Whether Regulatory Agencies can impose fines without recourse to the Court

WHETHER REGULATORY AGENCIES CAN IMPOSE FINES WITHOUT RECOURSE TO THE COURT

NATIONAL OIL SPILL DETECTION AND RESPONSE AGENCY (NOSDRA) v. MOBIL PRODUCING NIGERIA UNLIMITED (EXXONMOBIL) (2018) LPELR-44210(CA)

PRACTICE AREA: CRIMINAL LAW AND PROCEDURE

PREAMBLE

In ABDULLAHI VS. KANO STATE (2015) LPELR-25928 (CA) the Court of Appeal per Abba Aji, JCA, defined fine as a payment of money ordered by a Court from a person who has been found guilty of violating law. It may be specified as the punishment for an offender, usually a minor offence, but could also be specified and used as an option to imprisonment for major crimes or a complement to other punishments specified for such crimes.

It is therefore the exclusive preserve of the Court to impose fine as a punishment for offences as Constitutionally provided for under Section 6 of the 1999 Constitution of the Federal Republic of Nigeria 1999 (as amended). This exclusive preserve cannot be shared, exercised or usurped by any persons, organisation or regulatory body as it will be ultra vires.

An attempt to impose penalties or fines by persons or bodies other than the Court shall be deemed illegal, null and void and of no effect whatsoever.

FACTS

In the Federal High Court, Uyo Judicial Division, National Oil Spill Detection And Response Agency (NOSDRA) as Plaintiff instituted this action against Mobil Producing Nigeria Unlimited (EXXONMOBIL) as Defendant claiming the sum of N10,000,000.00 (Ten Million Naira) as penalty fees for the alleged contravention of the National Oil Spill Detection and Response Agency (NOSDRA) Act and its regulations.

In its defence, Mobil Producing Nigeria Unlimited (EXXONMOBIL) argued that upon observing the small amount of oil and water released from its facilities, it immediately shut down the affected tanks’ operations and activated its emergency response procedure in order to contain the spread of the spilled oil and water which were immediately contained and cleaned up.

It was also argued that the clean up, remediation and assessment exercise of the impacted site was indeed in line with the stipulated standards of the NOSDRA Act, 2006 and its Regulations. Mobil Producing Nigeria Unlimited (EXXONMOBIL) pleaded National Oil Spill Detection And Response Agency (NOSDRA) Report which rated the clean-up exercise as satisfactory. Consequent upon the above, Mobil Producing Nigeria Unlimited (EXXONMOBIL) stated that there was no basis or justification for the penalty levied against them as the clean-up exercise done on its Qua Iboe facility was in line with the NOSDRA Act and Regulations.

In a well considered ruling, the Federal High Court per I. L. Ojukwu J. struck out the case for want of jurisdiction. Miffed by the vexed ruling, National Oil Spill Detection and Response Agency (NOSDRA) filed this appeal in the Calabar Judicial Division of the Court of Appeal Coram: CHIOMA NWOSU-IHEME (Ph.D), J.C.A. (Delivering the Leading Judgment), STEPHEN JONAH ADAH, J.C.A., and JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

ISSUES FOR DETERMINATION

The Court determined the appeal on a lone issue viz:

  1. Whether having regard to Section 6(2) and (3) of the Plaintiff/ Appellant’s Establishment Act the Learned Judge was right in holding that the imposition of penalties on the Defendant/Respondent by the Plaintiff/ Appellant was ultra vires its powers.

DECISION

In a unanimous decision, the appeal was dismissed for want of merit. The Ruling of I. L. Ojukwu, J, of the Federal High Court, Uyo Judicial Division in Suit No. FHC/L/CS/1623/2016, delivered on the 16th of May, 2017 striking out the case for want of jurisdiction was affirmed.

RATIO DECIDENDI

CRIMINAL LAW AND PROCEDURE – FINE: Whether an Administrative/Regulatory Agency has the inherent power to impose fines without proper adjudication by a Court of law

“The Appellant’s argument in this appeal revolve essentially around the fact that the Appellant’s action in levying fine and penalty on the Respondent was done consequent upon its powers in Section 6(2) and (3) of the Act Establishing the NOSDRA. It made heavy weather on provisions of its enabling Act prescribing for penalties and fines for non-compliance. The Respondent’s grouse on the other hand, is whether the Appellant is imbued with the powers to impose fines and penalties in the light of the fact that the powers to make such impositions belong to the judicial arm of the Government and the Courts specifically.

