constitution.

The State Governor 

The Act vests all land in the territory of each State in the Federation in the governor of the State, in trust, to be administered for the use and common benefit of all Nigerians in accordance with the provisions of the Act. Under the provision of section 3 of the Act, the basis of the control and management of land by the governor or the local government is determined by the designation of land as urban area and confining the undesignated areas to the control of the local governments. The Land Use Act in section 2 empowers the governor to control and manage land within an urban area only, while the local government is empowered to administer land outside a designated urban area. It is important to note that, for the governor to control and manage land in the state, there must be a designated area called urban area clearly spelt out in a gazette. Without this designation, the governor has no area of control and management of land in the state, as all lands are presumed to be non-urban areas by the Act.

Land Use and Allocation Committee 

Section 2(2) of the Act mandates the establishment of the Land Use and Allocation Committee (LUAC) to help the governor in the management and administration of urban lands under his care. The functions of the LUAC are threefold. These are expressed in the Land Use Act as (i) Advising the State governor on any matter connected with the management of land in an urban area; (ii) Advising the State governor on any matter connected with the resettlement of persons affected by the revocation of rights of occupancy on the ground of overriding public interest; and (iii) Determining disputes as to the amount of compensation payable for improvements on land. The appointment, composition and the modus operandi of the committee is at the exclusive discretion of the governor. The Land Use and Allocation Committee shall be presided over by one of its members as may be designated by the governor and, subject to such directions as may be given in that regard by the governor, shall have power to regulate its proceedings. The governor is thus the unquestionable personage in the overall administration of land in the state.

Power to Grant Right of Occupancy 

The Land Use Act empowers the governor to grant statutory right of occupancy and no more. The governor can only issue a certificate of occupancy in respect of land rights preceding the promulgation of the Land Use Act. All other powers of the governor flowing from this power of grant are restricted to statutory right of occupancy so granted. The provision of section 5 of the Act is clear and unambiguous in this respect. It reads: It shall be lawful for the Governor in respect of land, whether or not in an urban area to-(a) grant statutory rights of occupancy to any person for all purposes; (b) to grant easements appurtenant to statutory rights of occupancy; (c) to demand rental for any such land granted to any person. Thus, the power to grant easements and demand and review rent by the governor is limited to the grant of statutory right of occupancy. The governor may, however, impose a penal rent for a breach of any covenant in a certificate of occupancy requiring the holder to develop or effect improvements on the land the subject of the certificate of occupancy and to revise such penal rent as provided in the Act. This latter power is exercisable irrespective of whether the land is covered by statutory right of occupancy or otherwise; the essential requirement here is that the land is covered by a certificate of occupancy. By virtue of section 5(1) (f) of the Act, the governor can only impose penal rent for breach of any condition express or implied, where the land is covered by statutory right of occupancy granted by the governor. The implication of the provision is that rights of occupancy not statutorily granted under section 5(1) are excluded from the application.

Allocation Of Land In Fct

The Supreme Court in the Case of ONA v. ATANDA, while considering whether area councils have power to allocate lands in FCT considered the provisions of Section 49(1)  of the Land Use Act, Section 1(3) FCT Act and section 297(2) of the Nigerian Constitution 1999 (As Amended).

Section 49(1) LUA provides that:

“Nothing in this Act shall affect any title to land whether developed or undeveloped held by the Federal Government or any agency of the Federal Government at the commencement of this Act and, accordingly, any such land shall continue to vest in the Federal Government or the agency concerned.’’

Section 1(3) also provides that:

‘’the area contained in the Capital Territory shall, as from the commencement of this Act, cease to be a portion of the States concerned and shall henceforth be governed and administered by or under the control of the Government of the Federation to the exclusion of any other person of authority whatsoever and the ownership of the lands comprised in the Federal Capital Territory shall likewise vest absolutely in the Government of the Federation. 

Furthermore, Section 297(2) of the Constitution of the Federal Republic of Nigeria, on its part provides it pointedly thus:- 

‘’The ownership of all lands comprised in the Federal Capital Territory shall vest in the Government of the Federal Republic of Nigeria.’’

The implication of the above cited authorities is that ownership of land in the FCT vest solely on the Federal Government. The question now is whether by virtue of these provisions, customary right of Occupancy has been abolished in FCT? The firm view is that customary right of occupancy has been abolished by the provisions cited above in Federal Capital Territory. A community reading of Section 297(2) of the Constitution, Section 49(1) and Section 1(3) does have far reaching effects about the ownership, control and management of land within the Federal Capital Territory. It is beyond doubt that complete dominion or title or for that matter, proprietary right over all lands that comprised the Federal Capital Territory has become completely that of the Federal Government independent of any other person or authority. The Federal Government has thus become not only clothed with possessory right over land within the Federal Capital Territory but assumed exclusive right over it as its owner, not just holding it in trust for the people as in the case of the State Governors or Local Governments wholly and solely, devoid of any qualification or exception. 

The Supreme Court while interpreting S.49(1) of the Land Use Act holds that it provides that the provisions of the Land Use Act shall not have any effect on any parcel of land the title of which is held by the Government of the Federation or any of its agencies. The title so held by the Government of the Federation or its agency applies to lands whether developed or undeveloped. Thus, land held by the Government of the Federation or any of its agencies prior to 29th of March, 1978 when the Land Use Act came into operation was not affected in any way by the provisions of the Act. Section 297(2) of the Constitution states in clearest terms that all land comprised in the Federal Capital Territory is owned by the Government of the Federation. Undoubtedly, nothing will affect the ownership of the land in the Federal Capital Territory that is vested in the Government of the Federation. The provisions of the Land Use Act therefore do not apply to the Federal capital Territory. 

Furthermore, Sections 1 and 2 of the Land Use Act, laid a good foundation as basis for the inclusion of Section 49(1) thereof. These sections read thus:- “1. Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation are hereby vested in the Governor of that State and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of this Act. 2(1) As from the commencement of this Act:- (a) All land in urban areas shall be under the control and management of the Governor of each State; and (b) All other land such subject to this Act, shall be under the control and management of the Local Government within the area of jurisdiction of which the land is situated.” In the two sections quoted above, nothing is said about vesting, control and management of land on the Government of the Federation. Evidently, the Act is meant to apply and have effect on lands held by the Governor of a State or as the case may be, the Local Government in trust for the use and common benefit of Nigerians. Indeed the citation of the Act makes it even clearer. It runs thus:- “An Act to vest all land comprised in the territory of each State (except land vested in the Federal Government or its agencies) solely in the Governor of the State, who would hold such land in trust for the people and would henceforth be responsible for allocation of land in all urban areas to individuals resident in the State and to organizations for residential, agricultural, commercial and other purposes while similar powers with respect to non-urban areas are conferred on Local Governments. It can be clearly seen that land vested in the Government of the Federation and that of its agencies are exempted from land matters provided for in the Act. Section 51(2) of the Land Use Act merely restated the obvious that the powers of a Governor under the Act shall be exercisable by the President in respect of the Federal Capital Territory. Also, in the case of Madu v. Madu, the Supreme Court noted that it is well settled that the ownership of the land comprised in the Federal Capital Territory, Abuja is absolutely vested in the Federal Government of Nigeria vide Ona v. Atenda (2000) 5 NWLR (Part 656) page 244 at page 267 paragraphs C – D. See also Section 297(1) & (2) of the Constitution of the Federal Republic of Nigeria, Section 236 of the Constitution of the Federal Republic of Nigeria, 1979 and Section 1(3) Federal Capital Territory, Act 1976. Section 18 of the Federal Capital Territory Act, Cap. 503 Laws of the Federation of Nigeria, 1990 vests power in the Minister for the FCT to grant statutory rights of occupancy over lands situate in the Federal Capital Territory to any person. By virtue of the provision of these laws, ownership of land within the FCT vests in the Federal Government of who through the Minister of FCT vest same in every Citizen upon application and not the Area Councils.

Conclusion

Conclusively, by virtue of S.297(2) of the Constitution, the Federal Capital Territory Act and the Land Use Act itself, all lands owned by the Government of the Federation or its agencies will not be subjected to the provisions of the said Land Use Act. Consequently, the question of customary right of occupancy does not arise in respect of lands that comprised the Federal Capital Territory.

References

1. Constitution of  The Federal Republic of Nigeria 1999 (As Amended
2. Land Use Act Cap L5  Vol 7 LFN 2004
3. Federal Capital Territory Act Chapter F6 Laws of the Federation of Nigeria 2004
4. Ona v. Atanda (2000) 5 NWLR Pt. 656 at 244,
5. Madu v. Madu (2008) LPELR-1806(SC)
6. The Land Use Act and Land Administration In 21st Century Nigeria: Need For Reforms Akintunde Otubu Afe Babalola University: J. Of Sust. Dev. Law & Policy Vol. 9: 1: 2018 Pg. 81

The Traditional In-house Counsel vs The Age of Technology, Online Forms and Outsourced Legal Services By John Demide Esq

Introduction

Most people would say that the experience displayed by a counsel engaged in conversation with a client, is the fulcrum of the brief being the basis upon which a firm secures a client . However, it goes much further than that. In the face of this pandemic, the legal profession and indeed other service-based industries have been thrown off the deep end into a culture shock and as such business processes have had to be reviewed and, in some cases, re-invented to accommodate the new realities we have been thrust into.

No doubt, long before now, the legal services industry has had a developing standoff with regards to the assimilation of technology into legal practice processes with the arguments being put forward as to what role technology can play in the advancement of law and its practice. It has had to fight its way into prominence and relevance beyond being a means to project thoughts (i.e. through power point presentations and word processing software), through the facsimile processes (i.e. telegram, fax and email transmissions) through to its products being subjected to stringent principles of interpretation to see to their admissibility in court as substantive forms of evidence (i.e. electronic receipts having being generated online following new modes of acknowledgement of payments and other similar documents). The Evidence Act 2011 opened up the flood gates to accommodate electronically generated evidence in many ways considering the fact that we have moved into an era where the electronics highway has come to define how commerce and everyday relationships are conducted. Section 86(4) for instance states that where a number of documents have all been made by one uniform process, as in the case of printing, lithography, photography, computer or other electronic or mechanical process, each shall be primary evidence of the contents of the rest…The list goes on and on. Technology cannot be dispensed with in the active performance of the legal practitioners daily duties.

The Role of Technology in the Evolution of Legal Practice

Through it all, technology has been the midwife of the practicing lawyer and the firm, nursing it from the narrow and treacherous terrain of client on-boarding to document generation through to storage, transmission and eventual archiving and retrieval to mention just a sliver of the options available.

The average Nigerian lawyer looks up to the notion of automating the on boarding process as a matter that requires an interpersonal engagement rather than it being outsourced to an intangible system or process. The practice of a small to medium styled boutique law firm that deals in a crossbreeding of practices has a process that is purely operating on a basic anomalous notion that most office processes do not need to be automated. This has set some practices in the face of this pandemic down a path of irrecoverable breakdown due to their lack of forward planning and innovations.

On the other hand, there are some forward-thinking climes that had foreseen the future of practice and begun to migrate from the traditional mode of operations to the practice mode of the future (i.e. virtual operations) and this was all made possible by the incorporation of technology and virtual-automation into the everyday processes of a firm and businesses alike.

The age of the automated Office and Online Legal Documents

The work of legal practitioners involves a high level of documentation and information processing, storage, and retrieval. The information intensiveness of a lawyer’s responsibility is such that tools and technologies that would speed up the documentation, management and information handling are not only important but professionally necessary. The value of accuracy, correctness, completeness, relevance and timeliness are characteristics of information which ICT systems do generate to meet lawyer’s information needs[1].

With the inset of various legal service software and the advent of the Search Engine Optimization (SEO) algorithms online. Indeed, the practice of law is poised for a new dawn and the Nigerian Lawyer is open to becoming a candidate for extinction level events of becoming obsolete. Thus, because of losing clientele to the new competition that have no physical form but can equally give a satisfactory level of service which hitherto could only be gotten from the four walls of a firm strictly speaking the 21^st Century lawyer must as of necessity hit the ground running.

The mainstreaming of technology into their processes if they seek to still remain relevant in the coming years is the way to go looking forward. A Case in view can be the Nigerian Corporate Affairs Commission. Only recently, the Commission had its act amended to introduce automated processes to declutter the commission and optimise their output/service delivery. This has led to the massive deployment of resources to upgrade its online incorporation process, which hitherto were done solely by the staff of the commission. Now, all an accredited agent (lawyer, accountant etc) or prospective customer needs to do is get online, create a profile and the doors of the commission and the customers’ wallet are open for business. Of course, this novel process for us is not bereft of its challenges, but those are expected whenever a new system is introduced for mass-access in Nigeria, but it does not mean failure.

This is a process that the traditional lawyer must take into consideration if they seek to set themselves aside from the pack. Knowledge and skill acquired from practicing the law is no longer enough in the current competing clime. The ability to deploy your knowledge and services swiftly, precisely and satisfactorily is only assured through the engine chosen (i.e. technology).

