Review of The Minimum Capital Requirements for Commercial, Merchant, and Non-Interest Banks in Nigeria

You can download the pdf of this article here: Paul Usoro & Co – Minimum Capital Requirements for Nigerian Banks.

Introduction

On 28 March 2024, the apex financial regulatory body in Nigeria, the Central Bank of Nigeria (“the Bank” or “CBN”) issued a circular reviewing the minimum capital requirements for commercial, merchant, non-interest banks, and promoters of proposed banks in furtherance of its statutory responsibility to promote a safe, sound and stable banking system in line with section 9 of the Banks and other Financial Institutions Act 2020 (BOFIA) and section 5 BOFIA which entrusts the power to revoke or vary the conditions of licenses on the Bank.

This paper aims to highlight the implications of the circular vis-a-vis the provisions of the Banks and other Financial Institutions Act, 2020, the Securities and Exchange Commission Rules and Regulations 2013, and other extant laws regulating corporate practices in Nigeria.

Review of Minimum Capital Requirements

The total capital owned by a bank is called the Total Regulatory Capital (TRC) which is the sum of Common Equity Tier 1 (CET1), Additional Tier 1 Capital (AT1), and Tier 2 Capital (T2), net of regulatory adjustments.^[1] The Central Bank of Nigeria, in a bid to ensure stability and confidence in the Nigerian banking sector reviewed the minimum capital requirements for banks which shall comprise paid-up capital and share premium only.^[2] The circular outrightly restricts ATI and shareholders’ funds for the purposes of meeting the new requirement. Notwithstanding the capital increase, banks are to ensure strict compliance with the minimum capital adequacy ratio (CAR) requirement applicable to their license authorization in line with the extant regulations.

The power of the Bank to review the minimum paid-up share capital requirement of each category of banks licensed under the Act is provided under section 9 BOFIA. Accordingly, the Bank announced an upward review of the minimum capital requirements for commercial, merchant, non-interest banks, and promoters of proposed banks. The Bank further provided three broad options that banks may consider to meet the minimum capital requirements, viz:

Private placements, right issue and/or offer for subscription;
Mergers and Acquisitions; and/or
Upgrade or downgrade of license authorization.

The circular by the Bank reviewing the minimum capital requirements, by implication demands the banks to increase their share capital with either of the restructuring alternatives:

Private Placement – This is the issuance of securities by a public company which is not quoted on the stock exchange or by a private company upon application by members subject to its articles and approval of the Securities and Exchange Commission (SEC). No public company shall offer securities by way of private placement without the prior approval of SEC.^[3] Also, the securities shall not be offered to more than 50 subscribers and it cannot be advertised, mentioned, and/or discussed in the print and electronic media.^[4] Essentially, the securities are not offered to the public at large but to targeted individual investors.
Right Issue – These are offers made to existing shareholders with a duty to pay for the shares otherwise known as Pre-emptive rights. Default in payment, the shares will be relinquished, and the company can take them back and issue it to the public. Rights issue helps to maintain shareholding equilibrium as it enables existing shareholders to maintain their percentage share of ownership and protect current shareholders from dilution in value or control. Rights circular shall be sent to every shareholder and all securities offered by way of rights shall be tradable by the holders thereof only during the offer period.^[5]
Offer for Subscription – This is synonymous with Direct Public Offer. Here, the Company offers its shares to the public through an issuing house. Although, the company, and not the issuing house bears all the risk and liabilities if the public offer fails. Buyers in this category automatically become part owners of the company, hence share in the company’s risks. The terms and conditions of the offer are all contained in the prospectus attached to the offer and the prospectus must conform with the contents as specified under Rules 288 SEC Rules 2013 and Sections 73 and 79 Investment and Securities Act 2007.
Mergers – This is the amalgamation of the undertakings or any part of the undertakings or interests of two or more companies and one or more corporate bodies.^[6] It involves the fusion of two or more corporate entities into one and it occurs when one or more undertakings directly or indirectly acquire or establish direct or indirect control over the whole or any part of the business of undertaking. An undertaking is deemed to have control over the business of another undertaking when the beneficiary owns more than half of the issued share capital or assets of the undertaking; is entitled to cast a majority of votes at the general meeting of the undertaking; is able to appoint the majority of the directors of the undertaking; is a holding company and the undertaking is a subsidiary; has the ability to control majority of the votes of the trustee where the undertaking is a trust; and has the ability to materially influence the policy of the undertaking to exert control.^[7] The approval of the Federal Competition and Consumer Protection Commission must be obtained before the implementation of any merger scheme.
Acquisitions – Acquisition means where a person or group of persons buys most (if not all) of a company’s ownership stake in order to assume control of the target company.^[8] Unlike mergers where two or more companies are fused into one and the target company goes extinct, acquisitions are merely the purchase of significant control of the target company. The target company retains its identity, and the acquirer is now only in control of the target company. By Rule 434(a) SEC Rules, SEC is empowered to regulate acquisitions in both private and unquoted public companies through the filing and approval of the requirements for acquisitions by any corporate body or individual.
Upgrade or Downgrade of License Authorization – Upgrade or downgrade of license can either be carried out by re-categorization and/or conversion of the license type. Re-categorization is the transformation of an institution within the same license type, where the institution is changing its current authorization/category to take up a new authorization/category within the same license type. This change may be upscaling or downscaling of a class of the same institution type.^[9]While conversion is the transformation of an institution from one license type to another, where the legacy and proposed entities are licensed under separate regulatory guidelines.^[10]

Types of Banks, Authorization Level, and Suitable Restructuring Options

The category of banks affected by the minimum capital requirements circular are commercial, merchant, and non-interest banks with international, national, and regional authorization levels.

Bank types

Commercial banks are financial banks that accept deposits and offer different banking and financial products. On the other hand, merchant banks are financial institutions that engage in underwriting and business loans, catering primarily to the needs of large enterprises and high-net-worth individuals. Non-interest banks (NIB), a species of specialized bank are banks which transact banking business, engage in trading, investment, and commercial activities as well as the provision of financial products and services without the conventional interest charges. Such banks may operate either in accordance with or without Shari’ah principles and rules of Islamic jurisprudence.^[11]

Authorization level

An international authorization license confers on the holder the right to carry out banking activities in and out of Nigeria. A national authorization license limits the banking activities to Nigeria while a regional authorization license only enables the holder to carry out banking activities in a minimum of two geo-political zones in Nigeria.^[12]

Suitable Restructuring options

No bank shall enter into an agreement or arrangement except with the approval of CBN.^[13] Before the commencement of either of the restructuring options, the written consent of the CBN must be obtained. One or more alternatives may be open to a bank although the types of banks and the current authorization level would determine the more suitable restructuring options.

