How appeal court’s verdict on nullification of some CAMA’s provisions strengthens human rights suits

The Court of Appeal in Abuja, on 17 September, upheld a Federal High Court judgement nullifying several provisions of the Companies and Allied Matters Act (CAMA), 2020, Nigeria’s principal corporate regulatory law.

The judgement struck down a string of CAMA provisions which conferred some powers on the Corporate Affairs Commission (CAC), to control and intervene in the running of incorporated trustees, including religious bodies and other associations, in certain situations.

Both the Federal High Court and the Court of Appeal ruled concurrently that the provisions infringed upon constitutionally protected rights to freedom of thought, conscience, religion, association, and peaceful assembly.

But the Court of Appeal differed with the lower Federal High Court’s decision striking out the National Assembly’s name as a defendant in the suit filed as a fundamental human rights enforcement action.

In a landmark pronouncement in the judgement, the Court of Appeal held that the lower court’s decision striking out the National Assembly’s name from the suit on the grounds that it was not served with a pre-action notice before the suit was filed “cannot stand.”

The pronouncement on the judgement brings renewed attention to the special status of fundamental human rights suits and the limits of pre-action notice statutorily mandated to be served on some public institutions before suing them in court.

The Court of Appeal’s decision trashed the long-held notion that failure to serve a pre-action notice on some public institutions or serve them within the time stipulated by statute automatically rendered subsequent legal actions against the institutions incompetent.

The court’s three-member panel comprising Abba Mohammed, Donatus Okorowo, and Eberechi Nyesom-Wike ruled that fundamental rights enforcement suits are exempted from such statutory limitations or pre-action notice requirements.

“Since the right of action in fundamental rights enforcement cases is specifically provided by the Constitution, such a right of action cannot be limited or affected by any statutory limitation or requirement of pre-action notice,” Mr Okorowo wrote in the certified true copy of the lead judgement newly obtained by PREMIUM TIMES.

The decision was one of the two interrelated judgements the Court of Appeal delivered on 17 September.

The first, which arose from the appeal filed by the CAC, dealt with the crux of the matter – the legality or otherwise of the disputed CAMA provisions, while the other, which stemmed from the appeal filed by the plaintiff Emmanuel Ekpeyong who commenced the suit at the trial court, centred primarily on the effect of pre-action notice on the matter.

PREMIUM TIMES found after reviewing the verdicts that the Court of Appeal ordered the restoration of the National Assembly as a defendant in the matter.

The appeal court faulted the aspect of the 18 April judgement of James Omotosho of the Federal High Court that failure to serve the National Assembly with pre-action notice made the lawyer’s fundamental rights action against the legislative body incompetent.

Section 21 of the Legislative Houses (Powers and Privileges) Act, 2017, requires anyone intending to sue the National Assembly to give it three months’ notice before instituting the action.

However, Section 46(1) of the Nigerian constitution guarantees the right of any person to approach a court for redress over an alleged violation of their fundamental rights.

The Court of Appeal panel held that the constitutional provision superseded the provision of the Legislative Houses (Powers and Privileges) Act.

Mr Okorowo ruled that “Section 21 is a subsidiary requirement that cannot lawfully clog the right of immediate constitutional access conferred by Section 46(1).” He added that the requirement was void to the extent that it applied to fundamental rights proceedings.

The court also rejected the National Assembly’s claim to immunity, noting that the constitutional provision cited applied only to the removal of a governor or deputy governor.

It therefore held that the “part of the judgement” of the Federal High Court “which held the suit incompetent” against the National Assembly for failure to serve a pre-action notice under Section 21 of the Legislative Houses (Powers and Privileges) Act, 2017, and which accordingly struck out the name of the 1st Respondent, is hereby set aside.”

The court went on to declare that the failure to serve a pre-action notice on the National Assembly “does not render a fundamental rights action incompetent” against the National Assembly. It said the law relied on by the Federal High Court to make such a declaration was “inapplicable to proceedings for the enforcement of rights guaranteed under Chapter IV of the Constitution.”

“The name of the 1st Respondent, the National Assembly, is restored as a party to Suit No. FHC/ABJ/CS/1076/2020,” Mr Okorowo also ruled, while affirming “the substantive determinations” of the Federal High Court on the overall merits of the case. The substantive issue was not a subject of appeal in the particular case.

The suit

Mr Ekpenyong filed the suit less than a month after late President Muhammadu Buhari signed CAMA 2020 into law in August 2020.

The law expanded the CAC’s powers over incorporated trustees, including religious organisations, raising concerns about possible interference with their affairs.

Although the Act introduced several reforms to Nigeria’s corporate environment, its provisions on incorporated trustees, which cover churches, mosques, charities, NGOs and other associations, drew strong objections from religious organisations and civil society groups.

At the centre of the controversy was Section 839, which gave the CAC powers to suspend trustees and appoint interim managers where certain conditions existed, including alleged misconduct or mismanagement, fraud or where intervention was considered necessary in the public interest.

Religious organisations feared the provision could give the government excessive control over their internal affairs.