Age of Advanced Legal Resource/Advice Location Online

The argument as to what weight could be given to the level of information secured from the legal information being circulated over the internet because of an SEO query from an inquisitive individual has been put to a lot of definitions, analysis, and counter analysis. Some lawyers have said that the personal touch of a lawyer cannot be dispensed with when seeking to draft, advise or to instruct in the appropriate legal remedies available to a client seeking redress. This is sadly as far away from the truth as can be imagined.

Experience is being quickly replaced by precedents and analogies that can be readily secured at a click of a button and dedicated data streaming. The era of hardcopy precedents being within the exclusive clutches of lawyers and law firms has been demystified with the advent of the internet. Thus, to say that a form secured online based on a specific query put forward by a potential client would not yield a document capable of satisfying the required needs of a client, does not hold weight.

Azinge (2002) identified five key areas of IT relevance to lawyers. The main points are summarized below;

• Internet Access To Judicial Decisions: with basic IT facilities like a personal computer, a dial-up or wireless connectivity,  a lawyer can now access judicial decisions of the Supreme Court of Nigeria, and all the House of Lord Judgments. The same is applicable to the judgments of many United States Courts. Online legal databases like Lexis/Nexis and Westlaw are already a practical experience of legal professionals in developed countries.
• Electronic Communication: Digital technology provides the platform for lawyers to: transmit and receive messages from clients, colleagues and the court system; gain access to the internal know-how of the institutional memory of a law firm and provide access to information on specific subject matters.
• Documentation: this is a cardinal aspect of the legal institutions responsibilities. The legal process is undoubtedly documentation-intensive. Whether in drafting agreements for clients, or legislative drafting or litigations, preparing writs or even judges writing their judgments. Thus, asof necessity, every counsel needs to learn the ropes surrounding the generation and transmission of documents through computer consoles as the future is now in our palms as well as our systems.
• Litigation Support Service. Information technology is relevant to the lawyers’ management and control of the diverse documents which they have to master in order to advance and prepare their clients’ case. It relates to efficient use of IT systems for the efficient storage and speedy retrieval of such documentation.
• Collaborative Multi-tasking: IT system allows a lawyer to work on many documents simultaneously while at the same time downloading materials from the internet. He can copy and paste one document to another or from one section of document to another. Thus offering up more qualitative service to clients and cooperation between counsel, clients, courts and law investigation and enforcement institutions.
• Electronic Service of Processes: recently with the advent of the pandemic, the National Industrial Court issued fresh guidelines that could redefined the landscape of court proceedings, with the adoption of the submission of final written addresses on CDs for the purpose of digital viewing and quarantining processes to reduce the level of contact between judges and processes and to aid in curbing the spread of the vector. This innovation that has already been in use in our emails could come to be mainstreamed in the delivery of processes thus, eliminating the surrounding intricacies of physical delivery and arduous physical exertions.

The Nigerian Lawyer is open to so many resources out there on the internet clamouring to simplify the business of customers without them having to be bothered about the legalese surrounding for example a “simple contract”. These two-word keyed into a SEO will yield close to 1,000,000 results equipped with backing laws that guide their respective areas of application. If this does not signal the end of an era, this writer does not know what does.

Who is an In-house Lawyer?

The Black’s Law Dictionary[2], defines an In- house Lawyer as one or more Lawyers employed by a Company. Even though the wordings of the subject matter appear simple there is still difficulty in placing a definition on it. And to overcome the limitations associated with every definition, an in-house lawyer can be described as a lawyer employed as part of the internal employees of a corporate body, company and agency to perform legal duties. To say that every organization needs an in-house lawyer, is simply stating the obvious. The role of in-house lawyers appears to be underrated, even though they play a very important role in the proper functioning of the organisation which they belong to. In most cases, their functions are not restricted only to their professional duties.

The dynamics of business growth has continued to propel the need for in-house lawyers in corporate bodies and government agencies. As the business environment grows, so also is the need for such bodies to be proactive in their approaches to anticipating and solving likely legal problems.  However, in the face of the burgeoning change that faces the Legal service industry, if the In-house lawyer refuses to adapt to the change, he will be replaced by binary code.

Where do In-house Counsel stand?

In the current state of things, in-house counsel (i.e. lawyers employed within an organization to give legal advice and review documents) are duty bound to sharpen up their skills and look to ensure that they put in their uttermost best to ensure that their employers are never caught out in the sun wondering If they can do without the unit.

In-house counsel are duty bound to seek out appropriate knowledge and tools that enhance their relevance within the system. Ted Lazarus[3] Google’s Legal Director when asked what the most significant use of technology he has deployed in the course of doing the business of law at google said that the ability to work collaboratively on documents, presentations and spreadsheets using cloud-based Google applications has transformed the way we do our jobs. Teams of lawyers exchanging ideas in real time, both with each other and with other functions, thus ensuring that all points of view are heard and efficiency maximised.

Significantly, Kerry Phillip[4] equally said that at Vodafone, the adoption of contract lifecycle management technologies to speed up contracting and give access to the wealth of data contained in our contracts has allowed the business to begin the process and only brings lawyers into the fold when the contract is new or different. Thus, freeing up their lawyers to work on much more creative and higher value-add matters.

Indeed one of the policy statements passed by the Nigerian Bar Association at the 2019 Annual General Conference was targeted at the quest to enhance[5] the technical skills of the next generation of lawyers in the areas of digital communication, foundational technologies, enabling technologies and transformational technologies, with tutorials by real players in computer and data science as well as statistics.

The idea behind organizations engaging in-house Counsels is to help reduce the attendant legal risks associated with the policies and transactions of a company. Though, some of the duties of an in-house counsel are essentially what an average lawyer does daily, there are some specific duties which are peculiar to an in-house Lawyer, especially as provided by the Rules of Professional Conduct for Legal Practitioners in Nigeria. The pattern of in-house counsel’s function put him at a vantage position to mitigate potential losses and several legally related multidimensional threats to the organisation.

Outsourced Legal  Services

However, recently there has been a glaring push to outsource Soliciting processes usually done by in-house lawyers to foreign climes and much recently to virtual job sourcing sites. These are online sites where there is a pool of resources offered by people who do not necessarily belong to a firm, but provide their services through bids and allocated resources and they give equal service and in some situations higher quality services than what some in-house counsel provide.

This has thus set the pace for the alarm bells to ring. Some of these outsource sites are upwork, fiver to mention a few. These have been dismissed by lawyers as fads that will fizzle and die away. Not so a 2018 Freelancer Income survey released by American financial services company Payoneer shows that regardless of their own location, the freelancers surveyed serve clients from all over the world, many work with clients from more than one region. More than two-thirds of freelancers (68%) work for clients based in North America, and half of freelancers (51%) serve clients based in Europe. The Middle East and Africa are the smallest outsourcing markets[6] but are promising nonetheless. 

Conclusion

The Nigerian Lawyer has to own up to the emerging revolution happening in his backyard and embrace technology as a necessary partner in development. It is no longer a tool for typing, but it is much more than that, it is a tool that facilitates efficient service delivery and diversification.

Moreover, in the wake of the invasion of various courts by hoodlums, particularly in Lagos and Delta States during the wave of the #EndSARS protest, where several court processes, exhibits, and other vital documents were allegedly vandalized it calls for a deep reflection and a desperate need for evolution and development in the administration of justice system in Nigeria by the actors, principally counsel.

The In-house lawyer has to become as proficient in the art of technology as he has become in the art of the law for which he is known. Use it to sharpen his wit and put him/herself in a position of relevance, showing that code(i.e artificial intelligence) can never substitute the quick wit and intuition of the tangible and visible lawyer.

[1] https://digitalcommons.unl.edu/libphilprac/662/Information Communication Techonology (ICT) Use as a Predictor of Lawyers’ Productivity J.E. Owoeye, University of Lagos

[2] 8^th Edition

[3] https://www.legal500.com/gc-magazine/feature/new-tech-frontiers-and-the-in-house-counsel/

[4] Ibid

[5] https://nigerianbar.org.ng/sites/default/files/ /2020-05/ Policy Book of the 2019 ANNUAL GENERAL CONFERENCE OF THE NIGERIAN BAR ASSOCIATION

[6] https://techpoint.africa/2019/07/08/nigerian-freelancer-marketplaces/

[7] image credits from www.forbes.com – top 7 digital transformation trends in legal for 2019

CONSTITUTIONALITY OF APPLICATION OF PENSION REFORM ACT 2014 TO STATES PUBLIC SERVICE AND PRIVATE SECTOR EMPLOYMENT – BY GERALD AJOKU ESQ.

INTRODUCTION

The Pension Reform Act came into force on July 1, 2014. In other words, the Act    repealed the Pension Reform Act No. 2 of 2004. The objective of the Act is to create a more effective pension administration system in Nigeria, to boost general participation in the Pension Scheme and to legally enforce worker “welfarism”. The 2004 Act was made applicable to employees in the Federal Public Service as well as those in the private sector organisation that have at least five [5] employees. See Section 1 [2] of the 2004 Act, but not to employees in the public service of the states.

This write-up will examine the legitimacy of the extension of the operation of the Pension Reform Act, 2014 to the public service of states and private sector employments against the backdrop of the constitutional provisions conferring the National Assembly with the power to make laws with respects to Pensions. The Act, as will be referred in this write up shall mean the Pension Reform Act, 2014.

PROVISIONS OF THE CONSTITUTION

The extension of the operation of the Pension Reform Act to private sector employment generated controversy as to whether or not the National Assembly transgressed the bound of its legislative authority. The 2014 Act has gone even further to extend its tentacles to employees in the Public Service of states. The question that arises from the foregoing is: from where does the National Assembly derived the power to enact laws regulating the pension right of employees in the public service  of the states  and private sector organisations?

The relevant constitutional provisions which empower the National Assembly to make legislations with regards to pension include the following:

Section 4[1] of the 1999 Constitution provides that:

“ The Legislative Powers of the Federal Republic of Nigeria shall be vested

In the National Assembly for the federation which shall consist of a Senate

And House of Representatives.’’ 

Section 4[2] of the Constitution provides: 

“the National Assembly shall have power to make laws for the peace, order

And good government of the Federation or any part thereof with respect to

To any matter included in the Exclusive Legislative List set out in Part 1 of 

Second Schedule to this constitution.”

Section 16 [1 & 2d] of the Constitution provide:

Section 16 [1], the state shall, within the context of the ideals and objectives for which provisions are made in this Constitution provides:

“suitable and adequate shelter, suitable and adequate food, 

reasonable national minimum living wage, old age care and pensions, 

and unemployment, sick benefits and welfare of the disabled are

provided for the citizens.”

Part 1 of the Second Schedule [Exclusive Legislative List] especially:

Item 44 provides for Pensions, gratuities and other like benefits payable out of the Consolidated Revenues Fund or any other public funds of the federation.

In the scheme of apportionment of legislative powers between the Federal Government and State Government under the constitution, both have the power to make laws with respect to the pension right of their respective employees. By the combined force of Section 4 [2] together with item 44 in the part 1 of the second schedule to the Constitution, the National Assembly has the exclusive power to enact laws concerning ‘’Pension’’ and Gratuities and other like benefits payable out of the Consolidated Revenue Fund. See section 80 [1] of the 1999 Constitution. This position is supported by the Supreme Court case of Central Bank of Nigeria Vs. Jacob Oladele Amao & Ors [2010] 16 NWLR [Pt 1219] P.271 the court held that:

“the Federal Government has the competence to make laws and regulations

governing the pension and other retirement benefit of employees of the

the appellant, being in the public service of the federation within the

meaning of section 318 [1] of the Constitution.”

On the other hand, the power to make laws with respect to Pensions of the employees in the Public Service of States, which are defrayable from the Consolidated Revenue Funds of the States falls within the residual legislative powers of the state by virtue of Section 4 [7a] of the 1999 Constitution which empowers the Houses of Assembly to make laws with respect to any matter not included in the Exclusive Legislative List. 

The provision of the Pension Reform Act ought not to have been applicable to employees of states. To be applicable to employees of the state, matters regarding pension and pension reforms ought to be in the concurrent list to be legislated by both the National and State Houses of Assemble. In Abdullahi Vs. Military Administration, Kaduna State [2009] 15 NWLR [Pt 1165] P. 417, the Supreme Court affirming the decision of the court of appeal held:

“that the [now repealed] Pension Act, Cap. 346, LFN, 1990 and Act No. 102 of 1979 being  Federal Statutes, applied only to civilian employees in the public service from which the appellant retired from”. 

In the exercise of their constitutional powers according to the 2011 Annual Report of the National Pension Commission [PENCOM], 18 out of 36 states had enacted laws  establishing the contributory scheme as at December 2011, while others are still in the process of doing so.

The Lagos State Pension Model was enacted in 2004 following the then enactment of the Pension Reform Act 2004 at the Federal level. A pension commission for the state was established and the contributory pension scheme took off fully in 2007. Lagos State government and it’s employees have an equal contribution ratio of 7.5% of basic salary, housing and transport allowances. This is however being reviewed by the State House of Assembly in the amendment of its pension reform law. Employees are to  align with the Federal Pension Reform Act 2014 of the State prior to the enactment of the State pension law where beneficiaries to pension bonds upon redemption were transferred into individual RSAs.

