CASE TITLE: NERC v. IBEDC LTD & ORS (2024) LPELR-62386(CA)
JUDGMENT DATE: 10TH JUNE, 2024
PRACTICE AREA: REGULATORY AGENCY
LEAD JUDGMENT: JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.
SUMMARY OF JUDGMENT:
INTRODUCTION:
This appeal borders on Company Law.
FACTS:
This is an appeal against the decision of the Federal High Court, Abuja sitting in Abuja delivered on the 10th of July, 2020.
The Respondents filed a summons to the trial court to determine whether Regulation 18 of the Electricity Industry (Enforcement) Regulations 2014, which seeks to regulate the corporate governance of the 1st Plaintiff, is not inconsistent with Sections 248(1) and 262 of the Companies and Allied Matters Act, CAP C20, LFN 2004, and therefore null and void. They also sought to determine if Regulation 18 is not ultra vires the powers of the Respondent, and if the Respondent has statutory power to suspend the directors of the 1st Plaintiff and/or direct the members to appoint new directors to replace the suspended directors. They also sought to determine if the Respondent’s Order No. NERC/181/2018 dated 19.06.18 does not amount to an unlawful interference with the composition of the board of directors, control, and management of the 1st Plaintiff, and if the “purported suspension” of the directors by the Respondent is not illegal and liable to be set aside.
The Respondents then upon the determination of the said questions, sought the following reliefs:
1. A Declaration that Regulation 18 of the Respondent’s Electricity Industry (Enforcement) Regulations 2014, is inconsistent with the provisions of Sections 248(1) and 262 of the Companies and Allied Matters Act, CAP C20, LFN 2004; and, therefore, null, and of no effect or inoperative.
2. A Declaration that Regulation 18 of the Respondent’s Electricity Industry (Enforcement) Regulations 2014, is ultra vires the powers of the Respondent and therefore null, void, and of no effect.
3. A Declaration that the Respondent lacks the statutory power to suspend the 3rd–8th plaintiffs from their respective positions as directors of the 1st Plaintiff.
4. A Declaration that the Respondent lacks the statutory power to direct the members of the 1st Plaintiff to appoint new directors to replace the suspended directors, amongst others.
On being served, the Appellant filed a counter-affidavit, to which the Respondents filed a reply. After taking the arguments of counsel for the two sides, the learned trial Judge delivered a considered judgment wherein his lordship dismissed the preliminary objection of the Appellant and found in favour of the Respondents.
Dissatisfied, the Appellant appealed to the Court of Appeal.
ISSUES FOR DETERMINATION:
This appeal was determined based on the following issues thus;
1. Whether having regard to condition 20 of the Electricity Distribution Licence NERC/LC/033 dated 1 November, 2013, the learned trial Judge followed the right principle of law in dismissing the Appellant’s Notice of Preliminary Objection premised on Respondents’ failure to exhaust internal remedies prior to the commencement of this matter?
2. Whether having regard to the express admission by the Respondents for repayment of sums diverted as contained in Exhibits TN5, the decision of the learned trial Judge that the issue of fraud and financial impropriety be further investigated by law enforcement agencies is proper in law?
3. Whether the decision of the learned trial Judge in finding the Appellant liable for denial of a fair hearing to the Respondents is proper notwithstanding the contents of Exhibit TN3?
And
4. Whether the trial Court’s order striking down Section 18 of the Electricity Industry (Enforcement) Regulations 2014 on the grounds that it is inconsistent with the provisions of the Companies and Allied Matters Act, 2004 was right in law?
DECISION/HELD:
In the final analysis, the appeal was allowed.
RATIOS:
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