The recent Money Laundering Act [hereinafter referred to as “MLA”] was enacted in May 2022 to repeal the previous Act of 2011. This latest law like its predecessor is to ensure transparency and disclosure by shining the torchlight on financial transactions, combat money laundering and other related crimes. Penalties as usual, have been prescribed to act as deterrent for anyone, whether natural or corporate, who flouts these provisions.
The Law
Section 2(1) provides that no person or body corporate shall except through a financial institution, make or accept a cash transaction exceeding the sum of N5 Million Naira or its equivalent [in the case of an individual] or N10 Million Naira [in the case of a body corporate].
Section 3(1) imposes a duty to report in writing, a transfer to or from a foreign nation, funds or securities by any person including a money service business, of any sum exceeding $10,000, to the Special Control Unit against Money Laundering [hereinafter referred to as “SCUML”], a unit under the Economic and Financial Crimes Commission, Central Bank of Nigeria and Securities and Exchange Commission, within one day from the date of the transaction.
Section 4 (1) – (12) creates a responsibility on financial institutions and designated non-financial business and profession [hereinafter referred to as “DNBP”] to identify the identities of customers, take reasonable measures to verify anyone acting on their behalf, carry out due diligence while establishing business relationships and transactions, scrutinize transactions, gather sufficient information about customer and their business, etc.
Section 6 (1)says that financial institutions and DNBPs whose profession involves cash transactions shall in the case of a new business, before its commencement and an existing business, within 3 months after the enactment of the Act, submit to the SCUML, a declaration of its activities.
Section 7also imposes a duty to report any suspicious transaction involving a frequency which is unjustifiable or unreasonable, surrounded by conditions of unusual or unjustified complexity, appears to have no economic justification or lawful objective, is inconsistent with the known transaction pattern of the account or business relationship, or is in the opinion of the financial institution or non-financial business and profession involves the proceeds of a criminal activity, unlawful act, money laundering or terrorist financing, and so on.
Section 11 (1)further goes on to say that notwithstanding anything to the contrary in any other law or regulation, a financial institution or DBNPs should report to the Nigerian Financial Intelligence Unite [hereinafter referred to as the “Unit”] in the case of a financial institution and to the SCUML in the case of a designated non-financial business and profession in writing within 7 days, any single transaction, lodgment or transfer of funds in excess of N5 Million Naira or its equivalent [in the case of an individual] or N10 Million Naira [in the case of a body corporate].
In addition, the law has gone a step further to place a burden on society; everyone has a reasonable man’s test to undergo. According to Section 20 (a) and (b), any person who:
“(a) conceals, removes from jurisdiction, transfers to nominees or otherwise retains the proceeds of an unlawful act on behalf of another person, where he knows or reasonably ought to have known or suspected that other person to be engaged in an unlawful act or has benefited from an unlawful act, or
(b) knows or reasonably ought to have known or suspected that any property either in whole or in part directly or indirectly represents another person’s proceeds of an unlawful act, acquires or uses that property or takes possession of it, commits an offence under this Act and is liable on conviction to a fine of at least five times the value of the proceeds of the unlawful act or imprisonment for a term of at least four years but not more than 14 years or both.”
The implication is that no one can feign ignorance about the unlawful nature of a transaction. You are expected to exercise reasonable care when dealing with third parties and a certain level of diligence is expected of you.
The Law and Lawyers
Section 11 (4)expressly states that legal professional privilege and the invocation of client confidentiality shall not apply in connection with:
the purchase or sale of property;
the purchase or sale of any business;
the managing of client money, securities or other assets;
the opening or management of bank, savings or securities accounts;
the creation, operation or management of trusts, companies or similar structures.
One of the basic tenets of the legal profession is confidentiality. Like Religious Priests with congregation members, and Medical Practitioners with patients, the law in jurisdictions worldwide regard the relationship of a lawyer and his client as sacred. Such relationship is built and sustained on the concept of trust. According to Rule 19, Rules of Professional Conduct 2007, a Lawyer and Client communication is privileged. Without consent from the latter, it cannot be disclosed. To do so is a disbarrable offence on the part of the lawyer. The communication between both parties is privileged and generally cannot be used in evidence. Section 192 (1), Evidence Act 2011 provides that the communication between a lawyer and client is privileged. Except with the Client’s consent, the lawyer CANNOT disclose such information. The exceptions are:
a. Where such communication is made in furtherance of a crime; b. Any observation made by the lawyer that since his employment, the Client has committed a crime.
