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THE EFCC IS NOT A DEBT RECOVERY AGENCY

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Dictum

It is important for me to pause and say here that the powers conferred on the 3rd Respondent, i.e the EFCC to receive complaints and prevent and/or fight the commission of Financial Crimes in Nigeria pursuant to Section 6(b) of the EFCC Act (supra) does not extend to the investigation and/or resolution of disputes arising or resulting from simple contracts or civil transactions in this case. The EFCC has an inherent duty to scrutinize all complaints that it receives carefully, no matter how carefully crafted by the complaining party, and be bold enough to counsel such complainants to seek appropriate/lawful means to resolve their disputes. Alas! The EFCC is not a debt recovery agency and should refrain from being used as such.

— S.D. Bage JSC. Diamond Bank Plc V. H.R.H. Eze (Dr) Peter Opara & Ors. (SC.375/2012, 9 March 2018)

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CREDITOR CAN PROCEED AGAINST A GUARANTOR FOR DEBT GUARANTEED

I dealt with the meaning of a Guarantee and referred to the case of Trade Bank PIc v. Khalid Barakat Chami (2003) 13NWLR (Pt.836) 158 @ 216. I also referred to Fortune International Bank PIc v. Pegasus Trading Office (GmbH) and @ Ors. (supra) – Where it was stated by Uwaifo, JSC, that the tendency is that the law appears to have moved to the centre to make the right of the creditor less conditional. That the creditor is now entitled to proceed against the guarantor without or independent of the incident of the default of the principal debtor. I also referred to the observation of Ayoola, JSC, in the case of African Insurance Development Corporation v. Nigeria (LNG) Liquefied Natural Gas Ltd. (2000) 4 NWLR (Pt.653)494 @ 505-506; (2000)2 SCNJ, 119; (2000) 2 S.C. 57. I then stated that it is settled that the liability of a guarantor becomes due and mature immediately the debtor/borrower becomes unable to pay its/his outstanding debt. That the guarantor’s liability is then said to have crystallised. I referred to some other decided authorities in this regard and stated that a Surety or Guarantor, is bound by the written agreement it/he entered into. – Ogbuagu JSC. Nwankwo v. Ecumenical (2007)

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WHEN IS A DEBT SAID TO HAVE ARISEN?

In AG Adamawa State & Ors. V. AG Federation (2014) LPELR – 2322 (SC), the Supreme Court per Muhammed JSC, had reiterated inter alia thus: “In financial terms, any amount of money which is still owed after some payment has been made is what is called a balance. It remains a debt on the neck of the debtor. Limiting it to financial dealings, ‘debt’ … represents a sum of money due by certain and express agreement. It is a specified sum of money owing to one person from another, including not only obligation of debtor to pay, but right of creditor to recover and enforce payment.”

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UNLESS AGREED, NOTICE NOT NEEDED BEFORE COMMENCING PROCEEDING AGAINST PRINCIPAL DEBTOR

The fact that the obligations of the guarantor arises only when the principal debtor has defaulted in his obligations to the creditor does not mean that the creditor has to demand payment from the principal debtor or from the guarantor or give notice to the guarantor before the creditor have to commence proceedings against the principal debtor unless there is an express terms in the contract requiring him to do so. See C.B.N V INTERSTELLA COMMUNICATIONS LTD (2018) 7 NWLR (Pt. 1618) 294 at 494. — M.L. Shuaibu, JCA. Ekpo v GTB (2018) – CA/C/324/2013

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WHAT IS A SECURED DEBT

A secured debt is a debt on which payment is guaranteed by an asset or a lien. This means that a secured debt has collateral to reduce the risk associated with lending, such as mortgage. Where the borrower defaults on payment, the bank seizes the mortgage property, sells it and uses the proceeds realized to pay back the debt as the property is liable to forfeiture. — M.L. Shuaibu, JCA. Ekpo v GTB (2018) – CA/C/324/2013

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