The Jigawa State Pension Model is recognised as the pioneer contributory defined benefits pension scheme model in the Nigerian pension landscape. It kicked off in 2011 after the Jigawa state government implemented reforms to its previous defined benefit pension model due to its huge pension deficits, the nonpayment of pensioners as well as multiple and fraudulent pensioner records. The contributory pension scheme in Jigawa has provided an opportunity for the State employees to key into their retirement future. The state government contributes 17% of employees’ basic salary into the employees retirement savings account while employees contribute 8% of their basic salary. It also has a gestation period of five years before employees can draw benefits from their contributions.

Note that even though a state can enact Pension Laws setting up contributory pension schemes for the employees of the state and its local government, the investment of pension fund assets held under such schemes has to comply with the provisions of Pension Reform Act and any regulation made by PENCOM.

TRANSITIONAL PROVISION TO PRIVATE AND PUBLIC CORPORATION

By the provision of Section 1 of the Act, provides for the establishment for any employment in the Federal Republic of Nigeria, a Contributory Pension Scheme (in this Act referred to as “the Scheme”) for payment of retirement benefits of employees to whom the Scheme applies under this Act. 

Section 2 of the Act states that the Scheme established under subsection (1) of this section shall apply to all employees in the Public Service of the Federation, the Federal Capital Territory, States, Local Governments and the Private Sector subject to the provisions of section 5 of this Act.

Section 50 of the Act gives private employees the power and allows all existing pension schemes in the private sector to continue as long as such schemes are fully funded and any shortfall made up within 90 days or as the Commission may prescribe. The Pension funds and assets must be separated from the company’s assets and kept with a Custodian. For defined contribution schemes, contributions in such schemes will be valued and credited to RSA accounts that will be opened for participating employees. In the case of defined benefit schemes, an actuarial valuation must be conducted every year to assess the adequacy of the assets. The Act also provides that licenced Closed PFAs may continue to exist and will be deemed to be PFAs.

The Scheme applies to employees in both the public and private sectors. Mandatory contribution is applicable to organisations in which there are 15 or more employees (previously 5 employees). This effectively reduces the number of employers and employees that are likely to benefit from the scheme. Given the low level of contributors under the Scheme, this change is counterproductive. Contributions are now to be based on ‘monthly emoluments’ being the total emolument as defined in the employee’s contract of employment provided it is not less than the total of the employee’s basic salary, housing and transport allowance. – Only employers with a minimum of 15 employees are required to contribute to the new Scheme. The Act provides that in the case of private organisations with less than 3 employees participation in the Scheme would be governed by guidelines issued by the National Pension Commission (PenCom). However, the Act is silent on the applicability of the Scheme to private organisations with more than 3 but less than 15 employees. Also what happens to employers with 5 to 14 employees regarding their past contributions under the old Act

By virtue of section 4[7] [a] of the 1999 Constitution, the power to enact laws regulating all private sector pension scheme as well as state and local government pension scheme falls under the residual powers of state legislature, as those categories of pensions are not mentioned in the exclusive or concurrent legislative list. See Abia State vs. AG of the Federation [2002] 6NWLR [Pt763] P. 264, AG of Lagos State vs. AG of the Federation [2003] 12 NWLR [Pt 833] P.1

Also, Section 3[1] of the Act state that: 

“there shall be established for any employment in the Federal Republic

Of Nigeria a contributory Pension Scheme for payment of retirement benefit

Of employees to whom the scheme applies.’’”

Section 3[2] of the Act provides for certain classes of persons to whom the contributory pension scheme applies, to wit: employees in the public service of the federation or federal capital territory and any private sector organisation in which there are 15 or more employees, see Section 2[2] of the Act. This class neither encompasses all citizens nor excludes non-citizens. Apart from this class of persons to whom the scheme  applies compulsorily, Section 4 [7] of the Act, however, affords some leeway for any person who is not ordinarily covered under section 3 of the Act.

CONCLUSION

Accordingly, it is my view that by extending the operation of Pension Reform Act to public service of the states and private sector employments, the respective States House of Assembly should ensure and take proactive steps to enact  Pension Laws to conform with the provisions of the Pension Reform Act 2014 . The pension law would govern and regulate the administration of the states pension scheme. This call is to avoid conflict with the Principal  pension Reform Act, 2014 enacted by the National Assembly. This position was further stated in Section 4 [5] of the 1999 Constitution as amended that:

“if any law enacted by the house of assembly of a state is

   is inconsistent with the law validly made by the Natiional

   Assembly, the law made by the National Assembly shall

   prevail, and that other law shall, to the inconsistency, be

   void.’’ 

2. Establish a Pension Bureau and develop a Transitional Framework 

3. Register eligible employees with the National Pensions Commission (PenCom) 4. Obtain employer codes for all its MDAs from PenCom 

5. Remit pension contributions and employee accrued retirement benefits rights if any to a PFA of employee choice. 

While the Act is generally a step in the right direction, some of the changes introduced appear not to have been well thought through and highly appreciated by stakeholders as well as employers of different organisations especially in extension of Pension Reform Act to Private and Public Service of the state as outlined in the provision of the Act and some of the changes appear to have been made at the last minute thereby creating some gaps, ambiguities which this write up does not extend to.

INCONSISTENCIES IN THE LAW ON INDIAN HEMP IN NIGERIA VIZ A VIS THE SUPREMACY OF THE CONSTITUTION – IBRAHIM MOHAMMED MAJIDADI ESQ

INTRODUCTION

The Indian Hemp Act was passed into law in 1966 to prosecute cases relating to Cannabis cultivation, use, importation, exportation, and sale of Indian Hemp (Genus cannabis). Under the Act, no specific security agency was vested with the responsibility of Prosecuting the offences therein, so the Police basically have powers in handling such matters. The Act vested jurisdiction for prosecuting the offences with the Magistrate and High court, and also prescribed punishments for those offences as opposed to the Nigeria 1999 Constitution[CFRN] and the National Drug Law Enforcement Agency [NDLEA] Act which confers Jurisdiction on the Federal High Court [FHC] and also Makes NDLEA the prosecutorial Agency for such offences respectively.

This article highlights the areas in the Indian Hemp Act which are in conflict with the Nigerian Constitution which is the Supreme Law of the Land and also goes contrary to the NDLEA act which both are latter enactments. 

THE INDIAN HEMP ACT, 1966 

The Indian Hemp Act makes the planting, cultivation, importation, exportation, smoking or unlawful possession of Indian hemp, possession of utensils for use in smoking Indian Hemp and use of premises for sales and smoking of Indian Hemp an offence in NIgeria. Section 1 of the Act defines Indian Hemp as “any plant or part of a plant of the ‘genus cannabis’

By virtue of section 8 of the Act, the Magistrate Court is empowered to try offences under sections 4-7 of  the Act. Section 8(1) provides:

“Every magistrate in any part of Nigeria shall, notwithstanding anything contained in any enactment, have jurisdiction for the summary trial of any offence under section 4 to 7 of this Act and may impose the punishment provided by this Act for such offence.”

The Act in Sections 2(2) and 3(2)  also confer on the High Court the  jurisdiction to try  offences under Sections 2 and 3 of the Act which relates to planting and cultivation, and unlawful importation or sale of Indian Hemp respectively.  Section 2[2] read thus:

“A person charged with an offence under this section shall be tried summarily by a single judge of the High Court within whose jurisdiction the offence was committed”

Section  3 of the act which criminalises Unlawful importation or sale of Indian Hemp under section 3 [2] provides thus;

“A person charged with an offence under this section shall be tried summarily by a single judge of the High Court within whose jurisdiction the offence was committed”

THE NATIONAL DRUG LAW ENFORCEMENT AGENCY (NDLEA) ACT

The NDLEA Act establishes the National Drug and Law Enforcement Agency whose role is to enforce laws against the cultivation, processing, sale, trafficking and use of hard drugs and to empower the agency to investigate persons suspected to have dealings in drugs, and other related matters.

Under the Act, drugs include cocaine, heroine, opium, opium poppy, cannabis plant, coca bush, LSD, narcotics and other psychotropic substances. By virtue of section 26 of the Act, it is the FHC that has jurisdiction to try offences under the Act.

SIMILARITIES IN THE PROVISIONS OF THE INDIAN HEMP ACT AND THE NDLEA ACT

1. Planting or cultivating Indian hemp (genus cannabis)- section 2 of the Indian Hemp Act has the same effect with the provisions of section 11[a] of the NDLEA Act which also criminalises planting of  similar drugs which Cannabis falls under as held in Ochala V F.R.N [2016] 17 NWLR 226 S.C
2. Unlawful importation or sale of Indian hemp: Section 3 of the Indian Hemp Act has the same effect in part with section 11 [a]of the NDLEA act as they both border on importation of Indian Hemp.
3. Exportation of Indian hemp: Section 4 of the Indian Hemp Act, prohibits the exportation of cannabis, an offence similar to what is contained in part under Section 11[b] of the NDLEA Act
4. Smoking or unlawful possession of Indian hemp: Section 5 of the Indian Hemp Act uses the word “smoking”,  whereas under the NDLEA Act the word ‘smoking ’ was not expressly used, however, it can also be construed to also have the same meaning as ‘úses’ (i.e. the implied usage) which is also used in the construction of section 11 [d] of the NDLEA Act. Thus a combined reading of the two sections highlighted above from the two Acts shows a duplication of contemplated elements of the offence envisaged.
5. Possession of utensils for use in smoking Indian hemp-Section 6 of the Indian Hemp Act criminalises possession of utensils used in smoking cannabis, even though no exact offence with same wordings exist under the NDLEA Act. However, Section 12 of the NDLEA Act contemplates the possibility of a suspect who volunteers their premises for the purpose of “… storing, concealing, processing or dealing…’   as being an offence liable to be prosecuted. This position in this writer’s humble opinion will give almost the same effect as section 6 of the Indian Hemp Act as Storing and concealing requires Utensils and infrastructure”.
6. Use of premises for sales, smoking, etc., of Indian hemp: Section 7 of the Indian Hemp Act criminalizes use of premises for smoking and sales etc of Indian Hemp which is also the same offence as the one in Section 12 of the NDLEA Act.
7. Forfeiture under section 12: This provides for the forfeiture of articles of a person convicted under the Act, this provision is similar to the provisions of section 27 of the NDLEA Act which also provides for forfeiture of asset, properties and instrumentalities of a convict to the Federal  Government of Nigeria.

FUNDAMENTAL INCONSISTENCIES OF THE INDIAN HEMP ACT WITH THE NIGERIAN CONSTITUTION

It is clear from the above analysis that the provisions of the Indian Hemp Act conflicts with the provisions of the NDLEA Act and the Constitution, all of which are in pari materia in the area of which one of the courts holds exclusive jurisdiction to try offences stated within the respective laws. 

Further conflict arises on the power to prosecute criminal matters relating to Infractions on possession, usage, export and sale of Cannabis and all related matters. Section 8(1) of the Indian Hemp Act confers jurisdiction on the Magistrate Court which contradicts the provisions of section 251 of the CFRN which further confers exclusive jurisdiction to try such offences and pronounce punishments on the Federal High Court. Section 251(1)(m) of the Constitution provides:

“251. Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any court in civil causes and matters-

(m) drugs and poisons”

Section 251 (3) of the Constitution further provides that the Federal High Court shall also have and exercise jurisdiction and powers in respect of criminal causes and matters in respect of which jurisdiction is conferred by subsection (1) of this section.

In agreement, Section 26 (1) and (2) of the NDLEA Act further provides for the powers of the FHC to try offences under the Act. 

“26(1) The Federal High Court shall have exclusive jurisdiction to try offenders under this Act.

(2)The Federal High Court shall have power to impose the penalties provided for in this Act’’

By virtue of Section 4 of the 1999 Nigerian Constitution, the National Assembly is empowered to make laws for the Federation of Nigeria. In view of this, the National Assembly passed the National Drug Law Enforcement Agency Act 1989 which established the National Drug Law Enforcement Agency in 1990 and vested in the agency among other things the sole power to prosecute illicit drug trafficking, use, sale, and possession. Despite its clear mandate, the Provisions of the Agency’s enabling act still co-exists with the provisions of the Indian Hemp Act, as the latter is still much alive under our laws and has not been repealed.

Fate of the Indian Hemp Act

The National Assembly in exercise of its Powers under section 251 [3] of the 1999 Constitution which vests upon the Federal High Court Exclusive jurisdiction in respect of Criminal matters relating to Drugs and poisons, has had this position  strengthened by the Supreme Court in the Case of Mohammed v F.R.N[2018] 13 [NWLR] 229 S.C where it said;

 “… the Constitution has made clear and copious provisions in allotting jurisdiction to the Federal High Court over Criminal Causes and matters touching on Indian Hemp. Thus the Federal High Court traces the Statutory paternity of its jurisdiction over Indian Hemp offences, allocated to it by section 26[1] of the National Drug Law Enforcement Agency Act to the Constitution.”

The Supreme Court in Ochala [Supra] held thus: 

“the Constitution of the Federal Republic of Nigeria 1999 contains items in the exclusive legislative list in which only the Federal Government of Nigeria can legislate. These include Drugs and poisons listed in item 21. The Magistrates Courts that are under the powers of the state Governments cannot exercise or assume jurisdiction over those subjects in the exclusive legislative list and so their jurisdiction would be limited to matters within the state government legislations”. 

