UNION CAPITAL MARKETS LIMITED v. BJ EXPORT LIMITED & ANOR
(2019)LCN/12869(CA)
In The Court of Appeal of Nigeria
On Monday, the 18th day of March, 2019
CA/L/567/2011
RATIO
INTERPRETATION: LITERARY INTERPRETATION
“In ABIOYE & ORS V YAKUBU & ORS (1991) LPELR 43 (SC) the Apex Court on the principle guiding interpretation of a word that has been defined in a statute held thus: ‘…However, where the word to be construed has been assigned a meaning in the definition section of the statute, the intention of the lawmaker is that the meaning so assigned is to be given to that word in that statute, unless the subject or con renders the meaning repugnant. See Apampa v. The State (1982) 6 SC 47. Ejoh v. I.G.P. (1963) 1 All NLR 250; (1963) 2 SCNLR 102.'” Per KARIBI-WHYTE, J.S.C( P. 116, paras. D-F) PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JURISDICTION: JURISDICTION ON INVESTMENT AND SECURITIES.
“The extent of the jurisdiction of the Investment and Securities Tribunal (IST) was aptly covered in the case of The TRIBUNAL – INVESTMENTS AND SECURITIES TRIBUNAL- WEALTHZONE LTD V SEC (2016) LPELR 41808 (CA) where it was held thus: “The Investment and Securities Tribunal (IST), on the other hand is a Judicial Body established by Section 274 of the Investments and Securities Act 2007, formerly Section 224 of the Investment and Securities Act, 1999. The Tribunal has exclusive jurisdiction to hear and determine any questions of law or dispute involving; (a) Decisions or determination of the Securities and Exchange Commission (SEC). (b) Securities and Exchange Commission (SEC) and a Capital Market Operator. (c) An issuer of Securities and the Securities and Exchange Commission (SEC), (d) The Securities and Exchange Commission (SEC) and a market self Regulatory Organization, like the Stock Exchange, (e) An investor and the Securities and Exchange Commission (SEC) and (f) Disputes arising from the administration, management and operation of collective investment schemes. See MUFUTAU AJAYI vs. SEC (Supra) 1; SEC vs. KASUNMU (2009) 10 NWLR (PT. 1150) 509.” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JUSTICES
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
TIJJANI ABUBAKAR Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
Between
UNION CAPITAL MARKETS LTD – Appellant(s)
AND
1. BJ EXPORT LIMITED
2. SECURITIES AND EXCHANGE COMMISSION – Respondent(s)
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A. (Delivering the Leading Judgment):
This is an appeal from the Investment and Securities Tribunal by way of Originating application to which the Appellant filed a Notice of Preliminary Objection on the ground that the Tribunal lacked jurisdiction to entertain the case.
On the 19th of May, 2011 the Tribunal in a ruling dismissed the Objection and the Appellant being dissatisfied with the ruling filed a Notice of Appeal on 3rd June, 2011.
The parties filed and exchanged briefs in line with the Court of Appeal Rules, 2016. The Appellant brief was filed on 29/7/11 together with the reply brief filed on 23/8/11 which was settled by Ayoola Ajayi, Oak Partners LP, wherein he distilled two issues wit:
1. Was the Investments and Securities Tribunal right when it relied upon Section 289 of the IST Act 2007 to hold that it had jurisdiction to entertain this case against the Appellant.
2. Does the IST have jurisdiction to entertain this case against the Appellants?
On the other hand the 1st Respondent?s brief was filed on 3/8/11; same was settled by Bankole Sotuminu of Olumuyiwa Sotuminu & Co. who also adopted the Appellant?s issues for determination.
From the above the issues are straight forward and the Appellant?s issues shall guide the Court in its resolution. I shall resolve the two issues together, as they basically arise from the same facts.
ISSUES 1 & 2
Appellant submitted that the preliminary objection filed at the Tribunal was to contend that the Tribunal lacked jurisdiction to entertain the case because one of the three conditions precedent prescribed in Section 284(1) a) of the Investments and Securities Act (ISA) did not exist and had not been fulfilled before the case was initiated against the Appellant.
Appellant submitted that the case fell into category of matters covered by Section 284(1) (a) of the Act which prescribed mandatory conditions precedent before there must be a question or dispute between parties. He submitted that the section provided that:
i. There must be a question or dispute between the parties;
ii. There must be a decision or determination of the commission on the question or dispute;
iii. The question or dispute must involve or be between one of the parties below:
(a). between capital market operators
(b). between capital market operators and their clients
(c). between an investor and a securities exchange or capital trade point or clearing and settlement agency
(d). between capital market operators and self regulatory organisation
That of the above scenarios only (i) & (iii) had been fulfilled and condition (ii) was yet to be fulfilled because the commission had not taken a decision on the dispute between the Appellant and the 1st Respondent as required by law and the case was incompetent.
He stated that the 1st Respondent has admitted that the commission was yet to give a decision in its originating application and witness statement in paragraphs 38, 43, 53, 67, 82, 88 &90 and 36, 41, 43, 61, 65, 80, 86, & 88 of the applicant’s witness statement on oath and that coupled with this the Tribunal made this finding at page 347 of the record, and thus upheld the submission of the Appellant, that the case was premature.
