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Understanding the ‘Transfer Window’ for Portability of Retirement Savings Accounts in Nigeria | Michael Dugeri

Understanding the ‘Transfer Window’ for Portability of Retirement Savings Accounts in Nigeria | Michael Dugeri

Introduction

Prior to the commencement of the Contributory Pension Scheme in 2004,
Nigeria operated the Defined Benefit scheme which was challenged on many levels
with issues such as terrible service delivery by administrators of the scheme in
the form of delayed or non-payment of pension entitlements to retirees. As a
result, the Contributory Pension Scheme (CPS) was introduced, to among other
things, decentralise pension administration and establish an institutional
framework for the safety, management and custody of pension assets in favour of
all categories of workers in Nigeria. Pension Fund Administrators (PFAs)
licensed under the Pension Reform Act (PRA) have the responsibility to provide
customer service support to employees, invest pension assets under their
management, offer returns on the investments, and ensure prompt payment of retirement
benefits to retirees, in accordance with the provisions of the Act.

The CPS introduced the concept of portability of pension assets to
pension administration in Nigeria by granting to beneficiaries the statutory
rights to open retirement savings accounts with PFAs of their choice and to
carry along with them the account and the funds in the account from one
employer to another and/or from one PFA to another. Portability is however not
being fully exercised by employees, who are currently not able to carry along
with them, the funds in their retirement saving accounts from one PFA to any other
of their choice. This is due to operational challenges that the pension
industry has struggled with since portability was introduced under the 2004 PRA.
This means that currently, RSA holders, whose PFAs are underperforming in terms
of return on investments, are stuck with such PFAs as they cannot move their
contributions to PFAs with better history of high returns on investment or to
PFAs with better history of customer service. Against the backdrop of PenCom’s latest
timeline of December 2020 for the opening of the Transfer Window this article
aims at providing clarity on the key aspects of this important aspect of the
CPS.  

 

Legal Basis for Portability of Retirement Savings Accounts in Nigeria

What is commonly called ‘The Transfer Window’ means the coming into
effect of section 13 of the PRA. The PRA requires every employee to maintain a Retirement
Savings Account (RSA) in his name with any PFA of his choice. Section 13 of the
Act stipulates that, “subject to
guidelines issued by the Commission, a holder of a Retirement Savings Account
maintained under this Act may, not more than once in a year, transfer his
account from one Pension Fund Administrator to another
”. The employee need
not provide any reason for such transfer. This provision is, however, yet to
become operational due to challenges associated with the requisite IT application
and infrastructure, on the one hand, and management of the data of contributors
and pensioners, on the other.

The RSA holder’s choice to freely open his RSA and move the funds in the
RSA from one employer and or PFA to another was first introduced under section
11 of the 2004 PRA. The provision was retained under the 2014 Act and made subject
to guidelines issued by the National Pension Commission (PenCom). PenCom has
since issued Regulations for the Transfer of RSAs, first in 2012 and again in
2015, preparatory to the coming into effect of Section 13, even though it is
yet to open ‘The Transfer Window’, which will authorise PFAs to allow RSA
holders to transfer their RSAs from one PFA to another. It is unclear at this
point if PenCom will revise the 2015 Regulations in view of further changes
that it has introduced since then, such as the introduction of the Enhanced
Contributor Registration System (ECRS) to replace the former Contributor
Registration System (CRS).  

There are however, a few key points worth noting about the 2015 PenCom Regulations
for the Transfer of RSAs.  The
Regulations have four broad objectives, namely:

a.      seamless transfer of RSAs from one PFA to another;

b.     facilitating full and equitable pension assets portability within the
pension industry;

c.      enhancing ethical competition amongst the PFAs, and

d.     improving service delivery to RSA holders.

The Regulations, which make the benefit of the transfer available to
both employees and retirees, binds PFAs under the pain of sanctions. For
instance, a sanction of N200,000.00 per RSA and additional N100,000.00 daily
where the offence continues are to be imposed on any PFA/PFC that violates the
transfer processes as specified in the PenCom’s sanctions regime under section 5.0
of the Regulations.  

 

Challenges of Implementation
of a Data Governance Framework for the Pension Industry

The opening of the transfer window will facilitate full and equitable
pension assets portability within the pension industry, enhance ethical
competition amongst the PFAs and improve service delivery to RSA holders. This
is, however, not without challenges.

One of the major challenges to the opening of the Transfer Window is the
quality of the data that operators have over time collected about contributors
and pensioners. It is pertinent to note that at inception in 2004 contributors
were added to the CPS by PFAs without their bio-data and biometrics captured as
part of requirements for opening or operating an RSA. Registration of
contributors was concluded under a system known as the Contributor Registration
System (CRS), which was ill-equipped to ensure the integrity of the contributors’
data. This led to a situation of the pension industry’s data on contributors
and pensioners being of poor quality in terms of accuracy, completeness,
consistency, reliability and currency. There has therefore been the real concern
that until the matter of integrity and quality of extant contributors’ data is firmly
handled cases of identity theft and large-scale frauds may result from the opening
of the Transfer Window.

 

In order to address the issues on the quality of data on contributors
and pensioners, in 2019 PenCom developed and deployed the Enhanced Contributor
Registration System (ECRS) to facilitate an industry-wide data recapture exercise
for the over 9,039,748 RSA holders. The ECRS
consists of six major functions, namely, contributor registration to generate
unique pin, recapture for existing contributors, bio-data update, update of
signature (and picture where applicable), temporary PIN for employer-initiated
registration and RSAs verification service.