It is evident from the foregoing that Magistrate Courts lack the jurisdictional power and mandate to try any offence that relates to illicit drugs either in its usage, sale, importation, possession, exportation or importation etc. 

While it is glaringly clear as the sun that the Indian Hemp Act goes against the spirit and letters of the 1999 Nigeria Constitution as amended and the NDLEA Act, it still has not been repealed from our laws, despite the 1999 CFRN and NDLEA Act being of a latter period of enactment. It is trite in the Nigerian legal system that the Constitution is supreme and any other laws that are inconsistent with its provisions is void. The supremacy of the Constitution is encapsulated in Section 1(1)&(3) of the CFRN 1999, as amended. Section 1 (1) provides:

“This Constitution is supreme and its provisions shall have binding force on all authorities and persons throughout the Federal Republic of Nigeria”

Section 1(3) of the CFRN renders null and void the provisions of any other laws that are inconsistent with the provisions of the Constitution. The subsection states thus;

“If any other law is inconsistent with the provisions of this constitution, this constitution shall prevail, and that other law shall, to the extent of the inconsistency, be void.”

The Nigerian Courts, in plethora of cases have amplified the supremacy of the Constitution as held in cases like Mohammed V F.R.N [Supra] where it was held that 

“The Constitution is the Grundnorm and fundamental law of the law. It is supreme and prevails over any other legislation enacted by the National Assembly or any state house of assembly. Section 1[3] of the constitution provides that if any other law is inconsistent with the provision of the constitution, the constitution shall prevail and that other law, to the extent of the inconsistency, shall be void.”  

Despite numerous pronouncements by our courts that Magistrate courts no longer have such jurisdiction to summarily try offences relating to selling, dealing in or with Indian hemp as held in cases like Okewu v F.R.N. [2012]9 [1305] 327  and  Ochala V F.R.N [2013] LPELR 21386, drug issues are still prosecuted in Magistrate and shariah Courts by Police and other state prosecutors. 

It is clear from the authorities cited that the constitution is supreme and any law that goes against the spirit and wordings of the CFRN is null and void to the extent of its inconsistency and based on that, the provisions of the Indian Hemp act are null and void..

CONCLUSION/RECOMMENDATIONS:

1. The National assembly should repeal the Indian Hemp Act as sections 2-8 of the Act is in conflict with the NDLEA ACT and section 251 of the 1999 CFRN. The aim is to ensure that there is a uniform law on drugs and other related matters and the same court to try the same in line with the spirit of the Constitution which is the supreme law of the land. Currently there are two laws that criminalise use, storing, planting, cultivating, importing, exporting and other Illegal matters related to Cannabis in Nigeria but these two Acts confer jurisdictions on three different Courts to try the same and similar offences and also  prescribes different punishments for the same offences. This may pose a jurisdictional problem and act as an obstacle to our Criminal justice System as it relates to prosecution of drug related cases.
2. Stakeholders in the administration of criminal justice should engage in advocacy and campaign to enlighten the populace and actors involved in the administration of criminal justice about the oddity of the Indian Hemp Act because it prescribed different punishments for the same offences and also confers jurisdiction on court as against the provisions of the Constitution.
3. Lawyers should endeavour to look out for this and raise this issue whenever they are appearing in inferior courts and they come across cases of this nature being tried and our Courts should make clear pronouncements on this issue to avoid and clear ambiguity.
4. The General Public especially non-Lawyers, who most of the time are victims of abuse and forum shopping by some prosecutors, should have it at the back of their minds that any offence that relates to Cannabis [Indian Hemp] locally known as Igbo, Wiwi, Weed etc, the proper court to try such is the Federal High Court as most times Lawyers are not in matters like this and Suspects tend to be convicted under the Indian Hemp Act.

Ibrahim M. Majidadi Esq. is a Senior Associate at Path Solicitors Abuja and also a Member of the Legal Advocacy and Response to Drugs Initiative [LARDI]

REFERENCES

1999 Nigerian Constitution as Amended 2011

Indian Hemp Act Cap c14 LFN 2004

National Drug Law Enforcement Agency Act CAP N30 LFN 2004

Okewu v F.R.N. [2012]9 [1305] 327

Mohammed v F.R.N [2018] 13 [NWLR] 229 S.C

Ochala V F.R.N [2016] 17 NWLR 226 S.C/ [2013] LPELR 21386

FINTECH: Law & Regulation in Nigeria by Omobolaji O. Oyeniran Esq.

INTRODUCTION

Financial Technology (abbreviated as “FinTech”) is a fast growing sector in the Nigeria economy and globally. Apart from the fact that the industry enjoys a seamless physical restriction in the global market, it also has high possibility of growth. For instance, according to a Nigerian Startup Funding Report for Q1 2020, Nigerian, Fintech Startups raised $55.37 million which amounted to 82.2 % of the total funding received in the startup space in Nigeria. Further example is the recent acquisition by a US-based payment giant, Stripe, of a 5-year-old-Nigerian payment startups, Paystack (a FinTech company) for a whooping sum of $200million.

In the light of this development, the writer chooses to give an overview of the laws regulating the financial technology (FinTech) industry in Nigeria. The writer commences the article with a gist of what FinTech is, then proceeds to the regulatory framework of FinTech in Nigeria, and further adumbrates the legal framework of FinTech in Nigeria. 

FINTECH

Financial technology (FinTech) is the technology and innovation that uses technology to improve activities in finance. The word “Fintech” is defined according to Oxford as “Computer programs and other technology used to support or enable banking and financial services”. According to Wikipedia, it defines “Fintech” as “Financial technology, also known as FinTech, is a line of business based on using software to provide financial services. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software.” 

When fintech emerged in the 21st Century, the term was initially applied to the technology employed at the back-end systems of established financial institutions. ​Since then, however, there has been a shift to more consumer-oriented services and therefore a more consumer-oriented definition. Fintech now includes different sectors and industries such as education, retail banking agriculture, fundraising and nonprofit, and investment management to name a few. Fintech also includes the development and use of crypto-currencies such as bitcoin, litecoin, ethereum and so on.

The industry is a fast growing one in Nigeria. It has business offerings in banking; alternative lending and digital credit; electronic payment; public revenue collection; investment and financial management; and foreign exchange and remittance transaction.

REGULATORY FRAMEWORK

There are several regulatory bodies that supervise the registration and activities of fintech companies in Nigeria. The body a fintech company approaches for approval is based on the nature of the business such fintech company seeks to offer. However, there are paramount regulatory bodies that supervise every fintech company in Nigeria. Adumbrated below are some of these regulatory bodies:

1. CENTRAL BANK OF NIGERIA (CBN): The CBN is the body that is primarily responsible for regulating financial services in Nigeria. It is also the body that administers the Banks and Other Financial Institutions Act 2020 (BOFIA) under which the CBN is mandated to issue licenses to banks and other financial institutions. Any Fintech companies offering financial services in Nigeria must obtain license from CBN to operate in the country.
2. CORPORATE AFFAIRS COMMISSION(CAC): CAC regulates the registration and incorporation of companies in Nigeria and the Commission administers the provisions of the Companies and Allied Matters Act, 2020. Fintech companies must be incorporated under the CAC to carry on business in Nigeria except where exemption has been obtained under section 54 of CAMA, 2020.
3. NIGERIAN COMMUNICATIONS COMMISSION (NCC): The NCC is empowered by the Nigeria Communication Act, 2003 to regulate the telecommunications industry in Nigeria. Fintech companies that intend to render services involving the use of mobile networks or mobile are to obtain requisite license from the NCC.
4. SECURITY AND EXCHANGE COMMISSION(SEC): The SEC is the securities and capital market regulator in Nigeria pursuant to the Investment and Securities Act (ISA), 2007. Fintech companies that desire to raise capital from the capital market must register their security with SEC and comply with the provisions of ISA.

LEGAL FRAMEWORK

Presently, there are no laws specifically tailored to the fintech sector. However, embedded in certain legislations are provisions that stipulate regulatory requirements as well as the permissible and prohibited activities of financial institutions in Nigeria. Highlighted below are some of these legislations. These legislations include:

1. THE BANK AND OTHER FINANCIAL INSTITUTION ACT (BOFIA) 2020: Section 3 of the BOFIA 2020 stipulates that any person who wishes to carry on the business of banking must be registered with CBN. Under section 57 (2)  of the Act “other financial institutions” include entities that carry on financial businesses electronically, virtually, or digitally. Such entities are to incorporate a company in Nigeria and obtain a licence from the CBN before carrying out financial businesses in Nigeria. FinTechs (digital financial service providers) are now recognised as other financial institutions in Nigeria and their operations are regulated by BOFIA 2020 and the CBN.
2. THE TERRORISM (PREVENTION) (AMENDMENT) ACT 2013: This Act provides that where any person solicits or renders support to any association for the commission of a terrorist activity, including through the Internet or electronic means, such a person will be liable to a minimum of 20 years’ imprisonment.
3. THE ADVANCE FEE FRAUD AND OTHER FRAUD-RELATED OFFENCES ACT 2006: Under this Act, a person who conducts a financial transaction which involves the movement of money by wire or the use of a financial institution engaged in activities which affect commerce with the intent to promote a specified unlawful activity has committed a crime and will be liable to a fine and imprisonment.
4. THE CYBERCRIMES ACT 2015: The Cybercrime (Prohibition Prevention) Act 2015 requires a financial institution to:

• verify the identity of customers carrying out electronic financial transactions;
• observe adequate know-your-customer procedures;
• ensure that it obtains proper authorisation before debiting accounts; and
• keep all traffic data and subscriber information as may be required by the NCC.

The Act also prohibits the interception of electronic messages, e-mails and electronic money transfers, computer-related forgery and fraud, unauthorised modifications of computer systems, network data and system interference, and the manipulation of automated teller machines and point of sale terminals.

5. NIGERIA DATA PROTECTION REGULATION 2019: This regulation issued by the Nigerian Information Technology Development Agency provides that all personal data notwithstanding the means through which the data was obtained can be processed only where the data subject gives their consent directly or indirectly or where it relates to a task carried out in the interest of the public.
6. CIRCULARS AND GUIDELINES ISSUED BY THE CBN: The CBN, as the key regulator of the financial sector in Nigeria issues regulations to govern the financial technology sector. Highlighted below are some of the guidelines on Fintech in Nigeria.

• The CBN Consumer Protection Framework 2016: This regulation imposes a burden on financial institutions to maintain the confidentiality and privacy of all financial services customers.
• The CBN Anti-money Laundering and Combatting the Financing of Terrorism in Banks and Other Financial Institutions in Nigeria Regulations 2013: This regulation requires all financial institutions to adopt a policy on anti-money laundering and to combat the financing of terrorism. Fintech companies fall under this category. They must also have policies and procedures to address any risks for customers in relation to anti-money laundering and the financing of terrorism.
• The CBN Guidelines on International Money Transfer Services in Nigeria 2014

These guidelines regulate foreign exchange transactions over mobile applications. It states the minimum standards and requirements for the operation of international funds remittance over mobile devices in Nigeria. For instance, in order to provide inbound or outbound international funds remittance service in Nigeria, an institution must be approved by the CBN to carry out such services

• The CBN Guidelines on Mobile Money Services in Nigeria 2015

The CBN issued the guidelines on mobile money services in Nigeria with the aim of ensuring a structured and orderly development of mobile money services in Nigeria. Basically, mobile money services are financial services offered over mobile devices, such as mobile payment, credit card payment, and QR code payment.

The guidelines identify two models for the implementation of mobile money services: Bank Led and Non-Bank Led. Under the Bank Led model, either a bank or a consortium of banks may act as a Lead Initiator in providing mobile money services as part of its banking services. 

A corporate organization (other than a deposit money bank or telecommunication company) specifically licensed by CBN to provide mobile money services in Nigeria may also act as a Lead Initiator of mobile money services under the Non-Bank Led model.

• The CBN Guidelines on Operations of Electronic Payment Channels in Nigeria 2016

This guideline specifies the standards and specifications for ATM technology, guidelines for ATM deployment, minimum standards and specifications for POS terminals, minimum standards and technical specifications  for MPOS devices, and minimum standards for gateway provider of web payment services. 

The guidelines also establish a settlement mechanism for POS and MPOS transactions with the Nigeria Interbank Settlement Systems (NIBSS) acting as the Payment Terminal Service Aggregator for the financial industry.

• The CBN Regulatory Framework for the Use of Unstructured Supplementary Service Data (USSD) for Financial Services in Nigeria 2018

The guidelines regulate the use of USSD technology for offering financial services in Nigeria. By virtue of section…the only persons eligible to issue USSD short codes by the Nigerian Communications Commission (NCC) are Mobile Network Operators (MNOs) and CBN licensed entities furnished with a letter of no objection or letter of introduction from the CBN are eligible for the issuance. 

Also, financial institutions providing use of the USSD channel are required to encrypt all USSD information  and offer customers the option to opt in/out of the USSD channel. All transactions conducted through the USSD channel are placed with a transactional limit of N100, 000 per customer per day. A customer can increase their limit executing a documented indemnity.