Client-Attorney Privilege is so sacred that in 192 (3), this privilege still exists even if the Lawyer is no longer in the employ of the client. It is important. Thus, a law compelling a lawyer to disclose the transaction of his client is invalid. Therefore, the above provisions of Section 11 (4) MLA 2022 lifting such privilege is an aberration of established rules and principles of law. The Court of Appeal held in Mekwunye v. Carnation Registrars Limited [2021] 15 NWLR Part 1798 Page 1 that even the Court CANNOT compel a lawyer to break confidentiality. Espousing the importance of the concept, Pemu J.C.A @ Pages 40, Paras C – D held:
“The Counsel-Client relationship is fraught and clothed with privilege. Privilege for communication in relation to litigation based on the oath and honour of the lawyer who is duty bound to guard his client’s secrets.”
Privilege is not for fun. It is a duty. Keeping it short yet firm, the words of Daudu, SAN in the proceedings of Nigerian Bar Association v. Moses [2016] 10 NWLR, Page 366 @ 391 Paras F – C:
“The legal practitioner must accept that every privilege comes with a huge baggage of responsibilities.”
When the Old Act was enacted in 2011, the Nigerian Bar Association filed a suit against the Central Bank of Nigeria and the Attorney General, arguing that the provisions compelling disclosure cannot and should not be applied to lawyers because of Client-Attorney privilege. The Court of Appeal in Central Bank of Nigeria v. Registered Trustees of the Nigerian Bar Association & Anor. [2021] 5 Nwlr Part 1769 Page 268 held that although the law did not expressly mention, indeed lawyers were to be exempted from the application of such rule. The National Assembly in its own wisdom then choose to repeal the existing law and enact a new one in its stead and then expressly lift the privilege lawyers enjoy, therefore it would be said to be “what the law now says”. This is a disregard for Rule of Law. The act of the National Assembly in this regard is nothing short of legislative rascality. Client-Attorney Privilege is sacred! It must not be touched. In Agetu v. Commissioner of Police [2020] 13 NWLR Part 1741 Page 245, the Court held that a lawyer CANNOT be compelled to disclose information of his client except where he is a witness and even at that the Court can only permit him to do so if deemed necessary.
The provisions of Section 20 (a) and (b), MLA 2022 in our opinion should definitely not apply to lawyers. A lawyer should not be saddled with the responsibility of investigating the source of his client’s funds or wealth. That is within the remit and responsibility of law enforcement agencies. What he is owed is the perfection of his brief; the payment of his professional fees by the said client. The Court of Appeal, Lagos Judicial Division on May 14th, 2021 dismissed the appeal filed by the Economic and Financial Crimes Commission who froze the accounts of renowned learned silk, Mike Ozekhome S.A.N on the grounds that his professional fees being paid to him by his client were unlawfully acquired. Lawyers enjoy this privilege and it must not be tampered with except in accordance with the due procedure of the law.
Conclusion
Without a shred of doubt, the MLA 2022 is anchored on transparency and disclosure, as the foundations to build the machinery for combating money laundering. The public has a sense of responsibility to be bloodhounds; to sniff around suspicious transactions and persons and then report to the relevant authorities. This would therefore keep everyone on their toes knowing fully well that lack of diligence is now penalized.
On the other side of the coin, it is our considered view that the Act can be deemed unconstitutional. Section 37, 1999 Constitution guarantees the Right to Privacy. The Act seemingly infringes on this. Except a person is subject of an investigation, or where it is extremely important, he should not be forced to disclose details of his financial dealings. Private transactions should be made private. Except if such matters are part of public records [which they are not], law enforcement agencies should not easily have access to them as they like. Court orders should be sought and obtained first.
Furthermore, the sacrosanctity and sacredness of Client-Attorney privilege must also be put into consideration. No matter how desirable it is, lawyers cannot and should not be compelled to disclose details of their Clients’ affairs. It goes against the very ethos of the legal profession. The provisions of the MLA 2022 therefore are nothing but an attack on the legal profession. Lawyers help in drafting the law. Help in interpreting the law. Help in defending the law. But this time, the law is a weapon being brandished against us. The law here in our opinion, is “unlawful”.
It is an attack on lawyers.
TEAM VERNIA 52B, Adeyemo Akapo Street,Omole Phase I Estate, Off Agidingbi Road, Ikeja, Lagos. +234 813 830 6975 [email protected]
The 1999 Constitution of the Federal Republic of Nigeria is the grundnorm of the Nigerian Legal System. SECTION 1 (1), without a shred of doubt, expressly states that the Constitution is supreme which is binding on all persons and authorities throughout the nation. (3) goes further to say that any other law inconsistent with it is null and void to the extent of its inconsistency. In simple terms, the Constitution rules above everything and everyone in Nigeria.