Commercial banks – The fastest way for commercial banks to meet the CBN threshold for minimum paid-up capital is mergers and acquisitions. The summation of the current paid-up capital of two or more banks would satisfy the required minimum capital requirement. Another alternative is the upgrade or downgrade of license authorization. A commercial bank may choose to recapitalize from an international authorization license to a national or regional authorization license. Other alternatives include offer for subscription, rights issue, and private placement.
Merchant banks – Private placement and rights issue are more suitable for merchant banks who do not want to be divested of ownership and control. Other alternatives include mergers and acquisitions, and upgrade or downgrade of license authorization. Offer for subscription would only be available to a publicly quoted merchant bank.
Non-interest banks – non-interest banks may recapitalize by carrying out an upgrade or downgrade of license authorization, by offering its shares to High net-worth individuals via private placement. Mergers and Acquisitions are also viable options although the limited number of non-interest banks may result in the elimination of the growing number of NIB.

Way Forward and Conclusions

Increasing the minimum capital requirements have several positive impacts on the banking sector and the economy at large. The objective of the recapitalization is to ensure that Nigerian banks have the capacity to take bigger risks and weather difficult times. The banks will also have to attract foreign portfolios and direct investors to invest in the capital raise which will increase foreign exchange liquidity in the economy and ultimately support naira stability.^[14]

Higher capital requirements ensure that banks are resilient to financial instability. It also strengthens and bolsters the confidence of investors, stakeholders, and depositors in the banking system. While increasing minimum capital requirements may require banks to raise additional capital or restructure their business models, it is pertinent to ensure adequate compliance with extant financial regulatory provisions not to run afoul of the provisions of Anti-money Laundering and Combating the Financing of Terrorism (AML/CFT); and also ensure strict customer due diligence measures is conducted on Politically Exposed Person (PEP), especially for banks who opt for private placement. Section 29(6) places a duty on financial institutions to take reasonable measures to establish the source of wealth and source of funds of customers and beneficial owners identified as PEP.^[15]

Dolapo Adedeji – Associate

dolapo.adedeji@paulusoro.com

Corporate Transaction Services Section

[1] CBN Guidelines on Regulatory Capital, September, 2021; Pages 5-6 available at (1. GUIDELINES ON REGULATORY CAPITAL.pdf (cbn.gov.ng) accessed on 23 April 2024.

[2] Circular to ALL Commercial, Merchant and Non-Interest Banks; and Promoters of Proposed Banks, Page 2. Recapitalization_MARCH_2024.pdf (cbn.gov.ng)

[3] Rule 340(1) SEC Rules

[4] Rule 340(2)(3) SEC Rules

[5] Rule 324-325 SEC Rules

[6] Rule 421 SEC Rules

[7] Section 92 Federal Competition and Consumer Protection Act, 2018 (FCCPA)

[8] Rule 433 SEC Rules.

[9] Section 4(1) Regulatory Guidelines for Change of Operating License for Banks and other Financial Institutions in Nigeria, Pages 4.-5 Available online at https://www.cbn.gov.ng/Change of Operating Licence.pdf (cbn.gov.ng) (accessed April 2024).

[10] Ibid.

[11] Nigeria Deposit Insurance Corporation, Framework for Non-Interest Deposit Insurance Scheme. Available online at: https://ndic.gov.ng//Framework for Non-Interest Deposit Insurance Scheme – NDIC accessed on 24 April 2024.

[12] Central Bank of Nigeria; Circular to all Regional Banks-Expansion of the Scope of Regional Banks in Nigeria; Ref:FPR/DIR/GEN/CIR/07/057; Available at; HTPPS://Cbn.gov.ng// Circular on Expansion of the Scope of Regional Banks in Nigeria.pdf (Cbn.gov.ng)

[13] Section 7 BOFIA 2020.

[14] Hope Moses Ashike, “What CBN recapitalisation means for banks, economy”, 02 April 2024 – Available at: https://businessday.ng (Businessday NG)

[15] Central Bank of Nigeria (Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing of Weapons of Mass Destruction in Financial Institutions Regulations) 2022.

Follow us on LinkedIn | Instagram

March 26, 2024

PUC’s Visit to Bethesda Home For The Blind

May 26, 2023June 1, 2023

Plea Bargaining Under Nigerian Law

Introduction

The usual outcome of ‘guilty’ or ‘not guilty’ and or ‘sentencing’ in a criminal trial which was largely determined by the legal principles of ‘proof beyond reasonable doubt’ and ‘presumption of innocence’ has been resolved by the now common aspect of a negotiated agreement by parties to the criminal proceedings. In real terms, parties’ concession underlies the basis for a successful plea bargain to bridge the gap in circumstances where the prosecution is unable to procure compelling and conclusive evidence against the accused or co-accused necessary for the Court’s finding of ‘guilty’ and gives an opportunity to an accused person to elect not to proceed with the trial.

A plea bargain in ordinary parlance is a negotiated term of settlement in criminal trials between the prosecution and the accused, wherein the accused pleads guilty to a lesser offence or reduced charge in exchange for a reduction in sentence or dismissal of the charges,[1] which is finally accepted by the Court. Simpliciter, plea bargaining means a ‘conviction without trial.’ There are different types of plea bargain. Most specifically, is the charge bargain in which a prosecutor agrees to drop some of the counts or reduce the charge to a less serious offence in exchange for a plea of either guilty or no contest from the Defendant. The second type of bargain is a plea bargain in which a prosecutor agrees to recommend a lighter sentence in exchange for a plea of either guilty or no contest from the Defendant.[2] There is also the count bargain, in which a Defendant who is faced with multiple charges will be allowed to plead guilty to fewer counts of the charge. This is however not a common form of the plea bargain as it only applies to Defendants who are faced with multiple charges.[3]

Plea Bargain – Historical Background

The origin of the plea bargain can be traced to the American legal system in the eighteenth century. It began by convention but after it was accepted by the Courts, it became entrenched in the Federal and state criminal procedure rules.

The concept of the ‘plea bargain’ achieved its global recognition in 1970 in the landmark case of Brady v. United States,[4] by the Supreme Court of the United States of America where Brady who pleaded guilty to a kidnaping charge in violation of 18 U.S.C. § 1201(a) and whose sentence was 50 years imprisonment, was later reduced to 30.