 

Furthermore, the ECRS, which replaces the former CRS, is integrated with
the National Identity Management Commission for authentication of the
uniqueness of individuals seeking to register under the CPS. This, it is hoped,
will greatly enhance the integrity of contributors’ data and also facilitate
the seamless operation of section 13 of the PRA. Also, integrating RSAs with
NIN and BVNs will help the PFAs to clean up their databases to combat identity
theft as well as prevent fraud in the pension industry.

 

Following the ECRS PenCom has announced the development of RSA Transfer
System (RTS), an e-platform to enable seamless RSA transfers. The RTS platform is
said to enable PFAs to electronically submit to receiving PFAs RSA transfer
requests initiated by RSA holders to receiving PFAs. As rightly noted by
PenCom, the full deployment of the RTS will, however, entail extensive training
of the PFA’s relevant personnel and simulation of the associated processes,
industry-wide. It should also include the plan to keep the general public
sufficiently informed about it.

 

At the back of the data management challenges of the industry, there is
also the issue of requisite IT infrastructure for the RSA transfer process. The
2015 PenCom Regulations require every PFA/PFC to deploy IT infrastructure,
which must have adequate storage and retrieval capability for a period of Ten
(10) years. In addition, every PFA/PFC is to achieve and maintain an IT infrastructural
level to be specified by PenCom, which shall include the following:

a.      Automated fingerprint capturing equipment for capturing fingerprints
(for PFAs), and

b.     Automated Document Management System.

 

It is needless to say that these infrastructural commitments will come at
a huge cost to PFAs that are already struggling with increasing operational
costs and dwindling returns on their investments of AuM. There is also the cost
to contributors and pensioners who must now make themselves physically available
for the data recapture exercise in order to continue the seamless operation of
their RSAs.

 

In anticipation of the increase in competition among PFAs from the
opening of the ‘Transfer Window’ section 2.2.38 of the Regulations provide that
all personnel of PFA/PFCs shall abide by the PenCom Code of Ethics and Business
Practices and respect the confidentiality of all information relating to the
transfer process. PFAs with a history of poor customer service will now also
have to worry about losing customers to other PFAs that the customers may
prefer.

 

RSA Transfer Process under the 2015 PenCom Regulations for the Transfer
of RSAs

It is unclear at this point if PenCom will revise the 2015 Regulations
in view of further changes that it has introduced since the regulations were
issued in 2015, such as the introduction last year of the Enhanced Contributor
Registration System (ECRS) to replace the former Contributor Registration
System (CRS) and the development of the RSA Transfer System (RTS).

 

In order to ensure the effective implementation of RSA transfers, the
2015 Regulations established the Pension Administration System (PAS) as an
electronically driven infrastructure for handling inter-PFA RSA transfers in
order to remove potential bottlenecks associated with RSA funds transfers and
settlements. PAS, to be domiciled at PenCom, will warehouse all data on pension
matters relating to registered contributors/members. PAS is to have an
interface with all PFAs and Pension Fund Custodians (PFCs) to facilitate
transfers between the PFAs.

 

Section 2.2.14 of the 2015 Regulations further provided that the
transfer process could only be initiated by an RSA holder who has been duly
registered on PAS. To be registered on PAS an RSA holder must have his/her
bio-data and biometrics captured by his/her PFA and transmitted to PAS. PAS was
to operate the RSA Transfer Clearing Module (RTCM) to facilitate electronic RSA
balances transfers, automated direct debits and credits. The 2015 Regulations
state that the “RTCM shall serve as a
platform for the processing of Transfer of RSA from one PFA to another,
settlement of Net Transfer balances between PFAs, reconciliation of transfer
balances and monitoring of the transfer processes
”. It further provided
that the RTCM shall maintain an IT platform that facilitates seamless
coordination of transfer processes through a link that shall be accessed by
only authorised officials of the PFAs/PFCs.

 

The RSA holder intending to transfer his/her RSA to another PFA shall
obtain a Transfer Form, complete and submit it to the Receiving PFA with a copy
of certificate of registration or RSA statement of account issued by the
Transferring PFA (TPFA), and valid means of identification. If the beneficiary
is a retiree, he/she is also required to provide a copy of Programmed
Withdrawal Agreement (PWA) with the TPFA. This is because section 2.2.4 of the
2015 Regulations provided that only retirees on PWA are eligible for transfers.

 

Upon the receipt of a duly completed transfer form and authentication of
submitted documents, the receiving PFA shall electronically forward the RSA
transfer form and captured fingerprint images of the RSA holder to RTCM to
validate the form for completeness. If successful, RTCM shall forward the PIN, surname,
fingerprint images and Transferring PFA Code to the Registration Module of PAS
for validation.

The RTCM shall, within two working days from the date of receipt of the
transfer request determine the Effective Transfer Date (ETD) and electronically
communicate both the ETD and provisional approval to both Receiving and
Transferring PFAs and request the TPFA to forward the transaction history. On
the ETD, the Transferring PFA shall move the balance in the RSA to the TSA and
determine period of outstanding contributions if any. Upon completion of the
transfer process, the Receiving PFA shall notify the RSA holder of the transfer
value received within two (2) working days.

 

It is pertinent to note that all RSA balances to be transferred by the
Transferring PFA shall be in Naira value and shall be calculated based on the
unit price of the Transferring PFA’s RSA Fund as at the ETD. It is to be noted
further that RSA transfers under the Regulations shall attract no transfer fee.

