company proceedings, investment disputes resolution, investment and securities tribunal and administrative proceedings committee

According to Section 275 of the Investment and Securities Act, the Investment and Securities Tribunal shall consist of ten (10) persons to be appointed by the Minister as follows:

• a. A full time Chairman who shall be a legal practitioner of not less than fifteen years with cognate experience in capital market matters;
• b. Four other full time Members, three of whom shall be Legal Practitioners of not less than 10 years’ experience and one person who shall be knowledgeable in Capital Market matters who shall devote themselves to issues relating to adjudication and shall not exercise any administrative function;
• c. Five other part time members who shall be persons of proven ability and expertise in corporate and capital market matters.

The governing laws and procedural rules for company proceedings include:

• a. Companies Proceedings Rule 2004.
• b. Companies Winding up Rules 2001.
• c. Federal high Court Civil Procedure Rules, 2009.
• d. Securities and Exchange Commission Consolidated Rules, 2013. = e. Investment and Securities Tribunal Procedure Rules, 2003.

The various modes of commencement of company proceedings are:

• a. By originating summon: This is the default mode for commencing company proceedings unless otherwise provided. It can be exparte or on notice. It is as contained in Form 1 of the Schedule to the Companies Proceedings Rules. The matters which are to be commenced by Originating Summons are all proceedings involving companies under the Companies Proceedings Rules, except those for which there is an express requirement for another mode. Rule 2(1) Company Proceeding Rules 2004.
• b. By originating motion: This mostly contains mixture of law and facts and is usually used where there is a need to rectify or remedy an error or omission or benefit from a set of rules or principles of law.
• c. By petition: This is only used where the law expressly requires it to be used.

The matters to be commenced by originating motion according to Rule 3(a) – (g) of the Company Proceeding Rules 2004 are the following:

• a. Cessation of restriction on shares: An application for an order directing that nay shares in or debentures of a company shall cease to be subject to restrictions imposed by Section 372 CAMA, 2020.
• b. Having a dissolution order declared void: Application for an order declaring a dissolution of a company which has not been wound up to have been void. Section 691(1) CAMA, 2020.
• c. Inquiry as to complying with the directives of an inspector investigating a company: Application for an order for an inquiry into any case mentioned under Section 362(3) & (4) CAMA, 2020.
• d. Default as per private company requirements: Application for an order that a company be relieved from the consequences of default in complying with the condition constituting the company a private company. Section 23(2) CAMA, 2020.
• e. Extension of time for delivery to Corporate Affairs Commission: Application for an order extending the time for delivery to the Corporate Affairs Commission. Section 51(9), 154(3) and 355(5) CAMA, 2020.
• f. Rectification of Register of Members: Application for the rectification of the Register of Members of a company. Section 115(1) CAMA, 2020.
• g. Affairs of a company ought to be investigated: Application for an order declaring that the affairs of a company ought to be investigated by an Inspector appointed by the Corporate Affairs Commission. Section 358 CAMA, 2020.

The Company Proceedings Rules, 2004 provides every originating summons, notice of originating motion and petition by which any such proceedings are begun and all affidavit notices and other documents in those proceedings shall be entitled “IN THE MATTER OF THE COMPANY CONCERNED AND IN THE MATTER OF THE COMPANIES AND ALLIED MATTERS ACT.”

The company proceedings commenced by way of petition according to Rule 4 of the Companies Proceeding Rules, 2004 are the following:

• a. Memo alteration: Application for the cancellation of the alteration of a condition contained in a company’s Memorandum of Association. Section 52(1) CAMA, 2020.
• b. Restoration of name: Application for the restoration of the name of a company to the register where the application is made in conjunction with an application for the winding up the company. Section 692(6) CAMA, 2020.
• c. Cancellation: Application for the cancellation of the alteration of a company’s objects. Section 51(1) & (2) CAMA, 2020.
• d. Conversion from PLC to LTD: Application to cancel a special resolution for conversion of a company from a public company to a private company. Section 64(1) CAMA, 2020.
• e. Abrogation/variation of class rights: Application to cancel any abrogation/variation of the rights attached to any class of shares in a company. Section 167(1) CAMA, 2020.
• f. Reduction of share premium account confirmation: Application for the confirmation of the reduction of the Share Premium account of a company. Section 145 CAMA, 2020.
• g. Reduction of capital redemption reserve fund confirmation: Application to confirm a reduction of the capital redemption reserve fund. Section 182 CAMA, 2020.
• h. Reduction of share capital confirmation: Application for the confirmation of the reduction of the share capital of the company. Section 132(1) CAMA, 2020.
• i. Oppressive/unfairly prejudicial: Application for relief on the ground that the affairs of a company are being conducted in an illegal, oppressive or unfairly prejudicial manner. Section 354 CAMA, 2020.