This was adopted due to the adversarial nature of the United States’ judicial system which places the judges as an umpire, in which they are completely dependent upon the parties to develop the factual record and cannot independently discover information to assess the strength of the case against the Defendant. There are several cases where the US Courts have given full effect to plea bargains and as at today, 95% of criminal cases in the United States of America have been resolved by plea bargains.[5]

Plea bargaining as a concept was not known in Nigerian Criminal Justice jurisprudence until 2004. It became known and applied with the establishment of the Economic and Financial Crimes Commission (EFCC) Act following increased level of corruption, as the concept was provided for under Section 14(2) of the EFCC Act. This concept of the plea bargain was also boldly institutionalized by Lagos State House of Assembly in the Administration of Criminal Justice Law 2011, Laws of Lagos State.[6]

Plea Bargaining under the EFCC Act

Section 14(2) EFCC Act empowers the commission (subject to the prosecutorial powers of the Attorney-General under Section 174 of the Constitution to institute, continue or discontinue criminal proceedings against any persons in any court of law), to compound any offence punishable under the EFCC Act by accepting such sum of money as it thinks fit not exceeding the maximum amount to which that person would have been liable if he had been convicted of that offence. This discretionary power given to the EFCC coupled with the authority to compound offences exemplifies the proposed concept of plea bargaining under the Nigerian law. This provision has been given full interpretation and application by the Courts in several high-profile cases.[7]

However, the Economic and Financial Crimes Commission (EFCC) has been criticized for this provision and it has been termed as “smuggling” the plea bargain concept, which has been described as dubious into our legal system to prosecute public officers involved in money laundering and looting of the public treasury.[8] It has also been described as corruption to bring plea bargaining into the law of Nigeria.[9]

At a cursory look at the provision, one may argue rightly that there is no express or implied mention of plea bargaining under Section 14(2) of the EFCC Act and as such, what the section envisages is “compounding of offences’ which is an act in which a person agrees not to report the occurrence of a crime or not to prosecute an accused in exchange for money or other consideration. This is not the same as plea bargaining. The Section does not show the nature and type of the plea bargain neither does it show the stage of the proceedings at which the bargain may be initiated. There is also no laid down procedure or safeguards for plea bargaining and such agreement as envisaged under the EFCC Act does not necessarily culminate in a judgment neither does it lead to conviction nor sentencing. It is to be noted that compounding of a felony is an offence in itself.[10] It may also be argued that the purport of the EFCC Act may be the concept of Withdrawal of Compliant under Section 355 of the ACJA which provides that where a complainant at any time before a final order is made in a case, satisfies the court that there are sufficient grounds for permitting him to withdraw his complaint, the court may permit him to withdraw the complaint and shall thereupon acquit the Defendant. It may also be argued to mean reconciliation as provided under Section 23 of the High Court Law of Lagos State, 2019 which provides that in criminal cases, the High Court may encourage and facilitate the settlement in an amicable way of proceedings for Common Assault or for any other offence not amounting to a felony and not aggravated in degree, on terms of payment of compensation or other terms approved by court.

Plea Bargaining under the ACJL Lagos

The first attempt at codifying the concept of plea bargaining in Nigeria was under the provisions of the Administration of Criminal Justice Law of Lagos State (ACJL), 2007. Section 75 of the ACJL provides thus:

“The Attorney-General of the State shall have power to consider and accept a plea bargain from a person charged with an offence where the Attorney General is of the view that the acceptance of such plea bargain is in the public interest, the interest of justice and the need to prevent abuse of legal process.”

Section 76 of the ACJL, 2007 goes further to provide the procedure for plea bargaining under the law. It states inter alia that the prosecutor and a defendant or his legal practitioner may before the plea to the charge enter into an agreement in respect of a plea of guilty by the defendant to the offence charged or a lesser offence of which may be convicted on the charge. Where a plea agreement is reached, the prosecutor shall inform the Court of the agreement and the judge or magistrate shall inquire from the defendant to confirm the correctness of the agreement. If the answer is in the affirmative, the presiding judge or magistrate shall ascertain whether the defendant admits the allegations in the charge to which he has pleaded guilty and whether he entered into the agreement voluntarily and without undue influence. The court after satisfying itself on all of the foregoing will do one of the following:

Convict the defendant on his plea of guilty to the offence as stated in the charge and agreement.
If not satisfied, the court will enter a plea of not guilty and order that the trial proceed.

In essence, where the burden of proof on the prosecution cannot be discharged or where it will be insufficient to prove the guilt of the accused beyond reasonable doubt, the prosecutor may enter into an agreement with the defendant to plead guilty to the offence charged for a lesser offence or to a lesser offence which carries a lighter punishment.

It is worthy of note that the above provisions have been amended by Sections 8 and 9 of the Administration of Criminal Justice Law (Amendment) 2021, the above section 76 of the ACJL has been deleted and Section 77 has been amended to include plea bargaining which has similar provisions with Section 270 of the ACJA and provides inter alia “Notwithstanding anything in this Law or in any other law, the Prosecutor may subject to the approval of the Attorney-General and Commissioner for Justice: (a) receive and consider a plea bargain from a defendant charged with an offence either directly or on his behalf; or (b) offer a plea bargain to a defendant charged with an offence.”

Plea Bargaining under ACJA[11]

Section 270(1) & (2) ACJA, 2015 provides amongst others “Notwithstanding anything in this Act or in any other law, the Prosecutor may: (a) receive and consider a plea bargain from a defendant charged with an offence either directly or on his behalf; or (b) offer a plea bargain to a defendant charged with an offence. (2) The prosecution may enter into plea bargaining with the defendant, with the consent of the victim or his representative during or after the presentation of the evidence of the prosecution, but before the presentation of the evidence of the Defence, provided that certain conditions are met.

Requirements of plea bargaining under the ACJA & ACJL

It has been provided that for a plea agreement to be valid, such plea agreement shall be reduced to writing and contain a statement that the defendant has been informed of his rights, and the terms of the agreement including any admission thereof, and shall be signed by the prosecutor, the defendant, the legal practitioner, and the interpreter (where necessary).[12] The ACJA further requires that a copy of the agreement be forwarded to the Attorney-General of the Federation.[13]

Circumstances that will give rise to Plea Bargain under the ACJA

Plea bargains are not automatic, there are certain conditions that must be fulfilled before the plea bargain can be granted to a Defendant. By Section 270 (2) of the ACJA, the prosecution may enter into plea bargaining with the defendant, with the consent of the victim or his representative provided that all of the following conditions are present:

the evidence of the prosecution is insufficient to prove the offence charged beyond reasonable doubt;
where the defendant has agreed to return the proceeds of the crime or make restitution to the victim or his representative; or
where the defendant, in a case of conspiracy, has fully cooperated with the investigation and prosecution of the crime by providing relevant information for the successful prosecution of other offenders. Insufficient evidence to convict the defendant;

This is a similar provision under the ACJL. However, the ACJL did not state that the evidence of the prosecution must be insufficient for a Defendant to be availed the option of plea bargaining as all that is needed is for the Attorney-General to be of the view that the offer or acceptance of a plea bargain is in the interest of justice, the public interest, public policy and the need to prevent abuse of legal process, he may offer or accept the plea bargain.[14] Section 270(3) ACJA also provides that the prosecutor should be of the view that the offer or acceptance of a plea bargain is in the interest of justice, the public interest, public policy and the need to prevent abuse of legal process, he may offer or accept the plea bargain.”