 

Conclusion and Recommendations

The opening of the Transfer Window, long overdue, will facilitate full
and equitable pension assets portability within the pension industry, enhance
ethical competition amongst the PFAs and improve service delivery to RSA
holders. There should however be extensive training of the PFA’s relevant
personnel and simulation of the processes, industry-wide. RSA holders are
advised to immediately approach their PFAs to provide
their Bank Verification Numbers (BVNs), NIN as well as other required biodata

The sanctions regime under section 5.0 of the Regulations is not a
sufficient deterrence as the perceived gains from holding on to pension assets
to be transferred may outweigh the specified penalties for non-compliance. It
is suggested that penalties for non-compliance should be tied to a percentage
of the pension assets that are wrongfully withheld by a defaulting PFA. This
way, minor infractions will also not be over-penalised.

Also, the Regulations are silent on the procedure for establishing
breach by PFAs of the Regulations. This is important in view of the sanctions
regime, which is prone to abuse in the absence of a fair and transparent
dispute resolution mechanism. 

 

Finally, it cannot be over-emphasized that this exercise should be given
the maximum publicity so that the general public, especially stakeholders like
contributors and pensioners, are sufficiently informed on all the different
aspects of the exercise and its importance to the CPS and their retirement
savings.  

 

Michael
Dugeri is a Lagos-based Legal Practitioner with specialties in Energy Law,
Employment and Capital Markets 

COVID-19: African Free Trade Zone And The Ecowas Trade And Commerce |  O. M. Atoyebi, SAN

COVID-19: African Free Trade Zone And The Ecowas Trade And Commerce | O. M. Atoyebi, SAN

The world has never
been more ignited in recent times for survival than at the end of2019 and the
launch of 2020 through to the mid-year and still counting. For many, the
outbreak of the COVID-19 pandemic projected a rather unannounced arrival of end-time.
While the world is still adjusting to the disease and fighting to
curbit,
unfortunately,COVID-19 has triumphed in disrupting the entire chain of human
affairs across the globe with its rippling effect.

 

The African Free Trade Zone and the Economic
Community of West African States (ECOWAS) Trade and Commerce
, being one of
those economic engagements violently hit and halted by this crisis,along with
the repercussions birthed by various emergency measures adopted by member
countries and regions in curbing its overarching population sapping effects,
would have otherwise been the take-off of a tremendous economic transposition
for the African continent and indeed, the rest of the world.

 

Theeffect of the
pandemic and
withthe gradual easing of imposed lockdownsin
member countries (which until recently resulted in an indirect placing of
unintended embargo on these kinetic commercial interactions, all in a bid to
prevent the multiplicity of the contagion) spells for the growth of the African
market,is the focal point of this work.

 

THE AFRICAN
CONTINENTAL FREE TRADE AREA

 

The African
Continental Free Trade Area (hereinafter referred to as “AfCFTA”) is a trade deal designed to drop barriers
in intra-African
trade[1].
According to Brookings Institution, intra-African exports made up only 19% of
total trade in 2018, compared to 59% and 69% for intra-Asia and intra-Europe
trade respectively[2],
this sharp variance defines the rationale for the need to put such a long
overdue deal in place. Simply put, theAfCFTA aims at rewriting this
unproductive narrative by means of increasing in-house
African
trade through the removal of barriers.

 

The 55-nation
continental Free-trade Zone which has been referred to as the world’s largest Free-trade
Zone, is
being expected to create $3.4Trillion combined
gross domestic product of economic bloc with 1.3 Billion people across Africa
and constitute the largest new trading bloc in the world, since the
inception of the
World
Trade Organizationin 1994[3].
Interestingly, the International Monetary Fund (IMF) remarked that the AfCFTA
is a “potential economic game changer and
eliminating tariffs (in Africa) could boost trade in Africa by 15-25% in the
medium term”.

 

COVID-19
AND THE KICK-OFF OF THE LONG-AWAITED AFRICAN FREE TRADE AGREEMENT

 

The landmark
African Free Trade Agreement is the instrument intended to initiate the laid
out liberal trans-border commercial activities across the coastal regions of
the continent once implemented on the 1st day of July, 2020, having
been ratified by all member countries, with Nigeria following suit in July,
2019 (after series of delays and protracted consultations with relevant
stakeholders). This decision of the largest economy in Africa to sign the agreement
was a massive amplifier to the deal. The AfCFTA entered into force on 30th
May, 2019[4].

A Free Trade Agreement
simply means where a country has a lower cost of production in her home Nation,
such Nation will gain market share by offering products cheaper than the competition[5].
Also, by the Agreement, Nations can no longer artificially increase prices of
imported goods by imposing import duties[6].
Free Trade Agreements are designed to cut trade tariffs among member countries,
help make a country’s exports cheaper and get easier access to other markets.
It removes border taxes or trade barriers, get rid of quotas in such a way that
there will be no limit to the amount of trades indigenous businessmen can
conduct. These tariffs are usually in the form of taxes.[7]

 

Beyond dispute is
the fact that though the Agreement is already legally in force, a number of details
are still unsolved as part of the first phase of the process which would have
brought the July zero hour for the take-off of trade in goods and services
under the new tariff into fruition. This was as a result of the direct fallout
of the African Union’s inability to hold its earlier scheduled Conference in
Johannesburg, South Africa in May, 2020, to place the lid over the Agreement,
owing to the cross-border travel restrictions and in-country imposition of
lockdowns to arrest the rapid spread of the coronavirus pandemic[8].
As it stands, only a rescheduling of both the meeting and take-off dates by the
Assembly as soon as practicable, would see to the successful unveiling of
trading inter-relations in the zone as initially earmarked, especially with the
gradual easing of the somewhat stiff control measures placed in concerned
territories.

