Nospetco Oil & Gas Ltd V. Olorunnimbe & Ors (2021)

LAWGLOBAL HUB Lead Judgment Report

AMINA ADAMU AUGIE, J.S.C. 

The Appellant is in the business of oil and gas, as its object clause. The first to fourteenth Respondents, and many others, entered into an agreement with it by way of “Memorandum of Understanding for Joint Venture (J.V.) Supplies of Industrial Fuels”, wherein they were referred to as Joint Venture Partners [JV Partners]. Each JV Partner paid N450, 000 for a slot with a monthly profit of N40, 000 per slot.

In May 2007, the Securities and Exchange Commission [SEC], published a Public Notice titled “Illegal Investment Scheme operated by Nospecto Oil and Gas Ltd”, and being the apex regulatory body in the Capital Market, it put a stop to the Company’s business activities and got the Company’s accounts in all the Commercial Banks frozen. Since 2007, the money invested by the JV Partners, which runs into Billions of Naira, has remained in the custody of Central Bank [CBN].

​The said Respondents made strenuous efforts to recover their money from the fifteenth [SEC] and sixteenth [CBN] Respondents, to no avail. Whereupon, they filed an Application at the Investment and Securities Tribunal [Tribunal], wherein they claimed as follows:

a. A Declaration that the Applicants are entitled to know the total amount frozen from the 3rd Respondent’s accounts in various Commercial Banks in Nigeria including but not limited to Zenith Bank, First Bank, Union Bank, UBA, Skye Bank, Intercontinental Bank and Oceanic Bank by the 1st Respondent, since May 2007.

b. A Declaration that the Applicants are entitled to know the total amount frozen from the 3rd Respondent’s accounts in various Commercial Banks in Nigeria by the 1st Respondent and kept with the 2nd Respondent.

c. A Declaration that the continued withholding of the amount so frozen from the accounts of the 3rd Respondent by the 2nd Respondent without releasing same to the Applicants on demand is unlawful and inimical to the over-riding interest of the Applicants.

d. A Declaration that the refusal, omission and/or failure of 1st Respondent to direct 2nd Respondent to release the salvaged fund to the Applicants on demand is contrary to its statutory duty to protect the interest of the Applicants as spelt out in Section 13(1) & (k) of Investments and Securities Act 2007, ​ and the Judgment of the Investment and Securities Tribunal holden in Abuja in Case No. IST/OA/19/07 between the 3rd Respondent as the Applicant and the 1st Respondent as also a Respondent whereby it is stated inter alia that: “The Respondent has the statutory duty to protect investors including those that invested though the Applicant”.

e. A Declaration that the continued refusal, omission and/or failure of the 2nd Respondent to release the money in its custody to the Applicants despite the repeated demand and numerous representations amounts to insensitivity to the plights of the Applicants, legally indefensible and morally wrong.

f. An Order of this Honourable Tribunal compelling the 1st and 2nd Respondents to release without further delay all the amount so frozen from the 3rd Respondent’s accounts in their custody to the Applicants for immediate disbursement forthwith.

g. An Order mandating the 2nd Respondent to disclose the total amount in its custody based on the directive of the 1st Respondent with accrued interest since 2007 up to date and release same to the Applicants.

h. An Order compelling both the 1st and 2nd Respondents to set up without further delay an ad-hoc committee comprising 1st and 2nd Respondents, the Applicants, the Legal Representative to the Applicants, the Office of the Auditor-General of the Federation and Nigeria Police Force from the Special Fraud Unit, Milverton, Ikoyi, Lagos, to disburse the amount so recovered to the Applicants pro rata.

i. An Order compelling the 3rd Respondents to stop forthwith its illegal, unlawful and fraudulent business and banking activities, which it has been relentlessly carrying on under cover and clandestinely since May 2007, after its operations were halted by the 1st Respondent, and refund the money invested by the Applicants accordingly.

j. An Order of this Honourable Tribunal awarding the sum of N2 Million as cost of instituting and prosecuting the Application, traveling expenses to Abuja by the Applicants and their Legal Representatives to plead, ask, request and demand for the release of their money in the custody of the 1st and 2nd Respondent. And any other relief(s) as the Tribunal deems fit.

The Appellant, as 3rd Respondent at the Tribunal, filed its processes, including a Notice of Preliminary Objection, wherein it urged the Tribunal to dismiss/strike out the Application on the GROUNDS that:

1. The Applicant lacks the locus standi to institute this Suit.
2. This action is not maintainable in a representative capacity as the interest of the Applicants/Respondents is distinct and separate from each other and that of the alleged “Joint Venture Partners”.
3. Leave of this Honourable Tribunal is required for the commencement of any Suit in a representation capacity.
4. Leave was not first sought and obtained before filing of this Application.
5. The condition precedent for the exercise of jurisdiction by this Hon. Tribunal was not fulfilled before the commencement of this Suit.
6. This action discloses no reasonable cause of action against [it].
7. The subject n utter of this Suit is not within Section 284 of the ISA 2007.
8. There is another pending Suit initiated by the alleged “Joint Venture Partners” before the Federal High Court – – in Suit No. FHC/L/CS/408/08 –
9. The subject matter, issues and Parties in this Suit are the same with that of suit No. FHC/L/CS/408/08.
10. It is an abuse of judicial process to maintain two Suits between the same Parties on the same subject matter at the same time.
11. The reliefs being presently sought for are too wide, generic, vague, bogus and uncertain.

The first to fourteenth Respondents, as Applicants at the Tribunal, filed a Reply to the Notice of Preliminary Objection, and Appellant filed its Reply on Points of Law. The Objection was argued and the Tribunal delivered its Ruling on 13/4/2011, wherein it held as follows:

This Tribunal had in an earlier Ruling in Case No. IST/OA19/07 between NOSPECTCO V. SEC (unreported) delivered on 03/12/08, wherein the 3rd Respondent was the Applicant – – – where it was held that this Tribunal has jurisdiction to entertain the Suit as per the nature of transaction that took place between the Parties, being a Collective Investment Scheme, and we find no sufficient reasons to make us depart from our position in that case. Consequently, this Tribunal holds as follows:

1. The nature of business transaction carried on by the 3rd Respondent and the Applicants is a Collective Investment Scheme, which falls within Section 284(1)(f) of the Investments and Securities Act 2007.
2. Having found that the business transaction between 3rd Respondent and the Applicants is one of Collective Investment Scheme, this Hon. Tribunal has jurisdiction to hear and determine the Applicants’ Suit.
3. Accordingly, the 3rd Respondent’s Notice of Preliminary Objection of 25/11/10 fails and same is hereby dismissed.

Dissatisfied with the above Ruling, the Appellant herein appealed to the Court of Appeal, wherein it raised five Issues for Determination:

i. Whether Exhibit A attached to the Originating Application dated 7/9/2010 established a Collective Investment Scheme/Agreement as contemplated by Sections 153(1), 284(1)(f) and 315 of the Investment and Securities Act [ISA] 2007, as to confer jurisdiction on the Tribunal;

ii. Whether the Appellant’s right to fair hearing was not breached by the Tribunal in the hearing and determination of its Notice of Preliminary Objection;

iii. Whether the Tribunal has the jurisdiction to entertain the 1st — 14th Respondents’ reliefs as presently framed/sought;

iv. Whether the Suit founded on simple contract could be instituted in a representative capacity;

v. Whether the Suit is not an abuse of Court process same having been instituted during the pendency of Suit No. FHC/L/CS/408/2009 – at the Federal High Court, Lagos.

