The Court of Appeal in Abuja has upheld a Federal High Court judgement that nullified several provisions of the Companies and Allied Matters Act (CAMA), 2020. The provisions gave the Corporate Affairs Commission (CAC) powers over incorporated trustees, including religious and other associations. A three-member panel delivered the judgement on 17 September, affirming that sections 839, 842, 843, 844, 845, 846, 847, and 848 of CAMA infringed upon constitutionally protected rights.
The controversy over the amended CAMA began in August 2020, shortly after President Muhammadu Buhari signed it into law. The Act introduced several reforms to Nigeria's corporate environment, but its provisions on incorporated trustees drew strong objections from religious organisations and civil society groups. Section 839 gave the CAC powers to suspend trustees and appoint interim managers where certain conditions existed, including alleged misconduct or mismanagement.
Emmanuel Ekpenyong, a constitutional lawyer with Fred Young & Evans LP, instituted a suit on 31 August 2020 at the Federal High Court in Abuja, challenging the provisions of CAMA. He argued that they infringed upon his constitutional rights, including freedom of thought, conscience, and religion, freedom of association and peaceful assembly, and access to court. The Federal High Court ruled in his favour in April 2023, nullifying the disputed provisions.
The CAC appealed the Federal High Court's decision, arguing that it erred in assuming jurisdiction over Ekpenyong's fundamental rights suit and that he lacked the legal standing to institute the suit. However, the Court of Appeal substantially agreed with the Federal High Court, holding that voluntary associations are generally supreme in managing their internal affairs and that courts should not interfere unless an association acts contrary to its own constitution.
The Court of Appeal rejected the argument that the restrictions imposed by the provisions could be justified under Section 45(1) of the Constitution. The court held that the disputed provisions infringed the rights guaranteed by Sections 38 and 40 and were not reasonably justifiable within the meaning of Section 45(1). The court consequently affirmed the Federal High Court's decision striking down Sections 839, 842, 843, 844, 845, 846, 847, and 848 of CAMA.
The Court of Appeal modified the Federal High Court's decision on Section 851, holding that it was unconstitutional only to the extent that it purported to give the Administrative Proceedings Committee power to determine, at first instance and to the exclusion of the Federal High Court, justiciable disputes arising under CAMA and impose penalties. The court also affirmed Ekpenyong's legal standing to institute the action on the narrow basis of his personal interest and membership of a registered religious association.
The judgement has now placed limits on the extent to which the CAC can exercise regulatory powers over incorporated trustees where those powers conflict with constitutionally protected freedoms. The Court of Appeal's decision preserves the regulatory role of the CAC but draws a boundary around powers that could interfere with freedom of religion and association.
Key points
- The Court of Appeal upheld a Federal High Court judgement nullifying several provisions of CAMA that gave the CAC powers over incorporated trustees.
- The judgement preserves the regulatory role of the CAC but limits its powers to interfere with freedom of religion and association.
- The court affirmed Emmanuel Ekpenyong's legal standing to institute the action challenging the provisions of CAMA.