 

ECOWAS TRADE AND COMMERCE

 

Trade in the Community
is evolutionary. There was a time when old trading links were still being
relied on to sustain business
exchanges in the area. What
is being awakened now however is trade with development dimension. The Economic
Community of West African States (ECOWAS), since its inception has had a trade
policy designed to increase intra-regional commerce, raise trade volume and
generally galvanize the economic activities within the region in such a way as
to positively impact on the economic wellbeing of ECOWAS citizens[9].

 

The ECOWAS trade
policy is also meant to foster the smooth integration of the region into the
world economy with due regard for the political choices and development
priorities of states in the desire to engender sustainable development and
reduction of poverty[10].

 

The total trade of
the region has averaged $208.1 Billion. Exports are projected at approximately
$137.3 Billion while imports total about $80.4 Billion. The main active Countries
in trade are Nigeria; which alone accounts for approximately 76 percent of
total trade, followed by Ghana; (9.2 percent) and Cote d’Ivoire; (8.64
percent). The trade surplus of the region, estimated at about $47.3 Billion is
attributable to Nigeria ($58.4 Billion) and Cote d’Ivoire ($3.4 Billion) when
all other Countries have a deficit in the trade balance[11].

 

Today, the total
ECOWAS trade has increased by an average of 18 percent per year between 2005
and 2020. It is dominated by Mining Commodities (oil resources, iron, bauxite,
manganese, gold, etc..) and Agriculture (coffee, cocoa, cotton, rubber, fruits
and vegetables and other products rather marketed within the region such as dry
cereals, roots and tubers, livestock products) etc. Nigeria, Cote d’Ivoire,
Ghana and Senegal concentrate 87 percent of this trade, with 79 percent of
regional imports ($55,520Million per year) and 94 percent of exports and
re-exports ($77,792 Million per year)[12].

 

THE ECOWAS TRADE LIBERALIZATION PROGRAMME: CATALYST FOR
ECONOMIC TRANSFORMATION IN THE COMMUNITY

 

A main feature of
the Community’stradingand commercial policy is ECOWAS Trade Liberalization
Programme(ETLP). The objective of the programme is to progressively establish a
Customs Union among the Member States of the Community over a period of fifteen
years, starting from 1st January, 1990, the date of entry into force
of the Scheme. The Customs Union will among others involve the total
elimination of customs duties and taxes of equivalent effect.

 

The ECOWAS Trade
Liberalization Programme, involves three groups of products; unprocessed goods,
traditional handicraft products and industrial products. The programme is meant
to give several advantages to member States and their citizens as they trade
among themselves. An example of this is, the advantages accruing to unprocessed
goods imported from a member state as contained in Decision C/DEC.8/11/79 of the Council of Ministersis, total
exemption from import duties and taxes, free movement without any quantitative
restriction as well as non-payment of compensation for loss of revenue as a
result of their importation, provided that unprocessed products among other
conditions, originate from member states of the Community and must appear on
the list of products annexed to the decisions liberalizing trade in these
products.

 

COVID-19 CLOG ON ECOWAS TRADE AND COMMERCE

The unpremeditated advent
of COVID-19 and the measures placed to curb its dispersion across ECOWAS member
states, with the commonest of such steps being the ban on cross-border
movement, resulted in a huge dip in the progress of the ETLP in particular, and
all forms of commercial interrelations in the region in general. This could
otherwise be channeled along a more productive and economically transforming
axis for the concerned States and in fact, even the rest of the Continent. 

 

Continuous Trade in
both goods and services would have played a key role in overcoming the pandemic
and limiting its health and economic impact, especially on the poor through
adopting coordinated measures on trade in response to the COVID
19
epidemic. Trading and Commerce would have contributed immensely by providing
countries access to essential medical goods (including material inputs for
their production) and services to help contain the pandemic and treat those
affected; ensuring access to food, maintaining and enhancing nutritional intake
of the poor which will boost immune systems and contribute to the ability to
resist the virus; providing farmers with necessary inputs (seeds, fertilizers,
pesticides, equipment, veterinary products) for the next harvest; and
supporting jobs and maintaining economic activity in the face of a global
recession, disruption to regional and global value chains, and reduced
employment and increased poverty.

 

Conversely, measures
to contain the pandemic in West-Africa and the whole of Africa is reducing
trade. African countries are highly dependent on global trade, and measures put
in place that limit trade are rapidly having negative impacts on most countries
hitherto operating in the ETLP. Thirty-two countries in Africa have put in
place flight restrictions[13].
Some have suspended all commercial passenger flights, others have blocked
international flights, while a few have limited the restrictions to countries
with high infection rates.

 

Experience from
previous crises, such as the 2008-2011 food price crisis of 2009, clearly shows
that imposing export restrictions on medical and food products will increase
the international prices of these products which will impact most negatively on
the poorest people. Export bans on food also lowers domestic prices which
reduces the incentive to grow food crops in the next season. If the pandemic
spreads in Africa the same way as in Europe and the USA, it will result in
critical hotspots that could overwhelm local health capacities and food
security, the two most vital survival necessities for everything alive.

 

URGENT NEED FOR IMPLEMENTATION OF THE AfCFTA

 

The last World
Economic Outlook from IMF forecasts a -3% contraction in world GDP in 2020 and
a -1.6% contraction for sub-Saharan Africa for the same period[14].
The fall in the world GDP will no doubt lead to a severe fall in the exports
demand for African products due to the fall in the global demand as COVID-19
persists. Given the specificities of African economies, the negative impact
would be more than proportional, hence more trade among African nations and
between Africa and the rest of the world is of essence. The AfCFTA will thus
have the advantage of boosting intra-African trade contributing to mitigate the
rapid decline in African GDP[15].

