you have no power to investigate or recover civil contract debts, Court Instruct EFCC

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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