Going forward, Section 6 establishes the Judiciary as the machinery to interpret law [the Constitution especially] and adjudicate disputes. Hence, the Courts, from the inferior ones such as Magistrate Courts up to the apex of judicial jurisprudence i.e. the Supreme Court play very important roles in seeing that the letters of the Constitution transcend from mere drafting and enactment into proper understanding and interpretation. Thus, it would be grave if a Court of law misinterprets a provision of any law.
The legal profession has its unique mode of dressing. Section 45,Rules of Professional Conduct 2007 provides that lawyers are to appear in the High Courts, Courts of Appeal, and Supreme Court] in their “Barrister’s robe or Senior Advocate’s robe” which is known as the “wig and gown”. This has been our identity and separates us from the crowd. Anything else is an affront and disrespect to the Court and profession as a whole.
A backtrack to the Constitution; Section 10 recognizes Nigeria to be a secular state and there will not be an adoption of a State Religion. Regardless of this, Section 38 still guarantees the freedom of Thoughts, Conscience and Religion for everyone. As we know, no right is absolute; it can be derogated and restricted in certain circumstances.
On the 17th day of June, 2022, the Supreme Court in the decision of Suit No: SC/910/16; Lagos State Government & Others v. Asiyat Abdulkareem, held that pursuant to the provisions of Section 38, 1999 Constitution, female Muslim students in public secondary schools have the right to use Hijabs over their school uniforms. All seemed normal until the 23rd day of June 2022, when a Human Rights lawyer, Mr. Malcolm Omirhobo, went to the Supreme Court, dressed in a traditional worshipper’s regalia while still wearing the Barrister’s robe. He wore the usual white shirt commonly worn by lawyers, a makeshift necklace with a small gourd as the pendant, tied a red wrapper around his waist, inserted 2 feathers at the sides of his wig, tied cowries round his two legs [as anklets] and marked a part of his face with white chalk Mr. Omirhobo claimed to be a worshipper of Olokun, the goddess of the Sea in Delta State. He hinged his strange and funny mode of appearance on the interpretation of the Judgement that if Muslim students can wear their religious attires [in the name of propagating and enjoying their faith] in an institution that has a formal and general dress-code, then the same should be extended to lawyers [who also have the right to several religious beliefs] whilst appearing in the Courtrooms.
Picture Credit: waploaded.com
Of course, it is a funny and ridiculous sight to see, but the learned fellow is acting pursuant to the interpretation of the decision delivered by the highest Court of the land.
Now the burning question, what is the logicality or appropriateness of his actions in reconciliation with the Supreme Court’s Judgement?
The Constitution is supreme. No right is to be enjoyed absolutely. In as much as there is the right to religion, there are instances where it can be restricted. In formal institutions where there is a uniformity in dressing, religion has to take a bow and will be side stepped. Never in the Nigerian history do we see a female soldier or personnel adorn the Hijab. It is no secret that Nigerian policemen and military officers do not keep beards. This is funny because many of the top ranking officers are Northerners who are Muslims, and it is an Islamic culture to keep beards. If religion can be restricted here, why not for other institutions like schools and the judiciary? Even one of the Justices of the Supreme Court who sat on that matter, Kudirat M. Kekere – Ekun is a Muslim and has never been seen putting on the hijab while sitting on any matter in Court. Same goes for a former female Chief Justice of Nigeria, Aloma Mariam Mukhtar. These noble lords understand that Law and Religion might at times run on parallel lines; they should not intertwine themselves in certain scenarios.
Lawyers and laymen are split over this. While some believe that wearing the Hijab whether in Court or school is harmless because it goes to the identity of a Muslim woman, others believe that by implication, lawyers too of other religious faiths can wear their religious attires too. Imagine the scene where a Catholic lawyer goes to the High Court with white flowing gown. Well, there is no need to imagine it. Mr. Omirhobo has fed our eyes well enough!
Consequences
The Supreme Court, unintended has left the legal profession in a confused state. Because, while it did not foresee the actions of Mr. Omirhobo and probably others in future, it has set rolling in motion, balls of debates and controversies. Yes, the Rules of Professional Conduct is strict and firm on the dress-code for lawyers appearing in Courts, the Judgement has by implication overridden the provisions of the latter. The Judgement, let us not forget was birthed in the labour room of Constitutional Interpretation. Taking a look at that, the Constitution guarantees the Right to Religion and also establishes Nigeria to be a secular state. So, what are the instances where the right to religion will be restricted or derogated?
Clearly, the Supreme Court did not take these into account while delivering one of the most controversial and heavily talked judgement of all time.
Way Forward
An adage of the South Western Yoruba region of Nigeria, the Yoruba people to be precise goes:
“if we do not know where we are going, we should know where we are coming from”.
