I'm in pains! I'm in pains!! I'm in serious pains!!! Those have become common cries of many bank customers who feel betrayed by their respective commercial banks. The reason: notice that a caution, or if you like, a "post no-debit-order" has been placed on their account pursuant to a directive of the Economic and Financial Crimes Commission (EFCC/the Commission).

The law books are now replete with records of countless court actions filed by aggrieved bank customers, claiming damages from banks and sometimes joining law enforcement agencies, particularly the EFCC, as parties. Up until very recently, there has been a legal 'fix' as to which must prevail; the duty of care owed bankcustomers by the bank or the bank's seeming legal obligation to comply with the directives of the law enforcement agencies. The matter has moved a step closer to being laid to rest (in favour of the customer) with the recent Court of Appeal decision in Guaranty Trust Bank v. Mr AkinsikuAdedamola-CA/L/1285/15.

Generally, a bank owes its customersa duty of secrecy or confidence. This means thatthe details of, and access to his/herbank account and transactions conducted through the same, must be kept private from unauthorised persons. This confidentiality rule forms the bedrock of modern banking practice.With this duty of care, the bank is expected to protect the interests of its customers, howbeit, within the ambit of the law1. The duty of care owed to customers can be defied if such defiance is in tandem with the law2.For example, it is without doubt that the duty may be lawfully avoided where a court of competent jurisdiction orders that the account of a customer be placed on 'caution'3. In such an instance, the bank is under an obligation to depart from the duty of care without any accompanying liability. However, it is under this guise that many banks have found themselves unwittingly thrust into legal disputes.

In Nigeriathe EFCC Act, empowers the Commission to issue a directive to any bank to freeze the account of any of its customers under investigation. The directive must however be made only after the Commission has obtained an order ofCourt to that effect4. The law provides that this order can be obtained without informing the party affected and this is usually the case5. The practice, which has been subject to systemic abuse by law enforcement, has resulted in many law suits against banks. Rather than obtain a court order to place a caution on an account as provided by the law, the EFCC in a most cavalier fashion, routinely issues directives to banks without waiting to undergo the inconvenience of obtaining a court order. The banks have often acted in compliance with the EFCC's directives to freeze the accounts of their customers. In doing so, they have relied on the presumption of regularity under the Evidence Actwhich prescribes that the actions of a public officer are presumed to be regular. Operating under what seems to be statutory cover, the banks have not always felt the burden of duty to obtain a copy of the order of Court pursuant to which the Commission acts or ascertain whether such an order in fact exists at all.

The courts for their part, now seem bent on holdingthe banks liable for complying with an EFCC directive to freeze a customer's account, without a valid court order.The presumption of regularity seems to have been stretched too thin by banks arguing the point. The court,it seems, would be more tolerant in a situation where a bank was given a court order and presumed the order to have been validly obtained, and not where it was not given any court order and yet presumed there was a court order somewhere.

So it was, on the 1st of March 2019, the Court of Appeal, Lagos Judicial Division in Guaranty Trust Bank v. Mr AkinsikuAdedamola-CA/L/1285/15 per Hon. Justice Tijani Abubakar held that;

''even if the applicant was alleged to have committed a criminal offence, the EFCC cannot, on its own, direct the bank to place a restriction on his accounts in the bank without an order of court. The law allows the EFCC to come to court even with an ex parte application to obtain an order freezing the account of any suspect that has lodgements suspected to be proceeds of crime. No law imposes a unilateral power on the EFCC to deal with the applicant this way''.

The Court of Appeal went ahead to state that the bank does not have any obligation to comply with the directive of the EFCC where such directive was not made pursuant to a court order. The implication of this is that the legal and compliance departments of financial institutions now have a duty to ascertain that any directive from the EFCC is accompanied by a valid order from the court. Anything short of this may expose the bank to avoidable liabilities. Until a contrary decision is delivered by the Supreme Court, this is the law on the matter. While this judgement does not operate to inhibit or obstruct the powers of the EFCC to conduct investigations or trace and attach suspicious funds, it resonates the eternal principles of the rule of law, which is the bedrock of any thriving democracy where, in contrast to the Redbeard society, 'might is not right'.

Law enforcement agencies are creations of law and as such they must be compelled to operate within the bounds of the laws that created them. The (ex parte) order permitted by the law when an enforcement agency is investigating financial crimes, is only to ensure that the suspect who is being investigated does not over reach the commission and make a fast move to evacuate his funds from the bank where same is lodged. The Commission must be ready to act professionally and obtain the order of court in a timely and lawful manner to avoid a situation where it incurs liability against itself and the banks it deals with. The compliance and legal departments of banks must similarly ensure that they set up interactive sessions with the Commission and indeed other law enforcement agencies, to ensure that they are fully aware of the implications of not obtaining a court order before instructing banks to freeze the accounts of customers. Banks must now begin to repair the fractured trust between them and their customers. They must also let the Commission know it will no longer be business as usual when it comes to post-no-debit orders.


1. Joachimson v Swiss Bank Corporation [1921] 3 KB 110

2. Sarkar on Evidence, 15th Edition Reprint 2004, at page 2374

3. Effiwat v Barclays Bank (Nig) [1970] 2 All NLR 26,

4. Section 34 (1)(2) of the EFCC Act, 2004

5. Dangabar Vs. Federal Republic of Nigeria [2012] LPELR 19732 (CA);

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