The Asset Management Corporation of Nigeria (AMCON) was established under section 1 of the AMCON (AMENDMENT) Act 2015 to, amongst other functions, acquire eligible bank assets from eligible financial institutions and to hold, manage, realize and dispose of eligible bank assets (including the collection of interest, principal and capital due and taking over of collateral securing such assets) under the Act.
In a bid to give effect to the AMCON Act, being a special enactment and to achieve its purpose of quick recovery of toxic assets of the Federal Government, the Federal High Court issued the AMCON Practice Directions 2013 pursuant to sections 254 of the 1999 Constitution as amended, sections 53 and 61 of the AMCON Act and order 57 rule 3 of the Federal High Court (Civil Procedure) Rules 2009. On the 1st March, 2013, the then Chief Judge of the Federal High Court, Ibrahim Auta, in exercise of the powers conferred on him by section 254 of the Constitution, section 44 of the Federal High Court Act, Sections 53 and 61 of the AMCON Act 2010, Order 57 Rule 3 of the Federal High Court (Civil procedure Rules), issued the AMCON Practice Direction, 2013 to guide the Courts in the effective handling of AMCON matters. A careful perusal of the Practice Direction, 2013 reveals a very comprehensive and well detailed provision, devoid of technicalities, aimed at quick and effective handling and disposal of AMCON matters. This Practice Direction alongside the AMCON (Amendment) Act, 2015 have been used over time for the determination of AMCON matters until 13th December, 2018 when the Chief Judge of the Federal High Court, Honourable Justice Adamu Abdu Kafarati, issued the Federal High Court Asset Management Corporation of Nigeria (AMCON) Proceedings Rules, 2018 (hereinafter referred to as “the AMCON Proceedings Rules, 2018” or “the AMCON Rules”) relying, inter alia, on the powers conferred upon him by section 254 of the 1999 Constitution as amended.
2. Objectives of the AMCON Proceedings Rules, 2018
Order 1 rule 1 of the AMCON Proceeding Rules, 2018 clearly states the objectives of the Rules; the main objective being to enable the Court deal with AMCON claims quickly and efficiently. The Judges of the Federal High Court are enjoined by Order 2 Rules 1 & 2 of the AMCON Rules to further the objectives of the Rules by active case management which includes doing any of the following:
i. Identifying the issues at an early stage;
ii. Deciding the order in which issues are to be resolved;
iii. Encouraging the parties to use an ADR mechanism;
iv. Encouraging parties to settle the whole or part of the case;
v. Fixing timetables and otherwise controlling the progress of the case;
vi. Dealing with as many aspects of the case as possible on the same occasion even when not scheduled;
vii. Making use of technology; and
viii. Giving directions to ensure that the trial of a case proceeds quickly and efficiently.
3. Major Provisions of the AMCON Proceedings Rules, 2018
A careful perusal of the AMCON Rules discloses the following as its major provisions:
i. Clear delineation of how actions are to be commenced by writ of summons, originating summons, originating motion or petition
All AMCON claims shall be commenced by writ of summons, originating summons, originating motion or petition or any other method provided under the AMCON Act and it explained the circumstances for their use.
ii. Lifespan of originating processes tagged claims
Order 3 Rule 8 of the AMCON Rules provides that an AMCON claim form shall be valid in the first instance for one year from the date of issue. The judge may upon application order a single renewal for a period not exceeding six months. An application for renewal is to be brought before the expiration of the claim form.
iii. Timeline for services of AMCON processes
Order 3 Rule 11 of the AMCON Rules is to the effect that AMCON originating processes shall be served on the other party within 7 days of its filing, default of which will attract a penalty as prescribed in the schedule to the AMCON Rules. A defendant is entitled to 5 days to reply if any.
iv. Default fee for each day of default for late filing of memorandum of appearance
Order 3 Rule 13 of AMCON Rules imposes a fine of N5,000 for each day of default in filing memorandum of appearance after 5 days allowed in Order 3 Rule 11(3) of the Rules.
v. Electronic filing provided for
The provisions relating to e-filing in the Federal High Court (Civil Procedure) Rules shall apply to all AMCON claims and any party represented by a legal practitioner is required to file a memorandum of appearance with comprehensive details of his phone numbers and email addresses; see Order 6 of the AMCON Rules. Also, where the parties undertake to serve the processes electronically, they shall file a certificate of service in the court.