The timeline for plea bargaining in criminal trials has been entrenched in the ACJA to be entered by parties before Trial or during trial, but before the presentation of the evidence of the defence.[15]

As regards Sentencing under plea bargaining, the Court, upon conviction shall consider the agreed sentence and if satisfied may impose the agreed or a lesser sentence, or a heavier sentence provided the Court informs the defendant and he elects to abide by the plea of guilt notwithstanding such sentence.[16] It is worthy of note that the Court has the sole discretion to impose punishment provided by law on a convict.

However, a Court can order parties to proceed to trial and depart from a plea agreement where the Court is not satisfied that the defendant can be convicted on the plea agreement,[17] or the defendant withdraws from his plea agreement in the case of a heavier sentence[18] or in a case of involuntariness of the Defendant[19]

Conclusion

There are many disadvantages that can be seen to stem from the concept of plea bargaining in Nigeria, which include the fact that, innocent persons may be unduly influenced to plead guilty, offenders may be sentenced to lesser penalties which may give room for the commission of more crime, it may not encourage social justice and may likely undercut the requirement of proof beyond reasonable doubt. However, the idea of plea bargaining has aided the criminal jurisprudence in some ways which include the desirability and giving effect to prompt and certain disposition of criminal cases, savings on the cost of trial and or appeal as this can be seen as an equivalent of Alternative Dispute Resolution in Civil Trials. There is also an advantage of restitution to the victim where appropriate, unlike situations where a victim will be left emptyhanded and may likely want to also initiate a civil action for damages. It has also aided decongestion of courts and criminal trials.

The concept is plea bargaining is also very advantageous for companies who face criminal trials to avoid the prolonged issues from litigation and possible damage that the company may incur in terms of finance, reputation, and goodwill.

The EFCC Act should be amended to include specific provisions on plea bargain. If the concept of plea bargaining is applied correctly and not randomly, its benefits will aid the criminal justice system of the Country.

Key Contacts:

Anti-Corruption and Criminal Laws Practice Section

Chinedu Anyanso – Partner and Team Head

chinedu@paulusoro.com; 0802 200 3574;

info@paulusoro.com

[1] Black’s Law Dictionary (9th ed. 2009), available at Blacks Law 9th Edition : Admin : Free Download, Borrow, and Streaming : Internet Archive accessed on 05 April 2023

[2] Albert v FRN (2021) LPELR-56144(CA); Black’s Law Dictionary (9th ed. 2009)

[3] J. Meyer, “Plea Bargaining” available at Plea bargaining | Definition, Types, History, & Facts | Britannica and accessed on 05 April 2023.

[4] 394 US 742, 90 S.C.T. 1463, 25 L.Ed., 2d 747(1970).

[5] T. Eze & A. Eze, “A Critical Appraisal of the Concept of Plea Bargaining in Criminal Justice Delivery in Nigeria” Global Journal of Politics and Law Research Vol.3, No.4, pp.31-43, August 2015 available at A CRITICAL APPRAISAL OF THE CONCEPT OF PLEA BARGAINING IN CRIMINAL JUSTICE DELIVERY IN NIGERIA (eajournals.org) accesses on 05 April 2023.

[6] Section 76 (Now repealed and included in section 77 by the Lagos State Administration of Criminal Justice (Amendment) Law, 2021).

[7] EFCC v. Dr (Mrs) Cecilia Ibru (FHC/L/297C/2009) ; FRN v. Lucky Igbinedion (FHC/EN/6C/2008)

[8] A speech by Fmr. CJN Dahiru Mustapha, Rtd, made at the 5th Annual General Conference of the Section on Legal Justice of the Nigerian Bar Association at Abuja on November 14, 2011 availabe at PLEA BARGAIN: CJN slams EFCC – Vanguard News (vanguardngr.com) accessed on 04 April 2023.

[9] Kayode Eso, JSC, Interview with Vanguard Newspaper on 23 October 2011, available at Archive: Justice Eso’s last interview: ‘Why plea bargain breeds corruption’ – Vanguard News (vanguardngr.com) accessed on 04 April 2023.

[10] Sections 127 and 128 of the Criminal Code (Now Repealed).

[11] Albert v. Federal Republic of Nigeria (2021) LPELR-56144(CA); Peace V. Federal Republic of Nigeria (2021) LPELR-56410(CA)

[12] Section 270 (7) ACJA; Section 77(7) ACJL (Amendment) 2021

[13] Section 270(7)(d) ACJA

[14] Section 77 (2) ACJL, 2021

[15] Section 270 (2) ACJA

[16] Section 270(11) ACJA; Section 77 (12), ACJL (Amendment) 2021

[17] Section 270 (10) (b) ACJA

[18] Section. 270(11) ACJA; Section 77 (11) ACJL (Amendment) 2021

[19] Section 270 (10) ACJA; Section. 77 (10) (b) ACJL (Amendment) 2021

May 9, 2023

PUC Records Another Victory for Access Bank PLC

PUC Records Victory for Access Bank PLC in respect of Claims for Retirement Benefits, Compensation, and Sundry Reliefs to the Tune of ₦459,592,456.07

Paul Usoro and Co (“PUC”) successfully represented Access Bank Plc – the erstwhile employer of Mr Benson Oraelosi – Former General Manager of the defunct Diamond Bank Plc (Now Access Bank Plc) in Suit No. NICN/LA/109/2020: Mr Benson Oraelosi v. Access Bank Plc at the National Industrial Court of Nigeria (“NICN”), Lagos Judicial Division in a well-considered Judgment delivered by Honourable Justice (Prof) Oji on 22 February 2023. The Suit, was at the instance of Mr. Benson Oraelosi, as Claimant against the Defendant seeking Retirement entitlements, compensation and sundry reliefs in the cumulative sum of N459,592,456.07 (Four Hundred and Fifty-nine Million, Five Hundred and Ninety-two Thousand, Four Hundred and Fifty-six Naira and Seven Kobo).

