Mufutau Ajayi v. Securities And Exchange Commission (2023)

LAWGLOBAL HUB Lead Judgment Report – SUPREME COURT

UWANI MUSA ABBA AJI, JSC (Delivering the leading judgment)

The appellants case is that when he was in active service with African Petroleum Plc. and as its Finance and Accounts Manager, it was alleged that he authorized the issuance of a prospectus dated 30/3/2000 for offer of sale of shares of 86,400,000 ordinary shares of 50k each of N28.50 per share containing an untrue statement that the total indebtedness of the Company as at 30/6/1999 was N10.2 billion whereas subsequent revelations indicated that the company’s indebtedness was over N22 billion.

That the appellant was penalized by the Administrative Proceeding Committee (APC) of the respondent on 19/4/2004 without serving him the notice of hearing of the allegations against him and was not afforded the opportunity of representing himself.

The respondent on the other hand narrated that the appellant with several other principal officers of the company was served with hearing notice to appear before the Administrative Proceedings Committee (APC) but the appellant failed to appear. Consequently, he was found liable and accordingly penalized.

The appellant filed a suit at the Federal High Court, Abuja, seeking to quash the decision of the Administrative Proceeding Committee (APC), which declined jurisdiction and transferred the case to the Investments and Securities Tribunal (IST). Dissatisfied with the ruling, the appellant appealed to the lower court, which affirmed the decision of the trial court, hence this appeal.

The appellant has distilled these issues for determination:

1. Whether the Court of Appeal was not wrong in its decision that the Federal High Court had no jurisdiction to entertain the appellant’s claim against the respondent.
2. Whether the Court of Appeal ought not to have granted the appellant’s application filed at the Federal High Court.

The respondent contrarily framed these issues:

1. Whether the Court of Appeal is not right in law when it held that the proper forum to determine the appellant’s suit is the Investment and Securities Tribunal.
2. Whether having held that the Federal High Court lacked the competence to quash the decision of the Administrative Proceedings Committee of the respondent as contained in exhibit MA-2″, the Court of Appeal was not right in law when it refused to quash the said decision of the Administrative Proceeding Committee.

This appeal shall be better determined on a lone issue thus:

“Whether the lower court was right to affirm that the trial Federal High Court did not have the jurisdiction to entertain the appellants suit.”

It is submitted by the learned counsel to the appellant that the appellants application for judicial review by way of an order of certiorari in respect of the violation of the appellants right to fair hearing necessarily means that the Federal High Court has the jurisdiction to entertain the action.

Furthermore, that the appellants case was because the respondent constituted its Administrative Proceedings Committee (APC) and reached prejudicial conclusions and findings against the appellant without an opportunity to respond to the allegations against him, contrary to section 36(1) of the 1999 Constitution (as amended) . He also relied on Arije v. Arije (2018) 37 WRN 1; (2018) LPELR-44193-(SC). Similarly, the appellant settled that there is nothing in the Investment and Securities Act, 1999 or 2007, that gives the Investment and Securities Tribunal (IST) judicial powers to make the orders of certiorari and injunction being sought by the appellant in his application at the Federal High Court.

Under issue two of the appellant, it is submitted that the lower court ought to have invoked section 16 of the Court of Appeal Act to quash the respondents decision being complained of because the appellant was never served with the hearing notice. He therefore prayed for the resolution of this issue in his favour and for the appeal to be allowed.

The respondent on the other hand submitted that by virtue of sections 242 and 234(1) & (2) of the Investment and Securities Act, 1999, the ISA does not give the appellant any option as to what court he could institute his action or appeal save the Investment and Securities Tribunal (IST) by virtue of the express provision of section 236(1) of the ISA.

Since the instant suit is against the decision of the respondent, it is the IST that has the jurisdiction to entertain capital market transactions and disputes and not the Federal High Court because the action of the APC and that of the respondent are acts done under the Act.