• The CBN Guidelines on International Mobile Money Remittance Service in Nigeria 2015

This guideline applies to International Money Transfer Service Operators which is abbreviated as (IMTSOs) who offer digital international money transfer services. Under the guideline, IMTSOs must be licensed by the CBN, and deposit money banks are prohibited from operating as international money transfer service operators, but they may act as agents. CBN has licensed more international money transfer operators [IMTOs] to operate in Nigeria in furtherance of effort to liberalize the foreign exchange market, ensure liquidity and make foreign exchange more readily available to low end users.

• The CBN draft Risk-Based Cybersecurity Framework and Guidelines for Deposit Money Banks and Payment Service Providers 2018, which is to provide a framework for managing cybersecurity.
• The NCC Consumer Code of Practice Regulations 2007 provide that all licensees must take reasonable steps to protect consumer information against “improper or accidental disclosure” and ensure that such information is securely stored.

FINTECH LICENSING REQUIREMENTS

Basically, any company who desires to be registered as a Fintech company in Nigeria are licensed if they provide fintech-based products or services similar to a regulated financial product or service. For instance, under the Guidelines for the Operation of International Money Transfer Services in Nigeria 2014, IMTOs are required to obtain licences from the CBN before engaging in money transfer services or otherwise be sanctioned. Also, under the CBN Guidelines on International Mobile Money Remittance Service in Nigeria 2015, for foreign IMTOs to operate in Nigeria, it must apply to the CBN for a licence and show evidence of possession of a licence in their home country. Furthermore, under the NCC Licence Framework for Value-Added Service, mobile payment service providers must obtain a five-year renewable licence from the NCC.

From the above it’s clear that there is no clear cut requirement for the registration of Fintech companies in Nigeria; the requirement is solely dependent on the industry.

In a subsequent article, the writer would discuss the requirements and procedure for registration as a Fintech company in Nigeria.

PROHIBITED FINTECH PRODUCTS IN NIGERIA.

Cryptocurrency as a product of Fintech, as simply defined by the Federal Trade commission is “digital money. that means there is no physical coin or bill-its all online.”2 in recent times, we have seen how cryptocurrency has become a currency for most online transactions and engagements and at the same time prone to manipulation and the fact that it does not have any insurance and  protection like the Naira does and scammers have been using it as a means of receiving victims monies due to the fact that it is not reversible and not refundable once made, for this latter reason, the Nigerian Government vide a Letter to all Deposit Money Banks, Non-Bank Financial Institutions and other Financial Institutions, 2021, the CBN prohibits the holding of, and entry into transactions in cryptocurrencies by licensed banks and other financial institutions in Nigeria. 

Basically, all financial institutions in the country are to desist from transacting in virtual currency as it is not recognised as legal tender in Nigeria and any Bank or institution that transacts in such businesses does so at its own risk.  

CONCLUSION

The financial technology industry is a fast growing one in the banking, financial and technological sectors in Nigeria. It is laudable that there are tangible regulations that govern and regulate the industry. These legislations seek to promote and ensure an effective and sound financial system for the settlement of transactions, including the development of electronic payment systems in Nigeria. These regulations also leverage technology to promote financial inclusion and enhance access to financial services among low-income earners in the Nigerian society by legitimizing their access to a cheaper payment service through the mobile payment service.

Omobolaji O. Oyeniran Esq is an Associate Counsel at Path Solicitors.

THE RECEIVERSHIP REGIME UNDER THE AMCON ACT, 2019

-Ugochukwu Sandra Odigbo

Introduction

The Receivership procedure in relation to debtor companies is governed chiefly by the Companies and Allied Matters Act. The CAMA has provided the procedure for appointment of a Receiver and the power that behoves upon him where he is appointed.

The Asset Management Corporation of Nigeria (AMCON), in keeping with its obligations and the purposes of its creation, has, by the AMCON Act (as amended) provided a special procedure and given special powers to a Receiver appointed under the AMCON Act. These powers are an extension of the powers under CAMA and show the seriousness of AMCON in the recovery of the debts due.

The AMCON Receivership regime is largely unknown to the usual Nigerian legal practice and due to its relative novelty, is not very familiar to practitioners. This has prompted the need for this article; to educate legal practitioners and provide a reference where necessary in relation to the special powers under the AMCON Receivership regime.

Receivership

A Receiver/Manager is defined by the Companies and Allied Matters Act [CAMA] as “including a Manager”. The implication of this definition is that a Receiver is a lot of things including a manager. The meaning of the term “Receiver”has eluded any complete definition but the Court in the case of Ponson Enterprises Nigerian Ltd Vs Njigha, made a distinction between the powers of a Receiver and the powers of a Manager. The Manager has only the authority to continue the business whilst the Receiver can do this and can wind up the company where he deems that to be the best way to proceed.

Receivership is an insolvency practice through which Creditors either personally or through an Order of Court appoints a Receiver to realize the assets of the company for the benefit of the Creditor. The Oxford Dictionary defines Receivership as the state of being dealt with by an official receiver.

A Receiver is deemed to be an agent of the persons on whose behalf he is appointed where he is appointed outside the Court under any instrument providing for his appointment. Where he is appointed as a manager, he also has a fiduciary duty to the company to act in utmost good faith towards it.

In special cases, the Receiver can be regarded as an agent of the company; for instance, where the instrument allowing his appointment specifies such.

Receivership Under CAMA

1. Appointment by Agreement

The most common way to appoint a receiver is through an express provision in the security agreement between the parties. Thus, a Receiver may be appointed pursuant to enabling power in the debenture by the debenture holder. Also, the trustee of a debenture may appoint a Receiver Manager if satisfied that an event has occurred which entitles the debenture holder or a class of debenture holders to realise the security. When such event occurs, the terms of the agreement would be granted its plain interpretation.

However, a Receiver appointed out of court may apply to the court for direction in relation to the performance of his function when the need arises. 

• Appointment by the Court

In the absence of a provision for the appointment of a Receiver, a Debenture holder or trustee may still apply to court for such appointment. The general ground upon which such application is granted is the protection or preservation of the property or corporate entity, for the benefit of persons with vested interest in it. Once the appointment is made, the Receiver may decide to carry on the business with the objective of a rescue in the long term or to sell same as a going concern in the short term.

The essence of receivership is to enable a secured creditor to enforce his security against a debtor by appointing a Receiver to sell some assets of the insolvent company, or the company itself as a going concern or in some cases, manage the company with a view to recovering the amount due to the creditor and then hand the company back to its owners. In Uwakwe & Ors v. Odogwu & Ors the Court held that there are two main classes of cases in which the appointment is made:

1. To enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realization, where ordinary legal remedies are defective; and
2. To preserve property from some danger which threatens it.

In the case of Intercontractors Nigeria Ltd. v. UAC, the court enunciated that once a receiver/manager is appointed, he becomes the alter ego of the company. This suggests some wide powers. However, section 209(3) CAMA specifically mentions the powers of a Receiver to include power to: grant or accept leases of land and licences in respect of patents, designs, copyright or trademarks; collect debts owed to the property; enforce claims vested in the company; compromise, settle and enter into arrangements in respect of claims by or against the company, on the company’s business with a view to selling it on the most favourable terms; take possession of the assets subject to the mortgage, charge or security and to sell those assets and, if the mortgage, charge or security extends to such property;  and recover any instalment unpaid on the company’s issued shares.             

These powers granted by CAMA are in addition to any other powers conferred on the trustee of the debenture trust deed or on behalf of the debenture holders by the debenture instrument and may be altered or altogether excluded by the debenture instrument. The powers of the Receiver are further listed in section 393(3) CAMA and Schedule 11 CAMA. Thus, the Court of Appeal in CBCL (Nig.) Ltd. v. Okoli summed up the powers of a Receiver when it held that a receiver has the power to deal with the asset and liabilities of a company on behalf of the company. A Receiver/Manager possesses the above mentioned powers in addition to his power to carry on any business or undertaking of the company.

For Receivers appointed under an instrument, all monies realized from sale of assets, rents or debts are distributed by the Receiver in accordance with his instrument of appointment. Where the Receiver is appointed by court, an application shall be brought for an order setting out the manner of distribution amongst various claimants. Typically, the settlement of the cost of realizing the assets and other incurred expenses and remunerations connected thereto takes precedence. The cost of the debenture holder’s action (if any) is settled next. Thereafter, the Receiver usually settles preferential debts out of the property subject to a floating charge in priority to the claims of the debenture holder. Finally, the Receiver then settles debenture debt with interest accruing thereon up to the date of payment.

Receivership Under the AMCON Act

The AMCON Act extends the powers of the Receiver beyond the powers under CAMA. One example is that Section 387(1), CAMA prohibits bodies corporate from being appointed as Receivers. This prohibition does not apply to AMCON as the AMCON act expressly permits AMCON to act as a Receiver or to appoint one where it sees fit. A Receiver under the AMCON Act, in addition to the powers provided under CAMA, has additional powers which make an AMCON Receiver much more powerful than a Receiver under CAMA.

Firstly, Section 48(3) of the AMCON Act gives the Receiver control over assets of the debtor company whose powers are not limited to the charged assets but can be extended to assets unpledged/uncharged. This special provision gives AMCON the power to exert extreme pressure on the debtor company and to increase the assets from which the debt may be recovered. On this power, there have been issues arising from questions of legality/unconstitutionality of the Section. However, these issues are settled by the proviso to Section 44(2), Constitution of the Federal Republic of Nigeria which provides thus:

“Nothing in sub-section (1) of this Section shall be construed as affecting any general law……. relating to leases, tenancies, mortgages, charges, bills of sale or any other rights or obligations arising out of contracts.”

Secondly, according to the provisions of the AMCON Act, once AMCON commences Receivership over a debtor company, all pending and prospective suits against a Receiver are suspended for a minimum period of one year. However, this protection only applies to a Receiver who has elected to manage the affairs of the company and has published the notice of election pursuant to Section 48(4) of the Act.

Thirdly, under the AMCON Act, a Receiver has three options where appointed. He may:

1. Realize the assets of the debtor company;
2. Enforce individual liability of the shareholders;
3. Manage the affairs of the company.

Fourthly, the AMCON Act gives the Receiver the power to commence a hive-down which is a means of restructuring the company. Where the Receiver/Manager determines that it will not be feasible to rehabilitate the debtor company, the Act empowers him to restructure the company by way of a hive down. The Receiver may, on behalf of the secured creditors, transfer the assets of the debtor company up to the amount of its indebtedness to a new company incorporated for that purpose by the Receiver/Manager. After the transfer, the Receiver may elect to operate the new company or sell it. Where he elects to operate the new company, he has a time limit of one year from the date of the transfer of assets except where time is extended by the unanimous approval of the secured creditors. After the hive down, shares in the new company will be allotted to the secured creditors in proportion to the value of assets over which they hold secured interest.

Conclusion

The Receivership tool is one of the most effective debt recovery tools that can be harnessed by a debtor, made even more powerful by the AMCON Act. The powers of a Receiver under CAMA are numerous and far reaching and all these and more are given to AMCON Receivers. The Receivership procedure also provides a time-efficient way of recovering debts in comparison with debt recovery actions in Court which can only be stalled by obtaining an express order restraining the continued exercise of receivership powers or an order setting aside the Receiver’s appointment.

The Rights of a Receiver exists without recourse to the Courts. The Receiver may however, elect to approach the Courts for protective orders. It is important to note at this point that a Receiver appointed under the AMCON Act need not approach the Court asking to be appointed a Receiver. This would amount to submitting the validity of the Receiver’s appointment to the jurisdiction of the Court thereby creating room for the Receiver’s validity to be challenged. Where a Receiver is appointed under the AMCON Act or other instrument or agreement, the powers become exercisable from the time of appointment.

The glaring observation from this analysis is that the AMCON Act deliberately departs from some of the provisions of CAMA while building upon some. This is because the Corporation was created for peculiar cases of a dire nature. Hence, the Corporation’s approach required an extraordinary character. A recognition of this fact will help get a better grasp of the reasoning behind the seemingly extreme provisions of the AMCON Receivership section.

ENDNOTES

1.  Section 567(1), CAMA

2.  (2000) 15 NWLR (pt 689) page 46

3.  Chuka Agba SAN; Overview of the Fiduciary Duties of AMCON Receivers/Receiver Managers and Receivership as a tool in AMCON Debt Recovery Drive.

4. Section 390, CAMA

 5. See Carnco Foods Nig Ltd Vs Mainstreet Bank Ltd (2013) LPELR-20725(CA)

6. Intercontractors Nigeria Ltd v. UAC [1988] 2 NWLR (Pt. 76), 303

7. A debenture is a long-term security yielding a fixed rate of interest, issued by a company and secured against assets.

8. Section 209, CAMA

9. Section 309, CAMA

10. Okoya & Ors. v. Santili & Ors. [1990] 2 NWLR (Pt.13), 172.

11.  Lightman and Moss, the Law of Receivers of Companies. (5thed., 2014), p.11

 12. [1989] LPELR-3446(SC)

13. A floating charge is a liability to a creditor which relates to the company’s assets as a whole and may become fixed in particular circumstances (such as liquidation)

 14. A Debenture Trust Deed is a document created by a company as security that is issued by the company to protect the interest of a denture holder, where trustees are appointed. In order to raise funds from the general public, companies can create security in the form of shares known as debenture stock. – https://www.618bees.com/article/476-what-is-a-debenture-trust-deed-and-when-is-it-necessary#:~:text=A%20Debenture%20Trust%20Deed%20is,shares%20known%20as%20debenture%20stock.