The evidential issues in company proceedings are:

• a. Common seal: a company is to have a common seal, the use of which is to be regulated by its articles. Section 98 CAMA 2020. When common seal is required by the articles of the company and by CAMA and the common seal is not used in such circumstances then the document is invalid. African Development Corp. Ltd. V. L.E.D.B.
• b. Official seal: As provided in Section 99 CAMA 2020, the official seal is usually used in places outside Nigeria, where a company’s articles of association authorize the company to transact outside Nigeria. Thus, instead of carrying the common seal, the official seal is used. It is a facsimile of the common seal of the company with addition on its face of the name of every country where it will be used. In practice, “international” can just be added. It goes without saying that the document to be tendered if it involves trans-border transaction, the official seal should be on it else it may not be a valid document.
• c. Execution of company’s document by a power of attorney: a company may appoint any person by writing under seal, empowering such person in general or as regards a specific matter, as its attorney to execute deeds on its behalf within or outside Nigeria. Section 100(1) CAMA 2020. Where a deed is signed by a person in accordance with power of attorney so executed, it shall bind the company and have same effect as it would have if it were signed by the company. Section 100(2) CAMA, 2020. d. Authentication of documents: where a document requires authentication by a company, it can be signed by a director, secretary or other authorized officer of the company and such document need not be under its common seal unless otherwise so required by the Companies and Allied Matters Act. Section 101 CAMA, 2020. Thus, once a document has been authenticated unless required by CAMA for common seal to be used on it, there would be no need for the use of common seal, thus a valid document. S.P.D.C NIG LTD v. Allaputa.

The ethical issues involved in company proceedings include the following:

• a. Advice to client on Alternative Dispute Resolution options.
• b. Dealing properly with client’s money.
• c. Conversance with the company rules.
• d. Understanding of the issue of jurisdiction.
• e. Ensuring proper service of court processes.

Investment disputes are disputes and controversies arising from the operation and application of the Investment and Securities Act and the Rules and Regulation made therefrom. They may include disputes between:

• a. Capital market operators.
• b. Capital market operators and their clients.
• c. Capital market operators and self-regulatory organizations.
• d. An investor and a securities exchange or capital trade point or clearing and settlement house.
• e. The Commission and self-regulatory organizations.
• f. An issuer of securities and the Commission.
• g. Arising from the administration, operation and management of collection investment schemes.

The regulatory framework for investment disputes in Nigeria include:

• a. Amicable settlement or reconciliation.
• b. Alternative Dispute Resolution and Arbitration and hybrid processes.
• c. Settlement of self-regulatory organization for its members.
• d. Administrative Proceedings Committees of the Securities and Exchange Commission.
• e. Investment and Securities Tribunal.
• f. The Federal High Court.

According to Section 276 of the Investment and Securities Act, the Investment and Securities Tribunal shall be duly constituted if it consists of not less than 3 members of the Tribunal.

According to Section 290 of the Investment and Securities Act, the powers of the Investment and Securities Tribunal include the following:

• a. Summon and enforce the attendance of any person and examine such person on oath.
• b. Require the discovery and production of documents.
• c. Receive evidence on affidavits.
• d. Call for examination of witnesses or documents.
• e. Review its decisions.
• f. Dismiss an application for default or deciding matters ex-parte.
• g. Set aside any order or dismissal of any application for default or any order made by it exparte.
• h. It has powers to do anything which in its opinion is incidental or ancilliary to its function.