The Suit emanated from the Claimant’s voluntary resignation/termination of his contract with the Defendant upon the merger of the defunct Diamond Bank Plc with Access Bank Plc. The Claimant, after his “resignation”, claimed his terminal entitlements pursuant to the Defendant’s 2006 Policy Manual which he vehemently alleged to be the applicable Manual at the time of his exit from the Defendant in 2019. The claims against the Defendant include; (i) a declaration that the Defendant’s action of calculating the Claimant’s retirement benefits under the Retirement Policy Scheme that came into effect in 2017 is void and of no effect having regard to the provision of the Defendant’s extant Human Capital Management Policies and Procedures Handbook of 2006, (ii) a declaration that the Claimant is entitled to have his retirement benefits and entitlements calculated under the Retirement Policy Scheme of the Defendant’s Human Capital Handbook of 13 March 2006, (iii) a declaration that the Claimant is entitled to enjoy all the benefits and entitlements which accrued to him as an employee of the Defendant pursuant to the Defendant’s Human Capital Handbook of 13 March 2006, (iv) an Order directing the Defendant to pay the Claimant the sum of N328,331,881.24 (Three Hundred and Twenty-eight Million, Three Hundred and Thirty-one Thousand, Eight Hundred and Eighty-one Naira and Twenty-four Kobo) representing the Claimant’s three months compensation for each completed year of service as stipulated in the 2006 Manual and other sundry reliefs cumulatively totalling the sum of N459,592,456.07 (Four Hundred and Fifty-nine Million, Five Hundred and Ninety-two Thousand, Four Hundred and Fifty-six Naira and Seven Kobo) as monetary claims.

The crux of the Claimant’s claim was that his exit from the Defendant was a voluntary retirement pursuant to the 2006 Manual having spent an unbroken period of 25 years and was above 45 years at the time of his exit from the Defendant’s employ. On the contrary, the Defendant’s position was that the 2006 Manual was reviewed in 2014, and subsequently in 2017, being the extant Manual at the point of the Claimant’s exit from the Bank in 2019. The Claimant made a heavy weather of the fact that he was not personally advised of the review of the said 2017 policy, but he admitted the receipt of the sum of N57,000,000(Fifty-seven Million Naira) which was paid to him as retirement/ gratuity upon the review of the said policy.

The Court upon a holistic consideration and evaluation of the parties’ case, agreed with the Defendant that the applicable Human Capital Policy at the time of the exit of the Claimant from the Defendant was the 2017 Manual. Consequently, the Honourable Court refused all the monetary claims of the Claimant against the Defendant.

Apart from the illuminating questions of law and facts that were in issue PUC has re-affirmed its mastery to competently defend the interests of her Clients in labour and related matters and indeed, all spectra of the legal system.

For more enquiries, contact:

PUC’s Financial Services, Arbitration, Corporate law and Tax (FACT) Practice Section

Mr. Munirudeen Liadi – Partner and Team Lead: munirudeen.liadi@paulusoro.com
Inyenebong Etefia – Associate: inyeneobong.etefia@paulusoro.com

April 6, 2023April 6, 2023

Liability of Social Media Companies for Injuries and Losses Suffered as a Result of Posts Hosted on their Platforms

AN EXAMINATION OF THE LIVECASE OF GONZALEZ v GOOGLE AT THE UNITED STATES’ SUPREME COURT.

Outline

Overview/Definition of Concepts
Review of Nigerian laws on the liability of Social Media Companies
Foreign Jurisdiction laws on liability of Social Media companies
Writer’s opinion on the appropriateness or otherwise of Social Media liability
Examination of the Ongoing case of Gonzalez v Google in the U.S.

Overview

The issue of the liability or otherwise of Social Media companies for injuries including but not limited to death and other losses suffered by users and non-users alike resulting from posts hosted on their platforms, is gradually becoming a burning issue. In the past, it was not envisaged that a time would come when the Social Media platforms would be employed by non-state and faceless actors in unleashing their terror on unsuspecting victims. This issue is more remote in developing countries like Nigeria where it is not so relatable. Social Media companies have grown exponentially and have spread their tentacles everywhere that these non-state actors, especially terrorist organizations, are increasingly employing their platforms in advancing and enhancing their nefarious activities.

Social media platforms have spread to the most remote parts of the globe and so too have their positive and adverse effects. It is the norm to seek to protect social media companies from liability for injuries and losses occasioned by the use of their platforms. Extant laws in most advanced democracies favour their protection from such liabilities in order to encourage their growth. Overtime however, these platforms are increasingly becoming stadiums for many non-state players and organizations in the perpetration of their heinous crimes.

Definition of Concepts

Social Media: Social media are websites and computer programmes that allow people to communicate and share information on the internet using a computer or a cell phone.[1]
Social Media Companies: These are companies that set up, own and run social media platforms and/or apps. These companies are the entities that are recognised by law and clothed with legal personalities. They have legal personalities and are responsible for maintaining the various social media platforms. For the purpose of this discourse, these companies include:
- Meta Inc. that own Facebook, Instagram and acquired WhatsApp in 2014.
- Alphabet Inc. the parent company of Google, which owns YouTube.
- Twitter Inc. which owns and operates Twitter app.
- Microsoft Inc. which owns LinkedIn.
- Snap Inc. formerly Snapchat Inc. owns and operates Snapchat app.
- Bytedance, a Chinese company owns and operates TikTok app.
- Tencent Inc. another Chinese company owns WeChat and QQ apps Etc.
Liability: Liability in the simplest form means the state of being legally responsible for something. Going further, Civil liability refers to the right of an injured party to hold someone responsible for his injuries or damages, which resulted from the other party’s wrongful actions. In order to hold a person or entity civilly liable, the wronged party must have suffered some type of quantifiable loss or damage. This may be in the form of personal injury, property damage, loss of income, loss of contract, and a host of other losses. In a civil liability lawsuit, the injured party’s losses must have occurred due to the defendant’s violation of a law, breach of contract, or other wrongful acts, referred to as a “tort.” Examples of civil liability cases include injuries and property damages sustained in automobile accidents, and defamationof character claims. To be successful in a civil liability lawsuit, the Plaintiff must prove to the Court, or to a Jury, that it is more likely than not that the defendant’s actions caused his injuries or loss. This level of proof required is referred to as a “preponderance of evidence.”
Foreign Jurisdiction: Foreign Jurisdiction in lay man’s terms means any jurisdiction outside the borders of Nigeria. For the purposes of this discourse, foreign jurisdiction are the laws of other countries particularly the laws of the United States on liability or otherwise of Social Media companies for injuries occasioned by posts hosted on their Apps.

Continue reading “Liability of Social Media Companies for Injuries and Losses Suffered as a Result of Posts Hosted on their Platforms”

March 23, 2023March 23, 2023

A Review of the Business Facilitation Act, 2023 in Relation to CAMA, 2020

President Muhammadu Buhari, on 13 February 2023, signed the Business Facilitation (Miscellaneous Provisions) Bill 2022, otherwise known as the Omnibus Bill into law. The Business Facilitation Act 2023 amends relevant legislation to promote the ease of doing business in Nigeria and institutionalize all the reforms to ease implementation.