15. Section 209(5), CAMA

 16. [2009] 5 NWLR (Pt. 1135), 446 C.A

 17. Section 391, CAMA

18. Section 182, CAMA

19. Section 48, AMCON Act (as amended)

20. Section 48(7), AMCON Act (as amended)

Understanding Patent Rights in Nigeria

-Khalid Olalekan Abdulkareem Esq

Introduction

A patent is granted under the law to protect an invention that is new or essentially better in some way than what was made before, or for a better way of making it. This protection is of tremendous importance to technicians and technologists; to medical scientists and space scientists; to lecturers, researchers and professors in institutions of higher learning; to physicists, computer engineers, telecommunication and mechanical engineers and other professionals.

Notwithstanding the importance of the law of patents in this age of advanced technology, it is very saddening that the growth of industrial and technological development in Nigeria is very slow. As a result of this, there are very few inventions for which protection has been sought through  the grant of patent in Nigeria.

This article examines the various rights available to patent holders. It further discusses the benefits, categories of persons who can register patents in Nigeria and the duration of registered patents in Nigeria.

MEANING OF INTELLECTUAL PROPERTY

Intellectual property refers to creations of the mind – everything from works of art to inventions, computer programs to trademarks and other commercial signs.

While Intellectual Property Rights (IPR) have been defined as ideas, inventions, and creative expressions based on which there is a public willingness to bestow the status of property on a particular work or invention. IPR provides certain exclusive rights to the inventors or creators of that property, this is in a bid to give them opportunity to benefit economically from their inventions or creations.

Essentially, Intellectual Property Rights such as copyright, patents and trademarks can be viewed like any other property right. They allow the creators or owners of IP to benefit from their work or from their investment in a creation by giving them control over how their property is used. IP rights have long been recognized within various legal systems.

WHAT IS A PATENT?

A patent is the granting of a propriety right by a sovereign authority to an inventor. This grant provides the inventor exclusive rights to the patented process, design, or invention for a designated period in exchange for a comprehensive disclosure of the invention.

According to Collins dictionary, a patent is an official right to be the only person or company allowed to make or sell a new product for a certain period of time.

By patenting an invention, the patent owner secures an exclusive right over it, meaning that he or she can stop or prevent anyone from using, making or selling the invention without express permission from the owner.

CRITERIA FOR THE REGISTRATION OF PATENT IN NIGERIA

Section 1 of the Patent and Design Act (the “Act”) provides the criteria or requirements for registering a patent in Nigeria as follows:
Patentable Inventions

 (1) Subject to this section, an invention is patentable– (a) if it is new, results from inventive activity and is capable of industrial application; or (b) if it constitutes an improvement upon a patented invention and also is new, results from inventive activity and is capable of industrial application.

a. Novel Invention

The first requirement to be satisfied before an invention or creation is patented is that it must be new and have an inventive step that is not obvious to someone with knowledge and experience in the subject. The invention must also have never been known, used or made public. This means that newness or novelty of an invention is a sine qua non of patentability. The field of knowledge against which novelty is judged is referred to as the state of the art. Section 1(2)(a) of the Patent and Design Act states that an invention is new if it does not form part of ‘’the state of the Art’’

Subsection 3 defines ‘’art’’ as the art or field of knowledge to which an invention relates and “the state of the art” means

‘’everything concerning that art or field of knowledge which has been made available to the public anywhere and at any time whatever (by means of a written or oral description, by use or in any other way) before the date of the filing of the patent application relating to the invention or the foreign priority date validly claimed in respect thereof, so however that an invention shall not be deemed to have been made available to the public merely by reason of the fact that, within the period of six months preceding the filing of a patent application in respect of the invention, the inventor or his successor in title has exhibited it in an official or officially recognised international exhibition.’’

Secondly, an invention is also patentable if it constitutes an improvement upon a patented invention. In other words, it does not matter that a process similar to it has already been invented. As long as this new process constitutes an improvement on the old process and it satisfies the requirement of novelty.

• Capable of Industrial Application

The invention must be capable of being made or used in some kind of industry. Industry in this context is in its broadest form and it means “Anything distinct from being purely intellectual”. This suggests that the invention goes beyond just an idea, a scientific theory, an aesthetic creation, a computer program but must take the practical form of an apparatus, product or a device.

• Public Policy and Morality

The invention must not be against public policy or morality. An invention which is against public policy and morality may be rejected by the Patents Registry because its exploitation is prohibited by law.

• Full Description

In addition to the provisions of Section 1 of the Act, the Registry prescribes that the application must clearly and fully disclose the details of the invention, the processes involved and all that it entails.

Procedure For The Registration Of A Patent In Nigeria

When the conditions qualifying an invention for a patent as stated above have been met, an application shall be made to the Registrar of Patents and Designs (the “Registrar”) and shall contain the following:

1. The applicant’s full name and address, and if the address is outside Nigeria, there should be an address for service within Nigeria;
   1. A description of the relevant invention with any appropriate plans and drawings;
   1. A claim or claims (for any number of products, processes or applications), however, an application shall relate to one invention only;
   1. The application is to be accompanied by the prescribed fees as determined by the Registry from time to time;
   1. Where appropriate, a declaration by the true inventor of the product supplying his name and address and requesting that he be mentioned as such in the Patent;
   1. Where the application is submitted by an agent, a power of attorney authorising the donee of the power of attorney to that effect.

WHO CAN REGISTER A PATENT?

In Nigeria, only accredited individuals or companies can register patents on behalf of the inventors. Any person or company interested in registering a patent will therefore need to employ the services of accredited agents for this purpose. The Government agency that manages the grant of patents is the Trademarks, Patents and Designs Registry, Commercial Law Department, Federal Ministry of Industry, Trade and Investment. Applications are made to the Registrar.

BENEFITS OF REGISTERING A PATENT

1. A patent gives the patent holder the right to stop others from using the registered invention without express permission.
2. A patent also gives the patent holder the right to bring a legal action against anyone who infringes on the registered invention and to seek for injunction and damages.
3. A patent gives the patent holder the right to grant others a license to use such invention, or sell it, as with any asset. This can provide an important source of revenue for your business.

CATEGORIES OF PERSONS WHO MAY APPLY TO REGISTER A PATENT

1. Statutory Inventors

Section 2(1) of the Patent and Designs Act provides that, the right to a patent in respect of an invention is vested in the statutory inventor, that is to say, the person who, whether or not he is the true inventor, is first to file, or validly to claim a foreign priority of the invention.

• Persons who employ or commission other to make an invention

Section 2(4) of the Patent and Designs Act provides that, where an invention is made in the course of employment or in the execution of a contract for the performance of specified work, the right to a patent in the invention is vested in the employer or as the case may be, in the person who commissioned the work.

• Persons To Whom The Invention Has Been Assigned

The property, in whole or in part, in an invention in respect of which an application for patent has not yet been made may be sold and assigned in the same manner as any other chose in action. In the same vein, the application for patent when made and the rights arising under it, may be dealt with  fully and without hindrance. An assignment under the Act must be in writing, signed by the parties. Such an assignment will have no effect against third parties unless it has been registered and the prescribed fee has been paid.

DURATION OF A PATENT IN NIGERIA

Section 7 of the Patent and Designs Act provides for the duration of Patent.

(1) Subject to this Act, a patent shall expire at the end of the twentieth year from the date of the filing of the relevant patent application. (2) A patent shall lapse if the prescribed annual fees are not duly paid in respect of it: Provided that- (a) a period of grace of six months shall be allowed for the payment of the fees; and (b) if the fees and any prescribed surcharge are paid within that period, the patent shall continue as if the fees had been duly paid. (3) The expiration or lapse of a patent shall be registered and notified.

WHAT HAPPENS AFTER EXPIRATION OF PATENT?

After the Patent expires, the work goes into public domain. This in effect means that anyone may make, use, offer for sale, sell or import the invention without express permission of the Patent owner, provided that subject matter is not covered by an unexpired patent.

INFRINGEMENT OF PATENT

An infringement is committed where a person other than the patentee makes, imports, sells, uses such product, without the licence of the patentee. An actual infringement of the patent must occur before the cause of action can accrue. However, where there is a threat of infringement, a patentee may apply to the Court for an injunction restraining the infringement. In the case of Sunday Uzokwe V. Densy Industries Nig. Ltd & Anor (2002) Lpelr-3456(Sc) The Court held that: in a patent action for infringement, as in every other kind of action, the onus is on the plaintiff to prove that he has a definite cause of action against the defendant and he is not entitled to call upon the defendant to disprove the alleged infringement, in other words, to prove that plaintiff has no cause of action against him.

GLOBAL EFFECT OF REGISTERING A PATENT IN NIGERIA

Section 3(4) of the Patent and Designs Act provides that if a Nigerian application is made within 12 (twelve) months of the making of the earlier application in a foreign country in which Nigeria has signed a treaty or a convention, such application will be treated as having been made on the same date on which the corresponding foreign application was made.

An applicant seeking foreign priority to his application is expected to provide the following details:

1. The date and the number of the earlier application.
2. The country in which such application was made; and
3. The name of the person who made it.

Furthermore, not more than 3 (three) months after filing the application, the applicant must furnish the Registrar with a copy of the earlier application, certified correct by the appropriate industrial property office of the foreign convention country.

Also, where a person applies for the protection of an invention in accordance with the law of any convention country, such registration is equivalent to an application duly made in that convention country, he shall be deemed to have applied in each of those convention countries or in that convention country, as the case may be:

SOME OF THE CONVENTIONS AND TREATIES NIGERIA IS A PARTY TO ARE AS FOLLOWS:

1. Patent Cooperation Treaty (8th May, 2005)
2. Patent Law Treaty (28th April, 2005)
3. Convention   Establishing   the World Intellectual Property Organization (WIPO), (9th April, 1995)
4. Paris Convention for the Protection of Industrial Property (2nd September, 1963)
5. Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure, Budapest (Adopted on 28th April, 1977, and Amended on 26th September, 1980).
6. Agreement on Trade-Related Aspects of Intellectual Property Rights (1st January 1995).

A patent holder desiring to protect his invention in specific countries which are not signatories to the relevant conventions or treaties will need to make such application in the county he so desires as industrial property rights are specific to countries.

A patent holder may consider the option of applying to have his patent registered under the World International Property Organization (WIPO) which currently has over 189 member states including Nigeria.

CONCLUSION

Patents afford protection for a limited time to the inventor of a product to the exclusion of others, with few exceptions, as discussed above. This temporary (20years) protection affords added impetus for recouping of the fruit of the inventive ingenuity of the inventor and encourages further creativity and inventiveness by all and sundry. This creativity, in turn, engenders increased productivity and innovativeness, and acts as a catalyst for sustained industrialization of the country.

REFERENCES

1. https://www.mondaq.com/nigeria/patent/703362/registration-of-patent-in-nigeria
2. https://lawpadi.com/how-to-register-a-patent-in-nigeria/
3. Requirements and procedure for patent registration in Nigeria: https://www.lexology.com/library/detail.aspx?g=f0321f8b-0da4-4480-b424-ca31ca894726
4. Patents and Designs Act CAP P2 LFN, 2004
5. F.O. Babafemi, Intellectual Property: The Law and Practice of Copyrights, Trade Marks, Patents and Industrial Designs in Nigeria (2006) 342.
6. Sunday Uzokwe V. Densy Industries Nig. Ltd & Anor (2002) Lpelr-3456(Sc)
7. https://www.investopedia.com/terms/p/patent.asp
8. https://www.collinsdictionary.com/dictionary/english/patent 

Khalid Olalekan Abdulakareem Esq is a Senior Associate at Path Solicitors.

LEGAL LIABILITIES OF AIRPLANE OWNERS FOR AIR ACCIDENTS IN NIGERIA

-M. I. Majidadi

Just like any other transport sector, the aviation sector has its hazards which includes accidents. Even Though Air travel fatalities have been recorded in each of the last 12 years, with a total of 287 deaths in 2019 due to air crashes, despite some pronounced year-to-year differences, the overall trend has been for a reduction in the number of fatalities and statistically it remains the safest mode of transportation.

In Nigeria we have not also been without our share, as we have experienced more than 10 airplane crashes with the first being on  November 20, 1969, when a government-owned DC-10 aircraft on a flight from London crash-landed in Lagos and killed all 87 passengers and crew on board and the Dana airplane crash 2012 was instrumental in the claim for compensation but till date no conclusive information has shown whether the prolong call for full payment of compensation from families ever reached Nigerian courts and as to whether Dana ever paid full compensation still remains something we will find out some day.

In  most instances where airplane accidents occur, likelihood of death is higher than the survival and the families of the victims are left traumatised.

To ameliorate those pains and losses, mechanisms have been put in place to avoid such occurrence of accidents and where it happens , liabilities are placed on the airplane carriers and it is the intention of this article to espouse those liabilities that arise after this tragic accident.