In its Judgment of 19/12/2011, the Court of Appeal held on Issue I that:

The summary of the Appellant’s argument on the issue of whether the 1st-14th Respondents were engaged in a Collective Investment Scheme – – is that Exhibit A does not qualify as such by virtue of Section 253 and Section 315 of the ISA [and] that the agreement Exhibit A does not show that the Parties’ agreement was made in contemplation of the fact of whether or not Appellant is a Capital-Market Operator. That argument is in my humble view misconceived being based on the alleged non- compliance by the Appellant and the Respondents with the provisions of the ISA. If the Appellant as protagonist in the drama, who engaged in activities that led to this Suit, deceived 1st-14th Respondents into an illegal scheme, it cannot turn around to claim that illegality to avoid the contract between the Parties – – – On the issue of privity of contract between the Appellant and 1st-14th Respondents, it is clear that Exhibit A – – in the name of Mrs. S. A. Umar further confirms that the 1st — 14th Respondents initiated and maintained this action in a representative capacity. This is despite the fact that the name of Mrs. Umar does not appear as a member of the NOSPETCO Investors Forum on the Court processes. However, the name of the said Mrs S. A. Umar is contained in the list of registered investors on page 343 – – of the Application for accelerated hearing dated 10/6/2011 before the Tribunal. The name was equally contained in the Applicant’s Amended Originating Application. The Investors came together and nominated representatives, who are representing them in Court, and I do not think in these circumstances, the Appellant can challenge the basis of their representative action – –

The Court of Appeal also resolved Issue No. ii against the Appellant, however, on Issue No- iii, dealing with jurisdiction, it held as follows:

If the claims of the 1st – 14th Respondents were limited to (i) compelling the Appellant to stop its allegedly illegal and fraudulent business and banking activities, then the Tribunal would have had exclusive jurisdiction, However, since the principal claims are against SEC and CBN, the Tribunal has no jurisdiction to determine them. As I said earlier, no matter how laudable the reasons, the Parties and the Tribunal cannot by complicity confer jurisdiction on it. That would be ultra vires the Constitution – – – Apart from the above, it is trite that a Court must be able to grant all the reliefs before it in order to enable the Court exercise jurisdiction. I am of the humble but firm view that the Tribunal has no jurisdiction to try the claims brought before it by 1st-14th Respondents. This pivotal issue of jurisdiction is resolved in favour of the Appellant.

It held as follows on the question of simple contract [Issue No. iv]:

Exhibit A was tendered by the 1st-14th Respondents – – to show the sample of the Joint Venture Scheme contract or agreement entered into by the Investors. It was never tendered to prove the agreement – – but a sample thereof. Secondly, the law is that where there are several persons with the same interest in a cause or matter, one or more of such persons, may with the leave of Court, sue or defend the Suit on behalf of or for the benefit of all the others. Thus, they can come together to attack a common enemy. When they are many, they may choose representatives among themselves to represent the common interest. When this is done it must be shown clearly in the Writ that the action is being instituted in a representative capacity. The representative capacity of the 1st — 14th Respondents was clearly shown. I do not see any merit in this point raised by the Appellant – – This Issue is resolved against the Appellant.

It resolved Issue v against the Appellant and concluded as follows:

Even though I had resolved the pivotal issue of jurisdiction in favour of the Appellant, I decided to consider and resolve all other Issues submitted for determination. I hold fast to the view that it is the duty of this Court as an intermediate Court to determine all issues submitted to it – I have hitherto resolved the pivotal issue of jurisdiction in this Appeal in favour of the Appellant. The Appeal is therefore allowed.

Although its Appeal was allowed, the Appellant is dissatisfied with parts of the Judgment, wherein Court of Appeal held inter alia that:

i. Exhibit A attached to the Originating Application dated 7/9/2010, established a Collective Investment Scheme (between the Appellant and each of the 1st to 14th Respondents and those being represented thereof) contemplated by Sections 153(1), 284(1)(f) and 315 of the ISA, as to confer jurisdiction of the Investment and Securities Tribunal.

ii. The action founded on the alleged contracts between the Appellant and each of the 1st to 14th Respondents and all those represented is maintainable in a representative capacity.

Thus, it filed a Notice of Appeal in this Court, which it amended, and the Amended Notice of Appeal contains seven Grounds of Appeal. The first to fourteenth Respondents, who split themselves into two, (1st, 4th, 7th to 14th Respondents and 2nd, 3rd, 5th & 6th Respondents), filed Cross Appeals against the part of the Judgment on jurisdiction.

Briefs were filed and in the main Appeal, the Appellant distilled three Issues for determination from the Grounds of Appeal; that is:

i. Whether Exhibit “A” attached to the Originating Application dated 7/9/2010 established a Collective Investment Scheme/Agreement as contemplated by Sections 153(1), 284(1)(f) and 315 of the Investment and Securities Act [ISA], 2007 as to confer jurisdiction on the Tribunal.

ii. Having regard to the decision of the Court of Appeal in the cases of C. C. B. (Nig.) Plc V. Rose (1998) 4 NWLR (PT. 544) 37 and Bossa V. Julius Berger Plc (2005) ALL FWLR (PT. 290) 1503 at 1518, whether the cause of action founded on the alleged contract between the Appellant and each of the 1st to 14th Respondents as well as all those purportedly represented is maintainable in a representative capacity in the circumstances of the Suit in the instant Appeal.

iii. Whether the Court of Appeal was right when it held that the Appellant deceived the 1st to 14th Respondents into an illegal scheme.

The “1st, 4th, 7th to 14th Respondents”, who will be referred to as the first set of Respondents, also formulated three Issues, as follows —

i. Whether Exhibit “A” attached to the Originating Application dated 7/9/2010 establishes a Collective Investment Scheme between the 1st to 14th Respondents and the Appellant as contemplated by Sections 153(1), 284(1) (f) and 315 of the Investment and Securities Act [ISA] 2007 as to confer jurisdiction on the trial Tribunal.

ii. Whether the cause of action is founded on a collective investment scheme between the Appellant and each of the 1st to 14th Respondents and all those they represented and accordingly maintainable in a representative capacity.

iii. Whether the Court of Appeal was not right when it held that the Appellant deceived the 1st to 14th Respondents into an illegal scheme.

The “2nd 3rd 5th & 6th Respondents”, who will be referred to as the second set of Respondents, also distilled three Issues, as follows:

i. Whether Exhibit “A” attached to the Originating Application dated 7/9/2010 establishes a Collective Investment Scheme between the 1st to 14th Respondent and the Appellant as contemplated by Sections 153(1), 284(1)(f) and 315 of the Investment and Securities Act [ISA] 2007 as to confer jurisdiction on the trial Tribunal.

ii. Whether the Suit against the Appellant by each of the 1st to 14th Respondents and all those they represent is maintainable in a representative capacity.

iii. Whether the Court of Appeal was not right when it held that the Appellant deceived the 1st to 14th Respondents into an illegal scheme.

SEC, fifteenth Respondent, did not file any processes in this Court. CBN, sixteenth Respondent, adopted Appellant’s Issues in its Brief, and I will do same in dealing with this Appeal. Issue No. i., questions the import of Exhibit A in the scheme of things; it reads as follows:

Memorandum of Understanding between NOSPETCO Oil and Gas limited – hereinafter referred to as “NOSPETCO” AND MRS S. A. UMAR – – referred to hereafter as “the JV Partner” WHEREAS:

1. NOSPETCO Oil and Gas Ltd. is an Oil Service Company which is into the supply and distribution of Industrial Fuels.
2. The JV Partner is desirous to partner with NOSPETCO for the supply and distribution of Industrial Fuels.
3. NOSPETCO accepts JV participation in slots of N450, 000 only for JV supply of Industrial Fuels.
4. The participation could be increased in slots of a minimum of N225, 000 which will be treated on pro rata basis. The JV Partner could however roll over the yield and earn on pro rata as per JV agreement. Note it is hereby agreed as follows:
5. The JV Partner has provided the sum of N450,000 only for (1) slot. (The sum is hereinafter called “The Partner’s Funds”)
6. Each slot will yield a return of N40,000 only per month for the Partner, for every full month operating period.
7. The JV Partner shall provide a bank account into which the yield will be paid.
8. NOSPETCO shall employ this sum to purchase and supply industrial fuels.
9. Industrial disputes and production constraints could cause a stoppage in operations. Where this happens, the returns for that period will be prorated. If the situation lingers, the Partner shall be duly informed and the Partner’s Funds refunded.
10. On demand, JV Partner shall be issued periodic operating reports indicating the status of the JV business.
11. This understanding could be terminated wholly or partly at the instance of either party upon due notification, the investment must be at least for five months. Where this happens, Partner’s Funds shall be returned within two weeks.
12. Depending on prevailing operating costs variables, NOSPETCO, the JV services Company, shall be entitled to vary the monthly yield payable on a slot or the value of a slot. Where this happens the JV Investor will be duly informed at least one month before the change is effected.