In order to prevent the lingering uncertainty and drama ongoing, the Supreme Court has to overrule itself [which would be in another case entirely], or revert to the status quo. Let things be as they used to be which has been the accepted custom and practice of the Nigerian Bar. Religion has an important place in societal development and legal jurisprudence; Laws and Religion often are interwoven and the rights must be safeguarded. However, a statute is superior to any religious doctrine and not the other way around.
The Supreme Court in a race against time to issue clarity on its recent pronouncement. We need to be certain of what the law is at the moment so that there can be Justice and decorum in the profession, because while lawyers are hungry for harmony in the interpretation of the Judgement, all we have for now is chaos for breakfast.
TEAM VERNIA 52B, Adeyemo Akapo Street,Omole Phase I Estate, Off Agidingbi Road, Ikeja, Lagos. +234 813 830 6975 [email protected]
On the 12th day of May 2022, Nigeria was thrown into a frenzy when social media platforms carried posts of a video recording showing the lynching, burning to be exact, of one Ms. Deborah Samuel Yakubu, by a mob on the allegation that she insulted the Prophet Muhammed. The late Deborah was a student of Shehu Shagari Secondary School, situate in Sokoto State, in the Northern region of the country where Sharia [Islamic] law is the basis of the State’s criminal legislation. Of course, different think pieces from different schools of thought begun to flow uncontrollably; some supporting the actions of the mob on the grounds of disregard for religious beliefs while others condemned the action as a flagrant violation of the Constitution.
Law and Religion have always been two distinct fabrics yet inevitably interwoven in both societal development and legal jurisprudence. The Constitution in Section 33 guarantees the Right to life for every person and no one shall be deprived of this right except in the execution of a Court’s sentence after which he has been found guilty of a criminal offence. Section 38 on the other side of the coin says that everyone one has a Right to Thoughts, Conscience and Religion. The Law recognizes and seeks to enforce this right. For instance, Section 124, Criminal Law, Lagos State 2015, criminalizes the act of insulting the religion of another and punishes it with a prison sentence of 2 years or a N50,000 fine. At the same time, everyone is also entitled to the Right to Fair Hearing. Section 36(5) of the Constitution provides that everyone is presumed innocent until pronounced guilty by a competent Court of Law.
Whether or not blasphemy is a criminal offence in the North is irrelevant, Deborah ought to have been charged to Court first where her criminal liability or innocence would be determined. Deborah being a Christian also had the right to consent or not to the jurisdiction of the Sharia High Courts in Sokoto State. Therefore, the provisions of the Sharia Law did not automatically apply to her.
Section 6 of the Constitution establishes the Judiciary as the machinery of government responsible for interpreting the Law and adjudicating disputes. It was advocated in Federal Civil Service Commission v. Laoye [1987] 2 Nwlr [Part 106] Page 652 that men should drop their arms and carry their causes to the Courts. The lynching of Deborah is without a shred of doubt a homicide. The young woman was murdered. This reminds us of the 5th day ofOctober2012 where four (4) male students of the University of Port Harcourt [The ALUU Four] were lynched by a mob on a false accusation of theft.
Now, having attracted national and international attention, the Sokoto State Governor, Aminu Tambuwal ordered the arrest and prosecution of the killers. Both laymen and learned fellows alike expected the charges would be hinged on murder, but to our disdain and chagrin, two of the killers, Biliyaminu Aliyu and Aminu Hukunchi, who were caught and arrested, were charged with conspiracy and inciting public disturbance; both charges carry a minimum of 2 years’ jail sentence. What a slap to Justice and disregard for the Law!
As gleaned from the facts above, the offences are homicidal in nature. The prosecution of the accused persons should be founded on such grounds. Anything less is a waste of tax payers’ money and a disappointing job.
Common Intention
Going further into the criminality of the accused persons’ actions, it is irrelevant if one of them raises a defence that killing Deborah was not part of his intention. The Supreme Court in the most recent decision of State v. Chukwu [2022] 6 Nwlr [Part 1825] Page 105 affirming the law that if two or more persons agree to prosecute an unlawful purpose, and in the process, another offence was committed which is a probable consequence of the initial purpose, the law is that both parties are deemed to have committed the offence. In simple terms, if A and B conspire to rob C and in the process of doing so, C was injured while resisting or trying to fight back, B cannot say that his intention was to steal from C and not injure him; because the injury C suffered was a probable or likely consequence of him being robbed. According to the words of Ajim, J.S.C @ Pages 153 -154, Paras H – C:
“It does not require that each participant in the prosecution of the unlawful purpose must have had the intention to commit the crime that was committed in the joint prosecution of the unlawful purpose before such participant can be convicted for the said crime. What the section clearly requires is that offence committed in the joint execution of the unlawful probable purpose must be of such nature that its commission was a probable consequence of the prosecution of such purpose.”