 

COVID-19 is both a
supply and demand shock. Given this magnitude, the crisis may lead to a
significant upending of global value chains, perhaps leading to a higher
reliance on regional value chains. Given the potential for the AfCFTA to serve
as a real economic engine at the continental level, policymakers must maintain
the momentum towards its implementation so as to empower the region to more
successfully navigate the hit its economies will take and have already taken.
Trade liberalization under the AfCFTA is among many policies that could help
pull countries out of recession after the pandemic is over.

 

CONCLUSION

 

Indubitably,
the very soul of every nation is the income that accrues to it. From the
provision of basic amenities (with food, shelter and even clothing being the
constant variables), to the more political cum economically motivated projects,
policies and programmes aimed at maintaining the stronghold of a nation among
its other dominating contemporaries. African countries have managed to devise
tactical progressive models designed to rescue the continent from sinking into
the abyss of hunger, war and poverty, by evolving a medium via which trade and
commercial activities will flourish among the inhabitants of the black-nation
with little or no need of reliance on external channels.

 

The bid to
introduce the AfCFTA and the push to advance the long existing ECOWAS Trade and
Commerce(for the benefit of member-countries and by extension, the whole of
Africa), have been the forces at the forefront of achieving this mandate.
Unfortunately, just when plans were set to go on motion
, the
COVID-19 pandemic trotted its way from other parts of the Globe into the shores
of the Continent and is threatening to cancel the anticipated success of these
plans.

 

With the stiff
measures to fight the pandemic now being tenderly relaxed coupled with the
positive available windows it has helped to expose, the time is ripe for
African leaders to intensify their strength to see to the quickened implementation
and diversification of the masterplan for the economic development and
transformation of our dear continent.

 

 

 

Paper by OyetolaMuyiwaAtoyebi,
SAN
.

 

Mr. OyetolaMuyiwaAtoyebi, SAN is one of the most notable
professional Nigerian youth, who has distinguished himself in his professional
sphere within the country and internationally. He is the youngest in the
history of Nigeria to be elevated to the rank of a Senior Advocate of Nigeria.
At age 34, he was conferred with the prestigious rank in September, 2019. Mr.
O.M. Atoyebi, SAN can be characterized as a diligent, persistent, resourceful,
reliable and humble individual who presents a charismatic and structured
approach to solving problems and also an unwavering commitment to achieving
client’s goals. His hard work and dedication to his client’s objectives sets
him apart from his peers. 

As the Managing Partner of O.M. Atoyebi, SAN and Partners,
also known as OMAPLEX Law Firm, he is the team leader of the Emerging Areas of
Practice of the Firm and one of the leading Senior Advocates of Nigeria in
Information Technology, Cyber Security, Fintech and Artificial Intelligence
(AI). He has a track record of being diligent and he ensures that the same
drive and zeal is put into all matters handled by the firm. He is also an avid
golfer.

 

Email: Atoyebi@omaplex.com.ng

LinkedIn:
https://www.linkedin.com/in/atoyebi-oyetola-muyiwa-san-804226122/

 

Post-Judgment Interests In Nigeria  |Nonso Anyasi

Post-Judgment Interests In Nigeria |Nonso Anyasi

 

Introduction

It
is common knowledge that the Nigerian Courts will not award a relief that was
not expressly claimed by a party at trial because the Courts are prevented from
doling out unsolicited gifts like Father Christmas.[1]
However, it appears that many companies are unaware of an exception to this
rule, which exists in the rules of almost every High Court in Nigeria wherein
the Courts are permitted to award post judgment interest on every judgment sum,
even where same was not claimed by a successful litigant in his pleadings.[2]

 

Post Judgment Interests in the Various Rules of
High Court

Every
Court of equipollent jurisdiction with the high court (Federal High Court,
State High Courts, National Industrial Court and the Investment and Securities
Tribunal) has a provision in its rules which recognizes the award of
post-judgment interests on judgment debts at the rate of not more than 10% per
annum. This interest shall immediately apply on every judgment debt and it is
immaterial whether the judge made no pronouncement on it or whether the
successful party did not claim for this relief.

In
the Federal High Court, Order 23 Rule 5
of the Federal High Court Civil Procedure Rules 2019
provides as follows:

“The Judge at
the time of making any judgment or order or at any time afterwards, may direct
the time within which the payment is to be made or other act is to be done,
reckoned from the date of the judgment or order or from some other point of
time, as the judge deems fit and may order interest at a rate not exceeding ten
per cent per annum to be paid upon any judgment.”

In
the High Court of Lagos State,
Order
39 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules 2019

similarly provides as follows:

“The Judge may at the time of making any
Judgment or Order or at any time afterwards, direct the time within which the
payment is to be

(a)             
made or other act is to be done,

(b)             
reckoned from the date of the Judgment or
Order, or some other date or time, as the Judge deems fit; and may order
interest at a rate not less than 10% per annum to be paid upon judgment.”

In
the High Court of the Federal Capital Territory, Abuja, Order 39 Rule 4 of the High Court of the Federal Capital Territory
(Civil Procedure) Rules 2018
also provides thus:

“The Court at
the time of making any judgment or order, or at any time afterwards, may direct
the time within which the payment is to be made or other act is to be done,
reckoned from the date of the judgment or order, or from some other point of
time, as the Court may deem fit and may order interest at a rate not less than
10% per annum to be paid upon any judgment.”

