EZE OKOROCHA V. UNITED BANK FOR AFRICA PLC & ORS. (2018)

Background

This appeal concerned the jurisdiction of the Investments and Securities Tribunal under section 284 of the Investments and Securities Act 2007. The appellant subscribed for 2,000,000 shares in a public offer promoted by the first respondent, United Bank for Africa Plc, at N35 per share. The subscription was made through agents associated with the respondents. The appellant alleged that his share certificate was delivered on 1 February 2008, substantially outside the period prescribed by the applicable rules. He claimed that the delay amounted to a breach of contract and caused him financial loss, loss of investment opportunity and other damage.

By an originating summons, the appellant sought several declaratory and injunctive reliefs. These included declarations that the respondents were required to complete allotments within the prescribed period, a declaration that UBA had breached its contractual obligations, mandatory orders compelling certain respondents to comply with securities legislation, restraints against further public issues except in accordance with the law, and general, exemplary and special damages. He also sought an order compelling the Securities and Exchange Commission, the fifth respondent, to sanction the other respondents for alleged breaches of the Investments and Securities Act and the Commission’s rules.

The Investments and Securities Tribunal raised the issue of jurisdiction on its own motion. It concluded that the appellant was required first to complain to the Securities and Exchange Commission and obtain a decision or determination before invoking the Tribunal’s jurisdiction. Since that preliminary step had not occurred, the Tribunal struck out the action. The Court of Appeal affirmed the decision and further held that, although the Tribunal might have jurisdiction over a claim against the Commission in an appropriate case, the action could not be sustained against the Commission alone because the first to fourth respondents, whose interests would be directly affected, had not been properly brought within a legally maintainable proceeding before the Tribunal.

Issues

1. Whether the Court of Appeal correctly interpreted section 284(1)(a) of the Investments and Securities Act 2007 by holding that the Tribunal lacked jurisdiction over the claims against the first to fourth respondents in the absence of a prior decision or determination by the Securities and Exchange Commission.
2. Whether the action against the fifth respondent could be maintained separately where the first to fourth respondents were necessary parties but the Tribunal lacked jurisdiction over the claims against them.
3. Whether the preliminary objections to the competence of the appeal should succeed.

Ratio Decidendi

The Supreme Court dismissed the appeal and affirmed the Court of Appeal. The Court held that jurisdiction is statutory, not presumed, imagined or conferred by the consent of the parties. A court or tribunal can exercise only the jurisdiction donated to it by the Constitution or the statute establishing it. Section 284(1)(a) of the Investments and Securities Act 2007 gave the Tribunal jurisdiction over questions of law or disputes involving a decision or determination of the Commission, including specified disputes between capital-market operators, investors and market institutions. The statutory language created a condition precedent: the Commission had to make a decision or determination before the Tribunal’s appellate or review jurisdiction could be activated in the relevant class of dispute.

The appellant’s claims against the first to fourth respondents were founded on alleged breaches connected with a public offer and the late delivery of his share certificate. However, the appellant had not first submitted the dispute to the Commission and obtained the decision contemplated by section 284(1)(a). The fact that the Commission was joined as a respondent did not cure the failure to satisfy that statutory precondition. The Tribunal therefore had no jurisdiction to entertain the claims as constituted.

The Court also rejected the argument that the statutory procedure offended fair hearing or the rule against a person being a judge in his own cause. The question before the Court was not whether the Commission’s eventual decision would be immune from challenge, but whether the statutory sequence had been followed. If a decision were made and an aggrieved party remained dissatisfied, the Act provided the relevant basis for further proceedings before the Tribunal.

Court Findings

The Supreme Court first considered the respondents’ preliminary objections. It held that objections should ordinarily be determined before the substantive appeal where necessary, but found the objections unmeritorious. The grounds of appeal sufficiently challenged the lower court’s treatment of jurisdiction. In addition, jurisdiction is a fundamental issue which may be raised at any stage of proceedings, including for the first time on appeal, and may in appropriate circumstances be raised with or without leave, provided the proper procedural requirements are observed.

On the second substantive issue, the Court agreed that the first to fourth respondents were necessary parties to the declaratory and consequential reliefs sought. A party seeking declaratory relief must join every person whose legal interest is at stake or who will be directly, or likely to be, affected by the order sought. This rule ensures that the court does not make an order in the absence of persons bound by, or materially affected by, the declaration. Since no effective order concerning the alleged public-offer breaches could be made against the Commission alone while excluding the principal respondents, the claim against the fifth respondent could not stand independently.

Conclusion

The appeal was held to be without merit and was dismissed. The judgment of the Court of Appeal, which affirmed the decision of the Investments and Securities Tribunal, was upheld. No order as to costs was made; each party was directed to bear its own costs.

Significance

The decision reinforces the constitutional and statutory character of jurisdiction in Nigerian adjudication. It confirms that litigants cannot bypass a statutory administrative or regulatory process where legislation makes a prior decision a condition precedent to resorting to a specialist tribunal. It also illustrates the practical importance of properly framing declaratory proceedings and joining all necessary parties. A claim cannot be divided artificially so as to preserve proceedings against one respondent where the reliefs are inseparably connected with the conduct and legal interests of other respondents over whom the tribunal has no jurisdiction. The ruling is therefore significant for capital-market disputes, regulatory litigation, preliminary objections and proceedings seeking declarations, injunctions or sanctions against multiple parties.