Juxtaposing both statutory and judicial authorities with the matter currently at hand, everyone who was involved in the process of lynching Deborah Samuel Yakubu, whether directly or indirectly should be charged with murder. It is shameful and disgraceful for the Sokoto State Government to turn a blind eye to injustice by bringing such worthless charges against murderers. Yes, it is worthless because a life has been lost; so how can conspiracy and public nuisance serve as a deterrent to other people like Messrs. Aliyu and Hukunchi?
The Right to Life is the first right a person enjoys by virtue of his birth, no one qualifies for it. It is a gift of nature and protected by the Constitution. The celebrated decision of Nosiru Bello v. Attorney General, Oyo State [1986] 5 Nwlr [part45] Page 828 says that even a person sentenced to death still has this right until the due procedure for execution of Judgement has been followed. How much more someone who is yet to be arrested, charged and convicted by a competent Court of Law?
Deborah’s case paints a picture of so many dark colors. There are a lot of elements and several issues. The provisions of Constitution have been jettisoned and casted aside. A life has been gruesomely taken. The Right to Fair Hearing has been wantonly breached; it is now sentencing before trial. The final nail on the coffin is that a State Government chooses to indirectly aid injustice by failing to prosecute killers for the exact offences committed.
Though, Religion and Law tread on separate paths, they often cross themselves on several occasions. The Law recognizes the Right to Religion and at the same time preserves the Right to Life. The Right to Life ranks prior to any other right possessed by a person and it must be guarded with the highest instrumentality of the Law.
It is ironic that the victim bears names [“Deborah” and “Samuel”] which in the Holy Bible, were names of some of the Judges who ruled the Israelites. The Courts in modern dispensation are presided by Magistrates, Judges or Justices [on appeal] and they are the appropriate forum to lodge complaints which will eventually determine the innocence or guilt of a person. The Constitution mandates that a person is deemed innocent until proven otherwise. It is therefore sad and pathetic that Deborah was judged and sentenced by a mob even before she stepped into the halls of a Courtroom. If we were to add to the Ten Commandments said to be handed by God to Moses, we can safely include “Thou Shalt Not Judge”!
TEAM VERNIA 52B, Adeyemo Akapo Street,Omole Phase I Estate, Off Agidingbi Road, Ikeja, Lagos. +234 813 830 6975 [email protected]
After three decades, the Companies and Allied Matters Act of 1990 has finally been repealed and replaced by the new Companies and Allied Matters Act 2020 [“CAMA 2020”]. This latest statute is divided into 7 Parts [A – G] containing 870 Sections in all. The new law contains certain stand-out provisions which seek to make less-challenging, the set up and operation of businesses in Nigeria. The recent changes in this legislation are laced with positives and good tidings for anyone willing to invest in Nigeria’s commercial industry. Some of them include:
Single Shareholder/Director
It is now possible for companies to have just a single shareholder or director. Unlike the old law that required a minimum of two directors, under the current dispensation, just one director or shareholder is needed. [Section 18(2)].However, this is available to small companies only [Section 271(1)]. The advantage of this is that business owners who currently operate sole proprietorships [whose legal status are at best Business Names] can now upgrade their businesses to limited liability companies without the need for additional directors or shareholders. The beauty of this is that they can still continue to run their businesses as before and now enjoy the additional benefits that come with their new limited liability status; including access to credit from financial institutions of repute. A double plus.
2. Redefinition of Small Companies
Under the old law, a small company was defined as one which had a turnover of not more than N2 Million and a net asset value of not more than N1Million. Under Section 394(3)(b) & (c) of CAMA 2020, there has been a change; a small company is now a company with a turnover of not more than N120 million and a net asset value of not more than N60 Million. The benefit inherent here is that these small companies do not have to hold annual general meetings [Section 237(1)], appoint auditors [Section 402(1)(b)] or a company secretary [Section 330(1)] among other benefits. In the past under the old dispensation, these matters were highly important and business owners had to expend resources in appointing officers and holding these meetings. Now, it is not a requirement to have, which translates to conservation of resources to be deployed.
3. Reduced Costs for Registration of Securities
Under the old CAMA, before you can register security interests with the Corporate Affairs Commission [hereinafter referred to as the “Commission”], the filing fee costs 1% of the secured amount [for private companies] and 2% of the secured amount [for public companies]. Under the CAMA 2020, the maximum amount the Commission can charge is 0.35% of the secured amount [Section 222(12)]. This means that the cost of registering security interests at the Commission has been reduced by 65% for private companies and 82.5% for public companies. Therefore, business owners get to spend less on registration and thus, there is a reduction in their expenditure.