This Court in A.S.H.A. V. TIJJANI (supra) held:

“By the provisions of Sections 1(1) and (3) of the 1999 Constitution of the Federal Republic of Nigeria, the Constitution is supreme and its provisions are binding on all authorities and persons in Nigeria. Therefore, if any law is inconsistent with any provisions of the Constitution, the Constitution shall prevail and the other law shall to the extent of that inconsistency be void.”

The same Constitution in Section 6(6) vests Judicial Powers on the Courts. A sentence can safely be pronounced after a conviction for an offence has been made by a Court of competent jurisdiction.

The Apex Court in MFA v. INONGHA (2014) 4 NWLR (Pt.1397) 343 at 375 held as follows:

“Fair hearing within the meaning of Section 36(1) of the Constitution of the Federal Republic of Nigeria, 1999 means a trial or hearing conducted according to all legal rules formulated to ensure that justice is done to the parties. It requires the observance of the twin pillars of the rules of natural justice, namely: audi alteram partem and nemo judex in causa sua”

Nemo judex in causa sua simply means that no Judge should preside over a matter in which he has personal interest or involvement.

Paragraphs 20 and 21 of t he Appellant’s statement of claim read:

Paragraph 20:

“The Plaintiff wrote a sanction notification letter dated the 22nd day of December, 2014 wherein the Defendant was asked to pay a cumulative statutory fine of N10,000,000.00 (Ten Million Naira) only being penalty for the persistent breaches of the provisions of the NOSDRA Act, 2006 and its regulation… ”

Paragraph 21:

“In furtherance of the Plaintiff’s position in paragraph 20, the plaintiff wrote a reminder letter dated 13th July, 2015 prompting the Defendant on the pending sanction slammed on the Defendant….”

(See page 22 of the Records).

Granted that a demand was made, but the demand was for a sum of money defined as penalty for infraction of the regulation. This finding was made without giving the Respondent an opportunity to be heard. By so doing, the Appellant constituted itself into a Court with judicial or quasi-judicial powers, when in fact the law creating it did not donate such jurisdiction to it.

By the imposition of the fine, the Appellant acted in a judicial capacity which they are not imbued with under the Constitution. By so doing, the Appellant became a Judge in its own cause, the Complainant as well as the Judge, contrary to the maxim “nemo judex in causa sua”.

 

The Courts will not allow any authority to act ultra vires its powers under the Constitution. To this end, Sections 1 and 6 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) empowers the Courts to declare any Act of the National Assembly inconsistent with the provisions of the Constitution, null and void. See SHELL PETROLEUM DEVELOPMENT COMPANY NIGERIA V. AJUNWA (2015) 14 NWLR (Pt.1480) 403 at 473.

On the facts and circumstances of this case, I am of the firm but humble view that the imposition of penalties by the Appellant was ultra vires its powers, especially where no platform was established to observe the principles of natural justice. Penalties or fines are imposed as punishment for an offence or violation of the law. The power as well as competence to come to that finding belong to the Courts and the Appellant is not clothed with the power to properly exercise that function in view of the law creating the Appellant (NOSDRA). There is therefore a Lacuna in that law creating the Appellant.

In view of the fact that the main crux of the Respondent’s grievance bothers on the imposition of the fines/penalty on it, I hold that there is no merit in this appeal whatsoever.” Per NWOSU-IHEME, J.C.A.

CRIMINAL LAW AND PROCEDURE – FINE: Meaning of fine; whether awarding of fine is a judicial act and the sole prerogative of a Court of law

“It is very well known in law that a fine is a criminal sanction. This Court in ABDULLAHI VS. KANO STATE (2015) LPELR-25928 (CA) per Abba Aji, JCA, defines fine as a payment of money ordered by a Court from a person who has been found guilty of violating law. It may be specified as the punishment for an offender, usually a minor offence, but could also be specified and used as an option to imprisonment for major crimes or a complement to other punishments specified for such crimes. I must here underline the fact that awarding a fine is a judicial act and it is the sole prerogative of a Court of law under Section 6 of the 1999 Constitution of the Federal Republic of Nigeria 1999 (as amended). No other organizations or bodies can usurp that power. Any law that would consign to anybody other than the Courts the power to award fine is unconstitutional.” Per ADAH, J.C.A.

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