The New Company Law and the Constitutional Rights of Nigerians

The Companies and Allied Matters Act, 2019 (“the new CAMA”) recently signed into law by the President of the Federal Republic of Nigeria is a welcome development to Nigerian businesses. It has addressed the bottlenecks in formation of business entities and improved Nigerian corporate governance. It has also given leverage to small companies to thrive and incorporated technological innovations to the processes of the Corporate Affairs Commission (“Companies’ Registry”) to facilitate the ease of doing business in Nigeria.

However, the legislature in extending the powers of the Companies’ Registry to effectively regulate the activities of Churches, Islamic Religious Organisations, Charity and Non-Government Organisation which are registered as Incorporated Trustees (“associations”) has introduced some new provisions in the new CAMA which are capable of usurping the fundamental rights of citizens to their freedom of thoughts, conscience and religion, freedom of peaceful assembly and association and constitutional rights of access to Courts.

It is upon this premise that the Plaintiff, a Nigerian Citizen and Legal Practitioner, commenced Suit No. FHC/ABJ/CS/1076/ 2020; Emmanuel Ekpenyong Esq. v. National Assembly, Corporate Affairs Commission and Attorney General and Minister of Justice of the Federation at the Federal High Court, Abuja Division, challenging the constitutionality of some provisions of the new CAMA.

The Plaintiff contends that Section 839 of the new CAMA which gives power to the Companies’ Registry to remove trustees and appoint an interim manager to take over an association where it reasonably believes that there is misconduct, mismanagement, fraudulent practices, for protection of the property of the association and public interest; Section 842, Section 843, Section 844 of the new CAMA which gives the Companies’ Registry the powers to control the proceeds of a dormant account of an association and dissolve an association on account of its dormant account; Section 845, Section 846, Section 847 and Section 848 of the new CAMA which directs associations to keep and submit their statement of affairs and accounting records to the Companies’ Registry, infringes the Plaintiff’s freedom of thoughts, conscience and religion enshrined in Section 38 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) (“the Constitution”).

The Plaintiff opines that Churches, Islamic religious organisations, Charity and Non-Governmental Organisations give hope to the Plaintiff and the Nigerian people. The activities of associations augment the efforts of government. They act as watchdogs for the people and put the government in check. It is unfortunate for the provisions of the new CAMA to put the activities of associations under the complete whims and caprices of the Companies’ Registry which is an agency of the Federal Government.

The law provides for every association to have a Constitution which regulates the affairs of the association and protect them against misconduct, mismanagement, fraudulent or other activities which are contrary to the objects of the association. Hence, the Companies’ Registry has no business whatsoever in suspending trustees and appointing interim managers for them. This is a sure recipe for disaster. The activities of associations are not against public interest to warrant such draconian provisions.

The funds of associations are not public funds. They are contributions, offerings and freewill donations of members to carrying out their objectives. There is no legal justification for the Companies’ Registry to be interested in the dormant account of associations. Associations are non-profit making organisations. They are not business ventures as such the Companies’ Registry cannot be ingrained in the affairs of associations by expecting them to submit statement of affairs or accounting records to the Registry.

The Plaintiff has a freedom to his thought, conscience and religion alone or in community with others. The Plaintiff has a right to propagate his religion, worship, teaching, practice and observance in public or private and does not even need to register same with the Companies’ Registry to propagate same. Therefore, giving powers to the Companies’ Registry who is an outsider and complete stranger to determine the affairs of a place where the Plaintiff professes his thoughts, conscience and religion is an aberration which is in contravention of Section 38 of the Constitution.

Furthermore, the Plaintiff contends that Section 839, Section 843, Section 844, Section 845, Section 846, Section 847 and Section 848 of the new CAMA infringe his freedom to peaceful assembly and association. This is because the Companies’ Registry has a wide discretion to appoint interim managers to replace suspended trustees. The interim managers to be appointed by the Companies’ Registry may have nothing in common with the members of the association and the members will not have a right to challenge such appointment.