Appellant further stated that having found thus the Tribunal rather than strike out the action detoured and relied on Section 289 and held that it had jurisdiction, on the premise that an aggrieved person can seek redresses in the Tribunal either by way of originating application or appeal and that the inaction of the 2nd Respondent amounted to an action by them and the exhibit AG17 is a pre-action notice issued by the 1st Respondent to the 2nd Respondent.
Appellant submitted that he disagreed with this reasoning of the Tribunal for four reasons:
(1) That there was no action. He relied on UGWU V ARARUME (2007) 12 NWLR (PT 1048) 365, GANKON V UGUCHUKWU CHEMICAL INDUSTRIES LTD (1993) 6 NWLR (PT 2970) 55, KNIGHT FRANK & RUTLEY (NIG) V ATTORNEY GENERAL OF KANO STATE (1998) 7 NWLR (PT 56), EJUETAMI V OLAYA (2001) 12 SC (PT 175).
(2) Section 289 of the Act is instituting an action or an appeal against a decision and not an action of the commission.
(3) Section 289 of the Act is inapplicable to this case
(4) The reason whether Section 289 of the Act gave jurisdiction to the tribunal was raised suo moto without hearing the parties on the issue. He relied on CHAMI V UNITED BANK FOR AFRICA (2010) 6 NWLR (PT 11191) 474, CUNSIN (NIG) LTD V IGP (2008) 5 NWLR (NWLR (PT 1081) 546 AT 560F, EWHRUDJE V WLGC (2005) 7 NWLR (PT 924) 334, EGWUNEWU V EJEAGWU (2007) 6 NWLR (PT 1031) 431 at 448B.
On whether the IST have jurisdiction, he submitted that there is no appeal on this finding that had already been made by the Tribunal, and all that is left is for this Court to pronounce on the legal consequence of the finding. He relied on MISCELLANEOUS OFFENCES TRIBUNAL & ANOR V OKORAFOR & ANOR (2001) 18 NWLR (PT 745) 326H – 327A, MADUKOLU V NKEMDILIM (1962) 2 SCNLR 341.
Furthermore Appellant submitted that the jurisdiction of the IST is limited to matters specifically mentioned in the Act. He relied on NIGER CARE DEV. CO. LTD V ADAMAWA STATE WATER BOARD (2008) 9 NWLR (PT 1093) 498, EGUAMWENSE V AMAGHIZENWEN (1993)9 NWLR (PT 315) 1, ARIBISALA V OGUNYEMI (2005) 6 NWLR (PT 921) at P 17.
Appellant emphasised the importance of condition precedents and cited the cases of AMADI V NNPC (2000) 10 NWLR (PT 674) 76 at 113, PRINCE ATOLAGBE & ANOR V ALHAJI A AWUNI & ORS (1997) 9 NWLR (PT 522) 536, EIMSKIP LTD V EXQUISITE INDUSRTIES (NIG) LTD (2003) 4 NWLR (809) 88 at 118, DREXEL ENERGY AND NATURAL RESOURCES LTD & 7 ORS V TRANS INTERNATIONAL BANK LTD & 7 ORS (2008) 18 NWLR (PT 119) 388, APADI V BANUSO (2008) 13 NWLR (PT 1130) 204.
On the effect of when jurisdiction is lacking he relied on the cases of STB V OLUSOLA (2008) 1 NWLR (PT 1069) 561 at 591, GOMBE V P.W. (NIG) 1995) 6 NWLR (PT 402) 402 and urged the Court to strike out the case.
The 1st Respondent on the first issue submitted that he gave the commission through his solicitor 14days notice of its intention to institute an action at the tribunal pursuant to Section 289 of the Act, being aggrieved by inaction of the commission. He further submitted that the notion of Section 289 was not brought suo moto by the tribunal but was pleaded as part of the originating application and was also pleaded as part of the 1st Respondent’s reply to the Appellant’s preliminary objection. In addition he refuted the submissions of the Appellant, that the Tribunal accepted his submission that the case was premature but stated that if the case was under Section 284, the commission should have ruled first but since its under Section 289 there was no need for a ruling. He distinguished the case of CHAMI V UBA SUPRA and relied on DAIRO V UBN PLC 2007 11 MJSC PG 74 that the Court has a duty to consider the jurisdiction issue even if no brief of argument was filed.
In answer to issue 2 whether the IST had jurisdiction, he submitted that Section 284 of the Act is not the only avenue for commencing matters before the Tribunal. He referred to COTECNA INT LTD V CHURCHGATE NIG LTD (2004) 11 NWLR (PT 883) 128 PARAS D-F, on rules of interpretation and the use of ‘any’. MISCELLANEOUS OFFENCES TRIBUNAL V OKOROAFOR, AND NIGER CARE DEV V ADAMAWA STATE WATER BOARD.
He posit that Section 289 of the Act gives the Tribunal jurisdiction to hear any matter filed by a person aggrieved by any action of the commission with condition precedent which is that the aggrieved is to give 14 days notice to the commission in writing of his intention to institute an action or appeal against its decision and that this was fulfilled by the 1st Respondent when it served the commission with such notice dated 8/11/2010. The 1st Respondent concluded that Section 284 is not the only section where jurisdiction of the Tribunal is derived. He urged the Court to dismiss the appeal.
