Berkeley Legal | THE AMCON PROCESS AND THE DOCTRINE OF FAIR HEARING
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24 Nov THE AMCON PROCESS AND THE DOCTRINE OF FAIR HEARING

 

INTRODUCTION

It is a cardinal principle of every judicial/adversarial system that all parties must be accorded equal opportunities to have their disputes resolved on its merits. It is on this premise that the principle of fair hearing was enshrined under Section 36 of the 1999 Constitution of the Federal Republic of Nigeria (as amended). The principle of fair hearing is founded on the twin pillars of Natural Justice which are embedded in the Latin Maxims audi alteram partem (hear the other side) and nemo judex in causa sua (a person shall not be a judge in his own case).

The Asset Management Corporation of Nigeria (hereinafter referred to as “AMCON”) was birthed in 2010 in the aftermath of the free fall of the Nigerian Capital Market and the near collapse of the Banking Sector in June 2009. AMCON was established with the sole purpose of curtailing the looming economic crisis through the purchase of non-performing loans from eligible financial institutions. As a result, the AMCON Act, 2010; the AMCON (Amendment) Act, 2015; the AMCON Practice Directions 2013 and the AMCON Proceeding Rules, 2018 are replete with provisions that gives AMCON powers to obtain Interim Orders against debtors exparte i.e., without hearing from the debtors/other parties.

We seek to examine these powers viz a viz the principle of Fair Hearing in line with the objectives of AMCON in the judicial/adjudication process.

WHAT DOES IT MEAN TO HEAR A MATTER?

According to the Supreme Court in the case of Akoh v. Abuh (1988) NWLR Pt 85 Page 876, to hear a matter means to hear and decide the cause or matter from its commencement, up to, and including, the delivery of final judgment.

WHEN IS A HEARING CONSIDERED TO BE FAIR?

In Olugbenga Daniel v. Federal Republic of Nigeria (2014) 8 NWLR Pt. 1410 Page 570, the Supreme Court laid down the factors to be considered in the determination of the question as to whether a party has been granted a Fair Hearing. These factors are:

  1. The Court shall hear both sides in the case and on all material issues before reaching a decision.
  2. The Court shall give equal treatment, opportunity, and consideration to all parties.
  3. The proceedings shall be held in public, and all parties shall have access to and be informed of such public hearings.
  4. Having regard to all circumstances in the case, justice must not only be done, but manifestly and undoubtedly be seen to have been done.

 

WHAT DOES THE AMCON LAWS PROVIDE?

Section 49 and 50 of the AMCON Act, 2010 grants AMCON the power to apply to Court i.e., the Federal High Court exparte (without notice to the other party/parties) for an order of Court attaching both immovable and movable properties including funds belonging to debtors as well as appoint a Receiver/Manager over a debtor Company to manage its affairs. This provision is reiterated/reemphasized under Order 13 of the AMCON Practice Direction 2013 and Order 4 of the AMCON Proceeding Rules, 2018.

Although the Interim Orders are obtained by way of an exparte application, such orders are Interlocutory in nature and are to subsist during the pendency of the case i.e., till judgment is given. This is provided under Sections 15 and 16 of the AMCON (Amendment No.2) Act, 2019.

ARE THESE PROVISION OF THE AMCON LAWS CONTRARY TO THE PRINCIPLE OF FAIR HEARING?

It is our humble opinion that these laws are not contrary to the principles of fair hearing as enumerated above and the reasons are not farfetched. The reasons for taking this position are enumerated below:

  1. Power of Court to Set Aside: The Federal High Court has unfettered jurisdiction ex debito justitiae (as a matter of right) to set aside any interim orders obtained from the court upon satisfying certain conditions which include misrepresentation, fraud, concealment of facts etc. This is provided for under Order 26 Rule 9 of the Federal High Court (Civil Procedure) Rules 2019 and the case of Umar & Anor. v. Okeke (2016) LPELR-40258(CA). This law affords the debtor(s) an opportunity to bring an application to set aside any interlocutory order(s) obtained against them thereby granting them a fair hearing.
  2. Undertaking as to Damages: It is condition precedent to the grant of any exparte order that a party must provide undertaking as to damages. This undertaking serves as an indemnity to indemnify the debtor(s) in the event that it turns out that the Interim Order(s) ought not to have been granted. This is provided under Order 13.3(1) of the AMCON Practice Direction[supra] and the case of Sotuminu vs. Ocean Steamship Nigeria Ltd (1992) 5 NWLR (Pt. 239) 1.
  3. Obligation on AMCON to Commence Debt Recovery Proceedings: The law places an obligation on AMCON to commence debt recovery proceedings (case) within fourteen (14) days of obtaining the exparte order. We are mindful of the fact that there are arguments that this provision has been deleted from the Act, this notwithstanding, AMCON is still under an obligation to commence debt recovery proceedings against debtor(s) to have the matter heard on its merits before judgment. This substantive case therefore affords the debtor(s) an opportunity to be heard.
  4. Right of Appeal: Just like every decision of a Court, an exparte order is appealable. A party dissatisfied with the order must first take steps to set it aside before the court which granted it, and if same is refused, the debtor has a right of appeal to the Court of Appeal and further to the Supreme Court. This would also accord the debtor(s) the right to fair hearing.

 

CONCLUSION:

The provision of the AMCON laws which grants AMCON powers to obtain exparte orders are not in breach of the principle of fair. There are ample provision in the law which affords a debtor an opportunity to seek redress in the event that the ex parte orders ought not to have been granted.

Caveat:

The information provided in this snippet is for general informational purposes only and does not constitute legal advice. If you require specific legal advice on any of the matters covered in this snippet, please contact info@berkeleylegal.com.ng