This will impair the rights of members of associations to actively participate in activities of their associations and determine its direction. The enormous and dictatorial powers given to the Companies’ Registry to intrude and interfere with the operations and management of associations is not legally justifiable. The use of phrases such as “is satisfied”, “reasonably believes”, “deem it necessary”, “public interests” in relation to the powers of the Companies’ Registry over associations are ambiguous phrases that can easily lead to an abuse of power by the Companies’ Registry and contravene the Plaintiff’s freedom to associate peacefully with other persons enshrined in Section 40 of the Constitution.

Again, the Plaintiff contends that the provisions of Section 851 of the new CAMA which gives powers to the Administrative Proceedings Committee to hear cases arising from the provisions of the new CAMA limits the Plaintiff’s constitutional rights of access to Courts. Section 6 (1) and 6 (b) of the Constitution confers judicial powers to the Courts. Section 36 (1) of the Constitution gives citizens the right to access an independent and impartial Court to determine their civil rights and obligations. Section 251 (1) (e) of the Constitution provides for the Federal High Court to hear any matter arising from the provisions of the new CAMA.

Hence, the provision of Section 851 of the new CAMA comes as a very huge surprise. The composition of the Administrative Proceedings Committee is made up mostly of employees of the Companies’ Registry who are involved or aware of the issue which caused the dispute in the first place. It is against the principle of natural justice for a person to be a judge in his own case. In most disputes arising from the provisions of the company law or regulations, the Companies’ Registry is usually a party to the dispute.

The Companies’ Registry cannot independently and impartially determine a dispute which it is also a party. If this is allowed the Companies’ Registry will be a party and judge in its own case. It is without doubt that Section 851 of the new CAMA is contrary to the Plaintiff’s rights of access to Courts enshrined in Section 6 (1) 6 (b), Section 36 and Section 251 (1) (e) of the Constitution.

In conclusion, the Plaintiff contends that his freedom of conscience, thoughts and religion, freedom of peaceful assembly and right to access to Court are so serious and the only way to ensure that the rights are protected in the circumstance, is for the provisions of Section 839, Section 843, Section 844, Section 845, Section 846, Section 847 and Section 848 and Section 851 of the new CAMA to be expunge from the new CAMA. The Plaintiff prays for an order of mandatory injunction of the Court directing the Defendants to expunge the offending provisions of the new CAMA.

Deloitte Legal announces new head of Legal Management Consulting

Deloitte Legal has today announced the appointment of Jack Diggle as lead partner for its Legal Management Consulting (LMC) arm.

Joining this month, Jack is responsible for expanding Deloitte Legal’s offerings in this space by developing new capabilities and building on Deloitte Legal’s existing technology, change and operations teams. Jack was previously vice president and global head of consulting at alternative legal services provider Elevate Services. He also headed up legal transformation at Barclays, leading the strategic change agenda for its in-house legal department.

In addition, Craig Conte and Tom Birdseye will be joining to help build out Deloitte Legal’s consultancy offerings to in-house legal teams, contracting functions and law firms. Craig Conte is a globally renowned expert in contract management and consulting using technology and a range of legal managed services. A qualified lawyer with more than 20 years’ experience spanning a number of US law firms and geographies, Craig’s recent roles include being global head of contracts consulting at Elevate and head of the contracts and commercial management service line at Capgemini.

Tom Birdseye is a legal management consultant with over 20 years’ experience in change and transformation. He will focus on expanding Deloitte Legal’s work with both in-house legal teams and law firms seeking to increase the efficiency and effectiveness of their operations. Most recently he was head of EMEA consulting at Elevate and prior to this he was global head of change management at Freshfields Bruckhaus Deringer.

The appointments follow the firm’s hiring of Emily Foges to head up its Legal Managed Services business, announced earlier in the summer.

Michael Castle, UK managing partner at Deloitte Legal, commented: “Today’s world requires a new approach to the delivery of legal services. Now more than ever, legal departments are having to address the challenge of dealing with increasing complexity and demand with the same or fewer resources.

