CORPORATE LAW PRACTICE WEEK 19, COMPANY PROCCEEDINGS AND INVESTMENT DISPUTES
WEEK 19- TOPIC: COMPANY PROCEEDINGS AND INVESTMENT DISPUTES RESOLUTION
PART A
:: CHECKLIST OF RELEVANT RULES: CPR 1992, CWR 2001, FHCCPR 2009[1], SEC Consolidated Rules 2013, IST Procedure Rules 2003.
REGULATORY LAWS: ISA, CAMA, CFRN, ETC.
:: NATURE OF COMPANIES PROCEEDINGS.
:: IDENTIFY SUITABLE APPLICATIONS FOR COMPANY’S PROCEEDINGS.
:: ADR OPTIONS AVAILABLE TO COMPANIES IN LIEU OF LITIGATION.
:: MODES OF APPLICATION FOR COURT PROCEEDINGS INVOLVING COMPANIES.
– ORIGINATING SUMMONS: As in Form 1 CPR For interpretation and construction of legal document.
– ORIGINATING MOTION: For Section 23(2), 46 (8), 129(2), 312 (5), 90(1), 315, 319 (3), 329, 524 CAMA applications be made by originating motion. Used for mixture of fact and law. E.g. appointment of inspector, rectification of company’s register, etc.
– PETITION: 46(1), 47(1), 53(3), 120(2), 121(2), 158, 170(1), 142(1), 311(1), 525(6), 591(3), 641 CAMA by petition.
– Originating application is the mode for IST under Section 6.
– Writ of summons is sparingly used but may be used for contentious matters where facts are in dispute.
The principles of Jurisdiction, Service and frontloading also applies here[2]. AGIP (Nig.) Ltd v AGIP Petroli International See generally; Rule 3.
:: DRAFT THE HEADING AND PRAYER CLAUSE OF AN ORIGINATING SUMMONS AND PETITION FOR WINDING UP.
Answer: Rule 1(1) CPR “IN THE MATTER OF (Company Name) AND IN THE MATTER OF THE COMPANIES AND ALLIED MATTERS ACT”
:: JURISDICTION OF FEDERAL HIGH COURT IN COMPANY PROCEEDINGS.
Section 251(1a) of the 1999 Constitution grants exclusive jurisdiction to the FHC for issues on Company Proceedings or administration of CAMA-Nashtex International Limited v Habib Bank ltd. Appeals from FHC lies to the Court of Appeal and then Supreme Court.
The Investments and Securities Tribunal (IST) is established under Section 224 of the ISA 1999 (now 2007) being a civil court (with original and appellate jurisdiction) for speedy, just and efficient resolution of investments and capital market disputes-284 ISA (from operation of ISA) within 90 days (from commencement of the action.
Appeal lies from the IST to the Court of Appeal and then to Supreme Court on matters of law with its decisions enforced as that of the FHC.
The IST operates a litigation and ADR Centre to promote speedy reconciliation, and the attendant advantages in ADR.
Section 284 ISA and 251 of the 1999 Constitution appear to be clashing on jurisdiction. In Nospecto Oil and Gas v Olorunnibe, the court held that the constitutional provisions are overriding. FIS Securities Ltd v SEC also.
It appears an effective resolution as suggested by Ogbuanya[3]; we are to look at the nature of the dispute. Where it specifically relates to the workings of the Capital market and actions (or inactions) of stakeholders therein (SEC, Public Quoted Companies, etc.) as it relates to the ISA and SEC Rules, it would be more appropriate for the IST to adjudicate being presumably more experienced and speedy.
On the other hand, where it relates to substantive corporate issues, MEMO, Articles and other modulations arising from CAMA, then the FHC should have exclusive jurisdiction as provided under Section 251 of the 1999 Constitution.
:: EVIDENTIAL ISSUES IN COMPANIES PROCEEDINGS- AUTHENTICATION OF DOCUMENTS, COMPANIES CONTRACT, COMMON SEAL AND OFFICIAL SEAL.
Common Seal is the engravement capable of inscribing the company’s name on paper used when required by law.
The official seal is used in place of common seal outside Nigeria.
Authentication of documents can be done by the Secretary, Director or other authorized Officer of the Company
:: PROCEDURAL RULES IN COMPANY PROCEEDINGS.
