The Appeal Court sitting in Sokoto has reversed the Federal High Court, Birnin Kebbi’s final forfeiture of Sterling Bank’s N71 million in an alleged unlawful activity case commenced by the Economic and Financial Crimes Commission (EFCC), involving alleged foreign exchange trade gains.
The reversal judgment was delivered by Justice Abdullahi M. Liman on July 17, 2025, according to the certified true copy of the verdict seen by Nairametrics on Wednesday.
Liman faulted the “growing trend for judges of the lower courts to grant interim orders of forfeiture under Section 17 of the Advance Fee Fraud Act or the Proceeds of Crime (Recovery and Management) Act without satisfying themselves that there exists, on the face of the application, a reasonable suspicion of unlawful activity.”
Lower Court Dispute
The EFCC had applied for and obtained an ex parte preservative order from the Federal High Court, Birnin Kebbi, against the bank over two sums:
- N36,433,295.00 suspected to be proceeds of unlawful activity, and
- N35,256,844.00 alleged profits made by Sterling Bank Plc from foreign exchange (FX) trades involving the said sum.
The EFCC legal team relied on the Proceeds of Crime (Recovery and Management) Act, 2022 (POCA) to seek final forfeiture, linking the money to “unlawful activity” against the bank.
Sterling Bank’s legal team opposed EFCC’s motion, citing a lack of jurisdiction, absence of credible evidence (maintaining the issue was a loan contract), and violation of the presumption of innocence.
However, the lower court granted EFCC relief in the following terms:
“That an order is hereby granted, forfeiting to the Federal Government of Nigeria through the Economic and Financial Crimes Commission the sum of N36,433,295.00, which is reasonably suspected to have been derived from unlawful activity, passed on to Sterling Bank Plc and now subject to a Preservation Order of this Court.
“An order is hereby made forfeiting to the Federal Government of Nigeria through the Economic and Financial Crimes Commission the sum of N35,256,844.00 made as profits by Sterling Bank Plc from foreign exchange trade with the use of the sum of N36,433,295.00 which is reasonably suspected to have been derived from unlawful activity, passed on to it and now subject to a Preservation Order of this Court.”
Dissatisfied with the lower court verdict, Sterling Bank’s lawyer, S. D. Baraya Esq., approached the Court of Appeal for redress.
The issues for determination before the Appeal Court were whether the Federal High Court, Birnin Kebbi, had territorial jurisdiction to entertain the EFCC’s application and whether the lower court was right to have granted final forfeiture of the funds to the Federal Government.
The bank asked the Appeal Court to allow its appeal and set aside the judgment of the lower court, while EFCC opposed.
Appeal Court Judgment
In delivering its judgment, the Appeal Court deduced that the bank (appellant), a designated financial institution licensed by the Central Bank of Nigeria to carry out banking operations, gave a loan to a client, part of which remains unpaid.
- Liman held that the client, according to the EFCC (respondent), deposited N64,500,000 into its account number in Sterling Bank Plc; and a restriction was placed on that same account by the appellant, “and the appellant (Sterling Bank) deposited N36,433,295 out of the N64,500,000.”
- The Appeal Court also noted that the said client “gave the EFCC N30,000,000 out of this money to settle a previous case pending at one of the zones and that EFCC neither returned it nor forfeited it to the benefit of the nominal complainant.”
- The judge held that the above position of the EFCC, as confirmed by the lower court—that the failure of the bank to disclose the indebtedness of that client to rice suppliers amounted to unlawful activities—is “in my view perverse as it is absurd.”
“In most cases, the lower courts, in considering ex parte applications for forfeiture or preservation under an Act of the National Assembly, do not offer any reasoning in their rulings to show their belief that the applicant has met the requirement of reasonable suspicion, as should be robustly manifest.
“This conduct must be deprecated. Lower courts must show on their records how they arrived at the decision to make such interim orders; anything short of this amounts to misconduct. They are to be guided by the ratio in the Melrose case (supra). This is precisely the situation in the instant case,” Liman added.
- In the unanimous judgment, the Appeal Court found that there is no unlawful activity on the part of the bank, and that the decision of the lower court “is perverse and unsupportable by the evidence on record.”
- The judge held that the appeal is allowed and consequently, the entire judgment of the lower court in Suit Number: FHC/KB/CS/34/2023 delivered on the 15th of July 2024, being perverse, is hereby set aside.
