CORAM

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Kenneth Ikechukwu Amadi-Justice, Court of Appeal

Binta Fatima Zubairu- Justice, Court of Appeal

Fadawu Umaru- Justice,Court of Appeal

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PARTIES

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SAHEED OLUWARANTI ARIORI

APPELLANTS

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ASSET MANAGEMENT CORPORATION OF NIGERIA

RESPONDENTS

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AREA(S) OF LAW

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BANKING LAW, CONSTITUTIONAL LAW, FEDERAL JURISDICTION, LIMITATION OF ACTIONS, DEBT RECOVERY, STATUTORY INTERPRETATION, AMCON LAW, CONFLICT OF LAWS, RETROSPECTIVE LEGISLATION, ASSIGNMENT

 

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SUMMARY OF FACTS

The respondent (AMCON) commenced an action at the Federal High Court, Abeokuta to recover ₦173,823,149.15 being outstanding indebtedness arising from a credit facility originally granted by Equitorial Trust Bank Plc to the appellant. The debt was acquired by AMCON pursuant to a Loan Purchase and Limited Servicing Agreement dated December 31, 2010 and was designated an eligible bank asset under the AMCON Act.

The appellant had been granted the credit facility on November 13, 2001 for 365 days, with liability becoming due around November 13, 2002. The appellant refused to repay despite repeated demands. AMCON did not institute the action until October 18, 2021, which was nineteen years after the claim arose in 2002, or eleven years after AMCON acquired the debt in 2010.

Following institution of the action, AMCON obtained interim orders for preservation and attachment of appellant’s properties on October 28, 2021. The appellant subsequently filed a motion contesting the trial court’s jurisdiction on the ground that the action was statute-barred under the Limitation Law of Ogun State, which requires actions founded on simple contracts to be brought within six years.

The trial court dismissed the appellant’s application on December 1, 2022, relying on Section 35(5) of the AMCON (Amendment No. 2) Act 2019, which provides that limitation statutes do not apply to AMCON claims regarding eligible bank assets.

 

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HELD

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The appeal was dismissed with costs of ₦500,000 against the appellant. The Court of Appeal held that AMCON operates under a specific federal legislative framework that overrides general State limitation laws. The court found that Section 35(5) of the AMCON (Amendment No. 2) Act 2019 explicitly provides that limitation statutes do not apply to AMCON claims regarding eligible bank assets. The court ruled that federal legislation prevails over state law where inconsistent, and that AMCON’s statutory scheme vests it with fresh and independent statutory rights of recovery not governed by ordinary principles of assignment. The matter was remitted to the lower court for hearing on the merits with directions for accelerated hearing.

 

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ISSUES

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1. Whether the Federal High Court lacked the requisite jurisdiction to entertain the respondent’s suit instituted on October 18, 2021, so as to enable it to strike same out in limine.?

2. Whether the Federal High Court was right to assume jurisdiction over the respondent’s suit, despite the appellant’s plea of statute of limitation under the Limitation Law of Ogun State.?

 

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RATIONES DECIDENDI

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AMCON ACT SUPERSEDES STATE LAW – FEDERAL SUPREMACY:

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“The AMCON Act is a Federal Legislation and therefore supersedes the State Law. Appellant’s Counsel did not take cognizance of the fact that the above provision of the AMCON Act is a specific law which specifically applies to AMCON matters, whereas the Limitation Law of Oyo State is a general law applicable to various causes of action in the State.” – Per FADAWU UMARU, J.C.A.

 

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SPECIFIC LAW PREVAILS OVER GENERAL LAW – LEGAL PRINCIPLE:

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“It is trite that general laws do not override laws on specific subject matters.” – Per FADAWU UMARU, J.C.A.

 

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SUBSEQUENT SPECIFIC PROVISION PREVAILS – GENERALIBUS SPECIALIA DEROGANT:

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“It is instructive to restate here that this Court has held that where a specific provision is subsequent to a general provision, the specific provision of the statute will prevail.” – Per FADAWU UMARU, J.C.A.

 

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LIMITATION STATUTES INAPPLICABLE TO AMCON – STATUTORY EXCLUSION:

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“Any statute of limitation of a state or Federal Capital Territory or any like statute or Rule or practice direction of any Court limiting the time within which an action may be commenced does not apply or operate to bar or invalidate any claim brought by the Corporation in respect of an eligible bank asset.” – Per FADAWU UMARU, J.C.A.

