Does the Federal High Court really Exercise Concurrent Jurisdiction with the State High Court on Actions relating to Banker/Customer Transactions? By Wisdom C. Onyisi

The relationship subsisting between banker and customer is basically contractual and fundamentally that of debtor and creditor. It also consists of general and special contracts arising from the particular requirements of the banking business. The relationship may also be that of bailor and bailee as well as principal and agent. In Chief Festus Yusuf v. Cooperative Bank Nig Ltd, Bello CJN (as he then was) has this to say as per the nature of banker-customer relationship:

The relationship between a banker and its customer is that of a debtor and creditor and it is founded on a simple contract.”

Notwithstanding the nature of the relationship, the duties and obligations arising therefrom are so fundamental that even the slightest breach thereof can be a ground for an action, in which damages may lie. However, like all human dealings, dispute is definitely innevitable in this relationship, which may arise as a result of contractual breach or breach of duty by either party. The resolution of these disputes has been acknowledged to be no mean task for the parties thereto. Where the parties submit themselves to arbitration however, the burden is considered to be maximally reduced. On the other hand, where the parties decide to use the legal machinery of the court to resolve the disputes, they and/or their lawyers are sometimes faced with conundrum of filing their cases either at the Federal High Court or the state High Court, where the contractual breach occurred.

The jurisdiction of a court connotes the limits imposed on its powers to hear and determine the issue between the parties. It is the authority which a court has to decide matters that are litigated before it or take cognisance of matters presented in a formal way for its decision. It is settled law that courts are creatures of statutes based on the constitution with their jurisdiction stated or prescribed therein. No court assumes jurisdiction except it is statutorily prescribed as jurisdiction cannot be implied nor can it be conferred by agreement of parties. Once a court lacks jurisdiction, a party cannot use any statutory provision or common law principle to impose it because absence of jurisdiction is irreparable in law. The matter ends there and the only procedural duty of the court is to strike it out. The Supreme Court in Umannah v. Obong Victor Attah held that when the issue of jurisdiction is raised in a matter, once the court determines that it has no jurisdiction in the suit, it need not proceed further to consider any other issue, since it no longer has the jurisdiction to do so.

Jurisdiction can be substantive or procedural or as regards location. Procedural jurisdiction is the means or methods for invoking the jurisdiction of the court. While substantive jurisdiction has to deal with the subject matter of a suit and the power of the court to adjudicate on such subject matter which is usually provided for in the enabling statute of the court. This position was succinctly captured in the locus classicus case of Madukolu v Nkedilim that a court is only competent to exercise jurisdiction in respect of any matter where inter alia, the subject matter of the case is within jurisdiction and there is no feature in the case which prevents the court from exercising its jurisdiction.

As earlier noted, jurisdiction can also be conferred on a court by the Constitution or statute creating it.—Government of Gongola State v. Tukur.
The jurisdiction of the court in actions relating to banker/customer relationship has been another area where there has been some controversy. Section 7 of the Federal Revenue Court Act, 1973 listed “banking” as being under the jurisdiction of the then Federal Revenue Court. But, the Supreme court in Jamal Steel Structures v. African Continental Bank(1973) ALL NLR 258 held that ‘banking” under section 7 of the Federal Revenue Court Act of 1973 did not include ordinary banker/customer relationship. Bronik Motors Ltd. v. Wema Bank Ltd.(1983) 6 SC 158 followed the decision in Jamal Steel Structures v. African Continental Bank. In order to codify the decision in Jamal Steel Structures v. African Continental Bank, Decree 107 of 1993 included a proviso to section 230(1)(d) which is now section 251(1)(d) of the 1999 Constitution.

To set the stage in this deliberation is to go into the constitutional provisions of Section 251 (1) (d) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) CFRN for short and thus:

251 (1) -” Notwithstanding anything to the contrary 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 other Court in civil cases and matters (a)…; (b)…; (c)…’ (d) connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures”
The proviso the paragraph (d) above provides this “Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.”

But, inspite of the proviso, the Supreme Court in FMB v. NDIC(1999)2NWLR (pt. 591) 333 agreed with the Court of Appeal in NDIC v. FMB(1997)2 NWLR (pt 490) 735 and held that both the Federal High Court and the state High Court have concurrent jurisdiction in banker/customer cases. In NDIC v. Okem Enterprises Ltd.(2004) 10 NWLR (pt 880) 107, the Supreme Court restated the position. The apex Court explained that the proviso in Section 251(1)(d) does not take away the jurisdiction of the Federal High Court in banker/customer cases, but only takes away the exclusive jurisdiction and so the State High Court can also entertain such matters by virtue of section 272(1).