4. New Corporate Entities
There are new corporate entities and structures established by the new CAMA 2020. These are the Limited Partnerships [Section 795] and Limited Liability Partnerships [Section 746]. This is one of the best innovations of the new law; because investors now have alternative ways to carry on businesses in Nigeria without going through the stress of registering a company. Partnerships are registerable, thereby establishing their legal status and entity even better.
5. Proper Framework and Implementation for Corporate Restructuring
Under the CAMA 2020, Section 711 provides for a proper and better structure whereby mergers and other forms of arrangement, compromise or restructuring can be implemented. Under this framework, if the transaction is approved by at least ¾ [75%] in value of the shares held by shareholders present and voting at the meeting, the Court will sanction it [Section 711(2)]. The court sanction will then be filed at the Commission within 7 days [Section 711(6)]. Schemes of arrangement or compromise can also be done by virtue of Section 715. However, such schemes can be referred by the Court to the Securities and Exchange Commission to determine the fairness of the scheme. This requirement of referral is however not required under Section 711. Schemes under Section 715 do not become effective until a court order sanctioning such scheme has been filed at the Commission.
6. Companies Limited by Guarantee
In the old law, before one can register a Company Limited by Guarantee, one must seek and obtain the consent of the Attorney General of the Federation [hereinafter called “AGF”]. This meant that business owners were at the mercy of the AGF. However, by virtue of Section 26(5), if after all necessary documents have been submitted but the AGF does not grant his consent or communicate his refusal within 30 days, the promoters may place an advertisement in 3 national daily newspapers inviting the general public to make any objections to the incorporation of the company which will be considered by the Commission. If the Commission is satisfied that the Memorandum and Articles of Association of the company are in compliance with the CAMA 2020, the Commission will advertise the application in 3 national newspapers, inviting objections from the public to the proposed registration. If there are no objections from the public within 28 days, the Commission can go ahead and approve the application and register the company without the AGF’s consent. The upside of this new provision is that it reduces red-tapeism and bureaucracy. In the past, without consent, intended business owners were stranded; but now the new law has provided a way to scale that hurdle.
7. Increased Transparency
Transparency and disclosure in business naturally creates trust and boosts confidence amongst investors. The new law via Section 119 insists that disclosures are now required of persons with significant control [i.e. persons who hold 5% or more of the voting rights] in private and public companies while Section 791 provides same forlimited liability partnerships. The Commission will also maintain a register of such persons in which it will enter the information received from the companies or any change thereto.1
In conclusion, the new CAMA 2020 has no doubt evolved and the developments in it reflect the realities of the modern commercial day. Some of the bottlenecks and hiccups affecting business owners in the past have been resolved and thus, this recent legislation is a welcome development for entrepreneurs. Undisputedly, the CAMA 2020 is a sigh of relief for businesses in Nigeria.
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1There are still provisions of the new CAMA that concern the subject matter at hand. As time goes on, there would be an update of those in our subsequent articles
By : TEAM VERNIA 52B, Adeyemo Akapo Street,Omole Phase I Estate, Off Agidingbi Road, Ikeja, Lagos. +234 813 830 6975 [email protected]
Generally speaking, when people have disagreements, they rush to the Courts for resolution. This is the common way. After all, the primary role of the Judiciary is to interpret the law and settle disputes. The Courtroom is the proper forum to ventilate these grievances and the Court would reach a decision thereby resolving the dispute. Like the late eminent jurist, OPUTA J.S.C in FEDERAL CIVIL SERVICE COMMISSION V. LAOYE1 famously stated: “the Judiciary is the last hope for the common man“. However, it is NOT the best option available.
Litigation: A Problem
Litigation is not so simple and straight forward as it sounds. Like Heaven, the roads to it are long and narrow. Litigants spend donkey years in even at trial courts before the matters are escalated to the appellate courts. The time frame involved is so long that malicious parties have decided to utilize the strict and stringent procedures of litigation to their advantages. Several applications would be deliberately filed and argued on for years by the parties, while digressing from the main matter at hand, just to frustrate and impede the progress of a suit. Matters have gone all the way up to the Supreme Court after years since they have been filed only for the apex Court to return the matter back to the High Court due to lack of Jurisdiction. Many landlords have wasted years in the courts trying to eject defaulting tenants who have refused to vacate the premises but yet deliberately drag the matter in Court.
For these and other bottlenecks, many people run away from litigation. The amount of time, energy and resources spent on seeing these cases through eventually may not be worth it. Hence, Alternative Dispute Resolution is a better option.