The Appellant’s contention is that “Exhibit A” is not a conclusive and valid evidence to hold that the alleged relationship between it and each of the Respondents, and others they are said to represent, is that of a Collective Investment Scheme, as contemplated under the ISA; and the Court below is wrong to have held to the contrary. It cited the following authorities on jurisdiction and cause of action:

– Oloruntoba-Oju & Ors V. Abdul-Raheem & Ors (2009) 13 NWLR (Pt. 1157) 83;

– Petrojessica Enterprises Ltd. V. Leventis Technical Co. Ltd. (1992) 5 NWLR (PT. 244) 675 at 693;

– Obi V. INEC (2007) 11 NWLR (PT. 1046) 436 at 482;

– Niger Gate V. Niger State Govt. (2008) All FWLR (PT 406)1938 at 1965; and

– Okorocha V. UBA Plc (2011) I NWLR (PT. 1228) 348 at 373.

It submitted that Exhibit A, a written agreement, is the basis of the Respondents’ cause of action, and it also cited the following on the merits of an agreement in writing, and doctrine of privity of contract that a stranger, who is not a party to a contract, cannot sue on it – – A-G. Fed. V. A.I.C. Ltd. (2000) 4 WRN 96 at 103; (2000) 10 NWRL (Pt. 675) 293 at 311;

– L.S.D.P.C. v. N.L & S. F LTD (1992) 5 WNLR (Pt. 244) 653 at 669 – 670;

– Ilesa L.P.A. V. Olayide (1994) 5 NWLR (PT. 342) 91 at 103;

– Agbareh V. Mimra (2008) ALL FWLR (Pt. 409) 559 at 586.

– Rank Xerox (Nig.) Ltd. V. Centrex (Nig.) Ltd. (1995) 1 NWLR (PT. 374) 703;

– Mobil Prod (Nig.) Unlimited V. Umenweke (2002) 9 NWLR (Pt. 773) 543;

– Oshin & Oshin Ltd. V. Livestock Feed. Ltd. (1997) 2 NWLR (Pt. 486) 162.

It submitted that it is only the agreement in writing that can be used to establish the Parties thereto and other terms of the agreement, as the document, which speaks for itself, is the best evidence; and pointed out that Parties to Exhibit A are itself and “Mrs. S. A. Umar”.

It conceded that a Court can make use of a document properly placed before it, citing Niger Gate V. Niger State Govt. (supra), but citing Udofia V. CAC (1992) 5 NWLR (Pt. 242) 437, it submitted that if such a document is not properly placed before the Court, the Court is enjoined not to rely on it, especially where reliance on it will result in injustice and overreach the other Party; and that the Court below was wrong to have relied on the Application for accelerated hearing and the 1st to 14th Respondents’ Amended Originating Application to jettison the issue of privity of contract that it raised about Exhibit A.

As to the “List of Joint Venture Partners”, attached to the said two Applications, which contains the name of Mrs. Umar, and which the Court below referred to in its Judgment, the Appellant argued that it was wrong to have relied on that List to hold that her name was part of it; that her name being part of the List was raised for the first time in the said Respondents’ Brief filed at the Court of Appeal; that the List was not before the Tribunal and was not considered in its Ruling on the Preliminary Objection that led to the Appeal, thus, the said List constituted a fresh point or evidence for which leave of Court is required, citing Obajimi V. Adedeji (2008) 3 NWLR (Pt. 1073) 1 at 12/13, and Akano V. F.B.N PLC (2004) 8 NWLR (Pt. 875) 318 at 330.

​Furthermore, that the Court below was wrong to hold that the name of Mrs. Umar was contained on the said List attached to the said two Applications “and consequently subsumed the fundamental issue of privity of contract to the representative capacity by which the action was commenced”; and that since the said List of J.V. Partners was not signed and was procured during the pendency of the Suit, it ought not to be relied upon, citing Ojo V. Adejobi (1978) NSCC (Vol. 11) 161, A. G., Abia State V. Agharanya (1999) 6 NWLR (PT. 607) 362, Omega Bank V. O.B.C. Ltd. (2005) ALL FWLR (PT. 249) 1964 at 1993.

It also argued that even if the Court below was right, the fact that Mrs. Umar was being represented by the said Respondents is not a known ground in the law of contract so that her “sample” contract only, Exhibit A, could metamorphose to include strangers to the said contract, citing A-G. Fed. V. A.I.C. Ltd. (supra); and that the said Respondents, not being signatories/parties to Exhibit A, had no locus to file the Suit at the Tribunal, and the Tribunal was wrong to have relied upon Exhibit A to determine their relationship; and the Court below also erred in confirming the Tribunal’s position.

It submitted that Exhibit A was not tendered but attached to the said Respondents’ Application to support their allegation that it lured them into the agreement; that the Court and Parties are not entitled to read into a Record what is not there as they are bound by it – Onwuka V. Ononuju (supra); and there is nothing to support the inference that Exhibit A was attached merely as a “sample”.

It further argued that even if Exhibit A is relevant, it does not qualify as a Collective Investment Scheme, as contemplated under the ISA; that it is a mere Memorandum of Understanding, which as the Court below held in S.F. & P. Ltd. V. NDIC (2012) 10 NWLR (Pt. 1309) 522 at 538, is not the real contract between it and Mrs Umar, therefore, “Exhibit A” is not a Collective Agreement Scheme at all.

​It further submitted that the said Respondents failed to plead that the said investment was done at the Nigerian Capital Market or that any of them is a Capital Market Operator, so as to warrant the application of the provisions of ISA to the transaction in question; that their relationship, even if presumed from Exhibit A, does not qualify as a Collective Investment Scheme, defined in Sections 153 and 315 of ISA, and relied upon by the Tribunal and the Court below, especially when the phrase “Collective Investment Scheme” is never mentioned in the said Respondents’ entire pleadings. Furthermore:

– That Sections 38 & 71 of the Companies and Allied Matters Act [CAMA], authorizes it to execute contracts with individuals for the furtherance of its object clause i.e., doing business in oil and gas, and if the alleged relationship between them is stretched (without conceding) to mean “Collective Investment Scheme”, it would only qualify under ISA as the “Collective Investment authorized by CAMA, therefore, their alleged individual relationship “is a simple contract and nothing more”. That it is, therefore wrong for a Court to read into the Agreement the terms, which the Parties thereto did not agree to – Olatunde V. O. A. U. (1998) 5 NWLR (Pt. 549) 178 at 191 and Agbareh V. Mimra (supra) cited.

– That there is nothing in their pleading, particularly Exhibit A, that may suggest that they expressly agreed or intended to be governed by ISA, as to bring their relationship under the Collective Investment Scheme – Amadi V. Chinda (2009) 10 NWLR (PT. 1148) 107 at 124 cited. Furthermore, that it is not the function of a Court to either make a case/agreement for the Parties or to change their case/agreement – Nika Fishing Co. Ltd. V. Lavina Corp. (2008) ALL FWLR (Pt. 437) 1/25; that the said Respondents, in their entire pleadings and reliefs, did not make any claim/relief on Collective Investment Scheme because the Parties never made such an agreement; thus, the Tribunal and Court below were wrong to have made such a case for the Parties.

It argued that since the subject matter of the Suit did not arise from the administration, management and operation of a Collective Investment Scheme, as contemplated by Sections 13, 38, 54, 152 – 196 of the ISA, the Tribunal cannot, by virtue of Section 284(1)(f) of ISA, have jurisdiction to determine the Suit; rather that by virtue of the unlimited jurisdiction conferred by Section 272 of the Constitution on a State High Court, as confirmed in Onuorah V. Kaduna Refinary (2005) 6 NWLR (Pt. 921) 393, UPS. V. Adeyosoye (2011) 5 NWLR (PT. 1240) 314, and NIMR V. Akin-olugbade (2008) 5 NWLR (PT. 1079) 68, it is only the State High Court that has jurisdiction to determine this action founded on contract, the alleged subject matter of the Suit.

It urged this Court to resolve this issue in its favour by holding that Exhibit A did not establish a collective investment agreement between it and the said Respondents, including those purportedly represented, as contemplated by Sections 153(1), 284(1)(f) and 315 of the ISA, so as to confer jurisdiction on the Tribunal, and that the Court of Appeal was therefore wrong to have held to the contrary.