In the Appellant’s reply brief, Section 289 of the Act was said to be inapplicable due to the fact that the Tribunal had made a specific finding that the instant case falls squarely within the ambit of Section 284 and this has not been appealed against.
Secondly Appellant argued that where as Section 284 is titled ‘jurisdiction of the Tribuna’, Section 289 deals with and is titled ‘Appeals from decision of the Commission’.
RESOLUTION
It is trite that jurisdiction is governed by the plaintiffs claim in this case the originating application (see page 1 of the record) and paragraphs 2, 3, 4, 6, 7, 11, 12, 13-37, 38, 40-43, 44, 45, 47, 48, 49, 50, 53-88, 89-92 reproduced herein are the complaints of the applicant/1st Respondent against the Appellant and the 2nd Respondent.
1. The Applicant is a limited liability company registered under the laws of the Federal Republic of Nigeria and carries on the business of commodity export and investments at its registered office at Plot 180, Taiwo Ishola Street, Omole Phase 1, Lagos.
2. The 1st Respondent is a limited liability Company, engaged in the business of stock brokerage and a capital market operator whose place of business is Plot 97 Ahmadu Bello Way, Victoria Island, Lagos.
3. The 2nd Respondent is the apex regulatory organization for the Nigerian Capital Market whose headquarters is at SEC Tower, Plot 272/273 Samuel Adesoji Ademulegun Street, CBD, Abuja.
4. On the 27th December, 2009, the Applicant filed a complaint against the 1st Respondent at the Securities and Exchange Commission (SEC). The said complaint shall be relied on at the hearing of this matter.
5. SEC Lagos acknowledge receipt of the complaint by a letter dated 30th December, 2009 and the said acknowledgement shall be relied on at the hearing of this matter.
6. Further to the above, SEC Abuja also acknowledge receipt of the Applicant?s complaint by a letter dated 1st Feb, 2010 and the said acknowledgment shall also be relied on at the hearing of this matter.
7. By a letter dated the 12th day of March, 2010, the 2nd Respondent?s Lagos office invited the parties for an All Parties Meeting schedule for the 25th day of March, 2010. This invitation shall be relied on at the hearing of this matter.
8. At the meeting, the Applicant presented a 79 page written submission with exhibits detailing their complaint against the 1st Respondent. The said written submission with all exhibits attached thereto shall be relied on at the hearing of this matter.
9. The 1st Respondent officially replied to the said complaint via a letter to the 2nd Respondent dated March 29th 2010. The said reply shall be relied on at the hearing.
10. By a letter to the 2nd Respondent dated 19th April, 2010, The Applicant made a written response to the reply of the 1st Respondent via a letter dated. The said letter shall be relied on at the hearing.
11. The written submission of the Applicant in its entirety accused the 1st Respondent of committing the following contraventions.
i) Purchasing shares on behalf of the Applicant without cash cover.
ii) Mixing up their funds with the Applicant?s funds on two occasions.
iii) Withholding the Applicant?s one million Zenith Bank share sale proceeds totalling N22,079,028.51 (Twenty two million seventy nine thousand and twenty eight).
iv) Blocking/withholding N597,692,016.48 (Five hundred and ninety seven million, six hundred and ninety two thousand, sixteen naira, and forty eight kobo)worth of the Applicant?s shares without due process and compliance with SEC rules.
v) Selling ESTA portfolio without valid mandate from shareholder of record.
vi) Failure to honour duly executed transfer mandate
vii) 7 months delay in submitting April 2008 contract note in November, 2008
viii) Failure to manage the ESTA portfolio as contracted.
ix) Failure to strictly abide by the sworn code of conduct for registered market operators.
x) Holding Union Bank shares as security for a loan granted by Union Bank.
12. By virtue of a letter dated 17th April, 2008, Union Bank Plc (UBN), the parent company of the 1st Respondent offered the Applicant a credit facility for N180,000.000.00 (One hundred and eighty million) for an ESTA loan facility which was signed and accepted. The said letter of offer shall be relied on at the hearing.
13. The Equities Securities Trust Account (ESTA) Account is a special account created by UBN and operated by the 1st Respondent. It had very special terms and conditions which differentiated it from other accounts. These special features were stated in the leaflet advertising the ESTA account which shall be relied on at the hearing.
14. As per the leaflet, the ESTA account is tied to PORTFOLIO MANAGEMENT UNDER A TRUST. Further, a Trustee HAS TO BE APPOINTED for the shares the subject matter of the account. Again, all shares MUST be lodged with trust documents and other formalities executed and lodged accordingly.
15. These special features particularly attracted the Applicant to this account as the share to be bought were to be managed by a seasoned portfolio manager of the 1st Respondent who was to act as a trustee. The ESTA leaflet even stated that there would be one-week maximum tenor holding i.e that any equity bought under the ESTA facility could only be retained for a period of no longer than one-week which, if practiced, would greatly reduce the risk exposure of any investor.
16. All matters relating to the formalities to be executed and the lodgement and holding of shares was the SOLE responsibility of the Responsibility of the Respondent as the capital market operator.