“Jack, Craig and Tom have a wealth of experience between them which will help these departments and contracting teams rethink their operating models, achieve greater efficiencies and increase the value they deliver back to the business. They are recognised market leaders and these appointments will ensure that Deloitte Legal continues its commitment to provide new and integrated solutions for clients.”

Jack Diggle, lead partner for legal management consulting at Deloitte Legal, added: “General Counsel and legal departments are facing multiple challenges: a heightened regulatory environment, increased workloads and the acceleration of new digitally-enabled, agile operating models.

“By focusing on people, processes and technology, it is possible for legal and contracts teams to work in a smarter way to meet the challenges that lie ahead. I am looking forward to building on Deloitte Legal’s experience in this space and helping our clients’ legal operations.”

Globally, Deloitte Legal is made up of more than 2,500 professionals operating in more than 80 countries.

Deloitte Legal has more than 250 people in the UK, delivering technology-enabled legal solutions in areas such as employment, litigation, corporate and commercial and immigration, including more than 85 client-facing practicing lawyers.

Incompetence of the French Judicial Tribunal

Decree n°2019-1333 dated 11 December 2019 (Article 2) has this year introduced a new Article 82-1 in the French Code de procédure civile, which is said to simplify incompetence exceptions (heading of the Section 2 of the said decree : the simplification of incompetence exceptions).

This new Article 82-1 came into force on 1 January 2020 and establishes a new derogatory scheme creating a possibility to challenge the competence of the judicial tribunal. The judicial tribunal was recently created with the merger of the TGI (Tribunal de Grande Instance) and the TI (Tribunal d’Instance), such jurisdictions dealing with civil matters. Due to the coronavirus Covid-19 sanitary crisis, legal practitioners did not really have the time to test this new regime.

As a general rule (Article 74 of the French Code de procédure civile), an incompetence exception has to be raised in limine litis, that is to say, at the first hearing, before any discussions on the ground of the case, and by way of principle, before the same judge ruling on the case. On the contrary, and by way of derogation, the new scheme sets up a possibility to raise an incompetence exception, before the first hearing, either the parties or the judge raising it. If trigged, the parties or their lawyers are informed right away by any means giving fixed date (date certaine). In this perspective, the file is transmitted to the registry (greffe) of the judicial tribunal, which in turn, transfers the case to a designated judge. The competence of this newly appointed judge may also be challenged, by him or the parties, during a period of 3 months, by the transfer of the case to the President of the judicial tribunal. According to the new regulation, the President of the judicial tribunal has to transfer the case to a new appointed judge, and such a decision cannot be challenged. However, the competence of this new appointed judge may be challenged before this new judge by the parties, and the decision ruling on the competence may be appealed within a period of 15 days, as of the date of the notification of the decision.

The President of the judicial tribunal appears to be the keystone of the scheme, which is in line with the role usually attributed to him, as already in charge for example of summary proceedings (e.g. référé). The fixed date (date certaine) and the 3 months timeframe appear to be crucial, and purport to avoid endless discussions on the competence.

However, and surprisingly, this new scheme creates a very sophisticated legal architecture, not to mention the potential right to call the case before the French Cour de cassation (Supreme Court). In such a context, these new rules may unfortunately be used to artificially challenge a procedure and lengthen it. An author has recently described this mechanism as a potential Trojan Horse, allowing dilatory procedures (Katia Bennadji, Dalloz actualité, 22 July 2020, « L’article 82-1 du Code de procédure civile : cheval de Troie au service de manœuvres dilatoires »). This remains true to a certain extent, as this new Article 82-1 has been introduced in a context where, on the contrary, a lot of other procedural rules are aimed at streamlining the procedure e.g. concentration of the legal means (concentration des moyens), estoppel or prohibition of dilatory procedures.