The first set of Respondents countered that the Appellant’s arguments are “utterly misconceived and misleading”; that Exhibit A must be read together with all the paragraphs of their pleadings; that aside paragraphs vii-xii that it mentioned, paragraphs ii, xii, xiii, xiv, xv, xvi, xvii, xviii, xix, xx to xxx of their Application are also core and indispensable aspects of their cause of action – A- G, Fed. V. Abubakar (2007) 10 NWLR (Pt.1041) 1, Adesokan V. Adegorolu (1997) 3 NWLR (Pt.493) 261; that the Tribunal did not say it arrived at its decision solely on Exhibit A, rather after viewing the nature of the business and the contents of Exhibit A, it found that Parties were involved in what could be called a collective investment scheme, so, the action does not allege breach of contract, rather the core issue is that the continuous withholding of the money belonging to them, by 15th & 16th Respondents, who halted Appellant’s illegal business, be forthwith stopped, and the withheld monies released to them.

Furthermore, that the key reliefs are not against the Appellant per se because the issue of the illegality of its business in which they were innocently involved, has already been decided by the Tribunal in case No: lST/OA/19107: NOSPETCO Oil and Gas Ltd. V. SEC, wherein it held in its Ruling delivered on 3/12/2008 that – “The nature of the business carried on by the Applicant is collective investment scheme which falls within the regulatory framework of the Respondent”; that the decision remains binding, as it has not been appealed against, and the Tribunal had relied on this decision in its Ruling in this case.

​It argued that the issue of privity of contract is not applicable to the scenario at hand, as Exhibit A was attached as a mere sample to show the format and wordings of the document establishing the collective investment arrangement between the Parties, which had been declared illegal by the above decision of the Tribunal; that the issue of privity of contract does not arise when their pleadings are properly juxtaposed and measured against provisions of Sections 153(1), 284(1)(f) and 315 of ISA; that the question of how they will satisfactorily prove the averments in their pleadings is not a matter that can be delved into or commented upon at interlocutory stage, but a matter to be determined at the Tribunal for hearing, citing Nwankwo V. Yar’adua (2010) 12 NWLR (Pt. 1209) 518 at 540, Odon V. Barigha-Amange (No. 2) (2010) 12 NWLR (Pt. 1207) 13 at 28; and that:

Having held that Exhibit A is a mere sample of the Memorandum of Understanding possessed by all of [them] and that same undisputedly established a collective investment scheme, as contemplated by Sections 153 (1), 284 (i)(f) and 315 of ISA the interlocutory question rightly ended there. To go further to determine who amongst [them] will eventually prove herself/himself to be entitled or not entitled to the reliefs sought against the 15th & 16th Respondents would have been tantamount to delving into merits of the case at an interlocutory stage.

They urged this Court to affirm the findings of the Tribunal and the Court below that Exhibit A, being a sample of the Memorandum of Understanding possessed by all of them, established a Collective Investment Scheme, as contemplated by ISA; that it is evident from the heading of Exhibit A that that is the nature of their relationship; therefore, the issue of privity of contract is absolutely inapplicable.

On the Appellant’s contention that “the Court below subsumed the fundamental issue of privity of contract to the mere fact that the suit at the Tribunal was instituted in a representative capacity”; they argued that it is a misapprehension of the ratio of the said decision, because even if the suit was instituted by them alone and without representing any other person, the nature of their pleadings already takes the issue out of the realm of strict/narrow contracts wherein the said issue of privity of contract may have been justifiably raised.

​Furthermore, that the Court below was not wrong in holding that Mrs. Umar’s name was part of the List of J.V. Partners since the issue was whether the scenario between the Parties was a contract or a Collective Investment Scheme, and whether the Court below looked at the List or not, the pleadings already created a prima-facie case primarily in favour of a Collective Investment Scheme; and that the issue of whether Mrs. Umar’s name was part of the List did not constitute a fresh point, same having been raised by the Appellant; and so, it was a reactive point from them, based on its arguments.

They also argued that its attempt to reduce the issue at stake to privity of contract is grossly misconceived and misleading; that their locus to institute the suit at the Tribunal is as contained in the pleadings and the Statements on Oath supporting their Application; and that the usage of the language “tendered” by the Court below, is only a matter of nomenclature, and since Exhibit A was attached to the Originating Process, it had the duty/power to look into same.

​They further submitted that the use of the word “tendered” by the Court below is nothing more than a mere slip on its part, and it is not every slip committed by a Court that will result in an appeal being allowed nor being the basis to nullify or set aside a decision as far as same does not occasion a miscarriage of justice; and that each slip or error is to be determined on the peculiar fact of each case, citing Pavex International Co. Ltd V. Afribank (2000) 4 SC (Pt. I) 6, Adeogun & Anor V. Sashogbon & Ors (No. 2) (2011) 2-3 SC (Pt. II) 90. On Appellant’s arguments regarding Exhibit A, they submitted that:

– To suggest that nothing on the Record showed or inferred that Exhibit A was attached merely as a sample is tantamount to gross misapprehension of the totality of their pleadings and wordings on their Statement on Oath, which established by logical interference that it was attached as a sample.

– It is only at trial that all other documents, of which Exhibit A is a sample, can be tendered because the practice and procedure at the Tribunal is not front-loading; that what is important is that the Appellant and 15th & 16th Respondents had been put on Notice of the case to expect at the hearing before the Tribunal; and every other issue is a matter of evidence at trial.

– The case of S.F. & P. LTD VS. NDIC (supra) on the definition of Exhibit A as “a mere Memorandum of Understanding” is not applicable to this case, and the Court below is right that the Memorandum of Understanding is not a contract between Mrs Umar and the Appellant but a Collective Investment Scheme; and that the said case reinforces their position; and

– That “if the Appellant argues in one breath that Exhibit A is a contractual document and in another breath, argues that it is a mere Memorandum of Understanding which does not qualify to be a contract, it is tantamount to approbating and reprobating at the same time”; and that it is unacceptable in law for the Appellant to argue from two parallel points of view, citing Akaninwo V Nsirim (2008) All FWLR (Pt. 410) 610, wherein this Court held:

A litigant should not be allowed to speak at the same time or the same moment from the two sides of his mouth. He can only be allowed to speak from one side of the mouth at the same time or the same moment. He cannot make a case in pleadings and suddenly change or reverse position to make a different case.

The second set of Respondents also cited the following authorities:

– A-G, Lagos State V. A-G, Fed. (2014) 9 NWLR (Pt. 1412) 217 and Obi V. INEC (2007) 12 NWLR (Pt. 1046) 565 on the jurisdiction of a Court or Tribunal.

– Section 284 of the ISA on powers of the Tribunal to entertain disputes arising from the administration, management and the operation of a collective investment scheme.

– A-G, Bauchi State V. A-G, Fed. (2018) 17 NWLR (PT.1648) 299 at 340, on what the Court considers before assuming jurisdiction.

– Azubuogu V. Oranezi (2018) 5 NWLR (Pt. 1613) 447 on pleadings.

They submitted that Exhibit A remains part of several documents that made up the Pleadings of the Respondents, therefore, it will be wrong for the Appellant to attempt isolation of Exhibit A alone, in determining whether what existed between the Parties conforms to the definition of Collective Investment Scheme under the ISA.

​Furthermore, that the Appellant refused to appreciate the fact that the cause of action arose as a result of the continuous refusal of 15th & 16th Respondent to release funds salvaged from it to them; that it has not denied the existence of an agreement as in Exhibit A nor denied that monies were deposited by investors and seized by 15th & 16th Respondents, but are only challenging Jurisdiction of the Tribunal to entertain the case, and this Court has the duty to sustain the prevalence of the truth in every given case, citing Uzodinma V. Izunaso (2011) 17 NWLR (Pt. 1275) 30; and to this end, the Tribunal relying on its powers in Section 284(1)(f) of ISA to entertain disputes relating to collective investment scheme, and its unchallenged decision on ‘Nature of Business’ carried out by Appellant in Case No. IST/OA/19/07, held that it has the jurisdiction to entertain this Suit.