Similar provisions exists in the rules of the
various State High Courts in Nigeria. Please see Order 35 Rule 4 of the Akwa Ibom State High Court (Civil Procedure)
Rules, 2009
and Order 35 Rule 4 of
the Ogun State High Court (Civil Procedure) Rules, 2014
for instance.

In the National Industrial Court, Order 47 Rule 7 of the National Industrial
Court of Nigeria (Civil Procedure) Rules 2017
contains a similar provision
thus:

“The Court
may at the time of delivering the judgment or making the order give direction
as to the period within which payment is to be made or other act is to be
performed and may order interest at a rate not less than 10% per annum to be
paid upon any judgment.”

In
the Investments and Securities Tribunal, Order
7 Rule 7 of the Investments and Securities Tribunal (Procedure) Rules 2014

also contains a more detailed provision thus:

“When a
decision awards a party a monetary sum (other than in respect of costs and
expenses), the award shall, unless set aside, and subject to any variation on
appeal or review, carry interest at the commercial rate from the date of the
event giving rise to the application to the Tribunal and or at the rate of ten
percent from the date of the decision. The interest may be recovered in the
same manner as the award to which it relates.”

 

Rationale Behind the Award of Post-Judgment
Interests

Post
Judgment interests on a judgment sum are awarded to a successful litigant to
encourage judgment debtors pay off the judgment debt as soon as possible. Our
legal system also acknowledges the inordinate length of time it takes for
appeals to be heard. An appeal may take as long as ten years to be concluded at
the Apex Court, such that a monetary award of the trial Court may have lost its
worth by the time the Supreme Court affirms the judgment of the trial Court.
Hence, the rules of every trial/High Court empowers the Courts to award
post-judgment interest on every judgment debt at the rate of not less than 10%
per annum.

Interestingly,
every judgment of the trial/High Court actually carries post-judgment interests
at the rate of 10% p.a. Hence, even where the trial Court is silent on the
issue of post-judgment interest, the apposite rules of that Court automatically
imputes interest at the rate of 10% per annum on the judgment sum.

The
Supreme Court of Nigeria has explained the rationale behind the compulsory
award of post-judgment interests in the case of Berliet (Nig.) Ltd. v. Kachalla
(1995) 9 NWLR (Pt.420) 478
when the Noble Lord Ogundare JSC held with
exquisite erudition as follows:

“The
principle behind the rule seems to me to be to provide incentive to judgment
debtors for the speedy payment of judgment-debts and to ensure that judgment
creditors do not suffer much detriment as a result of a delay in the settlement
of judgment debts. The wording of the rule clearly shows that the judgment
automatically carries interest at 10 per centum per annum until it is
satisfied. The rule however, gives the court a discretion to order otherwise.
In my respectful view, this discretion is a veto which the trial court may
exercise to direct that no interest be paid on a judgment debt, or to order
that a lesser interest be paid. Where he does not give any direction or where
the judgment is silent as to payment of interest on the judgment debt, the
judgment debt automatically carries interest at the rate fixed by the rule,
that is, 10 per centum per annum from the date of the judgment.”

 

Interpretation of this Rule by the Courts

Undoubtedly,
statutes and rules of Court are to be given their literal and unambiguous
meanings where the wordings of the legislature are clear and precise. However,
the Court may invoke the golden and/or mischief rule of interpretation where
the religious application of the literal rule will amount to manifest
absurdity.

A
prima facie observation of the
various rules of Court on the award of post-judgment interest would reveal that
the rules appears to give the judges the discretion to choose to order the
award of post-judgment interests or not. Some recalcitrant Judgment Debtors
have contumaciously held on to the literal construct of these rules to avoid
paying post-judgment interests where same was not expressly awarded by the
Courts. Some have argued that the use of the verb “may” in these rules evinces
the intention of the draftspersons of the rules NOT to connote mandatoriness,
and that it rather it confers a discretion on High Court judges to choose to
award the post-judgment interest or to refrain from doing so.

This
argument has been rejected by the Apex Court on a number of occasions,
including the locus classicus case of
G.K.F Investment
Nigeria Limited v Nigeria Telecommunications PLC (2009) 15 NWLR (Pt. 1164) 344
SC
where
the Apex Court laid this vexed issue of the interpretation of the rules of Court
on post-judgment interests to a definite rest while interpreting the provisions
of Order 38 Rule 7 of the Lagos State
High Court (Civil Procedure) Rules 1994
which has now
metamorphosed
into Order 39 Rule 4 of the High court
of Lagos State (Civil Procedure) Rules 2019
as follows:

“In the instant case where the
rules of court have provided for the recovery of interest on a judgment sum,
the entitlement is automatic unless otherwise ordered by the court. Since the
lower court had neither ordered the payment of interest to the Appellant nor
given a direction to the contrary, the sum of N200,000.00 awarded to the
Appellant automatically carries interest at the rate of 7 1/2% fixed by Order
38 Rule 7 of the Lagos State High Court (Civil Procedure) rules 1994 as
amended.”

Similarly,
in the case of Berliet (Nig.) Ltd. v. Kachalla (1995) 9 NWLR (Pt.420)478, the
Apex Court while interpreting the provisions of Order 27 Rule 8 of the High
Court (Civil Procedure) Rules 1976 of Kano State had earlier held with
unambiguous clarity as follows:

“It is not
difficult to resolve the main issue in this appeal which is the construction to
be placed on Order 27 rule 8 of the High Court (Civil Procedure) Rules 1976, of
Kano State. The rule is very clear
and unambiguous. Unless the court otherwise orders: a judgment debt carries 10
per centum per annum interest from the date of judgment until it is liquidated
by the judgment-debtor.
”(emphasis mine).  