One of the major amendments is as regards the provisions of the Companies and Allied Matters Act (“CAMA”) 2020. This short paper highlights some of the key amendments made to CAMA 2020 under Part 1, paragraphs 1-21 of the Business Facilitation Act (“BFA”).

They include:

Alteration of Share Capital –Section 127(1) of CAMA is now amended by paragraph 3 to provide that a company can also increase its issued share capital by a resolution of the Board of Directors. However, it is subject to conditions that may be imposed by the Articles or the company in general meetings. Previously, this could only be done by the company in general meetings.
Pre-emptive Rights– Section 142(1) of CAMA is now amended by paragraph 4 to provide that the right of an existing shareholder to be allotted newly issued shares now applies to a private company alone. Previously, it applied to all types of companies. A pre-emptive right or a right of first refusal is a right of existing shareholders in a corporation to purchase newly issued shares before it is offered to others. The right is meant to protect current shareholders from dilution in value or control. To mandate a public company to have the right of first refusal contradicts the essential principles of publicly traded company which is the issuance of shares to the public. Additionally, the time limit for the existing shareholders to accept the offer is 21 days. Previously, the applicable period was a reasonable time under Section 142(2)(c) of CAMA, 2020.
Authority to Allot Shares – Paragraph 5 of the BFA has amended Section 149 by substituting subsection (3) for subsection (1) and deleting the previous subsection (3). The implication of the amendment is that the members in general meeting of a private or public company reserve the power to allot shares. However, such power is exercisable by the board of directors where express authority has been vested on them by the company in general meeting or by the company’s articles. Previously, the power of the company to delegate allotment of shares to the directors was only applicable to a private company.
Return of Allotment– Section 154(1) of CAMA is now amended by Part 1, paragraph 6 of BFA to provide that the time limit for a company limited by shares to make a return of allotment to CAC is now 15 days. Previously, the timeframe was one month.
Share Certification– Section 171(7) by the amendment in paragraph 7 now provides for share certificates in physical or electronic form.

Continue reading “A Review of the Business Facilitation Act, 2023 in Relation to CAMA, 2020”

March 20, 2023March 20, 2023

PUC International Women’s Day 2023 Celebration

On the 8th of March 2023, our PUC Women celebrated International Women’s Day.

The internal celebration in recognition of this year’s IWD theme: “Embrace Equity” was held to foster bonds, support and promote an inclusive environment where the PUC woman can effectively grow and achieve a peak in her career while maintaining work-life balance.

PUC women had the opportunity to have as the guest speaker for the event, the Founder, Women in Technology in Nigeria, Mrs. Martha Alade, a Technopreneur and IT consultant, who enlightened the women about the use of technology, AI and IT tools and it’s advantages in work, life and even family with focus on the topic, “DigitALL: Innovation and technology for gender equality.”

The event also included games, bonding sessions, presentation of gifts and announcement of the winner of the first PUC IWD competition which centred on creating an innovative design with the IWD pose and a quote on this year’s theme.

Other images

At PUC, we continue to create a safe and enabling space for women as we strive to empower them for more.

See photos from the event below:

Follow us on LinkedIn | Twitter | Instagram

January 28, 2023January 28, 2023

Overview of Data Protection in Nigeria

INTRODUCTION

With the European Union’s General Data Protection Regulation (GDPR) coming into force in 2018, the prioritization of data protection by States has increased significantly. Protection of personal data has assumed an international human rights status. Paragraph 12 of the Universal Declaration of Human Rights (1948) and the International Convention on Civil and Political Rights (1966) provides that “No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation.” In Nigeria, the path to developing a data protection law has been protracted, with multiple yet unsuccessful attempts to adopt a law. The National Data Protection Regulation adopted by the National Information Technology Development Agency (NITDA) in 2019 as a subsidiary regulation has proved inadequate and only further emphasized the need for a comprehensive personal data protection framework.

This overview centers on the data protection regime in Nigeria, and the role of Nigerian lawyers in the Data Protection Sector.

DATA PROTECTION LAW – LEGAL FRAMEWORKS

Simply put, Data Protection is the process of securing digital information while keeping data usable for business purposes without trading customer or end-user privacy. The intent of data protection laws is to place human beings at the center of technological advancement. In the recent world, everyone has their personal details online and if mishandled, can be exploited to harm users unscrupulously for financial gain. It has therefore, become imperative to regulate how vast amount of personally identifiable data can be managed.

Although Nigeria does not have a specific statute regulating Data Privacy and protection, the National Information Technology Development Agency (NITDA) commendably came up with the Nigeria Data Protection Regulations (NDPR) in 2019 which specifically addresses Data Privacy and Protection in Nigeria.

Nigeria Data Protection Regulations (NDPR)

On 25 January 2019, the NITDA issued the NDPR pursuant to its powers under Sections 6 (a) and (c) and 32 of the NITDA Act, 2007. The Regulations have introduced a new data protection framework with pioneer compliance requirements for organizations that deal with the data of individuals. The objectives of the Regulations include safeguarding the rights of natural persons to data privacy, preventing manipulation of personal data, and fostering the safe conduct of transactions involving exchange of personal data and the integrity of commerce and industry in the data and digital economy. Based on the NDPR, data processing includes the collection, recording, storage, retrieval, use, disclosure, transmission, erasure, and destruction of personal data. The NDPR also specifically confers certain rights on persons that provide their personal data that is, Data Subjects. These include the right to information about their personal data, right to access their personal data, right of rectification of their information, right to withdraw consent, right to object, and right to data portability. The NDPR requires Data Controllers to develop adequate security systems to protect data within their custody. In line with this requirement, Data Controllers are required to maintain and publish a data protection policy that is in conformity with the NDPR and continually train and build the capacity of staff members on data protection and privacy procedures. The NDPR also mandates Data Controllers to appoint Data Protection Officers for the purpose of ensuring compliance with the Regulations; they are to obtain lawful consent of Data Subjects before processing their personal data. Data Controllers are required to display a simple and conspicuous privacy policy on any medium through which they collect or process personal data. Such privacy policy is to contain a description of the kind of personal data to be collected, and the purpose for the collection of the data amongst other information (a sample has been attached to the NPDR 2019); In the event that a Data Controller engages the services of a third party to process personal data of Data Subjects, the NDPR requires that such engagement must be governed by a written contract between the third party and the Data Controller.