They argued that the issue of the ‘Nature of Business’ carried out by Appellant that they invested in, ought not to be and cannot be made an issue at this stage premised on the following reasons-

a. The Appellant is only trying to have another bite at the cherry by using this medium to appeal an issue already decided in another case (Case No. IST/OA/19/07: NOSPTECO Oil and Gas Ltd. V. SEC), which was never appealed against.

b. The Court below upheld the decision of the Tribunal which was based on findings of facts, in reaching its decision that the Appellant is operating a Collective Investment Scheme.

c. It is a venerated principle of law propounded by this Court in plethora of cases that where a High Court (in this case, the Tribunal) and the Court of Appeal have made a clear concurrent finding of facts based on the evidence adduced at the High Court, and which findings are not perverse, this Court will not disturb such findings – Oguntayo V. Adelaja & Ors (2009) LPELR-2353 (SC) cited.

They further submitted that it is settled that subsisting Judgments, Ruling and/or Order of a Court remains valid until same is set aside, citing Akinyemi V. Soyanwo (2006)13 NWLR (Pt. 998) 496, therefore, the nature of business existing between Appellant and all of them, is a Collective Investment Scheme, same being a valid and subsisting Judgment of the Tribunal in Case No. IST/OA/19/07; that a look at Exhibit A shows that the nature of business is Collective Investment Scheme as contemplated under Section 153 of ISA; and that with the provision in Exhibit A wherein investors share the risks and benefits, it becomes obvious that Investors, including them, who agreed to share the loss, such as where industrial dispute cause disruptions in the operation of the said J.V, are Joint Venture Partners within the meaning of Collective Investment Scheme, as defined by the ISA.

On the issue of Privity of Contract, they submitted that the fact that Exhibit A is in Mrs. Umar’s name, buttresses the fact that they commenced their Suit at the Tribunal in a representative capacity; that Exhibit A was attached as a mere sample to show the format and wordings of the document, which established the Scheme; that although her name does not appear as a member of their Executive, it is on the List of Registered Investors attached to the Application for accelerated hearing and the Amended Originating Application, which were properly placed before the lower Court by virtue of Rule 20(1) of the Investment and Securities Tribunal (Procedure) Rules, and so, the Court of Appeal was right to have relied on them, citing Nigergate V. Niger State Govt. (2008) All FWLR (PT.406) 1938/1967.

​Furthermore, that the Court of Appeal was right to consider all the documents in the Record since it was done in accordance with provisions of its Rules and in line with the law that a Court is entitled to look into its record and make use of any document it considers relevant in determining issues before it, to arrive at a just decision, citing Eromosele V. FRN (2018) 11 NWLR (PT. 1629) 60. Furthermore, that Sections 38 & 71 of CAMA, cited by the Appellant are irrelevant, as Section 38 says a company can enter into an agreement with a natural person, while Section 71 provides for the mode of contracts by a company incorporated under CAMA, but none confers any right on a company to approach the public with a Collective Investment scheme that can be said to have been authorised by the said CAMA.

​On its part, the sixteenth Respondent reproduced Exhibit A, and after setting out the observation of the Court below on Section 153(1) (b) of the ISA, it argued that the Appellant made the issue of the Parties in Exhibit A as if the 1st to 14th Respondents are not privy to the contract; that if the cause of action that led to this Appeal could be determined by recourse to their Application, then Parties to the action are all Investors of its Joint Venture to the extent that whichever document is filed, must be considered by the Court, and the Parties are the investors having joint venture agreement with it, and not limited to those listed on the Originating Application; that Section 13 (b) of ISA is the answer to the issue, as the Investors are jointly to share the risk and the benefit of their investment in the joint venture; and that the Court below was right to hold as it did.

The Appellant filed its Reply Briefs to the Briefs of Arguments filed by the first set of Respondents, second set of Respondents and the sixteenth Respondent, and I will refer to them where necessary.

As it is, the Appellant has thrown up all manners of arguments ranging from compilation and transmission of the Record of Appeal, competency of the Amended Originating Application transmitted to the Court of Appeal, to its submissions on Exhibit A amongst others.

In my view, the first thing to do is sift the wheat from the chaff. To this end, it is important to bear in mind that the case filed by the said Respondents at the Tribunal was not determined on its merit. Thus, any issues touching on the substantive Suit is out of bounds.

​The Tribunal found as a fact that the nature of the transaction that led to the case filed before it is a collective investment scheme, therefore, it had jurisdiction to entertain the said Respondents’ Suit. In arriving at its decision, the Tribunal relied upon its earlier Ruling in Case No. IST/OA/19/07 between Nospetco V. SEC, wherein it held:

It is clear from the evidence before us that the Applicant also invited the general public outside its Shareholders to invest in its Company under a rather novel means; investors in the Applicant were made to buy a slot of N450, 000 and an individual could subscribe to as many as 20 slots or more. Each slot entitled the investors to a profit of N40, 000 each month and the investors are also entitled to withdraw their capital at anytime it so desire. Under cross-examination, the Applicant admitted that it has entered into joint venture agreements with thousands of Nigerians, who have bought several slots in the Company – – – The word “slot” appears to be synonymous with debt the Company owed its investors. It is not tantamount to a share in the Company. The slot-holder is entitled only to a share in profit every month – – Unlike a shareholder of a Company, who has inalienable right in the management of the affairs of the Company; a slot-holder is only entitled to his share of profit only. The profit or its entitlement is fixed and not subject to vagaries of business climate. Moreover, the slot-holder can request for the return of its said money anytime without any prior notice. It, only lends money to the organization, which pays both profit and return the capital invested in the business as well. From testimony of the Applicant and Respondents, we hold that the word “slot”, as used by the Applicant, is not a share in the Company but rather a way of raising funds to support its business – – – Having analyzed the entire transaction undertaken by the Applicant, we now turn to consider whether the act of the Applicant constitutes investments or investments contract. The second Schedule of the ISA defined investments to include Debentures, including debenture stocks, loan stock, bonds and other instrument acknowledging indebtedness. A critical examination of the Joint Venture Agreement between Applicant and its numerous slot-holders, it is clear that the transaction is an instrument of debt wherein the investors provides funds for Applicant. The debts attract fixed interest of N40, 000 a month apart from the return of capital by Applicant. The entire essence of creating loan stock is to enable the Company gather working capital to run its operation.

The creditor that is the so-called Joint Venture Partner has no lien over the assets of the Company. It may not really matter the appellation by which the Applicant may have used, such as Joint Venture, Partnership or Esusu, it is incontrovertible that the loan from investors was used to fund the operation of the Applicant. The act of the Applicant was purely to raise funds from pool of investors. This to our mind is a form of collective investments scheme, which falls under the regulatory ambit of the Respondent. Section 153(1) of the ISA 2007, defines Collective Investments Scheme as follows –

“Collective Investment Scheme means a scheme in whatever form including an open-ended investment company, in pursuance of which members of the public are invited or permitted to invest money or other assets in a portfolio and in terms of which:

(a) Two or more investors contribute money or other assets to and hold a participatory interest in the portfolio of the scheme through shares, units or any other form of participatory interest.

(b) The investors share the risk and the benefit of the investment in proportion to their participatory interest in a portfolio of a scheme or any other basis determined in the deed but not a collective investment authorized by any other Act.

Section 315 of the Act further defines portfolio as “a group of assets including any amount of cash”. Flowing from the above, we have no doubt in our mind that the nature of the business carried out by the Applicant in this case is Collective Investments Scheme.

So, the Tribunal held that the Agreement in question is a Collective Investments Scheme. As the two sets of Respondents pointed out, the Tribunal’s decision in that case has not been appealed against and the position of the law is that it remains valid until it is set aside —see Akinyemi V. Soyanwo (supra), wherein this Court stated that:

It is a settled principle of law that every Party to a Suit and indeed every citizen, has an obligation to obey the subsisting Court decision or Order in the Suit, unless and until it is set aside and the Party’s obligation to obey the decision is without regard to his perception about the irregularity or illegality of the decision as long as it subsists.