The Christian Association of Nigeria (CAN) called for the law to be amended, while the CAC maintained that it would not arbitrarily suspend trustees and that its actions remained subject to judicial review.

Amid the ensuing controversies, Mr Ekpenyong instituted the suit on 31 August 2020 at the Federal High Court in Abuja.

He sued the National Assembly, the CAC and the Attorney General of the Federation (AGF), over provisions of CAMA which he argued violated his constitutional rights.

In his suit, Mr Ekpenyong challenged the sections 839, 842 to 848 and 851 of the law, urging the court to rule that the disputed provisions infringed upon his freedom of thought, conscience and religion, freedom of association and peaceful assembly, as well as his right of access to court.

He relied on Sections 38 and 40, among other provisions, of the Nigerian constitution.

Federal High Court judgement

Delivering the judgment in April 2023, Judge James Omotosho agreed that the powers conferred on the CAC to regulate incorporated trustees under Sections 839 and 842 to 848 of CAMA were excessive and infringed Mr Ekpenyong’s rights to freedom of religion and association.

He declared the disputed provisions unconstitutional. He also held that Section 851, which provides for an Administrative Proceedings Committee to hear certain matters under CAMA, was inconsistent with the constitutional provision conferring jurisdiction on the Federal High Court.

But, while ruling in Mr Ekpenyong’s favour on the substantive issues, Mr Omotosho struck out the National Assembly as a defendant on the grounds of the plaintiff’s failure to serve a pre-action notice on the legislative body before instituting the suit.

Appeals

The ruling prompted two separate appeals.

The CAC challenged the decision nullifying the disputed CAMA provisions, while Mr Ekpenyong appealed against the decision to strike out the National Assembly as a respondent to the suit.

Mr Ekpenyong’s appeal challenged the Federal High Court’s decision that failure to serve a pre-action notice could prevent him from pursuing his fundamental rights claims against the National Assembly.

He argued that the lower court erred in law by holding that his action was incompetent against the National Assembly because he had not served the required notice.

He maintained that Section 46(1) of the Constitution did not make pre-action notice a condition for commencing proceedings to enforce fundamental rights guaranteed under Chapter IV.

He also argued that the Fundamental Rights (Enforcement Procedure) Rules were designed to advance applicants’ rights and freedoms, not restrict them.

The lawyer therefore asked the Court of Appeal to set aside the decision removing the National Assembly from the suit.

However, the National Assembly opposed the appeal, arguing that pre-action notice was a condition precedent to instituting proceedings against it.

Its lawyer, Bukola Adeagbo, of the legislature’s Directorate of Legal Services, contended that the failure to serve the notice affected the trial court’s jurisdiction to hear the case.

She also argued that the fundamental rights claims could wait until the required notice had been served and urged the appellate court to dismiss the appeal.

The Attorney-General of the Federation, represented by Samuel Gabriel, a principal state counsel in the Civil Appeals Department, similarly argued that the absence of pre-action notice rendered the suit premature and incompetent.

Mr Gabriel relied on the doctrine of sovereign immunity, contending that the National Assembly enjoyed such immunity and that Section 21 of the Legislative Houses (Powers and Privileges) Act, 2017, was intended to protect the legislature.

He further argued that Mr Ekpenyong’s action was essentially a request for the interpretation of CAMA and did not qualify as a fundamental rights suit.

The CAC did not file a brief in response to the appeal.

Federal High Court’s misapplication of law and internal inconsistency

Rejecting the respondents’ arguments, Mr Okorowo who gave the lead judgement consented to by the two other members of the panel, held that the nature of a suit was determined by the substance of the claim rather than its title or the procedure used to commence it.

The court rejected the reliance on Section 188(10) of the constitution to justify the National Assembly’s claim to immunity.

He ruled that the lower court had misdirected itself in law by striking out the legislature.

He said the lower court’s judge not only misapplied the law to come to that conclusion, but he was also “internally inconsistent with his own reasoning.”

“First, the internal inconsistency is patent,” Mr Okorowo wrote, noting that the judge earlier in the same judgement “correctly held that “fundamental human rights suits are sui generis and are largely not governed by the ordinary rules of civil procedure.”

He added on the basis of the special nature of fundamental rights enforcement suits, the trial judge “refused to strike out the suit for want of locus standi, relying on Paragraph 3(e) of the Preamble to the 2009 Rules, which provides that no human rights case may be dismissed for want of standing (see page 21 of the Judgement at page 169 of the Record).

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“Yet, after treating the suit as outside ordinary civil procedure for purposes of standing, he subjected the same suit to the ordinary civil-procedure requirement of a statutory pre-action notice, a creature of ordinary procedure and statutory privilege, without reconciling the two positions. The two holdings cannot stand together.

“If the suit is sui generis and distinct from ordinary civil procedure when the objection concerns standing, it does not lose that character when the objection concerns notice.”

The appellate court consequently set aside the part of the lower court’s judgement that removed the National Assembly from the suit.

It declared that the pre-action notice requirement did not apply to proceedings seeking to enforce fundamental rights guaranteed under Chapter IV of the Constitution and ordered that the National Assembly be restored as a party to the case.

The decision is subject to appeal at the Supreme Court.