 

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AMCON’S SURVIVAL BEYOND LIMITATION PERIODS – STATUTORY PROTECTION:

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“Further, AMCON’s right to pursue debt recovery (and enforcement of securities or guarantees) survives beyond ordinary limitation periods. Even if a cause of action might be ‘old,’ the limitation statutes cannot extinguish AMCON’s judicial enforcement rights in respect of eligible bank assets.” – Per FADAWU UMARU, J.C.A.

 

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AMCON RIGHTS BECOME STATUTORY NOT CONTRACTUAL – TRANSFORMATION OF OBLIGATIONS:

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“It is therefore incorrect to characterize AMCON’s debt-recovery actions as ordinary simple contracts subject to State limitation laws. Once AMCON purchases an eligible bank asset, the rights and obligations arising therefrom become statutory, not merely contractual.” – Per FADAWU UMARU, J.C.A.

 

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SECTION 35(5) AS PROCEDURAL AND REMEDIAL – RETROSPECTIVE APPLICATION:

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“First, Section 35(5) is not a new substantive right but a procedural and remedial provision designed to clarify and reaffirm the pre-existing statutory structure governing AMCON claims. Procedural enactments apply retrospectively unless a contrary intention is expressed.” – Per FADAWU UMARU, J.C.A.

 

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LIMITATION STATUTES DO NOT ENDURE AGAINST AMCON – JUDICIAL PRECEDENT:

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“Furthermore, this Court has repeatedly held that limitation statutes do not endure against AMCON.” – Per FADAWU UMARU, J.C.A.

 

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LIMITATION LAW AS PROCEDURAL AND RETROACTIVE – LEGAL CHARACTER:

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“The Limitation Law is certainly procedural, setting out clearly time frame within which an action must be brought. Unlike substantive law, it is retroactive in nature and such statutes on this all-important subject must be read as a whole.” – Per FADAWU UMARU, J.C.A.

 

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FEDERAL LAW PREVAILS OVER INCONSISTENT STATE LAW – CONSTITUTIONAL PRINCIPLE:

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“If any Law enacted by the House of Assembly of a State is inconsistent with any law validly made by the National Assembly, the law made by the National Assembly shall prevail, and that other Law shall to the extent of the inconsistency be void.” – Per FADAWU UMARU, J.C.A.

 

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STATUTORY TRANSFER MECHANISM – AMCON ACQUISITION RIGHTS:

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“Under Sections 35(1) and 48 of the Act, once an eligible bank asset is transferred to AMCON, AMCON acquires all rights, interests, and remedies associated with the debt, irrespective of any prior limitation affecting the assignor.” – Per FADAWU UMARU, J.C.A.

 

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NEMO DAT RULE INAPPLICABLE – STATUTORY OVERRIDE:

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“The AMCON regime is not governed by the ordinary principles of assignment under common law. The nemo dat rule does not apply in the rigid sense urged by the Appellant. The statutory scheme vests AMCON with a fresh and independent statutory right of recovery.” – Per FADAWU UMARU, J.C.A.

 

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CAUSE OF ACTION ACCRUES FROM DEBT ACQUISITION DATE – AMCON CLAIMS:

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“It is clear that for the purpose of applying the Limitation Law of a State or the Limitation Act of the Federal Capital Territory, where a debt is owed to the respondent by reason of its acquisition of an eligible bank asset, the limitation time shall begin to run from the date of the purchase of the debt and the cause of action shall be deemed to arise from that date.” – Per FADAWU UMARU, J.C.A.

 

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CASES CITED

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STATUTES REFERRED TO

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• Asset Management Corporation of Nigeria Act 2010

• AMCON (Amendment) Act 2015

• AMCON (Amendment No. 2) Act 2019

• Section 35(1) of the AMCON Act

• Section 35(5) of the AMCON (Amendment No. 2) Act 2019

• Section 48 of the AMCON Act

• Section 61 of the AMCON Act

• Constitution of the Federal Republic of Nigeria 1999

• Section 4(5) of the Constitution 1999

• Section 251(1)(d) of the Constitution 1999

• Limitation Law of Ogun State

• Court of Appeal Act

• Section 15 of the Court of Appeal Act

 

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OTHER CITATIONS

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CLICK HERE TO READ FULL JUDGMENT

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COUNSEL

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1.V.O. Adesanya, Esq. holding the brief of J.K. Aworinde, Esq.For Appellant(s)

2.John Duru, Esq.For Respondent(s)