Appeal Court Upholds Nullification of CAMA on CAC Powers over Religious Groups, Others

Alex Enumah in Abuja

The Abuja Division of the Court of Appeal has upheld a Federal High Court judgment nullifying several provisions of the Companies and Allied Matters Act (CAMA), 2020, that gave the Corporate Affairs Commission (CAC) powers over incorporated trustees, including religious and other associations.

A three-member panel, in a unanimous judgment, held that sections 839, 842, 843, 844, 845, 846, 847 and 848 of CAMA infringed upon constitutionally protected rights to freedom of thought, conscience, religion, association, and peaceful assembly.

The court also affirmed that Emmanuel Ekpenyong, a constitutional lawyer with Fred Young & Evans LP, had legal standing to challenge the provisions after he argued they infringed his fundamental rights.

The controversy over the amended CAMA began almost immediately after the late President Muhammadu Buhari signed it into law in August 2020.

Although the Act introduced several reforms to Nigeria’s corporate environment, its provisions on incorporated trustees, which cover churches, mosques, charities, NGOs and other associations, drew strong objections from religious organisations and civil society groups.

At the centre of the controversy was Section 839, which gave the CAC powers to suspend trustees and appoint interim managers where certain conditions existed, including alleged misconduct or mismanagement, fraud or where intervention was considered necessary in the public interest.

Religious organisations feared the provision could give the government excessive control over their internal affairs.

The Christian Association of Nigeria (CAN) called for the law to be amended. At the same time, the CAC maintained that it would not arbitrarily suspend trustees and that its actions remained subject to judicial review.

Amid the ensuing controversies, Ekpenyong instituted the suit on August 31, 2020, at the Federal High Court in Abuja.

He sued the National Assembly, the CAC, and the Attorney General of the Federation (AGF) over provisions of CAMA that he argued violated his constitutional rights.

In his suit, Ekpenyong challenged the disputed sections, urging the court to rule that they infringed his freedom of thought, conscience and religion; freedom of association and peaceful assembly; and his right of access to court.

He relied on Sections 38 and 40, among other provisions, of the Nigerian Constitution.

Justice James Omotosho agreed with Ekpenyong in his judgment delivered in April 2023, ruling that the powers granted to the CAC to regulate and administer incorporated trustees under sections 839 to 848 were excessive and infringed on his constitutional rights.

The judge also held that Ekpenyong had the legal standing to challenge the provisions and declared the affected sections unconstitutional, null and void.

Justice Omotosho further 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 CAC was dissatisfied with the decision and appealed to the Court of Appeal through its lawyer, Jibrin Okutepa (SAN).

On appeal, the CAC argued that the Federal High Court erred in assuming jurisdiction over Mr Ekpenyong’s fundamental rights suit.

The agency argued that Ekpenyong lacked the legal standing to institute the suit.

Ekpenyong opposed the appeal and maintained that the rights to freedom of thought, conscience and religion and freedom of association and peaceful assembly were fundamental to a democratic society.

The Court of Appeal substantially agreed with the Federal High Court.

Justice Okorowo, who read the Court of Appeal’s judgment, held that voluntary associations are generally supreme in managing their internal affairs and that courts should not interfere unless an association acts 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 of the Constitution.

The court also rejected the argument that the restrictions imposed by the provisions could be justified under Section 45(1) of the Constitution.

Justice Okorowo held that the disputed provisions infringed the rights guaranteed by Sections 38 and 40 and were not reasonably justifiable under Section 45(1).

The court consequently affirmed the Federal High Court’s decision striking down Sections 839, 842, 843, 844, 845, 846, 847 and 848 of CAMA.

The Court of Appeal, however, did not uphold the Federal High Court’s wholesale nullification of Section 851.

The appellate court held that the section was unconstitutional only to the extent that it purported to give the Administrative Proceedings Committee power to determine, at first instance and to the exclusion of the Federal High Court, justiciable disputes arising under CAMA and impose penalties as a court would.

The court consequently dismissed the CAC’s appeal in substantial part.

Justices Abba Mohammed and Eberechi Nyesom Wike, who were on the panel, concurred with the judgment.