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On April 18, the Federal High Court in Abuja struck down eight controversial sections of the Companies and Allies Act, 2020. The judgment, which annulled some of the provisions of the law, followed a constitutional and human rights lawsuit. lawyer, Emmanuel Ekpenyong. In this interview with PREMIUM TIMES’ Ameh Ejekwonyilo, Mr. Ekpenyong talks about his motivation to challenge the law and his intention to enforce the judgment. On the other hand, the Corporate Affairs Commission says that it has appealed against the verdict.
PT: What prompted you to file a lawsuit against the CAMA 2020 sections?
Ekpenyong: The action was inspired by my experience in the enforcement of basic human rights and constitutional law. Now, many people, especially those in the Federal Ministry of Justice, see fundamental rights as superfluous rights. More often than not, if you start an action against the government to enforce basic rights, they usually think you’re busy.
However, basic human rights are said to be the rights of life; The basis on which all laws in Nigeria must be established. This is why Article 1 (3) of the Nigerian constitution states that “the constitution is supreme and all other laws inconsistent with the provisions of the constitution are void to the extent of their inconsistency”.
So when the new CAMA was passed in 2020, it heralded a new dawn for doing business in Nigeria. A large part of our practice at Fred-Young & Evans Legal Practitioners is corporate law. So when we saw the law, we were excited because it brought innovation.
PT: What were the innovations?
Expansion: For example, the law brought in the sole proprietorship, which means one person can own a business these days and hold meetings on Skype and Zoom in instead of being called to meetings and travel; creating extra expenses and resulting problems. Another innovation was the limited company.
So, CAMA 2020 is a wonderful piece of legislation when it comes to doing business in Nigeria. But I don’t know what happened with regard to the matter of incorporated trustees. I believe the provisions went too far without considering the basic human rights of Nigerians.
Therefore, there is no need for the legislature to enact any law that seeks to erode the rights of the Nigerian people. Now, whether by design or by mistake, we asked the court to declare those provisions of CAMA null and void as they were really vis-à-vis the basic human rights of Nigerians.
For example, section 839 of CAMA 2020 provides Corporate Affairs Committee (CAC), wide latitude and enormous powers to remove association trustees and appoint an interim manager if they mismanage an association. But it is not the duty of the CAC to remove the trustees of the associations.
It will be recalled that under the old CAMA 1990 regime, associations were registered with the CAC and their constitutions were registered. Members were guided by their constitutions. If any member of the incorporated board of trustees had a problem with the way the association was being run, they had the power to go to court to air their grievances. It is not the CAC’s duty to determine what happens in an association.
As you know, churches, mosques or religious institutions, non-governmental organizations and other entities practicing the freedom of thought, conscience and religion of the Nigerian people exist through the incorporated trusts.
A simple analogy is this: I am a Catholic and I practice my thoughts and religion by participating in church activities. So it is too much power for a non-Catholic committee like me to remove an archbishop as an office bearer and appoint whoever they want because of the mismanagement of administrators within the Roman Catholic Church. This has violated my right to freedom of religion.
Therefore, we were convinced that those provisions of CAMA from 839 to 848 violate the provisions on freedom of thought, conscience and religion as well as the freedom contained in sections 38 and 40 of the constitution which guarantees peace.
Curiously, Section 851 of CAMA went so far as to establish an Administrative Procedures Committee, which would hear and determine matters that might arise from the new legislation. But it is fundamental law that matters arising from company law must be entertained and decided by the Federal Court. So parliament passed a law empowering a commission to take over the statutory powers of the court.
We are happy that Justice James Omotosho was bold enough to strike down the offending provisions of the new CAMA as inconsistent with the provisions of the constitution.
PT: What are the laudable intentions of the repealed CAMA provisions?
Expansion: Well, CAMA’s intentions were good, but MPs passed the UK Charity Act, which is completely at odds with our unique business climate. Laws should reflect the wishes and aspirations of the people. Although charities are registered as associations in Nigeria, the fact that the legislators have approved everything related to charities in the UK does not mean that all associations in Nigeria are registered as charities.
For example, churches and Islamic organizations in Nigeria are not charities. I believe that the intention of the legislators was to transparently manage the money given by the included associations. This is because there are reports that some churches and mosques generate enormous funds without paying taxes to the government. But as you would have realized from the court ruling, incorporated trusts are not incorporated companies. They are not run for profit. It shouldn’t be. The government cannot regulate religious bodies in the same way it does charities.
PT: What is the situation with the Nigerian government regulating non-profit organizations?
Expansion: CAMA puts trustees on par with companies. That shouldn’t be the case. For example, charities should be distinguished from churches and Islamic organizations and from non-governmental organizations that function as watchdogs for government activities. Therefore, to allow the CAC, a government agency, to regulate such an important entity will diminish its powers to check the abuses of government institutions.
What we were challenging was the authority of the commission to remove incorporated trustees and that commercial banks should delete the accounts of incorporated trusts because failure to comply within 15 days would close that entity. But these are not government funds. What is the CAC’s business with the accounts of incorporated trustees?
The essence of the case was to curtail the government’s excessive executive powers over the Nigerian people. This did not happen during the draconian age of the military.
So the repealed sections of the law gave the commission discretionary powers that were subject to abuse. We believe that the powers of the CAC should be limited to registration, constitutional law and ancillary matters, but not to the management of trustees.
PT: How do you want to fulfill the sentence?
Expansion: If so, the ruling will be reported to the CAC, and we will issue a legal opinion stating that those provisions that gave incorporated trustees enormous powers to regulate are nullified, unless an appellate court says otherwise. The Commission does not have to enforce these provisions.
We will then send the verdict to the major religious organizations of various faiths: the Catholic Church, the Christian Association of Nigeria (CAN) and Islamic organizations. This is to raise awareness that those provisions of CAMA are no longer applicable to them because they have been set aside by a court of competent jurisdiction.
If the CAC insists on enforcing any of the repealed provisions, those organizations have the right to initiate an action in the courts.
The verdict is a victory for democracy in Nigeria. Now, the myth that no action against the government can be started and won has been dispelled. We are in a democracy and citizens have the right to have the courts conduct trials in constitutional matters and human rights enforcement cases. This is how democracy grows.
Likewise, members of parliament at all levels of government are called upon to compare the provisions of the bills with the provisions of the constitution, especially chapter 4, which deals with the fundamental rights of citizens, before sending these bills to the president or governor for approval.
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