:: VALID SERVICE OF COURT PROCESSES AND DOCUMENTS ON COMPANIES
To a principal officer of the company (like director, secretary) or by leaving the process at the company’s head office Mark v Eke,Section 78 CAMA, Order 6 Rule 8 FHCCPR. Service on an ancillary staff is void and annuls the court’s jurisdiction upon a preliminary objection from the defendant’s lawyer MTN Communications Ltd v Bolingo Towers. Service of process on a foreign company is by its local agent (if any), otherwise by service outside jurisdiction or by post.
:: IDENTIFY ETHICAL ISSUES INVOLVED IN COMPANY PROCEEDINGS
PART B.
REGULATORY FRAMEWORK: include; ADR, Arbitration, Amicable Settlement, Self-regulatory Organisation, Administrative Proceedings Committte of SEC, IST/FHC.
:: NATURE AND INCIDENCES OF INVESTMENT DISPUTE:
Here we are concerned with disputes arising from the operation and application of the ISA and rules and regulations made therefrom.
Usually resulting from actions or inactions of Government/Regulatory Agency. E.g. revocation of operating license.
Parties would usually be; Capital Market Operators (or their clients), Self-Regulatory Organizations, Investor, Securities Exchange, Capital Trade Point, Clearing or Settlement House, CMO, Issuer of Securities, Collective Investment Schemes, etc.
:: STATE THE JURISDICTION, POWERS AND FUNCTIONS OF THE IST, TRIBUNALS AND THE COURT IN INVESTMENT DISPUTE RESOLUTION: Established in 274 ISA to provide an efficient and fair dispute settlement mechanism for investment disputes. Discussed earlier.
The Tribunal is composed of 10 members and constituted by any 3.
For Powers; it can generally do what civil courts can do like; summon attendance, require discovery and production of document, call for examination of witnesses and documents, review its decisions, ancillary functions, etc.
Original and Appellate Jurisdiction over appeals from decisions of SEC, Administrative Proceedings of Committee of the SEC.
The SEC should be given at least 14 days written notification by aggrieved person and appeals should be filed within 30 days from a receipt of a copy of the decision sought to be appealed against-289 ISA.
The Tribunal must adjudicate and decide the case within 90 days and give its judgment in writing which would be enforceable as though it were a judgment of FHC-293(3) ISA. Appeals from IST goes to COA then SCourt.
:: STATE THE ADR OPTIONS AVAILABLE TO PARTIES TO INVESTMENT DISPUTES IN PLACE OF LITIGATION.
See Section 16 NIPC Act:
First, the disputing parties are to attempt amicable settlement.
Where they cannot reach an amicable settlement, the parties are advised to exhaust available ADR Processes terminating with Arbitration (the NIPC Act provides for international and domestic Arbitration[4]).
Where ADR fails, they should resort to the Administrative Proceedings Committee of the SEC.
Where such fails, they can resort to litigation (by instituting in the IST (for securities matters) or FHC (for substantive corporate matters).
A dissatisfied party can appeal to the Court of Appeal and Supreme Court.
:: IDENTIFY SUITABLE APPLICATIONS (MODE) TO COURT IN RESPECT OF INVESTMENT DISPUTES RESOLUTION. IST uses Originating Application. Other possible modes have been discussed earlier.
[1] Note however that if it is a criminal offence, it can be tried by a court of competent jurisdiction in the place of the offence (not necessarily the FHC)).
[3] Nelson C. S. Ogbuanya Essentials of Corporate Law Practice in Nigeria, Novena Publishers Ltd 2nd Edition 2014. At page 681.
[4] There is UNCITRAL Conciliation Rules 1980, Rules of Lagos Regional Centre for International Commercial Arbitration established under the Auspices of The Asian-African Nigerian Government. Some institutions like; Chartered Institute of Arbitrators (London) Nigeria Branch, Negotiation and Conflict Management Group (NCMG), Centre for Dispute Management and Resolution administered by NOCS Consults and ADR Practice Group International. Where government and foreign party are involved and they fail to agree on what rule governs their dispute, government can suggest and if foreign investor still rejects, then they are to submit to the provisions of the ICSIDRules.