Similarly, the Supreme Court held that sections 3(1) and 9 of the Failed Bank Decree which conferred exclusive jurisdiction on the Federal High Court in banker/customer cases are inconsistent with section 251(1)(d) of the 1999 Constitution because the section has been interpreted as conferring concurrent jurisdiction on the Federal High Court. Reacting to this development, the learned author, Dr. Agabue A.D. (a senior lecturer in the Faculty of Law, Ambrose Alli University, Ekpoma, in his book “CIVIL LITIGATION IN NIGERIA: A PRACTICAL APPROACH noted thus:
” However the Supreme Court judgment in NDIC v. Okem Enterprises Ltd. (2004) vested banker/customer relationship on both the Federal High Court and State High Court.”
And this, it is submitted, is the law.
Similarly, in Merill Guaranty Saving & Loans Ltd & Anor v. Worldgate Building Society Ltd. (2013) 1 NWLR (Pt.1336) 581 relying on the decision of the Supreme Court in One Enterprises’. case held that Section 251 (1) (d) does not confer exclusive jurisdiction in disputes arising between individual customer and the bank on the State High Court. All it did is to remove the exclusivity in dealing with those kinds of disputes from the Federal High Court.

In the light of the above decisions, the decision of the court in Jamal Steel Structures v. African Continental Bank has been overruled. It is on this ground that I find erroneous the submission of the larned authors, Maureen Stanley-Idum and James Agaba, Esq in their book; “Civil Litigation in Nigeria,” 2nd Ed.( CITATION: Renaissance Law Publishers Limited, Lagos, 2018, p. 134., when they said:

“Although this decision in Jamal Steel Structures has been criticized in Afolayan v. Okorie on the ground that the proviso was meant to qualify paragraph (d) , but that the Supreme Court interpreted it to qualify all of sections 251”
The apex court has, by their judgments interpreted the proviso to section (d) of Section 251(1) to qualify the whole subsection and therefore vests concurrent jurisdiction on both State High Court and the Federal High Court in banker/customer cases.

The very recent case of ECOBANK v. ANCHORAGE LEISURES LTD & ORS CITATION: (2018) LPELR-45125(SC), seems to have buried the renaining controversy arising from the concurrent jurisdiction of State High Court and the Federal High Court in banker/customer cases. In this case, OKORO, J.S.C has this to say:
relationship between the appellant and the respondents is that of banker/customer relationship. There is nothing in the entire process to show a matter relating to simple contract. Section 251(1) of the Constitution of the Federal Republic of Nigeria vests exclusive jurisdiction on disputes between banks and other financial institutions but the Proviso thereto confers concurrent jurisdiction on the Federal and State High Courts in matters between an individual customer and his bank in respect of transactions between the individual customer and the bank. It is therefore erroneous to ague that the Federal High Court does not have jurisdiction in this matter between the Appellant and the Respondents… It must be noted that Section 251(1) (d) of the 1999 Constitution particularly the proviso thereof does not lose sight of the provision of Section 272(1) of the same constitution which provides that – “subject to the provisions of Section 251 and other provision of the Constitution the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue.” I do not think this provision provides exclusive jurisdiction on the State High Court on issue of disputes between an individual customer and his bank. Both Courts have concurrent jurisdiction on issue of banker/customer relationship. Based on the above few words of mine and the elaborate reasons in the lead judgment, I agree that the Court below was right to uphold the jurisdiction of the Federal High Court to entertain this matter.” (Pp. 36-38, Paras D-A.)

In the same case, his Lordship, PETER-ODILI, J.S.C. was of the view that:

Section 251 (1) (d) does not confer exclusive jurisdiction in disputes arising between individual customer and the bank on the State High Court. All it did is to remove the exclusivity in dealing with those kinds of disputes from the Federal High Court; which means that the High Court of a State by virtue of Section 272 (1) of the 1999 Constitution also shares the jurisdiction with the Federal High Court.”

The apex court has, by their judgments interpreted the proviso to section (d) of Section 251(1) to qualify the whole subsection and therefore vests concurrent jurisdiction on both State High Court and the Federal High Court in banker/customer cases. It is therefore submitted that though legal opinion may defer from the Court’s decisions above, by the doctrine of binding judicial precedents the latter judgements of the court remains the law in Nigeria.

WISDOM C. ONYISI is a 500 Level student in the Faculty of Law, Ambrose Alli University, Ekpoma.

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