In a constant movement, the French Cour de cassation draws the outlines of the concentration of the legal means principle. The French Cour de cassation (C. cass. civ. 2, 11 April 2019, n°17-31785), recently stated that the plaintiff, before any ruling on the case, has to expose all the legal means considered as the ground for the claim. This means that, in a same instance, an overruled legal claim cannot be raised again in connection with another ground based on the same object, as the one on which the tribunal has already definitely stated. According to this case law, the rule of the concentration of the legal means, uses the same underpinned concept as the fin de non-recevoir (i.e. res judicata pro veritate habetur), but is not an exception procedure as rather deals with the ground of the case. It remains to be seen however how this case law and all the case law hereof, will be used by legal practitioners to limit the import of this new Article 82-1. In this perspective, it is reasonable to think that they may wish to use the concentration of the legal means principle, also in connection with procedure exceptions, such as incompetence.

In addition, the estoppel theorie, albeit originally English law concept, is now part of the French legal system. In a considerably important decision, the French Cour de cassation, recognised and introduced into French law, this Anglo-Saxon concept (C. cass. Ass. Plen., 27 February 2009 (n°07-19.841)) and considers it as a fin de non-recevoir (i.e. a legal mean aiming at having declared the claim of the other party as not receivable). In this respect, the French Cour de cassation has stated that actions of the same nature based on the same conventions, opposing the same parties may give rise to a sanction, provided that a party kept contradicting itself, at the expenses of others. More specifically, the French Cour de cassation, Civ. 2, dated 15 March 2018 (n°17-21.991) reiterated this position, ruling that « (…) the principle according to which no one may contradict itself at the expenses of others, sanctions the procedural attitude consisting, for a party, during a same instance, to adopt contrary or incompatible positions leading the adversary in error as to its intentions ». Thus, it is reasonable to think that legal practitioners will use, inter alia, the estoppel theory to limit the possibility to use incompetence exceptions. In addition, even if the contradiction may occur in the same instance, it cannot be excluded that a judge may wish to streamline the procedure and prevent a party from utilising incompetence exceptions several times, in a same context.

A judge would also have the possibility to use article 32-1 of the French Code de procédure civile, which states that a person acting in justice in a dilatory manner may be convicted to a civil fine up to 3.000 euros, without prejudice of damages that would be claimed. In that event, the amount related to the civil fine is paid to the French Trésor Public.

To remain in the real trend of the procedure regulation, i.e. constant equilibrium between defence rights and efficiency of the legal system, judges and legal practitioners are in the position to put forward a strict construction of Article 82-1 of the French Code de procédure civile. Constructions rules are clear in this respect : exceptions or derogations have to be interpreted strictly, and the scheme created is created by way of exception. This means that each time a lawyer would invoke a competence exception on the basis of this new Article 82-1, the judge would have to conduct a teleological construction, in the view of maintaining a sufficient level of efficiency of the procedure, especially in a context where (i) ECHR (European Convention of Human Rights) already imposes an effective recourse in every steps of the procedure and (ii) numerous litigations deal with international matters, allowing the parties to raise incompetence exceptions, also on the ground of judicial international private law.

Up to date as of 22 July 2020

Four DLA Piper lawyers join WILEF leadership

DLA Piper is pleased to announce that four of its lawyers have joined the leadership of the Women in Law Empowerment Forum (WILEF). Ellen Scordino, a member of WILEF’s Global Advisory Board, will now also become a WILEF Boston co-chair, and Mariah DiGrino, Colleen Carey Gulliver and Holly Lake will join WILEF’s Global Advisory Board.

Scordino, a Boston-based partner in DLA Piper’s Intellectual Property and Technology practice, focuses on patent litigation, commercial matters and client counselling in the pharmaceuticals, biologics, diagnostics, biofuels and medical device industries.

DiGrino, a Real Estate partner based in Chicago, concentrates her practice in the areas of land use and zoning, public-private financing, public incentives, historic preservation, and community and economic development, as well as general real estate.

Gulliver is a New York-based partner in DLA Piper’s Litigation and Regulatory practice. Her practice includes the defence of class actions in various substantive areas, such as consumer, privacy and securities litigation, for many different industries, including consumer goods and retail, transportation and technology, as well as corporate litigation and counselling, business litigation and securities enforcement matters.

