The recent suspension and subsequent arrest of Nigeria’s central bank Governor and some Deputy Governors, as well as the appointment of an independent panel to investigate allegations of fraud within the Central Bank, raises some legal issues as to the scope of the legal immunity of the Central Bank as guaranteed under section 52 of the extant CBN Act.
1. Immunity of the Central Bank & its Officers
Section 52 of the extant CBN Act captures the immunity of the Central Bank, as follows:
“ Neither the Federal Government nor the Bank or any officer of that Government or Bank shall be subject to any claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon Government, the Bank or any such officer, by this Act”
2. Who can take the Benefit of the Immunity?
A literal reading of section 52 suggests that the immunity of the Central Bank applies to and will avail, the Minister of Finance, CBN Governor, the Deputy Governors and all employees of the CBN. It is submitted that the immunity of the Central Bank ought not extend to or cover, consultants, non-executive directors or contract staff, in so far as this category of persons are not officers or employees of the Federal Government of Nigeria or of the Central Bank.
3. What is the scope of the Immunity of the Central Bank?
The scope of the immunity covers all claims, demands and liabilities established against the CBN or its employees. However, it is submitted that section 52 immunity is not absolute. In our estimation, there are atleast 5 grounds for breaking the immunity of the central bank and its employees. For instance, the actions complained about must have been done in good faith and must have been done in pursuance of a power conferred upon the Central Bank or the relevant employee. This means, an employee may not be able to enjoy section 52 immunity where his or her actions are inconsistent with the statutory powers conferred on that employee. In the same vein, it is submitted that the immunity of the Central Bank ought not avail the CBN Governor where the Central Bank engages in the prohibited activities listed in section 34 of the CBN Act. It is further submitted that section 52 immunity should ordinarily not avail the CBN or its officers, where they engage in fraudulent or tortious activities. Other exceptions may also arise within the context of the decision of the Central Bank to revoke the license of a bank or to put a bank in resolution.
4. Entitlement to Legal Representation
It is submitted that, based on section 52, the CBN has a legal obligation provide free legal representation for any of its employees who is subject of any investigation or court action. Accordingly , officers of the central bank who are subject of any investigation and have not been provided with legal representation may rightfully seek a court order mandating the central bank to provide legal representation or to claim the professional fees for such representation.
The foregoing insight is not intended to constitute legal advice and is not prepared with a specific context in mind. Kindly seek professional advice specific to your situation. You may also reach out to your usual Balogun Harold contact or via support@balogunharold.com for support.