Problems raise questions. Questions demand answers. There has to be a way to hash and trash out disagreements in a faster and less expensive way, and also for the parties to walk away with satisfaction. This is where Consent Judgment comes into play.
Consent Judgement: The Solution
Consent Judgment is a judgement decision or Order given by the Court which arises as a result of the agreement of the parties.2 . In simpler terms, Consent Judgment means the parties have agreed to settle their dispute on their own terms and then take this resolution to the Court who approves it and makes it a judgment that binds the parties. Mr. A and Mr. B disagree on an issue, both of them come to an amicable resolution, after which they go to the Court to inform it of their decision, the Court then “signs and seals” that decision. So, Consent Judgment is determined by the disputing parties not the Court itself. Consent Judgment is very much legal. SECTION 241(2)(C) 1999 CONSTITUTION allows for people to resolve their issues and make such resolutions a consent judgment.3
How to get Consent Judgement? The Supreme Court in STAR PAPER MILL LIMITED V. ADETUNJI4 laid down the procedure for getting a Consent Judgment: a. Disputing parties reach an agreement on how to settle their matter. b. They reduce that agreement into writing which is called Terms of Settlement. c. They file the Terms of Settlement in the Court. d. The Court rules on it and enters it as a Consent Judgment.
The beauty of Consent Judgment
Avoidance of Litigation The very first benefit of Consent Judgment is that it avoids litigation. Even the Court itself in STAR PAPER MILL LIMITED’S CASE acknowledged that “the essence of Consent Judgment is to put an end to Litigation“. Thus, with consent judgment, there’s no need for trial. Several applications, final written addresses, etc. are unnecessary here. Even if the matter is on trial, Consent Judgment can still be entered by the Court anytime. As stated in the beginning, litigation takes a lot of time. In NTEILE V. IRAWAJI5, the parties spent 27 years at the trial court before they finally agreed to get a Consent Judgment. In fact, one of the Parties died while the matter was still on going
Less Possibility of Appeals. In litigation, when a party is dissatisfied with the judgment of a Court, he has the right to go on appeal. The Constitution allows for appeals as of right6. But in Consent Judgment, parties CANNOT appeal that judgment except they can prove that the judgment was obtained in a fraudulent manner. The consent of the parties must be free and voluntarily7. Parties must reach a consensus. There must be ad idem between the parties.8 Hence, after their consensual agreement has been entered as a judgment, it makes no sense to appeal it. The only way to appeal such judgement is to seek and obtain leave from the Court. The party MUST seek leave before appealing and he has to show special reasons why the judgment should be challenged. So, it is very difficult to appeal a consent judgment. To a very large extent, it is final, except if it was obtained by fraud or deceit. This feature is very attractive because as mentioned earlier, Litigation is notorious for appeals; actions can be initiated from the Magistrate Court which would be escalated as far as the Supreme Court. This process consumes a lot of time and energy. Whereas, Consent Judgement is once and for all.
Bindingness Consent Judgment binds everyone who agrees to it either directly or by representation. That is, a group of people can choose one individual who will represent them in Court. After they have all agreed, that person is the signatory to the Terms of Settlement which is filed in Court. Once, the Judge enters it as consent judgment, even though the names of the people may not be on the document [the Terms of Settlement], the judgment still affects them because they have been represented. Consequently, it is important to note that a person who is not a party to a Consent Judgment cannot be affected by it.9 Also, as mentioned in the second benefit, a party to a Consent Judgment cannot later make a U-turn and claim he is dissatisfied with it. The decision is binding. Parties are bound by the terms they consensually agreed to.
When is the best time you can get Consent Judgment?
The Terms of Settlement can be filed and the Consent Judgment can be entered into any time before the conclusion of trial. Even after that, when the matter goes on appeal, the Terms of Settlement can still be filed even before the hearing of the appeal. However, the Consent Judgment cannot be entered after the Supreme Court [being the apex and final Court in the land] has delivered a judgment, because after judgment, a Court becomes “functus officio”10. It is done and dusted with the case, and there’s no higher court to take the matter to or file Terms of Settlement.