The Regulations reserves the requirement for submitting data audit reports to certain categories of Data Controllers. Accordingly, only Data Controllers that process personal data of more than 1000 Data Subjects within a period of six months are mandated to file a soft copy of the summary of their audit to the NITDA. Similarly, Data Controllers that process personal data of more than 2000 Data Subjects within a period of 12 months are mandated to file a summary of their audit to NITDA, not later than 15 March in the following year. NITDA also requires that a verification statement by a licensed Data Protection Compliance Organization (DPCO) should accompany all filings made. A DPCO is any entity licensed by NITDA to train, audit and render consulting services and other services and products for the purpose of compliance with the Data Protection Laws applicable in Nigeria; Based on the NDPR, a data controller is required to only transfer data to a foreign country or international organization subject to the supervision of NITDA and the Attorney General of the Federation (AGF). NITDA would co-ordinate relations with the AGF with respect to international transfer of personal data. However, data controllers are obligated to notify NITDA of any such transfers.

NITDA is the agency responsible for administering the NDPR. The NDPR empowers NITDA to register and license DPCOs to monitor, audit, conduct training and render data protection compliance consulting services on its behalf. However, the DPCOs will be subject to Regulations and Directives of NITDA issued from time to time.

However, paragraph 2.1 of the regulation provides for Statutory and legal exceptions to the application of data privacy and protection as applicable to the NDPR. Therefore, the NDPR does not apply to the use of personal data in furtherance of national security, public health, safety and order by agencies of the Federal, State or Local government or those they expressly appoint to carry out such duties on their behalf; the investigation of criminal and tax offences; iii. the collection and processing of anonymized data; and personal or household activities with no connection to a professional or commercial activity. In furtherance of the NPDR, 2019, a guideline for the Guideline for the Implementation of the Nigeria Data Protection Regulation (NDPR), 2019, within Public Institutions in Nigeria was issued in 2020.

Asides the NDPR, there are other laws which touch on Data Privacy and Protection in Nigeria, which are briefly highlighted below:

Constitution of the Federal Republic of Nigeria: Section 37 of Nigeria’s 1999 constitution forms the foundation of data privacy rights and protection in Nigeria. It guarantees and protects the right of Nigerians to privacy and deems Privacy in this respect a fundamental right which is enforceable in a court of law when breached. Prior to the NDPR, most cases of data privacy breaches were enforced under this section.
The NCC Consumer Code of Practice Regulation 2007: Part VI of the Nigerian Communications Commission (NCC) regulation, generally deals with the protection of consumers’ data in the telecoms sector. Reg. 35 requires all licensees to take reasonable steps to protect the information of their customers against improper or accidental disclosures. It prescribes that licensees shall not transfer this information to a third party except as permitted by the consumer or commission or by other applicable laws or regulation.
The NCC Registration of Telephone Subscribers Regulation 2011: Regulation 9 and 10 of the NCC Registration of Telephone Subscribers Regulation 2011, deals with the data privacy and protection of subscribers. It provides for confidentiality of personal information of subscribers stored in the central database or a licensee’s database. It also provides that this information shall not be released to a third party nor transferred outside Nigeria without the prior written consent of the subscriber and commission, respectively.
The Freedom of Information Act 2011: Section 14 of the Freedom of Information Act protects personal data. It restricts the disclosure of information which contains personal information by public institutions except where the involved data subject consents to its disclosure or where the information is publicly available. The Act also provides that a public institution may deny the application for disclosure of information that is deemed privileged by law (e.g. Attorney-client privilege, doctor-client privilege)
The Cybercrimes (Prohibition, Prevention, etc.) Act 2015: The Cybercrimes (Prohibition, Prevention, etc.) Act, Nigeria’s foremost law on cybercrimes criminalizes data privacy breaches. Generally, this Act prohibits, prevents and punishes cybercrimes in Nigeria.
The National Identity Management Commission (NIMC) Act 2007: Section 26 of this Act requires the approval of the Commission before a corporate body or anybody can have access to data stored in their database. The Act also empowers the NIMC to collect, collate and process data of Nigerian citizens and residents.
The National Health Act (NHA)2014: The NHA which regulates health users and healthcare personnel restricts the disclosure of the personal information of users of health services in their records. It also ensures that healthcare providers take the necessary steps to safeguard such data.

Other acts are The Federal Competition and Consumer Protection Act 2019 and The Consumer Protection Framework 2016:

TAKING THE PRIVACY SPACE – THE ROLE OF LAWYERS

It is worthy of note that the issues surrounding legal protection have indeed created an opportunity to further specialize. There are opportunities in different specific sectors of the economy that intersects with privacy and which professionals will be able to provide tailored services, like healthcare, start-up, financial institution, insurance, big data companies, tech companies that engage in cloud computing, cyber insurance and cyber security amongst others.

Such areas of specialization include:

Privacy Policy advisor and analyst/Compliance officer – Good policies remain the driver of a regulatory framework. Involvement in Policy drafting for companies and contribution to policy recommendations when a draft regulation is issued for public consultation. Lawyers can effectively function as data protection officers, chief privacy officers or any other designation, assisting clients with compliance and transparency. Overseeing a company’s data protection strategy and its implementation to ensure compliance with extant data protection regulation.
Privacy Attorney/Consulting – Data Protection laws provide a right to lodge complaint which allows data subjects to initiate lawsuit before a supervisory authority or Courts in instances of infringement of their rights. Sanctions are imposed on organizations which are also challenged before National Courts. There is an opportunity for collaboration between privacy lawyers and litigation lawyers to navigate the slippery-slope. Outside the remit of litigation, transactions lawyers can provide advisory services on privacy and data protection and the appropriate implementation and compliance with privacy laws as a risk-based strategy.
Legislative Tracking – Lawyers can provide latest legal opinions and update organizations with latest decisions and laws that can impact their business. This entails providing real-time update and guidance to existing and new client companies, on the development in privacy laws globally and how it could possibly impact their businesses in order to guide them to wider compliance.

Recommendations for Growth

Lawyers can read up articles, books and laws governing data protection, sign up for courses, attend conferences and events centered on data protection laws in order to gain knowledge and possible clientele, write articles on data protection to create a large impression to the public on the firm’s expertise on data protection and contribution to policies and conversations.

Contact:

Mercy Agbo

Associate – Intellectual Property, Communications and Technology Sector.

mercy.agbo@paulusoro.com

January 17, 2023

PUC Secures Another Win for Dangote Industries Ltd. & Dangote Cement Plc.

PUC SECURES ANOTHER WIN FOR DANGOTE INDUSTRIES LIMITED & DANGOTE CEMENT PLC (“Dangote Group”) AT THE COURT OF APPEAL, BENIN DIVISION IN A TWIN DECISION DELIVERED ON 09 DECEMBER 2022 in the APPEAL NO. APPEAL NOS: CA/B/12/2022: BUA INTERNATIONAL LIMITED & ANOR v HONOURABLE MINISTER OF MINES AND STEEL DEVELOPMENT & ORS AND CA/B/13/2022: BUA INTERNATIONAL LIMITED & ANOR v DANGOTE INDUSTRIES LIMITED & ORS

Paul Usoro and Co (“PUC”) has consistently maintained its spot as the go-to firm for legal representations which it has shown in the issues that arose in the highly contested legal battle between BUA International Limited & Anor. and Dangote Industries Limited.