The Investment and Securities Tribunal has original as well as appellate jurisdiction. A person aggrieved by the decision of the Securities and Exchange Commission may institute an action in the tribunal thereby activating the original jurisdiction of the Tribunal or appeal against such a decision from the Administrative Proceedings Committee of the Securities and Exchange Commission.

According to Section 851(1) of the Companies and Allied matters Act, the Administrative Proceedings Tribunal is composed of the following persons:

• a. The Registrar-General who is the chairman of the Committee.
• b. Five representatives from the operational departments of the Commission not below the rank of director, one of whom shall be from the Commission.
• c. A representative of the Federal Ministry of Industry, Trade and Investment not below the rank of a director.

According to Section 851(2) of the Companies and Allied Matters, the persons that the Administrative Proceedings Committee may co-opt at its meetings are:

• a. Representatives of association of shareholders.
• b. Representatives of association of registrars.
• c. Representatives of association of trustees.

The jurisdiction of the Administrative Proceedings Committee is in respect of non-criminal disputes arising from the operations of the Act as they relate to:

• a. Names of companies, limited liability partnership, limited partnership, business names and incorporated trustees.
• b. Shares in private companies.
• c. Appointment or removal of directors, partners or trustees.

According to Section 851 (4) of the Companies and Allied Matters Act, the functions of the Administrative Proceedings Committee are the following:

• a. Provide opportunities for persons alleged to have breached the provisions of the Companies and Allied Matters Act or its regulations to be heard.
• b. Resolve disputes or grievances arising from the operations of the Companies and Allied Matters or its regulations.
• c. Impose administrative penalties for breach of the provisions of the Companies and Allied Matters Act or its regulations in the settlement of matters before it.

The procedure of settlement of disputes before the Administrative Proceedings Committee is as follows:

• a. Any party with complaint for adjudication by the Committee shall send it to the Registrar-General of the Commission.
• b. If the Registrar-General on receipt of the complaint is of the opinion that the provisions of the Act in respect of which the Committee has jurisdiction to adjudicate have been or is about to be violated, he shall refer the complaint to the Committee for adjudication.
• c. The secretary of the Committee upon receipt of the complaint shall within two working days schedule the complaint for hearing on a date that may be determined by the Chairman of the Committee.
• d. The secretary shall within five working days of receipt of the complaint send to the parties the notice hearing.
• e. The notice shall contain the names of the parties, particulars of claim, details of the alleged violations, date, place and time of hearing.
• f. The notice may be served on the parties personally or by registered post to their physical or electronic addresses and where it cannot be served on a party for whatever reason, the Chairman may direct that the notice be served by substituted means.
• g. The hearing of the complaint shall not be scheduled for a day less than 21 days from the date of receipt of the complaint together with the report of the investigation.
• h. Not later than 10 working days from service of hearing notice, the parties shall file their briefs with the Committees and serve each other notice of same.
• i. Parties may file and serve each other further documents not later than five working days from filing and service of the initial pleadings on each other.
• j. The periods prescribes for filing and service of documents maybe extended by the leave of the Committee.
• k. At the expiration of the time prescribed for further pleadings, the secretary shall set down the matter for hearing.
• l. Parties shall attend the sittings of the Committee either in person or be represented by a legal practitioner. m. Proceedings of the Committee shall be recorded on audio or visual tape or such other electronic device.
• n. The Committee may grant not more than two adjournments in a matter which may only be granted if it considers that refusing to grant adjournment may lead to miscarriage of justice and on condition of payment of administrative fees.
• o. Issues are determined by the Committee by simple majority of the members present and where there is tie, the chairman and member presiding is entitled to a casting vote.
• p. Decisions on the Committee are subject to confirmation by the governing board of the Corporate Affairs Commission.
• q. Parties dissatisfied with the decision of the Committee may appeal to Federal High Court.

According to Section 851(10) of the Companies and Allied Matters Act, the sanctions which the Administrative Proceedings Committee may impose are as follows:

• a. Imposition of administrative penalties.
• b. Suspension or revocation of registration.
• c. Recommendation for criminal prosecution if matters brought before it reveals any criminal act or conduct.