In the 2020 matter of ROAD NETWORK GLOBAL RESOURCES & ANOR. V. ALOYSIUS IHEANACHO & 6 ORS11 the High Court gave a judgment which the appellant appealed against, and they filed, served and exchanged Briefs of Arguments. However, the parties reached a resolution and decided to file Terms of Settlement in order to get a Consent Judgment. Initially, the Court was reluctant to concede to the request of the parties because the Court of Appeal is a court clothed with appellate jurisdiction, whose primary duty is to hear matters where a judgement is being challenged. So, it did not look like the appropriate forum to enter Terms of Settlement as consent judgment, that seemed like the purview of a High Court. But, the parties could not go back to the High Court because it has given judgment and automatically became functus officio. Hence, the Court of Appeal was the only and next place to go to. Therefore, after a brilliant and extensive submission by our Counsel, all the Court of Appeal Justices, seised of the case at the Ibadan Judicial Division were fully persuaded to enter the Terms of Settlement as Consent Judgement of the Court. Now, in the most recent decision of NTEILE V. IRAWAJI12, the Supreme Court also held that Consent Judgement can be entered anytime even if the parties have exchanged their Briefs of Arguments, thereby affirming and validating the decision of the Court of Appeal in the ROAD NETWORK CASE. The Supreme Court per OSEJI J.S.C reasoned that “the ultimate consideration is the agreement of the parties“13. So, the stage of the case is immaterial, as long as parties are willing to settle their matter, the Court will enter a Consent Judgment.
Litigation, Alternative Dispute Resolution or Consent Judgement?
The two common ways to resolve a dispute are Litigation and Alternative Dispute Resolution, which consists of Arbitration, Meditation and Reconciliation.
In Litigation, parties bring their matters before a Court and it delivers a judgment in respect of it. In ADR, especially Arbitration, parties bring their dispute before an appointed Arbitrator who listens to the case and delivers a binding decision. While in Mediation, a Mediator is appointed who helps the parties in reaching a settlement; and lastly the Conciliator hears the case and gives an opinion or suggestion in it for the parties to implement.
A common thread running between Litigation and the various ADR mechanisms is that the dispute is resolved by a third party. For litigation, it’s the Judge, in ADR, it’s the Arbitrator, Mediator or Conciliator. But in Consent Judgment, it is the PARTIES THEMSELVES that determine the outcome of the matter. The parties agree to what they want before filing the Terms of Settlement. Hence, before approaching the Court, the parties would already be satisfied because they have reached an agreement. In Arbitration and Litigation, whatever the Arbitrator/Judge says is final. A party loses, another wins. But in Consent Judgment, both parties will come to a decision that is most favorable to them. It is the closest to a win-win situation.
Also, like we said earlier, in litigation, you can appeal up to the Supreme Court, while in Consent Judgment, you cannot do so unless you can show that the judgment was obtained fraudulently and to do so, you must be granted leave of Court. This thus makes Consent Judgement so desirable and effective. It is highly beneficial and a sound business decision to opt for Consent Judgment rather than run to the courtrooms seeking resolution. Time and efforts are conserved over here.
In conclusion, beyond any contestation, Litigation remains the most common method to resolve disputes. People naturally prefer to go to Courts to argue and stake their claims over one issue or another. This is normal. The threat of litigation itself at times forces stubborn people to have a rethink and reach out for a more peaceful and quieter mode of settlement.
However, as explained above, Litigation is a mountain of work. It consumes energy, time and resources. Many times, cases have lingered on for years, the parties would die while the matter is still in the court’s docket. Litigation, as powerful as it is, comes with heavy baggage too. ADR on the other hand is also a veritable means of conflict resolution. Parties have been encouraged to utilize this platform to resolve their disagreements.
However, out of the three, Consent Judgement is the most effective method for achieving the goal. It is the best answer to the question initially asked at the beginning. For anyone on the journey to settlement of any dispute, Consent Judgement is the safest and fastest vehicle. Here, the interests of the parties are well represented and taken care off; it also costs less.
If choosing between Litigation, ADR and Consent Judgement for dispute settlement, is akin to a prince who is eligible for marriage and is being asked to select between three women as a potential wife, Consent Judgement can then be said to be the choicest bride!
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1 [1989] 2 NWLR PART 106 PAGE 652 2 In THE EXECUTORS, THE ESTATE OF EFEJUKU V. AZIZA [2013] 11 NWLR PART 136 PAGE 333, PARAS A-B 3 S.P.D.C LIMITED V. AZUKAENU [2011] 9 NWLR PART 1252 PAGE 360. 4 [2009] LPELR – 3113 SC. 5 [2021] 16 NWLR PART 1803 PAGE 411. 6 SECTION 241 (2)(C) 1999 Constitution. 7 STORMBERG ENGINEERING LIMITED V. AMCON [2019] LPELR – 47334 [CA[ 8“Ad idem” means “the meeting of minds”. 9 OGUNKUNLE V. ETERNAL SACRED ORDER OF THE CHERUBIM AND SERAPHIM [2001] LPELR -2339 [SC] 10Functus Officio means the Court had discharged its obligations and thus is done and dusted with the matter. 11 [CA/1B/248/2017; Vernia Legal Practitioners represented the Appellants in this matter] 12 [2021]16 NWLR PART 1803 PAGE 411. 13 @Page 454 Para C.
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