 

The
Court of Appeal in absolute fealty to the inveterate doctrine of stare decisis has also followed the
illustrious reasoning of the Apex Court above in the case of Uli
Microfinance Bank Nigeria Limited v. Agbanu Norbert (2018) LPELR-44953(CA)
when
the jurisdiction of the appellate Court was activated to interpret the
provisions of Order 35 Rule 4 of the
Anambra State High Court (Civil Procedure) Rules, 2006
which also deals
with the automatic application of post-judgment interests on judgment debts.
The Court held thus: 

“There
is no doubt from the record that the claim for interests on the amount due to
the Claimant/Judgment Creditor was rightly awarded in the circumstances. By
Order 35 Rule 4 of the Anambra State High Court Civil Procedure Rules, 2006,
“not less than 10% per annum to be paid upon any judgment” can be
awarded notwithstanding that the time for the payment of interest or the
interest rate were not pleaded or proved at the trial. The principle of awarding post judgment interest on a liquidated
judgment sum has been accepted as an exception that no person is entitled to
any remedy or relief not claimed
.”
(emphasis mine).

 

Pragmatic Circumnavigation of the Murky Waters of
Post-Judgment Interests

As
earlier stated, many Judgment Debtors (especially companies) are in the habit
of sulking and raising frivolous objections when a victorious Judgment Creditor
demands for the payment of the outstanding post-judgment interests on a
judgment debt after the forensic dispute between the parties has been finally
settled by the Apex Court. It is only after losing out on appeals that some Judgment
Debtors discover that the compounding post-judgment interests will have doubled
the value of the judgment debt.

The
safest way to escape the financial agony which is sure to accompany the demand
for the payment of outstanding judgment debt and post-judgment interests is to
place the value of the judgment debt in a high interest yielding account before
filing a notice of appeal against the decision of the trial Court. This will
provide a safe fall-back cushion in the event that the Judgment Debtor loses on
appeal as the judgment debt would have generated sufficient interests to
satisfy the post-judgment interest when the Judgment Creditor eventually comes
knocking for his outstanding judgment debt and interests thereon.

 

Conclusion

It
is certain that as night follows the day, post-judgment interests at the rate
of 10% per annum shall apply to every monetary judgment debt of the High
Courts, except where the Court expressly declares otherwise.

It
will therefore be futile for any Judgment Debtor to attempt to escape the
payment of post-judgment interests on monetary judgment debts of trial Courts.
Any objection to the compulsory application of post-judgment interests would be
treated as a moot point which may only succeed in irking the Courts further and
result in the imposition of costs while the outstanding interests shall still
continue to run.

 

Nonso
Anyasi is a Dispute Resolution and Data Privacy Attorney based in Lagos and can
be reached via nonsoanyasi@gmail.com.



[1] Ado Ibrahim & Co Ltd v BCC Ltd (2007) 15
NWLR (Pt. 1058) 538; Union Beverages v Owolabi (1989) 3 NWLR (Pt 108) 192.

[2] Uli Microfinance Bank Nigeria Limited v.
Agbanu Norbert (2018) LPELR-44953(CA)

#NBA2020AGC: 6 Quotes From The NBA2019AGC

#NBA2020AGC: 6 Quotes From The NBA2019AGC

As we prepare for another
exciting Annual General Conference, we
can’t help but think back to the amazing time we had at the 2019 NBAAGC which
held in Lagos. We have therefore put together 6 interesting quotes from
speakers at the Conference. Find them below – 


We don’t look at anybody’s
face before taking our decisions.

        –  Hon. Justice Tanko Muhammad, Chief Justice of
Nigeria
.

 

Social Media has boundless
opportunities for lawyers and law firms, but it depends on how you use it.

         – Adedunmade Onibokun

 

I commend you all for organizing
this conference over the years in a manner that has brought our country
positive global respect.

       –  
President Muhammadu Buhari GCON

 

We should not toil with the
independence of the Judiciary.

         – Mike Ozekhome SAN

 

We must address the problem
of judicial timidity
.

         – Mallam Yusuf Ali SAN

 

The Conference affords us
the opportunity to review how we operate.

         – Paul Usoro SAN (NBA President)


If you have a favourite
quote from the 2019 Annual General Conference; do share.

@Legalnaija

3 Things You Can Do Ahead Of The #NBA2020AGC

3 Things You Can Do Ahead Of The #NBA2020AGC

The NBA Annual General
Conference kicks off in 3 days and we are so excited about it. According to Mr.
Kunle Edun, the NBA Publicity Secretary, over 15,000 lawyers have registered
for the conference, a number significantly higher than the 2019 conference.

As we get ready for the
conference, here are 3 things you can do in anticipation.

1.     
Look
through the list of speakers

Visit
the NBA Conference Website and scroll through the list of speakers, you will
definitely find a number of speakers who spark your interest and whom you will
like to listen to. Some include Former President, Chief Olusegun Obasanjo GCON;
the Speaker of the House of Representatives, Rt. Hon. Femi Gbajabiamila; Hon. Justice Tanko Muhammad, Chief Justice of
Nigeria; Governor Nyesom Wike, Governor of Rivers State; Lord Angus Glennie, QC,
Of the Privy Council & Judge Of the Appellate Court of Scotland and Steven
Richman, Former Chair, American Bar Association Section of International
Law, just to mention a few. You can find the list of speakers here.