Lake is a Los Angeles-based partner in DLA Piper’s Employment practice. She is an employment litigator and advisor. She has a breadth of experience defending clients across industries, not only in single/multiple plaintiff cases, but also defending employers in wage-and-hour class, collective and private attorney general representative actions under California laws and the Fair Labour Standards Act (FLSA), Title VII and the Fair Employment and Housing Act. She also advises clients on all matters related to employment, including OFCCP compliance and affirmative action program development.

WILEF is the premier organisation for women in law exclusively dedicated to women from the largest law firms and corporate law departments in the United States.

Norton Rose Fulbright bolsters Riyadh office with new partner

Global law firm Norton Rose Fulbright today announced that Zayd Alathari, an intellectual property lawyer with experience in the Middle East and the US, has joined its Riyadh office as a partner.

Alathari joins the Mohammed Al-Ghamdi Law Firm in association with Norton Rose Fulbright US LLP from Saudi Basic Industries Corporation (SABIC), where he led the company’s IP initiatives as its Senior Manager & IP Counsel in the Middle East and Africa.

In eight years at SABIC, Alathari led a team that supported SABIC’s Middle East and Africa manufacturing teams and the company’s global technology & innovation teams for the chemical, agri-nutrients and metal business in the US, Europe, Middle East, China and India. Alathari also helped develop and implement SABIC’s global IP strategies and policies, and he provided legal and IP advice and contract support to protect and enhance the value of the company’s technology.

Additionally, Alathari and his team drafted and negotiated a wide range of technology agreements; prepared and prosecuted patent applications; managed and maintained patent portfolios; conducted due diligence; and handled freedom to operate (FTO) opinions.

Before his in-house career in Saudi Arabia, Alathari practiced at Venable LLP in Washington, DC. As an associate and registered patent attorney, he advised US-based and international clients on IP litigation, transaction and patent prosecution matters.

Tim Kenny, Norton Rose Fulbright’s Global Head of Intellectual Property, said: “Zayd possesses a broad range of IP experience with more than two decades split between a multinational corporation and a large law firm. When combined with Norton Rose Fulbright’s global platform, Zayd’s versatility and perspective will benefit our clients and their businesses worldwide.”

Mohammed Al-Ghamdi, Partner-in-Charge of Norton Rose Fulbright’s Riyadh office, commented: “Zayd is an accomplished leader who excelled in managing SABIC’s comprehensive intellectual property portfolio. He is well connected to major corporations in Saudi Arabia and respected throughout the Middle East.”

Alathari, who is also a member of the Gulf Petrochemical and Chemical Association’s (GPCA) research and innovation committee, said: “Saudi Arabia’s ambitious economic growth and diversification efforts are transforming the region as it heavily invests in technology, digitalisation, localisation, data protection and management, and a circular economy. Strong IP rights are critical to protecting these initiatives, and Norton Rose Fulbright’s global presence will help my clients realise and commercialise their maximum potential.”

Alathari earned his JD at American University Washington College of Law, his MS at Johns Hopkins University and his BS in biology from The George Washington University. A registered patent attorney with the United States Patent and Trademark Office (USPTO), he is licensed to practice in the District of Columbia and Virginia.

Eversheds supports call for Georgia hate crime legislation

Eversheds Sutherland has signed a letter by the Metro Atlanta Chamber and the Georgia Chamber of Commerce urging the Georgia General Assembly to pass a comprehensive, specific and clear bill against hate crimes in the state of Georgia. Currently, Georgia is one of the few states that does not have such a law in place.

“Our firm values stand against bigotry, hatred and inequality, and we believe the state of Georgia should send the same message by passing a law against hate crimes that protects diverse Georgians – our employees, our clients, and their families,” said Mark D. Wasserman, Co-CEO of Eversheds Sutherland. “Being part of the Georgia business community, we believe in advancing policies that support positive change and are proud to be part of a solution that fights for racial justice and equality.”

Eversheds Sutherland has joined the Metro Atlanta Chamber, the Georgia Chamber of Commerce and more than 60 corporations in support of comprehensive hate crime legislation. Companies interested in joining the growing group should go to www.passhatecrimesga.com where they will find instructions how to join and contact elected officials.