A comparative study of the scope of jurisdiction of the investment and securities tribunal of Nigeria: Matters arising

• Jurisdiction: South Africa
• Published date: 16 August 2019
• Date: 16 August 2019
• Pages: 105-129
• Citation: (2017) 4(2) Journal of Comparative Law in Africa 105
• Author: Dr Eric Okojie

105

A COMPARATIVE STUDY OF THE SCOPE OF

JURISDICTION OF THE INVESTMENT AND

SECURITIES TRIBUNAL OF NIGERIA: MATTERS

ARISING

Dr Eric Okojie,* LE Enakemere** and Peace Folorunsho***

ABSTRACT

The jurisdiction of the Investment and Securities Tribunal as a court of first instance

to the exclusion of regular courts in matters pertaining to the capital market has

generated debate within the legal community because of Nigeria’s previous history

with ouster clauses under military rule. This is more so when the independence

of the tribunal is subject to question due to the wide powers conferred on the

Finance Minister in Nigeria in the appointment of the chairman of the tribunal,

for example, active legal practice is not an obligatory criterion for legal practitioners

who may be considered for membership of the tribunal as only their experience

in the capital market matters. Adjudication by the tribunal is preferred by some

aggrieved because unlike the regular courts it is not burdened by technicalities,

arbitration is swift and just like the regular courts, an aggrieved has a right of

appeal. Despite these features, agitation for the removal of the exclusive jurisdiction

has continued to heighten. This paper argues that there is a need for the review of

the provisions of the enabling Act on membership of the tribunal; particularly for

legal practitioners by requiring that such a member must be in active legal practice

prior to his appointment as a means of assuaging the frequent appeals on the

grounds of lack of fair hearing at the appellate courts. There is also the need for the

public, key investors in the capital market about the activities of the tribunal as an

alternative means of judicial redress. It concludes with the position that various

securities tribunals/regulatory bodies must be manned with persons of expertise

knowledge and technical know-how. This would ensure that securities tribunals are

efficient, strong, transparent and responsive to the investors in the capital market.

La compétence du Tribunal des Investissements et des Valeurs Mobilières en tant

que tribunal de première instance à l’exclusion des tribunaux ordinaires pour les

affaires liées au marché des capitaux a suscité un débat au sein de la communauté

juridique en raison de l’histoire antérieure du Nigéria avec des clauses de

renversement sous la domination militaire. D’autant plus si l’indépendance du

tribunal est remise en cause en raison des larges pouvoirs conférés au Ministre

des Finances du Nigéria qui peut nominer le président du tribunal. Par exemple,

* Dr Er ic A Okojie is a Senior Lecturer, Business Law Department, Faculty of Law, University

of Benin, Benin City, Nigeria. E-mail: ayemereokojie.uniben.edu.

** LE Enakemere Esq., is an Abuja, FCT-based legal practitioner. E-mail: daddi2020@gmail.

com.

*** Peace Folorunsho Esq., is a solicitor/barrister of the Supreme Court of Nigeria. Email:

peacelynic@gmail.com.

(2017) 4(2) Journal of Comparative Law in Africa 105

© Juta and Company (Pty) Ltd

106 JOURNAL OF COMPARATIVE LAW IN AFRICA VOL 4, NO 2, 2017

la pratique juridique active n’est pas un critère obligatoire pour les praticiens du

droit qui peuvent être considérés comme membres du tribunal, puisque seule leur

expérience sur le marché des capitaux importe. Le jugement par ce tribunal est

préféré par les parties lésées parce que, contrairement aux tribunaux ordinaires, il

n’est pas alourdi par des aspects techniques, l’arbitrage est rapide et tout comme les

tribunaux ordinaires, la partie lésée a un droit d’appel. Malgré ces caractéristiques,

le débat pour l’élimination de sa juridiction exclusive a continué à d’augmenter.

Cet article fait valoir qu’il est nécessaire d’examiner les dispositions de la loi sur

l’appartenance au tribunal; en particulier pour les praticiens du droit, en exigeant

que tout membre du tribunal soit en pratique juridique active avant sa nomination

afin d’atténuer la fréquence des procédures d’appel au motif du manque d’équité

des audiences. Il est également nécessaire pour le public, les principaux investisseurs

sur le marché des capitaux, de percevoir les activités du tribunal en tant que moyen

de recours judiciaire alternatif. Il conclut en suggérant que les tribunaux spéciaux

/ organismes de réglementation doivent être composés de personnes ayant une

expertise légale et des compétences techniques. Cela garantirait que les tribunaux de

valeurs mobilières soient efficaces, solides, transparents et adaptés aux investisseurs

sur le marché des capitaux.

Key words: Capital market, investment and securities tribunal, scope,

jurisdiction

INTRODUCTION

In most countries, there is a financial system which regulates the financial

services industry or sector.1 Nigeria is a typical example of such. The

financial sector in Nigeria consists of the money market and the capital

market. The former, which is the money market, is ‘the market for short-

term funds such as securities, one-year treasury certificates, Central Bank

notes, negotiable instruments, commercial papers, merchant bank savings,

and other funds of less than one year duration’.2 While the latter, that is

the capital market, is the market where long-term funds and securities

lasting over a year are traded.3 Examples are bonds, shares, development

stocks and industrial loans.4 The capital market has been described as that

section of the financial sector that is responsible for channelling funds

1 Vitor Constancio, ‘Financial Regulatory Reform and the Economy’, (Speech at the 20th

Annual Hyman P Minsky Conference organised by the Levy Economics Institute, New York, 2011)

published by the European Central Bank, Eurosystem, available at .ecb.europa.eu/

press/key/date/2001/html/sp010531.en.html> (accessed 5 November 2017).

2 OO Ifuero, ‘Capital Market imperfection and Community economic development in

Nigeria’, being a paper presented at the Academy of Management, Nigeria, on 23 November 2005

at Abuja, p 3.

3 Ibid.

4 See Niger ian Stock Exchange, Summary available at http://www.nse.com.ng/market-data/

trading-statistics (accessed 10 October 2016).

© Juta and Company (Pty) Ltd