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Investors’ protection in Nigeria: How effective are the laws, policies and dispute resolution system? (3)

By Olarotimi Akeredolu

At common law, judicial review of the actions and decisions of administrative and statutory bodies has proven to be a sure way to check abuse of discretionary powers.

In line with its statutory powers under the Decree to set up committees for the purpose of carrying out its functions, the SEC established the Administrative Proceedings Committee (APC) -a quasi-judicial body- through which it resolved capital market disputes, mainly through enforcement proceedings. Dissatisfied parties could seek judicial review at the Federal High Court.

This scenario meant some sort of institutionalisation of the process of resolving disputes arising in the capital market by the SEC, for it  was required to give erring capital market operators the opportunity of being heard prior to imposing sanctions on them.

Nevertheless, this state of affairs was criticized by some who perceived the SEC to be, at once, the Regulator, prosecutor and judge.  Establishment of the Investments and Securities Tribunal (IST)

The above scenario was the position until the Federal Government accepted the recommendations of the 1995 Denis Odife Panel on the Review of the Nigerian Capital Market. A part of the outcome was the promulgation of the Investments and Securities Decree (now Act) No. 45 1999 (hereinafter called “ISA”), repealing the Securities and Exchange Commission Decree of 1988. Under its section 224, the ISA established the Investments and Securities Tribunal (IST) to adjudicate capital market disputes.

It was composed of 9 members called “Capital Market Assessors” who shall be experts in capital market matters, and the Chairman must be a legal practitioner of not less than 15 years post-call experience. See sections 225 & 226 of ISA 1999. Its quorum was 5 members. See section 225(4) of ISA 1999.

The IST was set up by the government to sanitize the capital market, restore and sustain investors’ confidence through timely and efficient resolution of disputes.

Hence, section 236(5) of the ISA mandated the Tribunal to dispose of any case pending before it within three months from the date of commencement of the action. Interestingly, in the case of UNILEVER NIGERIA PLC v. I.S.S. LTD (2007) 2 NISLR 267 at 286-287, paras. D & A, the Tribunal construed this underlined provision to mean that the time starts counting from the commencement of hearing.

I find no fault in this construction, for it would be ridiculous to hold otherwise. Its jurisdiction was provided for under section 234 as follows: “234(1) The Tribunal shall have power to adjudicate on disputes and  controversies arising under this Decree and the rules and regulations made there under.

(2) The Tribunal shall in particular adjudicate on matters relating to: (a) the interpretation of any law, enactment or regulations to whic this Decree applies; (b) disputes between the Commission and a Securities Exchange or  Capital Trade Point; (c) disputes between capital market operators and the Securities Exchange or Capital Trade Point; (d) disputes between capital market operators; (e) disputes between capital market operators and their clients; and (f) disputes between quoted companies and the regulators or the Securities Exchanges”.

Furthermore, the above jurisdiction was exclusive to the IST, for section 242 of ISA 1999 provides thus:  “242. Save as provided elsewhere in this Decree, no civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which the Tribunal constituted under this Decree is empowered by or under this Decree to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred on the Tribunal by or under this  Decree”.

Some had questioned the constitutionality of the above provision, mindful of the provision of section 251(1)(e) of the 1999 Constitution of Nigeria which provides as follows: Lagos lawyer, Carol Ajie in this piece, x-rays the just concluded Ekiti State governorship election re-run, with particular emphasis on the tenure of Governor Segun Oni, in view of the debate over his tenure, whether it’s a fresh four years, or he is to complete the tenure he started in 2007.“251(1).

Notwithstanding anything to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters..“(e) arising from the operation of the Companies and Allied Matters Act or any other enactment replacing that Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act”.

In my humble view, there is no conflict between the above constitutional provision and that of section 242 of ISA 1999. My position is informed by the fact that section 251(1)(e) of the Constitution does not make any specific reference to “capital market disputes” wherein the jurisdiction of the IST lies. The law is trite that “where the Constitution or a statute contains a general provision as well as a specific provision, the specific provision prevails over the general provision …” see PETER OBI vs. INEC (2007) 11 NWLR (PT. 1046) 436 at 558 paras. A-G.

Secondly, the National Assembly, empowered by the same Constitution under Section 6(4)(a) & 6(5)(j) to establish courts or tribunals, must have considered the provision of Section 251(1)(e) of Constitution (and other existing legislations) while enacting ISA 1999 and conferring on the IST such exclusive jurisdiction over capital market matters. What is more, the Federal High Court Act under section 7(8) anticipates the establishment by the National Assembly of a tribunal whose jurisdiction would be over causes and matters hitherto adjudicated by the Federal High Court.

It says thus: “Notwithstanding anything to the contrary in the preceding provisions of this section or any other enactment or rule of law, where a tribunal established on or after 31 December 1983, or having effect as if so established, by the Federal Government has jurisdiction to try any other matter specified in the preceding  provisions of this section, the Court shall, as from the making of the enactment conferring such jurisdiction on that Tribunal, forthwith and without any further assurance apart from this section, cease to exercise jurisdiction in respect of such matter.”


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