The Civil Aviation (Investigation of Accidents) Regulations in its interpretation section, 2 defined accident as “includes any fortuitous or unexpected event by which the safety of an aircraft or any person is threatened ”   this definition covers any time from when the first person starts boarding to when the final person disembarks the plane.  According to the Convention on International Civil Aviation, air traffic fatalities refer to an incident where a person is fatally injured due to an occurrence associated with the operation of the aircraft Corporate jet and military transport accidents are generally excluded.

In Air France v. Saks,12 the U.S. Supreme Court denied recovery to a passenger who suffered deafness as a result of a routine depressurization during landing. The Court found that injury to her inner ear was caused by sinus problems internal to her rather than by anything unusual about the flight. According to Justice O‟Connor, an “accident” under Article 17 “arises only if a passenger‟s injury is caused by an unexpected or unusual event or happening that is external to the passenger. 470 U.S. 392 (1985).

The definition of an accident as set out in the Air France v Saks According to this judgment, liability arises under Article 17 if the passenger’s death or injury is caused by an unexpected or unusual event or happening that is external to the passenger. An aeroplane crash, considering its rarity and magnitude, can be classified as one such event.  In the case of Wallace v Korean Air, it was held that an accident within the meaning of Article 17 referred to a risk characteristic of air travel or related to the operation of an aeroplane and where carriers are in a unique position to take all necessary measures to prevent such incidents. An aeroplane crash also falls under this definition.

The Civil Aviation (Investigation of Accidents ) Regulations relate to civil aviation only and applies to accidents arising out of or in the course of air navigation which occur to any civil aircraft in or over Nigeria, or elsewhere to civil aircraft registered in Nigeria. 

Aviation accidents can be devastating for the victims and their families and  when it comes to determining who is liable and pursuing compensation after the accident is complicated. Going up against an international airline can feel overwhelming for the victims’ families. Governments and the aviation industry have established a set of rules that determine a carrier’s responsibility in the event of an accident. These regulations set a procedure on how an accident victim can file a claim, what can they pursue compensation for and the time frame they have to submit a lawsuit.

CARRIER’S LIABILITY UNDER NIGERIAN LAW

The carrier’s liability is covered under Section 48 of the Civil Aviation Act 2006. The section provides that the rights and liabilities of carriers shall be governed by the relevant provisions of the Convention for the unification of certain rules relating to international carriage by air signed at Montreal on the 28^th May 1999 which is now the second schedule of the Civil Aviation Act. Based on this, the liabilities of carriers as regards airline accident in the Second Schedule of the Act are thus;

Article 17(1) makes the carrier liable for damage sustained in case of death or bodily injury of a passenger

Article 17 makes the carrier liable for damage sustained in case of destruction or loss of, or of damage to checked baggage

Article 18 imposes liability to carrier for damage sustained in the event of destruction or loss of, or damage to cargo, the only exception here is where there is inherent defect of cargo, defective packing, act of war or armed conflict or an act of public authority carried out in connection with entry and exit or transit of the cargo

The above liabilities are hinged on the condition that the accident took place on board the aircraft or while embarking or disembarking.

From the above it is clear that where cargo(s), person(s), and baggage(s) get involved in any accident (either causing destruction, injury death or damage) the carrier becomes liable for damages.

 Section 48 (3) part XIII of the Civil Aviation Act  provides that upon aircraft accident resulting in death or injury of passengers, the carrier shall make advance payments of at least US$30,000 within thirty days from the date of such accident to the natural person or such natural persons who are entitled to claim compensation in order to meet the immediate economic needs of such persons and such advance payments shall not constitute recognition of liability and maybe set off set against any amounts subsequently paid as damages by the carrier.

 Section 74 makes it mandatory for Air carriers to maintain adequate insurance covering its liability under the act and also its liability towards compensation for damages that may be sustained by third parties for an amount to be specified in regulations made by the Nigerian civil aviation authority and it is an offence not to abide by the provision of this section with a fine of not less than 1 million or imprisonment of not less than 2 years.

Another question to be answered is whether a carrier can incur liability for mental or emotional injuries sustained by the plaintiff. In Eastern Airlines v Floyd (499 U.S. 530 (1991)), the United States Supreme Court said allowing for emotional and psychological injuries would result in indeterminate liability. It is clear from the Jack v Trans World Airlines (854 F. Supp. 654 (N.D. Cal. 1994)) case that psychiatric damages that are unrelated to physical injury cannot be recovered.

The English Court of Appeal in Rogers v Hoyle  has affirmed the High Court’s decision that accident reports prepared by the UK’s Air Accidents Investigation Branch (AAIB) are admissible as evidence in civil proceedings.

In Olympic Airways v. Husain 541 U.S. 1007, 157 L. Ed. 2d 1146, 124 S. Ct. 1221 (2003),the U.S. Supreme Court applied this “definition” to allow recovery of a passenger who died aboard a flight because he was allergic to second-hand smoke.   Olympic Airways v. Husain,.

In Air France v. Saks470 U.S. 392 (1985)., the U.S. Supreme Court denied recovery to a passenger who suffered deafness as a result of a routine depressurization during landing. The Court found that injury to her inner ear was caused by sinus problems internal to her rather than by anything unusual about the flight. According to Justice O‟Connor, an “accident” under Article 17 “arises only if a passenger‟s injury is caused by an unexpected or unusual event or happening that is external to the passenger.

However, in the U.K. House of Lords, Lord Steyn in Morris v. KLM [2001] 3 All ER 126, while agreeing that pain caused by physical injury is recoverable, also, “would hold that if a relevant accident causes mental injury or illness which in turn causes adverse physical symptoms, such as strokes, miscarriages or peptic ulcers, the threshold requirement of bodily injury is satisfied.

in the case of Kruger v. United Airlines No. C 06-04907 MHP (N.D. Cal. Oct. 31, 2007), the court concluded that damage flowing from a loss of consortium were recoverable for a husband whose wife was struck in the head by a backpack swung by a fellow passenger on the jetway, causing her to lay in the lavatory, falling into unconsciousness during the flight. The court observed that Article 29 of the Convention leaves to domestic law the determination of what claim is cognizable and by whom.

The U.S. Supreme Court in Zicherman v. Korean Airlines 516 US 217  (1996) concluded that article 17 leaves to domestic law the question of who may recover and what compensatory damages are available to them. Thus, apparently, Article 17 prohibits recovery where the passenger suffers only emotional damages; yet if local law allows recovery for a spouse‟s emotional injury for the passenger‟s death or bodily injury, the Convention has nothing to say about it.

Eastern Airlines v. Floyd, 499 U.S. 530, 552 (1991)., the U.S. Supreme Court held that “an air carrier cannot be held liable under Article 17 when an accident has not caused a passenger to suffer death, physical injury, or physical manifestation of injury. . . . We express no view as to whether passengers can recover for mental injuries that are accompanied by physical injuries.”

DETERMINATION OF COMPENSATION

By virtue of the provisions of the  Civil Aviation (Investigation Of Accidents) Regulations LN 14 1966 upon the occurrence of an accident, the Minister shall be notified  of the details of such, the minister shall appoint inspectors to carry out investigations on the circumstances of the accident and the report of that investigations shall be submitted to the minister ,who then may direct that a public inquiry be held into the causes and circumstances of the accident. This Inquiry shall have the powers of a court of summary jurisdiction and after the inquiry the court shall make a report to the minister stating fully the circumstances of the case and its opinion touching the causes of the accident and adding any observations and recommendations.

By the provision of Article 21 of the Convention for the unification of certain rules relating to international carriage by air (Montreal 1999):

1. damages arising from death or injury of passenger, such person(s) or those entitled to claim compensation shall be entitled to an amount not exceeding 100,000 Special Drawing rights each
2. In the case of damage caused by delay in the carriage of persons, the liability of the carrier for each passenger is limited to 4150 special drawing rights
3. In the carriage of baggage the liability of the carrier in case of destruction, loss, damage or delay is limited to 1000 Special Drawing Rights (SDR) for each passenger or sum not exceeding the declared sum where the passenger has made a special declaration of interest in delivery at destination and has paid a supplementary sum.
4. In the carriage of cargo , the liability of the carrier in case of destruction, loss, damage or delay is limited to a sum of 17 SDR per kilogram unless the consignor has made, at the time of when the package was handed over to the carrier, a special declaration on interest in delivery at destination and has paid a supplementary sum if the case so requires which in such case the carrier will be liable to pay a sum not exceeding the declared sum unless it proves that the sum is greater than the consignor’s actual interest in delivery at destination
5. Article 17 of the modifications to the convention for the unification of certain rules relating to international carriage by air, the carrier is liable for ;
6. damage sustained in case of death or bodily injury of a passenger, so long as the accident occurred on board the aircraft or in the course of any of the operations of embarking or disembarking
7. damage sustained in case of destruction or loss of, or damage to checked baggage
8. Article 18 makes the carrier liable for damage sustained in the event of destruction or loss of, or damage to cargo
9. Article 19 makes the liable further liable for damage occasioned by delay in the carriage by air of passengers, baggage, or cargo

6. Article 21 provides that in the case of damages arising under paragraph 1 of article 17, the carrier shall pay to each passenger $100,000 and such carrier shall not be able to exclude or limit its liability
7. articles 22 further pegs the liability of the carrier at:
8. $4150 to each passenger for delay
9. $1000 for each passenger in case of destruction, loss, damage, or delay
10. $20 per kilogram in case of destruction, loss, damage, or delay of cargo

8. Article 25 allows a carrier to fix a sum higher than the one provided for in this convention or to no limits of liability whatsoever
9. While on the other hand Article 26 makes it null and void any contractual provision which seeks to relieve the carrier of liability or fix a lower limit than that which is provided for in this convention
10. Article 28 mandates the carrier t0 make advance payments to natural person or persons entitled to claim compensation in the case of an aircraft accident resulting in death or injury of passengers

 OPTION FOR ARBITRATION

Article 33 Convention For The Unification Of Certain Rules Relating To International Carriage By Air (Montreal 1999) gives parties to a contract of carriage for cargo the option to settle dispute relating to liability by arbitration and

LIMITATION TO BRING ACTION

Article 35 of the Convention For The Unification Of Certain Rules Relating To International Carriage By Air (Montreal 1999) stipulates that the Right to Damages shall Cease if an Action is not Brought Within a Period of Two years, Reckoned from the Date of Arrival at the Destination, or From the Date on Which the Aircraft Ought to Have arrived or from the date on which the Carriage stopped.

An Airplane Accident, whether it’s on a Commercial Airline or a Private Plane, is complicated to represent and requires a skilled and knowledgeable injury Lawyer to Accurately Determine Liability and Recover Compensation for the Victims even though in Nigeria so far in all the Airplane accidents, the Airplane owners have complied with provisions of the Act and that explains why in this aspect we have minimal litigation. 

CONCLUSION

Victims of airline ‘passengers’ accident in Nigeria are covered under the Civil Aviation Act 2006 as it relates to carrier’s liability when such passengers, owners of cargos, baggages are involved in accident which result to death, injury or destruction, the Act is in tandem with the Convention for the unification of certain rules relating to international carriage by air (Montreal 1999) and modifications to the convention for the unification of certain rules relating to international carriage by air.

But one class of persons the Act and convention does not cater for are persons who the airplane crashes over on or on their properties causing loss of lives and properties. In most instances these kinds of people are the worst hit as they innocently do not sign up and so need compensation and as such it will be ideal for the Ministry of Aviation and the National Assembly to make provision of payment of compensation to victims of airplane accidents who are not passengers on board but rather the plane crashes on them or their properties as the accident is not from their negligence and also in the interest of social justice.

REFERENCE

1. Civil Aviation Act 2006 LFN 2004 Vol. 7
2. The Civil Aviation (Investigation of Accidents) LN 14 1966
3. Convention on International Civil Aviation( Chicago1947)
4. Convention For The Unification Of Certain Rules Relating To International Carriage By Air (Montreal 1999)
5. Modifications To The Convention For The Unification Of Certain Rules Relating To International Carriage By Air Third Schedule of the Civil Aviation Act 2006
6. • Worldwide air traffic – fatalities 2019 | Statista
7. Nigeria: History of Air Crashes in Nigeria – allAfrica.com
8. Overview: Airplane Crash Liability in International Law – STA Law Firm
9. HFW | Landmark English Court of Appeal decision upholds a…
10. ACCIDENTS & INJURIES IN INTERNATIONAL AVIATION: (mcgill.ca)

A CRITIQUE OF THE POWERS OF THE CENTRAL BANK OF NIGERIA TO FREEZE BANK ACCOUNTS. by Omobolaji O. Oyeniran Esq.

INTRODUCTION

The Central Bank of Nigeria (CBN) is saddled with the responsibility of regulating the financial sector in the country, a role it performs with Banks/Financial Institutions, and other stakeholders in the financial sector. This article analyses the power of the CBN to freeze bank accounts under the Banks and Other Financial Institutions Act (BOFIA) 2020; the Terrorism (Prevention) Act 2011, as amended 2013 and the  Central Bank of Nigeria (Anti-Money Laundering and Combatting the Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations, 2013. The article further discusses the conditions precedent before the power is exercisable; the consequence of not fulfilling the conditions; and clarifications on the roles of the CBN as distinct from that of an individual Bank/Financial Institution. The article concludes with a recap of the article; calls for optimal service by the CBN; and exposes the need for Banks/Financial Institutions to uphold the duties owed to their customers.