See also Unity Bank V. Bouari (2008) 7 NWLR (Pt. 1086) 372 cited by second set of Respondents, wherein this Court held that a decision that is not appealed against is binding on an Appellant as it subsists. In this case, it is clear from the Tribunal’s Ruling in IST/OA119/07 that the agreement in that case is exactly the same as the agreement in question in this case. This is obvious from its observation as follows:

Investors in the Applicant were made to buy a slot of N450, 000 … Each slot entitled the investors to a profit of N40, 000 each month – – Under cross-examination, the Applicant admitted that it has entered into Joint Venture Agreements with thousands of Nigerians, who have bought several slots in the Company. The Respondent’s Witness testified that he invested the sum of N7, 875, 000 for 17-5 slots at the rate of N450, 000 per slot. He was only entitled to N40, 000 every month on each slot as return on its capital.

​Apparently, the Appellant admitted in that case that it entered into Agreements with thousands of Nigerians, who bought several slots, at N450, 000 per slot, with a monthly profit of N40, 000 per slot, and the thousands of Nigerians, must include the said Respondents and the other Investors, who bought several slots in the Company, at N450, 000 per slot, with same monthly profit of N40, 000 per slot.

Yet, the Appellant is questioning Exhibit A. which embodies same terms and conditions as the agreement spoken of in that case. This, in my view, is an exercise in futility, and it is so on many fronts. Take the issue of privity of contract for instance. It is its contention that Exhibit A is not a binding agreement between it and each of said Respondents and those they represent, as none was privy to it.

Basically, privity of contract is the relation between the parties in a contract, which entitles them to sue each other, but prevents a third party from doing so. Thus, the doctrine of privity of contract is all about the sanctity of contract between the parties to it, and it does not extend to others from outside — see UBA Plc. V. Jargaba (2007) 11 NWLR (Pt. 1045) 247 SC, wherein this Court held as follows:

The doctrine will not apply to a non-party to the contract, who may have to, unwittingly, be dragged into the contract with a view to becoming a shield or scapegoat against the non-performance by one of the Parties. Barmani Holdings, is a complete stranger in the contract between the Appellants and Respondents. Barmani was never joined as a Party – – – Courts of law do not make orders in vain or in vacuum. Court Orders affect directly those persons, who have had course to be subjected to the litigation before the Court either directly or by necessary extension.

In this case, no one sued anyone for breach of contract or made any allegation touching on breach of contract. The reliefs sought by the said Respondents in the Application filed at the Tribunal are simply:

– A Declaration that they are entitled to know the total amount frozen from the Appellant’s accounts in various Commercial Banks [Relief a.]

– A Declaration that they are entitled to know the total amount frozen by SEC [15th Respondent] and CBN [16th Respondent] [Relief b.]

– A Declaration that the continued withholding of the amount without releasing it to them is unlawful and inimical to their interest [Relief c.]

– A Declaration that the refusal, omission and failure of 15th Respondent to direct 16th Respondent to release the fund to them on demand is contrary to its statutory duty to protect their interest as spelt out in the ISA and the Judgment of the Tribunal in Case No. IST/OA/19/07 between the Appellant as the Applicant and the 15th Respondent [Relief d.]

– A Declaration that the continued refusal, omission and/or failure of the 16th Respondent to release the money to them despite repeated demand and numerous representations amounts to insensitivity to their plights, legally indefensible and morally wrong [Relief e.]

– An Order compelling the 15th and 16th Respondents to release without further delay all the amount so frozen to them [Relief f.]

– An Order mandating the 16th Respondent to disclose the total amount in its custody based on the 15th Respondent’s directive with accrued interest since 2007 up to date and release same to them [Relief g.]

– An Order compelling the 15th and 16th Respondents to set up an ad-hoc committee to disburse the amount recovered to them [Relief h.]

– An Order awarding them the sum of N2 Million as costs [Relief j.]

The claim against the Appellant in the said Application is Relief i.

An Order compelling [Appellant] to stop forthwith its illegal, unlawful and fraudulent business and banking activities, which it has been relentlessly carrying on under cover and clandestinely since May 2007, after its operations were halted by [15th Respondent] and refund the money invested by them.

Exhibit A came into the picture in their Written Statement on Oath, wherein the first Respondent herein averred in paragraph (vii) that:

The 3rd Respondent [Appellant] lured [them] into an Agreement by way of Memorandum of Understanding for “Joint Venture” supplies of industrial fuel oil and [they] were referred to as “JOINT VENTURE PARTNERS (Copy of the Agreement is herewith attached as Exhibit A)

The Court of Appeal observed as follows on the nature of Exhibit A:

Exhibit A was tendered by the 1st – 14th Respondent as Applicants at the Tribunal to show the sample of the Joint Venture Scheme contract or agreement entered to by the Investors. It was never tendered to prove the agreement between all the Investors but a sample thereof. The Appellant took exception to the use of the words “tendered” and “sample” in this observation of the Court of Appeal. It argued that the mere fact that the said Mrs. Umar was being represented by the said Respondents, “is not a known ground in law of contract that her “sample” contract only, Exhibit A, could metamorphose to include strangers to the said contract”. It further argued as follows:

It is also not correct – – when Court of Appeal held that Exhibit A was tendered as a mere sample of an agreement between [it] and 1st – 14th Respondents and at the same time still relied on same to hold that the “sample agreement” established a Collective Investment Scheme.

Yes, the word “tendered” is not the appropriate word to use in the circumstances of this case, where there was no trial at the Tribunal. Evidence is tendered at a trial, and this case never got to trial stage, because it was determined on the basis of a Preliminary Objection. Exhibit A was merely attached to the Originating Application filed by the said Respondents’ at the Tribunal. But, I do not see why the wrong word used by Court of Appeal to describe how Exhibit A got into the Court’s file, should be a bone of contention in this Appeal.

In my view, the Court of Appeal’s deduction that Exhibit A is a “sample” of the Agreement that the Parties entered into cannot be faulted because that is what it is; a sample, which is “a small amount of something that shows you what the rest is or should be like” dictionary.cambridge.org. The Appellant did not deny and cannot deny that it entered into an agreement with the said Respondents, and many others, whereby they bought a slot in the Company for N450, 000, which entitled them to profits of N40, 000 each month.

The said Respondents categorically stated in paragraph (xiii) and (xiv) of their Statement on Oath filed at the Tribunal that it was after the Judgment of the Tribunal in Case No. IST/OA/A9/07 wherein it held that “the Respondent [SEC] has the statutory duty to protect investors, including those that invested through the Applicant” that all of them approached the fifteenth and sixteenth Respondents:

“To disclose the amount so recovered for and on behalf of the Applicants but the 1st and 2nd Respondents were lackadaisical about their demand.”

In other words, the said Respondents, and others they represent, were aware of Case No. IST/OA/19/07 filed by Appellant against SEC [fifteenth Respondent herein] at the Tribunal, wherein it admitted that it had “entered into Joint Venture Agreements with thousands of Nigerians, who have bought several slots in the Company”. Thus, Exhibit A, a copy of their Agreement with the Appellant, which they attached to the Application they filed at the Tribunal for their case, cannot be a surprise to the Appellant, and the hue and cry it raised in this Appeal regarding Exhibit A, is nothing but smoke and mirrors.

The second set of Respondents hit the nail on the head when they said the Appellant was trying to take a second bite at the cherry, by raising this Issue in this Appeal. They are absolutely right because the Tribunal held in the said Case No. IST/OA/19/07 that the business carried out by the Appellant “is Collective Investment Scheme”, and in the case that led to this Appeal, the Tribunal simply stated that-

This Tribunal had in an earlier Ruling in Case No. IST/OA19/07 between NOSPECTCO V. SEC (unreported) delivered on 03/12/08, wherein the 3rd Respondent was the Applicant – – – held that this Tribunal has jurisdiction to entertain the Suit as per the nature of transaction that took place between the Parties, being a Collective Investment Scheme, and we find no sufficient reasons to make us depart from our position in that case.

The Appellant did not appeal against the earlier decision before the same Tribunal based its decision in this case on its earlier decision, and Court of Appeal affirmed the Tribunal’s decision on this Issue. So, the concurrent findings of the Tribunal and Court of Appeal that the said transaction is a Collective Investment Scheme stands firmly.

This is where things get a bit complicated because even as the Court of Appeal did not question the Tribunal’s finding that the said transaction is a Collective Investment Scheme, which falls within its jurisdiction, it held that the Tribunal has no jurisdiction in this case.