The legal tussle which started in 2016 following the Suit filed by the BUA Group to challenge the Dangote Group’s right over the Mining Lease No. 2541ML located at the border town between Okpella in Edo State and Okene in Kogi State and led the BUA Group to also seek to enforce their rights over the Mining Lease Nos. 18912 and 18913 which they claim were granted to them. The Dangote Group counter sued the BUA Group to challenge the latter’s acts of trespass, wrongful and illegal exploitation of the claim over the mining area covered by 2541ML which was historically granted on February 01, 2008 by the Mining Cadastre Office (“MCO”)and the Honourable Minister of Mines and Steel Development pursuant to the provisions of the Nigerian Minerals and Mining Act, 2007 (‘Mining Act) to Ado Ibrahim & Company Limited (“AICO”) and subsequently transferred to the Dangote Group in 2014. On 10 January 2022, the Federal High Court, Benin Judicial Division gave its Ruling on both Suits in favour of Dangote Industries Limited. Dissatisfied with the Ruling, BUA International Limited, Appealed to the Court of Appeal on both Rulings.

CA/B/12/2022: BUA INTERNATIONAL LIMITED & ANOR v HONOURABLE MINISTER OF MINES AND STEEL DEVELOPMENT & ORS

The Appeal was filed by the Appellants (“BUA Group”) challenging the Ruling of the Federal High Court, Benin Division Coram: Shuaibu J. delivered on 10 January 2022 in Suit No: FHC/B/CS/7/2016, striking out the Appellants’ Suit for being incompetent and for lack of jurisdiction after hearing the Preliminary Objections filed by the Respondents. In delivering its Judgment, the Court adopted the two issues raised by the Appellants in their Brief thus:

“Was the learned Trial Judge right when it held that the Appellants lacked locus standi to commence and maintain the Suit on the ground that the Appellants’ mining leases No 18912 and 18913 had expired?
Was the learned Trial Judge right when it struck out Suit No: FHC/B/CS/7/2016 on the ground that it was incompetent and statute barred without the consideration of the Statement of Claim of the Appellants at the Federal High Court?”

On issue one, the Court after extensively and painstakingly considering all submissions made by the Counsel and based on the 5^th Amended Statement of Claim, held that the Learned Trial Judge of the Federal High Court, Benin Division was right when it held that the Appellants lacked the locus standi to commence and maintain Suit No: FHC/B/CS/7/2016 on the ground that their mining leases number 18912 and 18913 had expired. It therefore resolved issue one in favour of the Respondents.

On issue two, the Court after considering Section 141 of the Nigerian Mineral and Mining Act 2007 and the Guidelines, held that the failure of the Appellants to fulfil the condition precedent to instituting and maintaining the action makes the action incompetent and therefore robs the Trial Court of the jurisdiction to adjudicate over this matter. Accordingly, the Trial Court was right to have declined jurisdiction to entertain the Suit. Consequently, the Court found that Appeal No: CA/B/12/2022, lacks merit and dismissed same and accordingly affirmed the Decision of the Trial Court.

CA/B/13/2022: BUA INTERNATIONAL LIMITED & ANOR v DANGOTE INDUSTRIES LIMITED & ORS

The Appeal was filed by the Appellants (“BUA Group”) challenging the Ruling of the Federal High Court, Benin Division Coram: Shuaibu J. delivered on 10 January 2022 in Suit No: FHC/B/CS/74/2016 dismissing the two Preliminary Objections filed by the Appellants. Dissatisfied with that Ruling, the Appellants commenced the instant Appeal. In delivering its Judgment, the Court adopted the three issues raised by the Appellants in their Brief thus:

Whether the trial Court rightly held that the Federal High Court has jurisdiction to entertain the 1^st and 2^nd Respondents’ claims on trespass to land.
Was the Trial Court right when it held that the 1st and 2^nd Respondents’ mining lease no 2541ML was validly issued by the Mining Cadastre Office?
Whether the trial Court was right when it held that the 1^st and 2^nd Respondents’ Suit does not constitutes an abuse of Court process in view of the pendency of Suit No: FHC/LKJ/CS/39/2013?”

On issue one, the Court held that from the Statement of Claim contained in the Record of Appeal, the principal claim is anchored on mining lease 2541ML and the principle of law is settled that the Federal High Court has jurisdiction over mining rights in mines and minerals, geological surveys and natural gas. Reliefs A-H are anchored on mining rights while reliefs no i & j are on trespass and that they are merely consequential reliefs whose success are dependent on the success of the principal claims on mining right. Accordingly, it held that reliefs A-H which are on mining rights are the principal reliefs upon which the success of reliefs i & j are dependent accordingly the trial Court has the jurisdiction to hear and determine the Suit.

On issue two, the Court after considering Sections 5 (5) and 65 (1) of the Mineral and Mining Act 2007 came to the conclusion that the Minister of Mines and the Director General of the Mining Cadastre Office both have the power to grant and transfer mining leases. Accordingly, mining lease No 2541ML granted to AICO Ado Ibrahim Co. Limited and transferred to the 1^st and 2^nd Respondents (“Dangote Group”) was validly granted and transferred. Consequently, issue two was resolved in favour of the Respondents.

On issue three, after extensively considering the submission of counsel, in its resolution, the Court looked at the ingredients that must be present for there to be an abuse of Court process and as such for Suit No: FHC/B/CS/74/2016 to be an abuse of court process, the subject matter, the issues and the parties must be the same with Suit No: FHC/LKJ/CS/39/2013 and found that the subject matter are not the same. The Court held that the argument that Suit No: FHC/B/CS/74/2016 is an abuse of Court process as it was filed during the pendency of Suit No: FHC/B/CS/7/2016 will not fly as it does not arise from the Appellants’ grounds of Appeal. Issue three was resolved in favour of the Respondents.

Consequently, all issues were resolved in favour of the Dangote Group, the Appeal was dismissed and the Ruling of the Trial Court affirmed.

PUC has continued to contribute to the evolvement of Nigeria’s Legal Jurisprudence on the principles of Mining and related matters.

The PUC Team was led by the Senior Partner, Mr. Paul Usoro, SAN and highly assisted by Mr. Chinedu Anyaso, Partner and Head of the Energy Law, Constitutional and Transport Law Practice Sections, with associates, Esther Samuel and Chijioke Obute.