LEGAL PRINCIPLE: CIVIL PROCEDURE – Proper Party to Sue – Mandatory Provision for Suits to be Instituted by or Against Board
PRINCIPLE STATEMENT
By section 15 of Agricultural Credit Guarantee Scheme Fund Act, Cap. 13 Laws of the Federation of Nigeria, 1990, all legal proceedings of civil nature arising from the failure of any borrower to repay a loan granted by the bank or guaranteed under the Act or arising from any matter pertaining to any guarantee given pursuant to the Act shall be instituted and conducted by or against the 'Board'. The cause of action giving rise to the proceedings falls within section 15 of the Act. In the circumstance, the respondent bank has no standing whatsoever to institute the proceedings against the appellant having regard to the state of the law at the time the cause of action arose.
RATIO DECIDENDI (SOURCE)
Per Ogwuegbu, JSC, in Alhaji Lawal Sarkin Tasha v. Union Bank of Nigeria Plc (2001) NLC-171996(SC) at p. 1; Paras A–B.
"By section 15 of Agricultural Credit Guarantee Scheme Fund Act, Cap. 13 Laws of the Federation of Nigeria, 1990, all legal proceedings of civil nature arising from the failure of any borrower to repay a loan granted by the bank or guaranteed under the Act or arising from any matter pertaining to any guarantee given pursuant to the Act shall be instituted and conducted by or against the 'Board'. The cause of action giving rise to the proceedings falls within section 15 of the Act. In the circumstance, the respondent bank has no standing whatsoever to institute the proceedings against the appellant having regard to the state of the law at the time the cause of action arose."
EXPLANATION / SCOPE
Section 15 of the Agricultural Credit Guarantee Scheme Fund Act mandates that all civil proceedings arising from guaranteed loans must be instituted by or against the Board, not the lending bank. The bank has no standing to sue. This is a mandatory statutory provision—not directory. The bank cannot circumvent it by suing in its own name. The cause of action belongs to or against the Board. The provision ensures the Scheme’s proper administration. Any action by the bank is incompetent and must be struck out. The court has no jurisdiction to entertain it. The defect is fundamental and cannot be cured by amendment.