Court of Appeal affirms nullification of CAMA provisions on incorporated trustees
The Court of Appeal sitting in Abuja has affirmed the judgment of the Federal High Court, Abuja, which nullified several provisions of the Companies and Allied Matters Act (CAMA) 2020 regulating incorporated trustees.
The appellate court held that Sections 839, 842, 843, 844, 845, 846, 847 and 848 of the Act infringed on constitutional rights to freedom of thought, conscience and religion as well as freedom of association and peaceful assembly.
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A three-member panel, in a unanimous judgment delivered by Justice Donatus Okorowo on September 17, dismissed the appeal filed by the Corporate Affairs Commission (CAC), holding that the affected provisions were inconsistent with the 1999 Constitution.
The certified true copy of the judgment was sighted on Friday in Abuja.
The court also affirmed that constitutional lawyer, Emmanuel Ekpenyong, of Fred-Young & Evans LP, had the legal standing to institute the original action at the Federal High Court.
Ekpenyong had instituted the suit, marked FHC/ABJ/CS/1076/2020, against the National Assembly, CAC and the Attorney-General of the Federation (AGF).
In the suit filed on August 31, 2020, he challenged Sections 839, 842, 843, 844, 845, 846, 847, 848 and 851 of CAMA 2020, arguing that the provisions infringed on rights guaranteed under Sections 38 and 40 of the Constitution.
He had particularly challenged the powers conferred on CAC to regulate incorporated trustees, including the suspension of trustees, appointment of interim managers, management of association accounts and possible dissolution of associations.
In its judgment delivered on April 18, 2023, the Federal High Court, presided over by Justice James Omotosho, agreed with Ekpenyong that the powers granted to CAC under the challenged provisions were excessive and violated his constitutional rights.
The court consequently struck down Sections 839, 842, 843, 844, 845, 846, 847, 848 and 851, declaring them inconsistent with the Constitution.
Justice Omotosho also held that Section 851, which empowered the Administrative Proceedings Committee to determine matters arising under CAMA, was inconsistent with Section 251(1)(e) of the Constitution, which confers relevant jurisdiction on the Federal High Court.
The trial court, however, struck out the National Assembly from the suit on the ground that the required pre-action notice had not been served.
Dissatisfied with the judgment, CAC, through its counsel, Jibrin Okutepa, SAN, filed a notice of appeal on May 25, 2023, which was lodged on June 9, 2023.
Among other grounds, the commission argued that the Federal High Court erred by entertaining Ekpenyong’s fundamental rights action because, according to CAC, he lacked the locus standi to institute the suit.
Ekpenyong, in response, maintained that the rights to freedom of thought, conscience and religion and freedom of association and peaceful assembly were fundamental to a democratic society.
He argued that the Constitution guaranteed his right to practise his faith and associate with other members of his religious community.
He told the court that he was a member of the Catholic faith and participated in the traditions, practices, doctrines and teachings of the Catholic Archdiocese of Abuja, which he said had been registered with CAC since May 26, 1992.
He further argued that the powers given to CAC under the disputed provisions could enable the commission to interfere with the leadership and affairs of religious associations by suspending trustees, appointing interim managers and managing their accounts.
In its judgment, the Court of Appeal agreed substantially with the Federal High Court.
Justice Okorowo held that a voluntary association was supreme in the management of its internal affairs and that courts should not interfere except where the association acted contrary to its own constitution.
The appellate court held that the trial court was right to invalidate the provisions that interfered with the constitutional freedoms protected under Sections 38 and 40.
It also held that the provisions could not be justified under Section 45(1) of the Constitution, which permits certain restrictions on fundamental rights in specified circumstances.
On Section 851, however, the Court of Appeal modified the Federal High Court’s decision.
The appellate court held that the entire section should not have been nullified. Rather, it is unconstitutional only to the extent that it gives the Administrative Proceedings Committee power to determine justiciable disputes at first instance, to the exclusion of the Federal High Court, and impose penalties in the manner of a court.
The court said the committee’s remaining administrative and regulatory functions could continue, subject to the supervisory jurisdiction of the Federal High Court.
Justice Okorowo consequently ordered that the appeal be dismissed in substantial part and affirmed the Federal High Court’s decision striking down Sections 839, 842, 843, 844, 845, 846, 847 and 848 of CAMA 2020.
However, the order nullifying the whole of Section 851 was set aside and replaced with a declaration limiting the invalidity of the section to the extent of its unconstitutional conferment of judicial powers on the Administrative Proceedings Committee.
The appellate court also affirmed Ekpenyong’s locus standi, based on his personal interest and membership of a registered religious association.
The court ordered that each party bear its own costs.
Justices Abba Mohammed and Eberechi Nyesom-Wike concurred with the judgment.
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