Court Vacates Interim Forfeiture Order On Accounts Without BVN

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Yemisi Izuora

The Abuja Division of the Federal High Court, has  varied the orders it made on October 17, which directed 19 commercial banks in the country to freeze all accounts without the Bank Verification Numbers (BVN).
Justice Nnamdi Dimgba, modified part of the order that granted the Federal Government interim ownership of funds in all the non BVN-linked bank accounts.

The variation was sequel to an agreement FG reached with the 19 commercial banks .

In his ruling, Justice Dimgba said he was minded to “revise” the earlier orders in view of the fact that it had been posing some “practical problems”.

The court directed banks to immediately unfreeze accounts that had since been linked to a BVN after the orders were made on October 17 following an ex-parte motion that was filed by the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN.

The court further revoked an aspect of the order which had directed an interim forfeiture of the proceeds in all the accounts without BVN pending the determination of the substantive suit.

The orders were modified on a day all the 19 commercial banks challenged jurisdiction of the high court to entertain the suit marked/ABJ/CS/911/16, which has FG and the AGF as the applicants.

Whereas FG was represented in the proceeding by Mr. Joseph Tobi, the 19 commercial banks were represented by Mr. Adeniyi Adegbonmire, SAN.

However, the Central Bank of Nigeria which was cited as the 20th respondent in the matter was not represented by any lawyer.

Justice Dimgba noted that before yesterday, unfreezing the accounts without BVN even with the account owners visiting the banks to undertake the BVN registration would have amounted to a violation of one of the orders of the court since the ruling did not make BVN registration a pre-condition for unfreezing such accounts.

He said with the way the order was couched, the freezing order placed on such accounts would have subsisted until the case was finally determined and not by the account owner undertaking the BVN registration.

Justice Dimgba said that aspect of his ruling had created “awkward and unfortunate result”.

According to the Judge, “Court engaged with all counsel to understand the practical problems posed by the Order of October 17, 2017, to the extent that it provides in Relief 4, ‘An interim order of the honourable court freezing the said accounts by stopping all outward payments, operations or transactions (including any bill of exchange) in respect of the accounts pending the hearing and determination of the substantive application’.

“It was generally agreed that this relief as currently couched creates an awkward and unfortunate result such that even when parties have gone to the banks to undertake their BVN, they still will not be able to operate the accounts because doing so will be in violation of the order of court.

“Parties agreed that the said Order No 4 should be revised to eliminate this problem, in the interim.

“Having listened to all counsel on record, and with the consent of all parties represented, I hereby revise Relief 4 of the court’s order of October 17, 2017 such that the new Relief 4 shall be: ‘An interim order of the honourable court stopping all outward payments, operations or outward transactions (including any bill of exchange) in respect of the accounts pending the linking of the accounts to a Bank Verification Number’.

“In view of the above agreed compromise revision of Relief 4, I also hereby revoke and set aside Relief 5 of the court’s order of October 17, 2017, which provides for:

“An interim order of forfeiture of the monies in the said accounts without BVN to the Claimants/Applicants being accounts with insufficient Know Your Customer guidelines contrary to Section 3 of the Money Laundering Act, 2011 and CBN guidelines the determination of the originating motion on notice”.

Meanwhile, counsel for the commercial banks, Mr. Adegbonmire, notified the court that his clients have filed an application to query jurisdiction of the court.

“My lord we have an application dated November 7, 2017 and filed same day. It, in the main challenges the court’s jurisdiction to make the ex parte order of October 17, 2017.”

Adegbonmire said the application had been served on FG, a development that was confirmed by the government’s lawyer.

Similarly, some persons that identified themselves as interested Nigerians, through their lawyer, Mr. Afam Osigwe, applied to be joined as parties in the matter.

Following request by counsel to FG and the 19 banks to be allowed to go through documents filed by the interested parties, Justice Dimgba adjourned the case till December 11 for hearing.

Original defendants in the suit are Access Bank Plc, Citi Bank Nigeria, Diamond Bank Plc, Ecobank Nigeria, Fidelity Bank of Nigeria Plc, First Bank of Nigeria Plc, First City Monument Bank Plc, Guaranty Trust Bank Plc and Heritage Bank Plc.
Others are Keystone Bank, Skye Bank Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc and the CBN.

Specifically, the court had upon an ex parte application by the AGF, ordered the CBN and the 19 commercial banks in the country to disclose all accounts without BVN in their record and balances on such accounts.

The court ordered the banks to also disclose details of all such accounts, their owners via an affidavit of compliance to be deposed to by their Chief Compliance Officers.

Besides, it issued an interim order directing banks to freeze all the said accounts by stopping all outward payments, operations or transactions, pending the hearing of the substantive application seeking the forfeiture of balances on the accounts to FG.

Justice Dimgba further directed the banks were to disclose any investments made with funds from these accounts without BVN in any products.

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