In an earlier article series1, we examined the extent and limitation of the powers of regulatory agencies and financial institutions to issue a directive freezing accounts of individuals that are subject to their regulatory oversight or individuals under their investigation. To this end, we stated that the power of regulators of financial institutions, as well as other regulatory/law enforcement agencies, to direct the freezing of accounts of bank users is exercisable subject to the directives of a court of law. In other words, in addition to any law that may empower a regulator to issue a directive freezing an account, such regulator must also obtain an order of a competent court before issuing a freeze directive to commercial banks.
Recognising this limitation, the Central Bank of Nigeria (the "CBN" or "apex bank") recently obtained an order, of the Federal High Court (the "FHC"), sitting in Abuja, to freeze 20 bank accounts linked to individuals and a Company that allegedly sponsored the #EndSARS protest2 in Nigeria.
Despite what appears to be compliance with the procedure for directing the freezing of bank accounts by the CBN, controversy trailed CBN's application as well as the order made by the court pursuant to the Motion Ex-parte filed by the CBN.
However, it is imperative to point out that these controversies have nothing to do with the procedure adopted by the apex bank in directing that the 20 bank accounts be frozen. Rather, it relates to the propriety of the court order directing the freezing of the accounts of the individuals involved.3
To efficiently examine the propriety or otherwise of the ex-parte order, it is important to consider all the background facts surrounding the grant of the order vis-a-vis the facts placed before the court by the CBN in obtaining the said order.
1. Governor, Central Bank Of Nigeria V. Bolatito Rachael Oduala & 19 Others4
By a Motion Ex-parte dated 20 October 2020 (the "Application"), the CBN requested an order of the Federal High Court, Abuja Division freezing the accounts of 19 individuals and 1 Company on the ground that the funds in the accounts might have been linked to terrorist activities in contravention of Section 13(1)(a) and (b) of the Terrorism (Prevention)(Amendment) Act (the TPA), 2013 and Regulation 31(2)(a) and (3)(b) of the Central Bank of Nigeria Anti-Money Laundering/Combating the Financing of Terrorism Regulations, 2013 ( "the Regulation").
In the affidavit in support of the application deposed to by one Aondowase Jacob on behalf of the CBN, it was averred, among other things, as follows:
"There is a grave allegation that the defendants are involved in suspected terrorism financing via their bank accounts in contravention of the provisions of extant laws and regulations. The aforesaid transactions undertaken by the defendants, using their bank accounts, can cause significant economic and security harm to the public and the Federal Republic of Nigeria if left unchecked.
"The applicant (CBN Governor) is thus desirous to have the court empower him to direct the freezing of the 20 accounts listed on the annexure to this application and all other bank accounts held by the defendants.
"A freezing order of this Honorable court in respect of the defendants' accounts would also enable the investigation of the activities of the defendants to a logical conclusion, with a view to reporting same to the Nigerian Financial Intelligence Unit."
Furthermore, the written address in support of the application partly reads as follows:
"My lord, the nature of the transactions undertaken through the defendants' accounts are of suspected terrorism financing in contravention of Section 13(1)(a) and(b) of the Terrorism (Prevention)(Amendment) Act, 2013 and Regulation 31(2)(a) and (3)(b) of the Central Bank of Nigeria Anti-Money Laundering/Combating the Financing of Terrorism Regulations, 2013."
In his decision, Hon. Justice Ahmed Mohammed ordered that the accounts of the 20 Respondents be frozen for an initial period of 90 days, subject to renewal upon an application by the CBN. The order was to allow CBN conclude its investigations.
For ease of reference, the court order partly reads as follows:
"A mandatory order is made empowering the plaintiff/applicant to direct the head office of the banks involved to freeze forthwith all transactions on the 20 bank accounts listed for a period of 90 days pending the outcome of investigation and inquiry currently being conducted by the Central Bank of Nigeria."
"It is, however, directed that the 90-day freezing order, when it lapses, may be renewed upon good cause shown by the applicant. "It is also directed that any person, whether artificial or natural, that is affected by this order may apply to the court to have his grievance or complaint heard by the court. The suit is adjourned till February 4, 2021."
1.3. Other Relevant Facts
Notably, the CBN did not disclose in the application that the 20 bank accounts were owned by individuals and a Company that were involved in the #EndSARS protests. Rather, the apex bank informed the court that the funds in the accounts are of suspected terrorism financing in contravention of the Terrorism Prevention Act and the CBN AML/CFT Regulations.
By the affidavit in support of the Application, CBN informed the court that "
However, the media reported that the CBN sought the freezing order against the 20 accounts after flagging them for receiving money with the narration "#EndSARS".5
2. Analysis 0f The Issues Arising from The Above
of the TPA and Regulation 31(2)(a) and (3)(b) of the "Regulation. For ease of reference, Section
commits an offence under this Act and is liable on conviction to imprisonment for a term of not less than ten years and not more than life imprisonment."
7any person involved in the offences under Sections 1 to 14 of this Act and includes his sponsor". Specifically, Section 1(3) of the TPA defined acts of terrorism to include "an act which disrupts a service but is committed in pursuance of a protest.".
Information available to the public reported that the #EndSARS protest was a decentralised social movement against police brutality in Nigeria. The core demand of the movement was the disbandment of the Special Anti-Robbery Squad (SARS), a unit of the Nigeria Police Force with long records of abuses, including torture; extortion; and extrajudicial judicial killings of citizens all over Nigeria.9
of the Federal Republic of Nigeria 1999 (As Amended) [The "Constitution"] every citizen with the right to peaceful assembly for the protection of their interests. To this end, 40 of the Constitution provides as follows:
"Every person shall be entitled to assemble freely and associate with other persons, and in particular he may form or belong to any political party, trade union or any other association for the protection of his interests"
The CBN also relied on Regulation 31(2)(a) and (3)(b) of the Regulation to justify its power to file the Ex-Parte Application seeking the freeze order.