Where a Court lacks jurisdiction, it has nothing to do with the merits of the matter as that is an exercise in futility, but as Tobi, JSC, explained in A.P.C. Ltd. V. NDIC (2006) 15 NWLR (Pt. 1002) 404/443:

The Courts below the Supreme Court will not be wrong to take the merits of the matter in the alternative. This exercise is useful and becomes very handy in the event that the Court wrongly ruled that it had no jurisdiction when in law it had. This helps in no little way in saving litigation period. Instead of sending the case back to the Court to hear the matter because it has jurisdiction, a decision in the alternative will stop such a procedure.

This is what the Court of Appeal did in this case. It resolved the Issue of jurisdiction in favour of the Appellant, and allowed the Appeal, but it dealt with the other issues because, “it is the duty of this Court as an intermediate Court to determine all the issues submitted to it”.

The Appellant did not and could not have appealed against the decision of the Court of Appeal on jurisdiction because that was its objection at the Tribunal, which it overruled, but that aspect is the subject of the Cross-Appeals filed by the two sets of Respondents.

​The point being made is that its findings on all the other Issues, which it resolved against Appellant, were made in the alternative, thus, any questions arising there-from, such as in Issues ii & iii, are academic questions, which this Court cannot, and will not entertain. Having resolved Issue i, against Appellant, this Appeal is dismissed.

​FIRST CROSS-APPEAL

The Cross-Appellants, who were the first set of Respondents in the main appeal, are challenging the decision of the Court of Appeal that the Tribunal had no jurisdiction to determine the Application that all of them, first to fourteenth Respondents in the main appeal, filed at the Tribunal. However, the first Cross-Respondent, who was Appellant in the main Appeal, filed a Notice of Preliminary Objection praying that their Cross-Appeal be dismissed on the GROUNDS that:

1. It is an abuse of Court process for the Cross-Appellants to file a separate Cross Appeal at the same time with the pending other Cross-Appeal filed by 2nd — 5th Cross-Respondents when the Cross-Appellants together with 2nd — 5th Cross -Respondents are the 14 Applicants, who filed a joint action in a representative capacity at the Tribunal, and 1st – 14th Respondents, who also jointly defended the Appeal at the Court of Appeal.
2. Again, the Cross-Appeal when viewed together with the consequential order sought therein is also an abuse of Court process in view of the pendency of Suit No. FHC/L/CS/248/2021: Prince Matiluko Emmanuel Olorunnimbe & 13 Ors V. SEC & 2 Ors, filed on 2/3/2012 at the Federal High Court, Lagos contained at pages 1 – 9 of the Additional Documents – – –
3. The Cross-Appellants unilaterally without any order of Court introduced the figure “13,737” into the description of the Parties contrary to the description of the Parties as contained in the Originating Application, decision of the Tribunal as well as the Judgment of the Court of Appeal.
4. The Notice of Appeal and [their] Brief of Argument and Cross-Appellants’ Brief are fundamentally defective as both contradict and breach the provisions of Order 2 Rule 8 of the Supreme Court Rules 1999, as Amended.
5. The sole issue formulated for determination of the Cross-Appeal by the Cross Appellants does not completely arise from the two Grounds of the Cross-Appeal.

The said Objection was argued in its 1st Cross-Respondent’s Brief. The Cross-Appellants responded in their Reply on Points of Law and first Cross-Respondent filed a Reply on Points of Law in respect of its Notice of Preliminary Objection, in reaction thereto. I have read their Briefs and considered the various arguments/submissions for and against the Objection but clear as it is may be that the Objection packs a heavy punch, I am of the firm view that in the circumstances of this case, the Grounds of the Objection pale into insignificance, when viewed against the subject matter of the said Cross-Appeal.

The Court of Appeal held that the said Parties “were engaged in a collective investment scheme”, however, it concluded as follows:

Thus, if the claims by the 1st — 14th Respondents were limited to (i) compelling the Appellant to stop its allegedly illegal and fraudulent business and banking activities, then the Tribunal would have had exclusive jurisdiction. However, since the principal claims are against SEC and CBN, the Tribunal has no jurisdiction to determine them.

​I already dismissed the main Appeal because Court of Appeal rightly affirmed the Tribunal’s finding on the nature of the said Agreement, which falls within its jurisdiction. What is left to be seen is whether the Court of Appeal is right to hold that even so, the Tribunal had no jurisdiction to entertain the said Application that led to the Appeal.

The answer to the said question may result in the matter going back to the Tribunal for continuation of trial, or being filed afresh at the Federal High Court. Either way, the said Objection cannot stand in the way of that overriding question, which deals with jurisdiction, and in the circumstances, the Objection will be discountenanced.

The Cross-Appellants’ contention in the Cross-Appeal is that their claims at the Tribunal do not challenge the validity of the executive or administrative decisions of sixth and seventh Cross-Respondents to make them fall within the jurisdiction of the Federal High Court.

They cited Bronik Motors V. Wema Bank LTD (1983) 1 SCNLR 296, Madukolu V. Nkemdilim (1962) 1 ANL (Pt. 4) 587, Obiuweubi V CBN (2011) 2-3 SC (Pt. 1) 46 and Ocholi Enojo James, SAN V. INEC & 4 Ors. (2015) 12 NWLR (Pt. 1474) 538, and argued that even if reliefs sought can only be granted by Federal High Court, Section 251 (1)(r) of the Constitution is not absolute, as its proviso created an exception to the rule, citing Abasi V. State (1992) NWLR (Pt. 260) 383, NDIC V. Okem Enterprises Ltd. & Anor (2004) 10 NWLR (Pt. 880) 107; and that there is no blanket provision that confers exclusive jurisdiction on the Federal High Court in Suits against Federal Government or its agencies regardless of subject matter – Adetayo V. Ademola (2010) 3-5 SC (Pt.) 103, Omosowan V. Chiedozie (1998) 9 NWLR (Pt. 566) 477.

Furthermore, that the Court below was merely intimidated by the presence of 6th & 7th Cross-Respondents, and if it had considered the subject matter and their claims, it would have realized that there was nothing at all capable of affecting the validity of any executive or administrative action of the Federal Government or its Agencies; and the only action is freezing of first Cross-Respondent’s accounts, which they did not ask the Tribunal to declare null and void nor ask that SEC and CBN be restrained from further freezing the accounts.

​They had a lot more to say, but the issue is whether the Court of Appeal is right to hold that “since the principal claims are against SEC and CBN, the Tribunal has no jurisdiction to determine them”. So, any disputation outside that narrow compass is a mere distraction.

On this Issue, the first Cross-Respondent argued that from the reliefs sought, the Suit principally seeks declarative and injunctive reliefs against SEC and CBN that are Federal Government Agencies, and the action as constituted is against the validity of the executive or administrative action or decision of SEC and CBN in respect of its business operation and its accounts; and the fact that reliefs sought are directed against SEC and CBN to recover the “invested money” in its frozen account put the validity of the action of SEC and CBN in continuing being in the custody of the frozen money into question.

It also submitted that “money in the frozen accounts” rings bell throughout the reliefs sought; that they should not have included the money frozen in its accounts in their claim, if the validity of the action of SEC and CBN is not in issue – A-G., Bauchi State V. A-G., Fed. (2018) 4 SC (PT. 1) 14, Obiuweubi V. CBN (supra) cited; that the action complained of has to do with executive, administrative actions and the decisions of SEC and CBN, who got its accounts frozen; and that:

So long as the claim principally seeks declarative and injunctive reliefs against SEC & CBN, who are federal government agencies, in respect of their administrative and executive actions and decisions in relation to [its] money sought to be recovered by [them], the Court of Appeal was very much right to hold as it did that the Federal High Court, but clearly not the Tribunal, has the exclusive jurisdiction to entertain the Suit.