17. As security for the facility, inter alia, the Respondent and UBN held a lien over:-
i) Sundry quoted shares at Union Capital Markets Ltd with a market value of N159,447,596.00 (One hundred and fifty nine million, four hundred and forty seven thousand, five hundred and ninety six Naira).
ii) Sundry quoted shares with other houses (subsequently transferred to Union Capital) with a market value of N251,765,408.00 (Two hundred and fifty one million, seven hundred and sixty five thousand, four hundred and eight Naira).
iii) Sundry quoted shares to be purchased (with the ESTA facility) with net value not below N180,000,000.00 (One hundred and eight million Naira).
18. The value of shares held on the ESTA facility alone as at the date the acceptance was signed was N411,243,044.00 (Four hundred and eleven million, two hundred and forty three thousand, forty four Naira). In addition to this, the Applicant independently bought two further portfolios of shares through the 1st Respondent. These are as reflected in the Union Capital Bought Contract Notes of June 2008, and November 2008 and statement of account for period ending 02-03-2009. These shall be relied on at the hearing.
19. The June 2008 Contract Note covers shares bought in the value of N75,032,194.01 (Seventy five million, thirty two thousand, one hundred and ninety four naira and one kobo). The November 2008 Contract Note covers shares bought in the Value of N86,416,818.47 (Eighty six million, four hundred and sixteen thousand eight hundred and eighteen naira, forty seven kobo).
20. The Applicant also transferred N25,000,000.00 (Twenty five million) worth of shares from SMARDAC LTD as per their letter to the Respondent dated April 29th 2008. The said letter shall be relied on at the hearing and the Respondents are hereby put on notice to produce the original.
21. Further to the above paragraph, the Respondent wrote to IBN via letter erroneously dated May 12, 2007 instead of May 12, 2008 which confirmed the transfer of the SMARDAC portfolio amongst others. This letter shall be relied on at the hearing and the Respondents are hereby put on notice to produce the original.
22. These shares in addition to the one already held give a total value of N597,692,016.48 (Five hundred and ninety seven million, six hundred and ninety two thousand, sixteen Naira, and forty eight kobo) worth of shares owned by the Applicant in the possession of the Respondent supposedly under the ESTA trust.
23. Once the account of the Applicant was credited by UBN, the Applicant issued a cheque in the sum of N180,000,000.00 (One hundred and eighty million naira) dated 24th April 2008 in favour of the 1st Respondent as specified in Section 4 of the loan agreement which states that ?Cheques drawn on the ESTA loan facility are to be issued in favour of Union Capital Markets Ltd with list of shares to be purchased? by UBN in the loan agreement. A copy of the cheque shall be relied on at the hearing.
24. Along with the above stated cheque, in compliance with condition 4 of the ESTA loan agreement of 17th April 2008, the Applicant attached an order for the specific shares to be bought with the facility in the form of a letter dated 24th April 2008 which stated clearly that the shares to be bought were to be ?MANAGED BY UNION CAPITAL SUBJECT TO AVAILABILITY.
25. The total value of the shares to be bought was commensurate to the N180,000,000.00 (One hundred and eighty million naira) being the value of the facility. This letter shall be relied on at the hearing.
26. From the time the cheque was paid, the conduct of the 1st Respondent became negligent, careless, reckless, illegal and inconsistent with existing market rules.
27. Further to the above, the Contract Notes were submitted 7 months late and there was a clear lack of segregation of accounts, Unsolicited Loans, Non-Remittance of proceeds, failure to adhere to client?s instruction, knowingly approving and buying UBN shares with UBN loan, illegal blocking of shares.
28. The 1st Respondent used part of the Applicant?s facility from UBN to buy shares in UBN in three transactions being:
i) 23,595 units on 25/4/2008
ii) 11,992 units on 28/4/2008 and
iii) 967,413 units on 28/4/2008
as per the Applicant?s statement of account with end date of 02-03-2009 and the bought contract note with end date 29-04-2008.
29. The 1st Respondent further held UBN shares as security for a UBN loan as shown in the 1st Respondent?s own letter to Union Bank of Nigeria erroneously dated May, 12th 2007 instead of 2008 which listed the Applicant?s stock portfolio at SMARDAC SECURITIES to include N113,000 (One hundred and thirteen thousand naira) UBN shares and the portfolio at RAINBOW SECURITIES to include N1,000,000 (One million naira) UBN shares.
30. The above stated contract notes for April 2008 transactions were only forwarded to the Applicant by the 1st Respondent in November, 2008, 7 months after the transaction. The Applicant?s e-mail to the 1st Respondent dated September, 10th 2008 requesting the statement of account and the e-mail by Charles Dako, an officer of the 1st Respondent forwarding the contract notes to the Applicant on November 18th 2008 shall be relied on at the hearing.
31. In the 1st Respondent’s letter to SEC dated 29th March, 2010, in response to paragraph 26 above, the 1st Respondent stated that the accounts ‘were promptly delivered to the Applicant’ but failed to state the date they were delivered on. They also did not refute the fact stated by the Applicant in their submission that notice of the transactions were given on the 18th November, 2008, 7 months late.
32. Upon receipt of the Applicant?s first mandate dated April 24th 2008 with the cheque for N180,000,000.00 (One hundred and eighty million) as per paragraphs 20 and 21 above, the 1st Respondent bought shares with a total value of N192,416,669.00 (One hundred and ninety two million, four hundred and sixteen thousand, six hundred and sixty nine).