 

2.      Check
out the Sessions

The NBA Conference website lists some of the
sessions scheduled to hold at the Annual General Conference, some of these
include the sessions on the State of the Nation; Of Layoffs, Furloughs and
Redundancy, a discussion on recent developments on labour and employment issues
in light of the impact of the COVID-19 pandemic, and A Dialogue on Insolvency
and Economic Recovery. You can find the list of sessions here on the NBAAGC Forum.

 

3.      Network
and Engage on the NBA Forums

The NBAAGC Website showcases forums for each of the
sessions where lawyers can network and engage. The Forum allows you connect
with many of the 15,000 delegates who have registered form various parts of the
world and diverse practice areas. The Forums are also platforms to meet up with
old friends and buddies. You can join some of the forums here.

So
what are you waiting for? If you are yet to register, log on to the NBA Website
here
https://conference.nigerianbar.org.ng/

@Legalnaija

 Image Source: NBA Website 

  

#WOCJusticeSummit:Developing an Institutional Concept of Justice in Nigeria | Bode Olanipekun, SAN

#WOCJusticeSummit:Developing an Institutional Concept of Justice in Nigeria | Bode Olanipekun, SAN

Within and outside the Nigerian legal space, there are few words that get more constant reference than the word ‘Justice.’ The consistency of its recurrence in our lexicon is indicative of the fact that, almost, if not, everyone with a capacity to reason has a perspective of what ‘Justice’ entails. There is also a natural disposition and assumption that whatever misaligns with an individual’s idea of justice would amount to injustice.


In view of the fact that, most citizens have an expectation of, and stake in justice, it is axiomatic that the concept itself and the vehicles for its delivery are communal and national issues that require a consensus (from, at least the majority) as to what the acceptable standards should be. It is for these reasons that Wole Olanipekun & Co. (WOC) has assembled a team of leading industry players and stakeholders in the justice sector to constructively engage in a solution driven discussion towards developing an institutional concept for justice.

WOC has been an active participant in the justice sector in the last four decades. Over the that period, we have built relationships that are now being leveraged upon to put up this summit as part of our contributions towards building, not only a lasting justice institution for Nigeria, but also one that satisfactorily adapts to the ever changing needs and expectations of citizens anchored on consistent and acceptable principles.

Register for the event immediately via this link  https://bit.ly/3aazQnS  and stream live on Youtube via this link http://bit.ly/Youtubewocjusticesummit

Bode Olanipekun, SAN
Managing Partner

Four Things You Can Look Forward To At The #NBAAGC2020

Four Things You Can Look Forward To At The #NBAAGC2020

With the NBA Annual General
Conference just 8 days away, we are super excited about this year’s conference
for various reasons and we want you to know 4 things you can look forward to at
the upcoming conference.

 

1.     
AWESOME
DISCUSSIONS

One
of the hallmarks of the NBA Annual General Conference are the panel session
discussions and speeches from world renowned leaders. For instance one of the
Keynote Speakers at this year’s AGC is
Hon. Dame Linda Dobbs, the Director of Training at the
Judicial Institute for Africa; Pro Chancellor of the University of Surrey; read
more about her here.

 Other
speakers, participants can look forward to engaging with at the conference
include; Prof. Yemi Osibajo SAN, GCON, Rt. Hon Femi Gbajabiamila, Governor
Nyesom Wike, Chief Olusegun Obasanjo and Brian Speers, President of the Common
Wealth of Lawyers Association. You can see the full list of Speakers
here.

 

2.     
BONDING
AND NETWORKING

Over
past conferences, lawyers are used to meeting up in person to network and bond.
Despite the pandemic, lawyers will still have the opportunity to network and
bond at the upcoming conference.

 

3.     
ENGAGING
NEW IDEAS

With
the new normal like we all like to call it, businesses have been forced to
think outside the box to provide engaging new ideas which ensure their
businesses thrive. At the 60th NBA Conference, we are going to be
engaging with new ideas as well.

 

4.     
A LOOK
AT THE FUTURE

Like
earlier mentioned, due to the pandemic we are forced to think outside the box
and the Nigerian legal profession must also discover new ways of preparing for
what the future brings. Most especially, how do we as lawyers prepare ourselves
for this future?

These and more are going to
be discussed at the NBAAGC 2020 and we recommend you do not miss it for the
world. To register, simply log on www.conference.nigerianbar.org.ng
 and click on the Registration button.
The website also has information on some of the special features of the
conference.

Dear Lawyers, What Are You Doing On the 26th – 29th of August, 2020? #NBAAGC2020

Dear Lawyers, What Are You Doing On the 26th – 29th of August, 2020? #NBAAGC2020

If your answer to the above
question is “you don’t know” or “you are not sure”, then you are truly on a
long thing and like we lawyers usually say “you are sleeping on your rights”. On
the 26th – 29th of August, 2020, the largest gathering of
lawyers in Africa, will be getting together for the NBA Annual General Conference.

There is really no excuse
not to be part of the NBAAGC 60th Anniversary. Can you believe the
NBAAGC is 60 years. WOW, that comes with so much history to it and guess what?,
the conference is free. One more special thing is that the Conference is
absolutely free.

To register, simply log on www.conference.nigerianbar.org.ng
 and click on the Registration button.
The website also has information on some of the special features of the
conference.

So now that you know what
you will be doing on the 26th – 29th of August, 2020. What
are you waiting for? REGISTER NOW, the conference is just 8 days to go.