AN APPRAISAL OF THE LEGAL FRAMEWORK FOR DISPUTE RESOLUTION IN THE NIGERIAN CAPITAL MARKET
AN APPRAISAL OF THE LEGAL FRAMEWORK FOR DISPUTE RESOLUTION IN THE NIGERIAN CAPITAL MARKET
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Date
2018-02
Authors
GEORGE ABANG, EKPUNGU
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Abstract
The capital market is the long arm of the financial market through which resources in the form
of savings are pooled and channeled to the production of goods and services. Disputes often
arise in capital market transactions, which must be resolved speedily, fairly and efficiently in the
interest of stability of the market. Notwithstanding the various processes for dispute resolution in
the Nigerian capital market, the jurisdiction to adjudicate over capital market disputes has been
a source of contention among stakeholders. In the event of disagreement, the forum to ventilate
grouses is not now firmly and squarely settled.The Investments and Securities Tribunal, which
was created by the ISA as a solution, to this near intractable dispute resolution crisis, has been
mired in constitutional and jurisdictional controversies. The Appellate Courts have not been
unanimous on its jurisdiction. Furthermore, the exclusive jurisdiction of the Federal High Court
on matters arising from the Companies and Allied Matters Act, 2004 has also been called to
question. As things stand presently, the following research questions seek urgent answers; is the
legal framework for dispute resolution in the Nigerian Capital Market adequate to resolve the
current controversies in the system; does the framework for dispute resolution in the Nigerian
capital market in conformity with international best practices and standards;and finally, are
there special needs or peculiarities in the operationsand emerging disputes in the Nigerian
capital market, requiring aspecialised dispute resolution system.The aim of this research is the
attainment of a robust dispute resolution system in the Nigerian Capital Market,that will meet
the aspirations of stakeholders. To this end, the objectives of this research are; to critically
evaluate the extant legal framework for dispute resolution in the Nigerian Capital Market and
advance recommendations, that will resolve the current challenges in the system; to examine in
detail the statutory and administrative procedures for the resolution of disputes in the Nigerian
Capital Market, such as the SEC Administrative Proceedings Committee and other internal
enforcement processes and the disciplinary/dispute resolution of the SROs. This is with a view to
making suggestions for reform, that will make same accord with global standards and
international best practices.Investors’ confidence can be buoyed by an assurance of a fair and
efficient dispute resolution system that is not hamstrung with teething challenges of competence.
The controversies surrounding the constitutional place and jurisdiction of the Investments and
Securities Tribunal has led to conflicting decisions by superior courts in Nigeria. These do not
portend encouraging signs for domestic and foreign investors.Stripping the Investments and
Securities Tribunal the jurisdiction in criminal matters has weakened its role as a fast-track
dispute resolution mechanism in Nigeria. The facts giving rise to disputes in the market are often
intertwined such that separating the fact that give rise to civil disputes from those that give rise
to criminal liabilities can be quite challenging. Therefore, since capital market disputes are time
sensitive, the problems arising therefrom become even more worrisome. This uncertainty is
certainly not a good sign for domestic and foreign investors in the Nigerian economy. The ISA
permits the SEC to constitute committees and under this power the SEC has over the years
constituted the Administrative Proceedings Committee, a quasi-judicial body, to resolve disputes
in the capital market. With the complement of primary and secondary data (statute,case law and
existing jurisprudence) on this subject, this study finds that the absence of a formal structure for
the APC or retaining it as an ad hoc committee convened at the pleasure of SEC has introduce
so much uncertainty into its existence To properly situate the Investments and Securities
Tribunal and address the controversies surrounding its status and jurisdiction, it is
recommended that section 6 (5) of the Constitution of the Federal Republic of Nigeria, 1999 be
amended to include the IST as a superior court of record. This will streamline the approach of
the Nigerian courts and assure investors that their grievances would receive fair, firm and
timeous hearing. Section 284 and 294 of the Investments and Securities Act require amendment
to confer civil and criminal jurisdiction on the Investments and Securities Tribunal. Section 310
of the ISA should also be amended to clearly establish the Administrative Proceedings
Committee.
Description
A DISSERTATION SUBMITTED TO THE SCHOOL OF POSTGRADUATE STUDIES,
AHMADU BELLO UNIVERSITY ZARIA, IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF THE DEGREE OF DOCTOR OF
PHILOSOPHY IN LAW, Ph.D
DEPARTMENT OF COMMERCIAL LAW,
FACULTY OF LAW, AHMADU BELLO UNIVERSITY,
ZARIA
Keywords
APPRAISAL,, LEGAL FRAMEWORK,, DISPUTE RESOLUTION,, NIGERIAN CAPITAL MARKET