33. In so doing the 1st Respondent gave the Applicant an unsolicited loan of N12,416,669,00 (Twelve million, four hundred and sixteen thousand six hundred and sixty nine and also mixed their funds with the depositor?s funds.
34. Further, a second mandate given by the applicant to the claimant via SMS dated 19th June, 2008 to buy shares of N70,000,000.00 (Seventy million) was also exceeded by N5,032,194,01 (Five million, thirty two thousand, one hundr3ed and ninety four thousand naira and one kobo) when the 1st Respondent bought shares on the account of the applicant worth N75,032,194.01 (Seventy five million, thirty two thousand, one hundred and ninety four naira and one kobo).
35. In so doing the 1st Respondent gave the applicant an unsolicited loan of N5,032,194.01 (Five million, thirty two thousand, one hundred and ninety four naira and one kobo) and also mixed their funds with the depositor?s funds.
36. The above transaction are documented in the above stated bought contracts notes and statement of account. The 1st Respondent further admitted these unsolicited loans in their letter to the 2nd Respondent dated March 29, 2010 where they stated that save for the first order which was accompanied by a cheque for N180 million, all subsequent orders were not backed by any cash or cheque and that the mandate to buy shares were not fully funded.
37. The 1st Respondent further admitted giving an unsolicited loan to the Applicant when they further stated that Cheques for subsequent purchases were received much later after purchases were made. This letter shall be relied on at the hearing.
38. The 2nd Respondent either refused or neglected to impose sanction on the 1st Respondent for these obvious contraventions of the SEC rules.
39. The Applicant?s e-mail disclaiming the excess purchases dated 13/1/09 shall be relied on at the hearing.
40. The Applicant?s letter of reminder and complaint dated March 21/2009 shall also be relied on at the hearing.
41. The Applicant?s further letter of September, 14, 2009 shall be relied on at the hearing.
42. In the letter of 19/3/2009 to the Applicant, the 1st Respondent?s stated that ?we used our discretion to buy shares worth 86.4 million which discretion had ultimately reduced your losses should we have executed your mandate in full? the 1st Respondent acknowledge that they do not work as per given mandate but on discretion only. This letter shall be relied on at the hearing.
43. The 2nd Respondent again either refused or neglected to impose sanctions on the 1st respondent for this obvious contravention of the SEC rules.
44. Pursuant to the applicant?s mandate of 18th and 19th November 2008, the 1st Respondent sold one million Zenith Bank Plc shares and has failed to remit the proceeds being N22,079,028.51 (Twenty two million seventy nine thousand and twenty eight naira, fifty one kobo) until date after numerous request. These funds were unlawfully taken by the 1st Respondent as payment for the unsolicited and unwanted loan which they gave the Applicant as shown in the letter by the 1st Respondent dated March, 3 2009. This letter shall be relied on at the hearing.
45. The 2nd Respondent again either refused or neglected to impose sanctions on the 1st Respondent for this obvious contravention of the SEC RULES.
46. The blocking of all the shares stated above in the possession of the 1st Respondent was done without the statutory due process.
47. The 1st Respondent blocked all the shares belonging to the Applicant, depriving the Applicant of the opportunity to sell the shares when it felt it appropriate to do so, and the opportunity to transfer the shares to another trading house who would managed them properly.
48. Even the 1st Respondent?s shares which were not held as security for the ESTA loan were illegally blocked by the 1st Respondent with all requests and demands for their transfer to another trading house ignored repeatedly by the 1st Respondent.
49. Via a letter dated July 30th 2009, from the Applicant to the 1st Respondent, the Applicant gave instructions to move the portfolio away from Union Capital to Rainbow Securities LTD DUE TO THE High degree of unprofessional and inept conduct experienced by them at the hand of Union Capital. This letter shall be relied on at the hearing.
50. The Applicant also wrote to Union Capital Markets Ltd via a letter dated August 3, 2009 enclosing the transfer forms necessary to affect a transfer of the portfolio but Union Capital has failed to comply with those instruction. This letter shall be relied on at the hearing.
53. All the 2nd Respondent again either refused or neglected to impose sanctions on the 1st Respondent for this obvious contravention of the SEC rules.
88. In a desperate bid to get SEC to fulfil their statutory duties and obligations, the Applicant was forced to petition the Minister of Finance in September 2010. The reply shall be relied on at the hearing.
89. A further petition to the Minister of finance dated 1/12/2010 against the inexplicable delay in reaching a finding on the part of SEC shall also be relied on at the hearing.
90. The 2nd Respondent has refused, neglected and omitted to make a pronouncement on this matter despite its knowledge that it is supposed to release its findings within 14 days.
91. It is evidently clear from their only and final submission before SEC, that the 1st Respondent has no answer for all the irregularities and negligence that characterized this ESTA transaction.
92. I have been charged the sum of N10,000,000.00 (Ten million naira) and the invoice shall be relied on at the hearing.
To drive home the point the Appellant is a limited liability company operating as a capital market operator in the stocks and securities market while the 2nd Respondent is a government regulator of the capital and securities market. The originating application is supported by a witness statement on oath, sworn to by a director of the applicant.
The main claim in the application is that the 2nd Respondent being the regulator failed in its statutory duty to sanction the Appellant and give compensation to the applicant/1st Respondent and damages thereof.