Meanwhile, Regulation 31(2)(a) and (3)(b) of the Regulations provides as follows:
"31(2) where a financial institution suspects that the funds mentioned under sub-regulation (1) of this regulation-
Are derived from legal or illegal sources but are intended to be used for act of terrorism
It shall immediately and without delay report the matter to NFIU12 and shall not be liable for violation of the confidentiality rules and banking secrecy obligation for any lawful action taken in furtherance of this obligation.
(3) A financial institution shall immediately and without delay; but not later than within 24 hours
Take appropriate action to prevent the laundering of the proceed of a crime, an illegal act or financing of terrorism"
ake appropriate action to prevent the laundering of the proceed of a crime, an illegal act or financing of terrorism"
14(1) of the TPA provides as follows:
"14(l) A financial institution or designated non-financial institution shall, within a period not more 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 organisation considered as terrorist."
The Federal High Court (Civil Procedure) Rules 2019 ("FHC Rules") provides that where an order is made pursuant to a Motion Ex-Parte, such order shall remain valid for only 14 days after any person affected has applied to the court to vary or discharge the order, unless the court, considering the interest of justice directs otherwise.
For ease of reference, Order 26 Rule 10 (1)(2) and (3) of the FHC Rules provide as follows:
"10(1) An Order made on motion ex parte may not, unless the Court otherwise directs in the interest of justice, last for -
(a) More than 14 days after the party or person affected by the Order has applied for the Order to be varied or discharged; or
(b) Another 14 days after application to vary or discharge it has been argued.
(2) An application to vary or discharge an order made ex-parte may be made by the party or person affected within 14 days after service and shall not last for more than 14 days after the application has been argued unless the Court otherwise directs.
(3) Where a motion to vary or discharge an ex parte order is not taken within 14 days of its being filed, the ex parte order shall lapse unless the court otherwise directs in the interest of justice."
ordered that the accounts of the 20 Respondents be frozen for an initial period of 90 days, subject to renewal upon an application by the CBN.
the interest of justice"
''An ex-parte Injunction, is expected to last for a very short time moreso, as the procedure, is likely to be abused by litigants. This is why, the order, must be very sparingly made and only when the circumstances, are urgent and compelling such as to leave the court with no other alternative in preventing an anticipated injury of a grave nature.''
"The settled law is that rules of court of each court are not made for fun, but to be obeyed. Once such rules are in place they must be adhered to and not contravened or ignored. This is most especially in matters or procedures of fundamental importance like in the instant case".
2 A movement which called for disbandment of the Special Anti-Robbery Squad (SARS), a notorious unit of the Nigeria Police Force with long records of abuses including torture, extortion and extrajudicial judicial killings of citizens all over Nigeria.
3 Alfred Olubunmi: "#EndSARS: Lawyers, activists condemn Nigerian govt. for freezing accounts of protesters";
5 Suit No: FHC/ABJ/CS/1384/2020
7 Alao Abiodun: "#EndSARS: Fresh protest threat over freezing of accounts"; See also William Ukpe: "#EndSARS: Activists petition courts to unfreeze accounts of supporters"
8 See Section 1 to 14 of TPA for all acts that constitutes act of terrorism under the Act
10 END SARS'; Stephanie Busari (CNN): "Nigeria's Youth find Its voice with the EndSARS Protest Movement"
11 Some report also revealed that the protest was later hijacked by hoodlums. See Tobias Sylvester: "Police Beating and Harrasing Peaceful #EndSARS Protesters in Nyanya, Abuja"; Steve Dede: "#EndSARS protest were peaceful, until Nigerian Government Weaponised Violence to Crush them [Pulse Features]"
12 See Section 1 of the Constitution of the Federal Republic of Nigeria 1999 (As Amended)
13 Nigerian Financial Intelligent Unit
14 CBN appears to qualify as a financial institution under the CBN AML/CFT Regulation and the T by virtue of Regulation 132 of "the Regulation" which defined financial institution to include any person or entity who conducts trading in-foreign exchange, etc. Also, by Section 40 of the TPA which defines Financial institution as any institution or persons regulated by any of the enactments specified in the schedule to the Act, including the Central Bank of Nigeria Act (the "CBN Act")-the Act regulating the CBN.
17 (2009) LPELR-33(SC) Per Mukhtar, J.S.C. (P.26, Paras.B-C); See also Okorocha v. PDP & Ors (2014) LPELR-22058(SC) Per OGUNBIYI, J.S.C
18 Alao Abiodun: "#EndSARS: Fresh protest threat over freezing of accounts"; See also William Ukpe:"#EndSARS: Activists petition courts to unfreeze accounts of supporters"
20 Blaid Construction Limited & Mrs. Ochuko Momoh v. Federal Republic of Nige ria FHC/ABJ/CS/132/2019
21 See Blaid Construction Limited & Anor. v. Access Bank Plc.
22 See also Order 26 Rule 10(2) of the FHC Rules; Abary v. Talle & Anor (2016) LPELR-40805(CA)
23 See Section 240 of the Constitution of the Federal Republic of Nigeria 1999 (As Amended).
24 See Blaid Construction Limited & Anor. v. Access Bank Plc.
3. #EndSARS: The Aftermath