GENERAL FUNCTIONS OF THE CBN

Under section 2 of the CBN Act, 2007, the CBN is charged with the overall control and administration of the monetary and financial sector and policies of the Federal Government. The objects of the Bank include inter alia:

1. ensure monetary and price stability;
2. issue legal tender currency in Nigeria;
3. maintain external reserves to safeguard the international value of the legal tender currency;
4. promote a sound financial system in Nigeria; and
5. act as Banker and provide economic and financial advice to the Federal Government.

The apex Bank is further saddled with the responsibility of administering the Banks and Other Financial Institutions (BOFIA) Act, 2020 as amended, with the sole aim of ensuring high standards of banking practice and financial stability through its surveillance activities, as well as the promotion of an efficient payment system^[1].

POWERS OF CBN TO COUNTER TERRORIST AND PROLIFERATION FINANCING VIS A VIS FREEZING BANK ACCOUNT.

Being the agency charged with the overall control and administration of the monetary and financial sector and policies in Nigeria, the CBN is empowered under several legislations to employ all possible means to curb money-laundering; counter-terrorist financing; and proliferation financing. The CBN performs this function in collaboration with individual Banks and Financial Institutions through its Financial Intelligence Unit. The Nigerian Financial Intelligence Unit (NFIU) is an autonomous unit, domiciled within the Central Bank of Nigeria and the central coordinating body for the country’s Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) framework.^[2]

This section discusses the powers of the Central Bank of Nigeria to investigate and place a Post-No-Debit directive on any Bank account in Nigeria under the Banks and Other Financial Institutions Act (BOFIA) 2020; the Terrorism (Prevention) Act 2011, as amended 2013; and the  Central Bank of Nigeria (Anti-Money Laundering and Combatting the Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations, 2013, amended 2019^[3]. Thus, in discussing the powers of the CBN in placing PND on a customer’s bank account, reference will be made to the NFIU (the CBN unit in charge) and individual bankers and financial institutions.

1. BANKS AND OTHER FINANCIAL INSTITUTIONS ACT (BOFIA) 2020

The Banks and Other Financial Institutions Act (BOFIA) 2020 empowers the CBN to freeze any bank account where the CBN Governor has any reason to believe that transactions undertaken in such an account involves the commission of any criminal offence. Section 97(1) of the 2020 Act provides:

97(1) “Notwithstanding anything contained in any other enactment, where the Governor has reason to believe that transactions undertaken in any account with any bank, specialised bank or other financial institution are such as may involve the commission of any criminal offence under any Law, the Governor may make an ex-parte application for an Order of the Federal High Court verifying on oath the reasons for the Governor’s belief, and on obtaining such a Court Order direct or cause a direction to be issued to the manager of the bank, specialised bank or other financial institution where the account is situated or believed to be or in the alternative to the head office of such bank, specialised bank or other financial institution directing the bank, specialised bank or other financial institution to freeze the account.”

2. CENTRAL BANK OF NIGERIA (ANTI-MONEY LAUNDERING AND COMBATTING THE TERRORISM IN BANKS AND OTHER FINANCIAL INSTITUTIONS IN NIGERIA) REGULATIONS, 2013, AMENDED 2019

“30 (1) A financial institution shall pay special attention to all complex, unusually large transactions or unusual pattern of transactions that have no visible economic or lawful purpose.

(2) A financial institution shall investigate suspicious transactions and report its finding to the Nigerian Financial Intelligence Unit(NFIU) immediately, in compliance with the provision of section 6 (2) (c) of Money Laundering (Prohibition) Act 2011 (as amended)”

‘Complex or unusually large transactions’ or ‘unusual pattern of transactions’ include  transactions that exceed certain limits, very high account turnover inconsistent with the size of the balance or transactions which fall outside the regular pattern of the account activity^[4]; that involves a frequency which is unjustifiable or unreasonable; is surrounded by conditions of unusual or unjustified complexity; appears to have no economic justification or lawful objective; or in the opinion of the financial institution involves terrorist financing. In such instance, the transaction shall be deemed to be suspicious and the financial institution shall immediately report the matter to the NFIU.

3. TERRORISM (PREVENTION) ACT 2011, as amended 2013.

Under section 14 (1) of the Terrorist (Prevention) Act, 2011, as amended 2013,  a financial institution/bank is mandated to forward reports of suspicious transactions to the NFIU within 72 hours. The sub-section provides thus:

“A financial institution or designated non financial institution shall, immediately, but not later than 72 hours, forward reports of suspicious transactions relating to terrorism to the Financial Intelligence Unit which shall process such information and forward it to the relevant law enforcement agency where they have sufficient reasons to suspect that the funds –

(a)are derived from legal or illegal sources but are intended to be used for any act of terrorism:

(b) are proceeds of a crime related to terrorist financing; or

(c) belong to a person, entity or organization considered as terrorist.”

Such financial institution or designated non-financial institution is not liable for violation of the confidentiality rules for every lawful action taken in furtherance of its obligations under sub-section (I) of this section^[5].

CONDITIONS PRECEDENT TO ACTIVATION OF THE POWER TO FREEZE BANK ACCOUNT.

At this juncture, it is good to note that before a PND placed on a customer’s bank account is activated, an ex parte order of the court must be obtained^[6]. Failure to obtain the court order before freezing the customer’s account makes such action unlawful. This issue has been laid to rest by the Court of Appeal in the case of MEGAWEALTH LTD Vs SEC [2017] 13 NWLR PT 1583 P.345 in which the Court considered the provisions of Section 13[x] of the Investment and Securities Act, 2007 which is in pari material with the provisions of Section 97(1) of BOFIA, 2020 as it empowers the SEC to freeze bank accounts of customers under the Securities and Exchange Commission Act held at page 378 that:

“The Securities and Exchange Commission must seek judicial order to freeze the account of any person whose assets were derived from the violation of the Act. In the instant case, the respondent did not obtain judicial order before freezing the appellants account. In the circumstance, the action was declared unlawful.”

Also inGTBANK PLC Vs ADEDAMOLA [2019] 5 NWLR PT 1664 at P.30, the court held inter alia that;

“By the provisions of section 34[1]  of the Economic and Financial Crimes Commission Act, 2004 the Economic and Financial Crimes Commission has no power to give direct instructions to Banks to freeze the account of a customer without an order of court, so doing constitutes a flagrant disregard and violation of the rights of a customer”

CLARIFICATION OF THE ROLES OF THE CBN AND FINANCIAL INSTITUTIONS IN FREEZING OF BANK ACCOUNTS.

As earlier stated, the CBN works with financial institutions in achieving its functions outlined in several legislations. To this end, there is little clarity as to the role/duty of each in achieving these functions, especially on the issue of freezing bank accounts. It is good to note that regardless of this fact, each party has unique roles/duties and the beneficiaries of these roles vary. Outlined below are some of the gray areas and the duties of each party.

1. OBTAINING COURT ORDER

 In deciding whose duty it is to obtain a court order, whether it is the CBN or the Bank/Financial Institution where the account is domiciled, the Court has held in plethora of cases that where the CBN places a Post-No-Debit (PND) on a bank account, the Bank with which the account is domiciled, who has a duty of care towards its customer, should ensure that a Court order has been obtained before freezing such account as directed by CBN. In GTBANK PLC Vs ADEDAMOLA [2019] 5 NWLR PT 1664 at P.30, the Court of Appeal in consideration of the provisions of Section 34[1] of the Economic and Financial Commissions Act, 2004, which is in pari material with the provisions of Section 60B of BOFIA held at page 43 stated categorically that:

“Before freezing customer’s account or placing any form of restrain on any bank account, a bank must be satisfied that there is an order of court.”

The implication of the court decision is that, where a PND directive is not supported with a court order, the receiving bank is expected to obtain one before freezing the account of its customer. This rationale being that the Banks/financial institutions owe their customers duty of care, which they must protect and must not be complacent, reticent, and toothless in the face of brazen and reckless violence to the rights of their customers.^[7] In addition to this, failure of a Bank/Financial Institution to obtain a court order before it freezes its Customer bank account amounts to breach of duty and the customer can obtain damages for such breach^[8]. see ADETOKUNBO ODUTOLA VS DIAMOND BANK PLC SUIT NO: LD/ADR/800/17 (UNREPORTED)^[9]

2. BREACH OF CONFIDENTIALITY RULES

Most times, Customers who have had their bank accounts frozen on the authority of CBN oftentimes call out their respective Banks/Financial Institutions on Social media for breach of their confidence. In as much as the Banks have the duty to protect the data of their Customers, the law mandates them to disclose such data in certain circumstances during which they would not be held liable for breach of confidence, so far it is done in compliance with the provisions of the law.

For instance, section 31 (2) & (3) of the CBN(AML/CFT) Regulations, 2013, amended 2019 mandates a financial institution to immediately report ‘complex or unusually large transactions’ or ‘unusual pattern of transactions’ to the NFIU and such financial institution shall not be liable for violation of the confidentiality rules and the Banking sector secrecy obligations for any lawful action taken in furtherance of the obligation^[10]. The same requirement and protection is provided under section 14 of the Terrorism (Prevention) Act, 2011, as amended 2013^[11] which includes penalty for any financial institution that discloses such information to other party other than the NFIU.^[12]

CONCLUSION

This article has reviewed the powers of the CBN, in conjunction with Banks/Financial Institutions, to freeze bank accounts in the bit to curb financial terrorism and financial proliferation. Also, this article has identified the roles of each party in achieving this goal.

The writer wishes to enjoin the CBN to carry out due diligence in carrying out its duties, as it is being called out by stakeholders on the arbitral use of its powers. As a reference, the National Assembly, in its response to plethora petitions against the apex bank for arbitrary freezing of bank accounts, ordered the Bank to commence review of all currently frozen accounts in Nigeria and to, after one week, remove the freeze order on accounts frozen before a valid court order was obtained; accounts frozen without obtaining a court order from the required court of competent jurisdiction; accounts frozen without providing the opportunity for a fair hearing to the account holder; accounts frozen but till date have not been referred to the Nigeria Police Force, National Drug Law Enforcement Agency (NDLEA) or any other appropriate regulatory authority for investigation; accounts frozen that are unconnected to the account suspected for involvement in the commission of a crime; accounts remaining frozen after a court authorised period of freeze has elapsed without obtaining a fresh order from a court of competent jurisdiction; accounts remaining frozen even after the concluded investigation has not indicted the account holder; accounts frozen without documentary proof of petition or reason for suspicion of involvement in the commission of a crime.^[13] The CBN is thus expected to ensure that due processes are observed in the execution of its duties so that the confidence reposed on it by the Nigerian citizenry does not dissipate on the altar of incompetence and lack of due diligence.

In concluding this article, the writer believes that even though the CBN, and at large other government agencies, is required to obtain a court order before freezing a customer’s bank, the duty to ensure that proper procedure is followed before placing the PND behoves more on the Bank where the account is domiciled than the CBN. It is imperative for Banks to identify and duly execute their roles in a bid to save themselves from the loss of millions of naira awarded as damages against them, and to protect their credibility.

Omobolaji O. Oyeniran is an Associate Counsel in Path Solicitors. She specialises in Corporate Litigation; Banking and Finance; Corporate Governance; and Intellectual Property Law.

[1] Section 1 (3) Central Bank of Nigeria Act, 2007.

[2] https://www.nfiu.gov.ng/Home/About

[3] CBN(AML/CFT) Regulations 2013, amended  2019

[4] Section 30 (3) Central Bank of Nigeria (Anti-Money Laundering and Combatting the Terrorism in Banks and Other Financial Institutions in Nigeria) Regulations [CBN(AML/CFT) Regulations] 2013, amended 2019

[5] Section 14 (2) Terrorism (Prevention) Act, 2011, amended 2013.

[6] Section 97(1) BOFIA, 2020; GTBANK PLC Vs ADEDAMOLA [2019] 5 NWLR PT 1664

[7] Tijani Abubakar J.C.A in GTB PLC Vs Adedamola at Pg 43 par. F supra

[8] In our earlier article titled POST-NO-DEBIT DIRECTIVES: LEGAL DUTIES AND LIABILITIES OF BANK posted at https://pathsolicitors.com/post-no-debit-directive-legal-duties-and-liabilities-of-banks/ we extensively laid foundation on the legal duties a bank owes to its customer anytime a PND is placed on the Customer’s account by any government agency.

[9] In  ADETOKUNBO ODUTOLA VS DIAMOND BANK PLC SUIT NO: LD/ADR/800/17 (UNREPORTED) the Court held that the Defendant bank failed in its duty of care to the Claimant/Customer and was therefore liable for the injury that arose from freezing the Claimant’s account. The court further awarded the sum of 25million naira as damages for unlawfully freezing the Claimant’s bank account.

[10] Section 31(2) CBN(AML/CFT) Regulations supra

[11] supra

[12] Section 14 (3) & (4) Terrorism (Prevention) Act, 2011, as amended 2013

[13] https://www.thisdaylive.com/index.php/2020/10/21/house-gives-cbn-deadline-to-unfreeze-over-5000-accounts/