The creating statute of the Investments and Securities Tribunal is in Section 274 of the Investments and Securities Act while the powers and jurisdiction vested on the Tribunal is in Section 284 of the Act and which for clarity of purpose is reproduced herein:
284 (1) The Tribunal shall, to the exclusion of any other Court of law or body in Nigeria, exercise jurisdiction to hear and determine any question of law or dispute involving:
(a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute: (i) between capital market operators; (ii) between capital market operators and their client; (iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency; (iv) between capital market operators and self regulatory organisation;
(b) the Commission and self regulatory organisation;
(c) a capital market operator and the Commission;
(d) an investor and the Commission;
(e) an issuer of securities and the Commission;
(f) disputes arising from the administration, management and operation of collective investment schemes.?
The extent of the jurisdiction of the Investment and Securities Tribunal (IST) was aptly covered in the case of The TRIBUNAL – INVESTMENTS AND SECURITIES TRIBUNAL- WEALTHZONE LTD V SEC (2016) LPELR 41808 (CA) where it was held thus:
“The Investment and Securities Tribunal (IST), on the other hand is a Judicial Body established by Section 274 of the Investments and Securities Act 2007, formerly Section 224 of the Investment and Securities Act, 1999. The Tribunal has exclusive jurisdiction to hear and determine any questions of law or dispute involving; (a) Decisions or determination of the Securities and Exchange Commission (SEC). (b) Securities and Exchange Commission (SEC) and a Capital Market Operator. (c) An issuer of Securities and the Securities and Exchange Commission (SEC), (d) The Securities and Exchange Commission (SEC) and a market self Regulatory Organization, like the Stock Exchange, (e) An investor and the Securities and Exchange Commission (SEC) and (f) Disputes arising from the administration, management and operation of collective investment schemes. See MUFUTAU AJAYI vs. SEC (Supra) 1; SEC vs. KASUNMU (2009) 10 NWLR (PT. 1150) 509.
Again, this Court in EBONG VS SEC (2017) LPELR – 43547 (CA) held thus:
“The Investment and Securities Tribunal (I.S.T.) is established by Section 274 of the I.S.A. A swift glance at Section 6(3) and (5) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) shows that it is not listed as a superior Court of record in Nigeria. In his book, “Company Law and Practice in Nigeria” 5th Ed., page 400, Orojo describes the I.S.T. as “…inferior to the High Court…” The law is that nothing shall be intended to be out of the jurisdiction of a superior Court of record but that which specifically appears to be so, and nothing shall be intended to be within the jurisdiction of an inferior Court but that which is so expressly alleged – African Newspapers of Nigeria v. F.R.N. (1985) 1 SC 127. Thus, being a Tribunal, nothing is within the jurisdiction of IST except that which is expressly stated to be so. Again, it must be stated that Courts or Tribunals do not hunger after jurisdiction, as Judges are not to enlarge their jurisdiction as, by doing so, they will be usurping the function of the Legislature. See again African Newspapers of Nigeria v. F.R.N. (supra). The jurisdiction of a Court or Tribunal vested by Law is determined by the plaintiff’s claim. The Court is to carefully examine the claim to see if it comes within the jurisdiction conferred on it by the Constitution or the relevant legislation. If it comes…complaint in this originating Application.”
In resolving this issue, it is also necessary for me to set out the provisions of the I.S.A. relied upon by the I.S.T. in arriving at its decision that it has jurisdiction over the instant matter; and which Counsel on both sides canvassed before this Court.
They are Sections 284(1), 289, 13 and 303(4).
(1) Section 284(1) and (2) 1. “The Tribunal shall, to the exclusion of any other Court of law or body in Nigeria exercise jurisdiction to hear and determine any question of law or dispute involving: a. a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute; (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing or settlement agency; (iv) between capital market operators and self regulatory organization; b. the commission and self regulatory organization; c. a capital market operator and the commission; d. an investor and the commission; e. an issuer of securities and the commission; and f. disputes arising from the administration, management and operation of collective instrument schemes.”
2. Section 294 “The Tribunal shall have exclusive jurisdiction on matters specified in this Act.”
3. Section 13 “The Commission shall be the apex regulatory organization for the Nigerian capital market and shall carry out the functions and exercise all the powers prescribed in this Act and, in particular, shall…” N/B – the functions of the 1st Respondent are set out in subparagraphs (a)-(d).
4. Section 303(4) “Notwithstanding the provisions of Subsections (2) and (3) of this Section the complainant of a contravention may seek by action, consequential or punitive damage or any other remedy that may be available under the law.”
