THE Court of Appeal in Abuja has affirmed a federal high court judgment invalidating several provisions of the Companies and Allied Matters Act (CAMA) 2020 that expanded the regulatory powers of the Corporate Affairs Commission (CAC) over incorporated trustees, including religious organisations.
In a unanimous decision delivered on September 17, the three-member panel held that sections 839, 842, 843, 844, 845, 846, 847 and 848 of the Act were inconsistent with constitutionally protected rights to freedom of thought, conscience and religion, as well as freedom of association and peaceful assembly.
Justice Donatus Okorowo delivered the lead judgment, which was supported by Justices Abba Mohammed and Eberechi Nyesom-Wike.
Dispute over CAC’s powers
The legal battle followed a suit instituted by lawyer Emmanuel Ekpenyong against the National Assembly, the CAC and the Attorney-General of the Federation.
Ekpenyong had challenged several provisions of CAMA 2020, including sections 839, 842 to 848 and 851, arguing that they violated fundamental rights guaranteed under sections 38 and 40 of the 1999 Constitution.
READ ALSO: Appeal Court rejects ex-acting accountant-general Nwabuoku’s bail bid in N868m fraud case
At the centre of the dispute was Section 839, which gave the CAC powers, in specified circumstances, to suspend trustees of an association and appoint an interim manager or managers to take charge of its affairs.
Ekpenyong argued that the provision could enable the commission to interfere with the leadership and internal administration of religious and other voluntary associations.
In April 2023, Justice James Omotosho of the Federal High Court Abuja upheld the challenge and declared sections 839, 842, 843, 844, 845, 846, 847, 848 and 851 unconstitutional.
The CAC subsequently appealed the decision, challenging, among other issues, Ekpenyong’s legal standing to institute the case.
Related Articles
Court backs challenge to CAMA provisions
In dismissing the CAC’s arguments on standing, the court of appeal agreed with the lower court that Ekpenyong had sufficient personal interest to challenge the provisions.
The appellate court noted that his membership of a registered religious association gave him an interest capable of supporting the action.
READ ALSO: Appeal court stays judgment ordering deregistration of ADC, four other parties
The panel also upheld the finding that the disputed provisions interfered with rights protected by the constitution.
Justice Okorowo emphasised the autonomy generally enjoyed by voluntary associations in managing their internal affairs.
The court held that judicial intervention in the affairs of such associations should ordinarily be limited to situations where the organisation acts contrary to its own governing constitution or applicable law.
The appellate court further rejected the argument that the restrictions created by the challenged CAMA provisions could be justified under Section 45(1) of the Constitution.
It therefore affirmed the federal high court’s decision to invalidate sections 839 and 842 to 848 of CAMA.
Appeal court limits scope of Section 851 ruling
The appellate court, however, disagreed with the lower court on the extent to which Section 851 should be struck down.
The federal high court had nullified the entire section, which deals with the powers and functions of the Administrative Proceedings Committee established under CAMA.
The court of appeal held that the provision was unconstitutional only to the extent that it purported to empower the committee to determine justiciable disputes in the first instance to the exclusion of the federal high court.
The appellate court also faulted any attempt under the provision to confer on the committee the power to impose penalties in the manner of a court.
However, it held that the committee could continue to perform its other administrative and regulatory functions, subject to the supervisory jurisdiction of the Federal High Court.
The decision therefore left the bulk of the federal high court’s judgment intact while modifying the blanket nullification of Section 851.
The court consequently dismissed the CAC’s appeal in substantial part but set aside the wholesale invalidation of Section 851.
It ordered the parties to bear their respective costs.