vi. Defects in documents to be treated as mere irregularities
Pursuant to Orders 7 and 16 of the AMCON Rules, the effect of non-compliance in commencing an action or at any stage of the proceedings may be treated as an irregularity and will not nullify the proceedings, any document, judgment or order made.
vii. Personal service of originating or other processes on the defendant not necessary
Under Order 8 Rule 3 of the AMCON Rules personal service of originating processes on the defendant shall not be necessary where the defendant undertakes in writing to accept service by his legal practitioner.
viii. Grant of default judgment by the Court in default of appearance or defense
Default judgment may be granted in default of appearance or defense by the trial court, as provided in Order 9 of the AMCON Rules. This default judgment may, however, be set aside if wrongly entered.
ix. Summary judgment procedure provided for
Where a claimant believes that there is no defense to the claim he may sue for recovery of a debt, a liquidated money demand or any other claim. Under this procedure i.e. summary judgment procedure under Order 10 of the AMCON Rules, the Claimant is required to file a motion on notice seeking summary judgment in a suit filed and setting out the grounds supported by a statement of claim and an affidavit stating that there is no defense to the claim and a written address.
x. Court to explore possibilities of settlement of the dispute
Order 11 rule 1 of the AMCON Rules provides that the court shall, in appropriate cases, grant not more than 21 days to parties within which to explore possibilities of settlement of the dispute.
xi. Parties to file respectively issues for determination
Before a matter proceeds to trial, Order 11 Rule 2(1) of the AMCON Rules provides that parties shall file their respective issues for determination. Sub – Rule (3) provides that where the parties have filed their respective issues for determination and the parties have not agreed on the issues for determination, or that the judge is of the opinion that the issues formulated by the parties do not adequately address the controversies between them, the judge may, in spite of the issues formulated by the parties, formulate appropriate issues for determination and such shall be the issues for determination at the trial of the matter.
xii. The court may grant interim orders
Under the provisions of Order 12 Rule 1(1)(a) – (p) of the AMCON Proceedings Rules, 2018 the court has powers to grant numerous interim orders stated thereunder including an order of interim possession under section 49 of the Act, an account-freezing order under section 50 of the Act, an interim order of injunction, an order to deliver up goods, an order restraining a party from dealing with any assets etc.
xiii. Mortgagee or Mortgagor may approach the court for reliefs
Under the provisions of Order 15 of the AMCON Rules a mortgagee or mortgagor, whether legal or equitable, or a person who is entitled to or who has property subject to legal or equitable charge or foreclosure may claim any of the reliefs stated thereunder. These include payment of moneys secured by the mortgage or charge, sale, foreclosure, delivery of possession, redemption, or re-conveyance.
4. Comparing the Practice Directions with the AMCON Rules
After a careful perusal of the provisions of both the AMCON Practice Direction, 2013 and the AMCON Proceedings Rules, 2018, it can be clearly seen that the latter incorporates the salient provisions of the former, while also making fundamental innovations. Some of those innovations are as follows:
i. The AMCON Rules allow for oral application for substituted service unlike the Practice Direction which stipulates that all legal arguments must be in writing.
ii. The AMCON Rules allow the judge to award claims/benefits not sought by parties. There was no such provision in the Practice Direction.
iii. The AMCON Rules allow the judge to make use of similar Rules when a particular matter is not provided for in it; but no such provision exists in the Practice Direction.
iv. The AMCON Rules give the judge full discretion of the conduct of the case notwithstanding the provisions of the Rules. There is no such discretion under the Practice Direction.
v. Defects in documents and proceedings are to be treated as mere irregularities and the court may allow such defects to be regularized or remedied on such terms as the court may direct.
It is important to note that the AMCON Proceedings Rules, 2018 did not repeal the AMCON Practice Directions, 2013. However, in view of the wide provisions made in the new Rules, the need to continue to have recourse to the Practice Direction may have become redundant. Indeed, the new 2018 Rules is an attempt to improve on the 2013 Practice Direction, which had been in use in the past five years.
We consider the period of 7 days for the service of AMCON processes, the period of 5 days for the Defendant to reply thereto, and the default fee of N5,000 for each day of default to be onerous. Although, we appreciate the reasoning behind these provisions, they may, ultimately, limit access to justice. It is hoped that, during future reviews of the AMCON Rules, the Bar would be consulted. Whatever may be its shortcomings, however, the AMCON Rules will no doubt be a good working tool for judges of the Federal High Court in the administration of justice in AMCON matters which come up before them.