By the provisions of Section 284(1) (a) (b) (c) (d)(e) and (f), the I.S.T. has jurisdiction to hear and determine any question of law or dispute involving the following:
(1) A decision or determination of the 1st Respondent in the operation and application of the I.S.A. and in particular, relating to any dispute: (i) between capital market operators; (ii) between capital market operators and their clients; (iii) between an investor and a securities exchange or capital trade point or clearing or settlement agency; (iv) between capital market operators and self-regulatory organization
(2) (i) the 1st Respondent and self-regulatory organization; (ii) a capital market operator and the 1st Respondent; (iii) an investor and the 1st Respondent; (iv) an issuer of securities and the 1st Respondent; and
(3) Disputes arising from the administration management and operation of collective investment schemes. The I.S.T. therefore has jurisdiction in any of the three instances or circumstances highlighted above. This is apart from the jurisdiction that may be prescribed by an Act of the National Assembly, which to the best of my knowledge, there is none. In Okorocha v. U.B.A. Plc (2011) 1 NWLR (Pt. 1228) 348 this Court, per Saulawa, JCA stated thus: “From the above provisions of Section 284 … its rather obvious that the phrase “decision or determination of the commission” as couched in Subsection (1) (a) (i)-(iv) … means the lower Tribunal’s jurisdiction is subject to first and foremost, the commission’s decision or determination of any dispute between: (i) capital market operators; (ii) capital market operators and clients thereof; (iii) an investor and securities exchange or capital trade point or clearing and settlement agency; and (iv) capital market operators and self regulatory organization, respectively. Contrariwise, jurisdiction of the Tribunal regarding Sub-sections (1) (b) (c) (d) (e) and (f) is not circumscribed by, or limited to, any dispute arising from the “decision or determination of the commission”.
That’s to say, the Tribunal has the jurisdiction to entertain, hear and determine any question of law or dispute involving (b) the commission and self-regulatory organizations; (c) a capital market operator and the commission; (d) an investor and the commission; (e) an issuer of securities and the commission; and (f) disputes arising from the administration, management and operation of collective investment scheme, respectively.” The three circumstances of the I.S.T.’s jurisdiction will now be addressed separately as follows: “(1) It was submitted by the Respondent’s Counsel that the use of the words “in particular” in Section 284(1) (a) of the I.S.A. to enumerate the class of persons over whom the I.S.T. has jurisdiction shows that the list is not exhaustive and that the subsection therefore covers all persons. I respectfully do not agree with him. The phrase “in particular” in that subsection is a term of restriction. The word used is “particular”. In Ibori v. Ogboru (2005) 6 NWLR (Pt. 920) 102, 106, it was held that where a word is clear, the Court is to follow its simple, grammatical and ordinary meaning rather than look further. In the Oxford Advanced…”
Therefore in this case, the complaints are in two folds:
(1) Against the Appellant a capital market operator for maladministration of the 1st Respondent?s portfolio and
(2) Against the commission (2nd Respondent) for refusal to sanction the Appellant in its regulatory capacity role.
In putting these complaints against the jurisdictional powers in Section 284 of the Act, it is clear that Section 284 (1) covers (a) – (f) while if in Section 284(1) (a) the case must fall within the parties so named in Section 284 (1) (a) (i) – (iv).
On the other hand, the Tribunal can also deal with cases/situations in Section 284 (1) (b) – (f) under which parties are not restricted to whether a decision or determination has been reached by the Commission.
The complaints of the 1st Respondent enumerated in the above named paragraphs shows the inaction of the 2nd Respondent to carry out its regulatory role to the detriment of the 1st Respondent which has occasioned him losses and loss of confidence in the capital market and he is crying for help/justice but has found none in the 2nd Respondent.
He now turned to the tribunal whose jurisdiction covers disputes, in this case between the 2nd Respondent and the investor which the 1st Respondent qualifies as. See paragraphs 4, 7, 8, 9, 10, 38, 67, 87, 84, 85, 86 and 90 (reproduced above) cataloguing several refusals of the commission to impose sanctions and the reminders and finally the petition to the Minister of finance and till date the 2nd Respondent sat on its findings report. This is the fulcrum of the 1st Respondent complaints to the Tribunal, for it to compel the 2nd Respondent to do its duty. I am fortified by this by an insightful look at the reliefs sought at page 22 of the record thus:
The Applicant claims against the 2nd respondent as follows; i. A DECLARATION that the Securities and Exchange Commission failed in its statutory duty to sanction the 1st respondent and give compensation to the applicant.
Damages for the Commissions dereliction of its duty and the injury caused to the business of the applicant
An apt intention of the drafters is not to shut others who have grievances with the commission itself but not with any decisions or determination. A contrary view will do radical damage to the spirit of the Act. The provision in Section 284 (1) (a) of the Act restricts the jurisdiction to hear and determine any question of law or dispute involving:
(a) a decision or determination of the Commission in the operation and application of this Act, and in particular, relating to any dispute:
(i) between capital market operators;
(ii) between capital market operators and their client;
(iii) between an investor and a securities exchange or capital trade point or clearing and settlement agency;
(iv) between capital market operators and self regulatory organisation.?
For the avoidance of doubt this condition or qualification does not extend to other parties with disputes or questions in subsection (b) – (f) of the same Section 284 (1). Therefore the situation of the 1st Respondent falls squarely into an investor and the Commission under Section 284 (1), Subsection (d); hence the Tribunal has jurisdiction to entertain and adjudicate over the matter.
The word used in the Section 284 (1) – ‘any question of law or dispute; is used to qualify or mean ‘several’ and is not restrictive.