First of all, I must clear the misconception that the Court of Appeal contradicted itself when it found that the nature of the Agreement is a Collective Investment Scheme, but held that the Tribunal had no jurisdiction “to try the claims” brought before the Tribunal. The law makes a distinction between jurisdiction over “principal claims” and “ancillary claims”. It says that if the Court has no jurisdiction to hear and determine the “principal claims”, then it will have no jurisdiction to entertain the “ancillary claims” – see PDP V. Sylva (2012) 13 NWLR (Pt. 1316) 85, Kakih V. PDP (2014) 15 NWLR (1430) 374, Egbuonu V. B.R.T.C. (1997) 12 NWLR (Pt. 531) 29, and Tukur V. Govt., of Gongola State (1989) 4 NWLR (Pt. 117) 517, wherein Obaseki, JSC, explained: If there is a Court with jurisdiction to determine all the Issues raised in a matter, including the principal issue, it is improper to approach a Court that is competent to determine only some of the issues. The incompetence of the Court to entertain and determine the principal question is enough to nullify the whole proceedings and Judgment, as there is no room for half Judgment in any matter brought before the Court.

Very apt; there is no room for half Judgment in any matter brought before a Court or Tribunal, as in this case, where the principal claims are directed against SEC and CBN, Federal Government Agencies.

The Cross-Appellants themselves submitted as follows in their Brief:

Issues, disputes arising from the administration management and operation of collective investment schemes, is the exclusive preserve of the Tribunal by virtue of Section 284(1)(f) of ISA. It is a special Court created to adjudicate with dispatch, issues arising from investment so that investors and investments do not unduly suffer. It is a known fact that cases in Federal High Court take years, at times more than five years to get resolved. Investors and their investment were to be spared this unfortunate situation by the creation of this special Court.

The Tribunal is a special Court created to deal with issues, disputes and matters arising from investment, but Cross-Appellants claimed:

a. A Declaration that the Applicants are entitled to know the total amount frozen from the 3rd Respondent’s accounts in various Commercial Banks in Nigeria – by the 1st Respondent, since May 2007.

b. A Declaration that the Applicants are entitled to know the total amount frozen from the 3rd Respondent’s accounts in various Commercial Banks in Nigeria by the 1st Respondent and kept with the 2nd Respondent.

c. A Declaration that the continued withholding of the amount so frozen from the accounts of the 3rd Respondent by the 2nd Respondent without releasing same to the Applicants on demand is unlawful and inimical to the over-riding interest of the Applicants.

d. A Declaration that the refusal, omission and/or failure of 1st Respondent to direct 2nd Respondent to release the salvaged fund to the Applicants on demand is contrary to its statutory duty to protect the interest of the Applicants as spelt out in Section 13(1) & (k) of the ISA and the Judgment of the Tribunal in Case No. IST/OA/19/07 – – whereby it is stated inter alia that: “The Respondent has the statutory duty to protect investors including those that invested though the Applicant”.

e. A Declaration that the continued refusal, omission and/or failure of the 2nd Respondent to release the money in its custody to the Applicants despite repeated demand and numerous representations amounts to insensitivity [their] plights, legally indefensible and morally wrong.

f. An Order – – compelling the 1st and 2nd Respondents to release without further delay all the amount so frozen from the 3rd Respondent’s accounts in their custody to the Applicants for immediate disbursement forthwith.

g. An Order mandating the 2nd Respondent to disclose the total amount in its custody based on the directive of the 1st Respondent with accrued interest since 2007 up to date and release same to the Applicants.

h. An Order compelling 1st and 2nd Respondents to set up without further delay an committee – to disburse the amount so recovered – –

i. An Order compelling the 3rd Respondents to stop forthwith its illegal, unlawful and fraudulent business and banking activities, which it has been relentlessly carrying on under cover and clandestinely since May 2007, after its operations were halted by the 1st Respondent, and refund the money invested by the Applicants accordingly.

j. An Order– awarding the sum of N2 Million as cost of- – prosecuting the Application, traveling expenses – – to plead, ask, request and demand for the release of their money in the custody of the 1st and 2nd Respondent.

The Court of Appeal set out the above reliefs and held as follows:

These reliefs are aimed at the 1st and 2nd Respondents – that is SEC & CBN.

There is no doubt that these are Federal Government Agencies. It is also not in doubt that Reliefs A-E are aimed at reversing decisions taken by the 1st & 2nd Respondents in the course of performing executive duties while Reliefs F-H are to compel them to do certain things in course of the performance of these duties. Section 251(1) (p) (q) (r) of the Constitution provides – – – This provision has been interpreted by the Supreme Court in the locus classicus on the point – NEPA V. Edegbero (2002) 12 SCNJ 173, (2002) 18 NWLR (Pt. 798) 79 – – – The circumstances of this case calls for the interpretation of Section 251(1)(r) vis-a-vis the provisions of Section 284(1)(f) of ISA – – – The position of the law is that Section 251 of the 1999 Constitution vests exclusive jurisdiction in the Federal High Court in respect of all the items therein. The 1st-14th Respondents have sued the two Federal Government Agencies for a declaration that they have the right to know the credit balance of the Appellant in various Banks, which had been frozen by the 15th and 16th Respondents. They also want mandatory orders for the release of the money to the said Investors. It is clear that these principal claims are against 15th and 16th Respondents, wherein the validity of their executive decision to freeze the accounts of Appellant is being challenged – – There is no doubt that freezing the account of the Appellant is a joint executive action of both the 15th and 16th Respondents – – By the provision of Section 284(1) of ISA, the areas where the Tribunal has exclusive jurisdiction is limited to disputes relating to powers of SEC vis-å-vis capital market operators, investors, etc. Section 284(f) gives the Tribunal exclusive jurisdiction to adjudicate in disputes arising from the administration, management and operation of a collective investment scheme. I have earlier held that the Appellant and 1st-14th Respondents were engaged in a collective investment scheme — thus if the claims by the 1st – 14th Respondents were limited to (i) compelling the Appellant to stop its allegedly illegal and fraudulent business and banking activities, then the Tribunal would have had exclusive jurisdiction. However, since the principal claims are against SEC and CBN, the Tribunal has not jurisdiction to determine them – – No matter how laudable the reasons, the Parties and the Tribunal cannot by complicity confer jurisdiction on it – – It is trite that a Court must be able to grant all the reliefs before it in order to enable the Court exercise jurisdiction – – – The Tribunal had no jurisdiction to try the claims brought before it by the 1st – 14th Respondents.

​Clearly, the Court of Appeal’s finding that the said Agreement is a collective investment scheme has no bearing on its decision that the Tribunal has no jurisdiction to determine the said Claims before it – they are two different things. In other words, the Tribunal may have exclusive jurisdiction over disputes arising from the administration, management and operation of a collective investment scheme, but the “principal claims” in the Application that led to this Appeal were directed at SEC and CBN, which are Federal Government Agencies.

Section 251(1) (r) of the Constitution (as amended) stipulates that the Federal High Court shall have exclusive jurisdiction over any “action or proceedings for a declaration or injunction affecting the validity of any executive or administrative action or decision by the Federal Government or any of its Agencies”. There is no question that the principal reliefs sought by the said Respondents at the Tribunal touched on the executive or administrative actions of SEC and CBN.

​Reliefs (a) — (e) are aimed at reversing the decisions they took while performing their executive duties, and Reliefs (f), (g) & (h) are to compel them to do certain things while performing these duties, and these fall within the exclusive jurisdiction of Federal High Court. Since the Tribunal only had jurisdiction to entertain Relief (i) against first Cross-Respondent, which is an ancillary claim, the Tribunal had no jurisdiction to determine the principal claims brought before it.

Thus, the decision of the Court of Appeal cannot be faulted. The Cross-Appeal lacks merit; it fails and it is therefore dismissed.

SECOND CROSS-APPEAL

The Cross-Appellants, who were the second set of Respondents in the main appeal, are also cross-appealing against the same decision of the Court of Appeal that was dealt with in the first Cross-Appeal. They canvassed, more or less, the same arguments as the Cross- Appellants in the first Cross-Appeal. The first Cross-Respondent, who was first Cross-Respondent in the first Cross-Appeal, made the same arguments on the same Objection, and on the Cross-Appeal.

Having dismissed the first Cross-Appeal, it goes without saying that this Cross-Appeal also stands to be dismissed. Thus, I adopt my reasoning and conclusion in the first Cross-Appeal and hold that this Cross-Appeal also lacks merit, it fails, and it is therefore dismissed.

​In sum, the main Appeal lacks merit, it fails and it is dismissed.

The Cross-Appeals also fail and they are both dismissed. The Parties in the main Appeal and Cross-Appeals shall bear their own costs.

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SC.305/2012