In ABIOYE & ORS V YAKUBU & ORS (1991) LPELR 43 (SC) the Apex Court on the principle guiding interpretation of a word that has been defined in a statute held thus:
“…However, where the word to be construed has been assigned a meaning in the definition section of the statute, the intention of the lawmaker is that the meaning so assigned is to be given to that word in that statute, unless the subject or con renders the meaning repugnant. See Apampa v. The State (1982) 6 SC 47. Ejoh v. I.G.P. (1963) 1 All NLR 250; (1963) 2 SCNLR 102.” Per KARIBI-WHYTE, J.S.C( P. 116, paras. D-F)
Furthermore in SETRACO NIG LTD V KPAJI (2017) LPELR – 41560 (SC):
“The Courts including the Apex Court have been well guided over the years in the interpretation of Statutes with the clear boundary beyond which the Courts cannot enter. That is to say that while the Courts have powers of interpretation of the law, it has no licence to veer into the legislative arena or constitute itself into the legislator however harsh or distasteful the piece of legislation may be, as once the words are plain and unambiguous, the Court is duty bound to give effect to those words and not interpret the law as it ought to be. See F.B.N. Plc v Maiwada (2013) 5 NWLR (Pt.1348) 444 at 448 and 483.”
In AWUSE V ODILLI (2003) LPELR – 666(SC) on the meaning of the word ?any?, the Apex Court had this to say:
?Though the word “any” when used as an adjective is defined in Longman Dictionary of the English Language thus: “one or some indiscriminately, whichever is chosen”. It would appear that the word “any” qualifying “question” was deliberately used by the lawmakers to indicate that an appeal to the Court of Appeal was not limited only to hearing appeals only to whether any person has been validly elected to the office of Governor.?
Per EJIWUNMI, J.S.C (P. 44, paras. D-F)
From the above, the use of ‘any’ is not to restrict the provisions and tied only to the Tribunal’s jurisdiction.
The issue of Section 289 of the Act which allows any one dissatisfied with any action or decision of the Commission may institute an action or appeal?provided 14days pre-action notice is issued to the Commission. The 1st Respondent submitted that this is another way of initiating proceedings at the Tribunal. Again this is tied to Section 284 (1) (a) of the Act.
The Tribunal in its wisdom has interpreted the word any action to include ‘inaction’ to act on any issue and there is no appeal against this finding. Therefore I shall not go there. It provides the background reason for it as to be.
Where a body statutorily empowered to among others handle complaints of aggrieved individuals, it fails or neglects to take decisive action over such complaints, the individual are not expected to fold their arms helplessly, where the law has made provision for the enforcement of their rights.
I cannot agree more, it tallies with the principle of ubi jus ubi remedium – where there is a wrong there is a remedy. The Tribunal has aptly captured the situation of the 1st Respondent and I adopt it in this
circumstance but in addition to the findings in this judgment that he qualifies under Section 284 (f).
The point of disagreement therefore with the Tribunal?s finding is that it falls under the provision of Section 284(1) (a) (i) – (iv) – this as earlier said is restrictive. The broader picture is in Section 284 (1) (b) – (e) which is not qualified by (a).
Howbeit, the 1st Respondent has submitted that once a pre-action notice is issued the 1st Respondent can access the Tribunal. This is partially correct except that he can also come under Section 284(1) (f) of the Act.
In answer to the submission of the 1st Respondent on the provisions of Section 289 of the Act not being raised suo moto by the Tribunal. I have diligently searched the record and find same not to be correct, the preliminary objection filed was to challenge the jurisdiction of the Tribunal to wit:
i) The case is premature and initiated without due process
ii) Applicant failed to comply with statutorily prescribed mandatory conditions precedent before commencing the case
iii) Case is not justiceable and is incompetent
iv) The investment securities’ tribunal lacks jurisdiction to entertain the case against the 1st Respondent.
The provisions of the Act were examined and the Tribunal relying on its past decisions examined its jurisdictional powers under the same Act and relied on the provision. It was not outside its powers when it showed that in the Act an applicant who has a complaint can come under another provision. The essence is access to justice is more important to give room to ventilate the grievance. I do not see how it qualifies as an issue raised suo motu.
On the whole, I resolve the issue one partly in favour of the 1st Respondent and issue 2 in favour of the 1st Respondent.
This is an appeal filed in 2011, a securities and capital market/commercial issue which has dragged on and would have been long concluded by the Tribunal. So much time has been wasted. It is in this light that I direct the Tribunal to hear the matter expeditiously under the accelerated status.
This appeal lacks merit and it is accordingly dismissed. The ruling of the Tribunal delivered on 19th of May, 2011 is hereby upheld. Costs of N250,000 is awarded against the Appellant in favour of the Respondent.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I agree with the lucid judgment prepared by my learned brother, Abimbola Osarugue Obaseki-Adejumo, J.C.A., which I had the honour of reading in print. I would, for emphasis, maintain in line with the lead judgment that the Investments and Securities Tribunal has primary jurisdiction over the dispute between the parties in this appeal.
I too dismiss the unmeritorious appeal and order that the action be given accelerated hearing by the Investments and Securities Tribunal as ably stated in the lead judgment and abide by the order on costs.
TIJJANI ABUBAKAR, J.C.A.: I read in draft the comprehensive leading Judgment rendered in this appeal by my learned brother Obasek-Adejumo JCA. I am in agreement with the reasoning and conclusion and adopt the Judgment as my own.
I also abide by all consequential orders, including order on cost.
Appearances:
Ayoola AjayiFor Appellant(s)
Chidiebere Chukwu for 1st Respondent.
Dimukeje C. F. for 2nd Respondent.
