Esq legal practice magazine dec 2013 edition

EsQ volume 3 issue 7

LEGAL

THE ESQ NIGERIAN LEGAL AWARDS THE CHANGE IS HERE

PRACTICE

ACTUALIZING NIGERIA S ECONOMIC POTENTIALS SANDIE OKORO: THE GLOBAL GENERAL COUNSEL WITH A HEART OF GOLD

EXPLORING THE ABUNDANT OPPORTUNITIES OF THE SUKUK MARKET

ARUNMA OTEH: FOCUSSED & COMMITTED TO THE CAPITAL MARKET REFORMS

HAJARA ADEOLA CEO, LOTUS CAPITAL

N700 $5.99 £3.99 1 234567 891019

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Finance

Marketing

Management

Technology

Sports

Lifestyle

ESQ DERIVATIVES DOCUMENTATION SCHOOL February 25th-28th 2014

EsQ volume 3 issue 7

LEGAL

SEC RULES 2013 HIGHLIGHTS OF THE MAJOR CHANGES

PRACTICE

REFOCUSING THE NIGERIAN STOCK EXCHANGE FOR ECONOMIC PROSPERITY OSCAR ONYEMA, CEO, NIGERIAN STOCK EXCHANGE

N700 $5.99 £3.99 1 234567 891019

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Finance

Marketing

Management

Technology

Sports

Lifestyle

DIAMOND SPONSOR

SILVER SPONSOR

BRONZE SPONSOR

CMC PLANNING COMMITTEE

inside INVESTING IN AFRICA: INVESTORS PROTECTION AND GENERAL ISSUES I11I

CC LOOKS TO STRENGTHEN AFRICA TIES BY GIVING TRAINING TO LOCAL LAWYERS I12I STILL AHEAD OF THE PACK: OLANIWUN AJAYI LEADS $3.3BILLION DANGOTE PETROLEUM REFINERY AND FERTILIZER/PETROCHEMICAL PLANT

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TEMPLARS CO-SPONSORS THE I14I OIL COUNCIL AFRICA ASSEMBLY (PARIS, FRANCE)

ARUNMA OTEH: THREE YEARS OF DOGGED PURSUIT OF CAPITAL MARKET REFORMS I60I 19

THE SECURITIES & EXCHANGE COMMISSION CONSOLIDATED RULES

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PRIVATE WEALTH MANAGMENT POTENTIALS & CHALLENGES

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TARGETING CLIENTS FOR GROWTH

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INFRASTRUCTURE FINANCING IN NIGERIA: THE DIFFERENCE BETWEEN PUBLIC FINANCING AND PRIVATE CAPITAL

TOYIN SANNI: ACTUALIZING NIGERIA S ECONOMIC POTENTIAL I16I 40 46

PREVENTING LAW FIRM DATA BREACHES UNDERSTANDING INVESTMENT RISK

inside CHALLENGES TO PRIVATE EQUITY IN NIGERIA I50I ENFORCEMENT OF FOREIGN JURISDICTION CLAUSES IN NIGERIA I52I

EXPLORING THE ABUNDANT OPPORTUNITIES OF THE SUKUK MARKET I55I

OSCAR ONYEMA: REFOCUSING THE NIGERIAN STOCK EXCHANGE FOR ECONOMIC PROSPERITY

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WHY CONTRACTING WITHAN INTERNATIONAL ORGANISATION IS DIFFERENT

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ELECTRONIC OFFER AND ACCEPTANCE AND THE ENGLISH COMMON LAW: THE JOURNEY SO FAR MULTIPARTY AND MULTI-CONTRACT ARBITRATION: A GLOBAL COMPARATIVE PERSPECTIVE

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KEEP YOUR CLIENTS COMING BACK WITH LAWPAVILION CASE MANAGEMENT SYSTEM

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LOOKING BEYOND THE ATLANTIC

SANDIE OKORO: THE GLOBAL IN-HOUSE LAWYER WITH A HEART OF GOLD

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boma ozobia Boma Ozobia is a dual qualified lawyer with 20 years experience. She holds a Masters degree in Maritime law from King's College, University of London and is an accredited Civil and Commercial Mediator. She is principal partner at Sterling Partnership. Boma as chairwoman (2005) of the Association of Women Solicitors was the first person of minority ethnic origin to serve in that capacity in England and Wales. She currently serves as the President of the Commonwealth Lawyers Association and as a trustee of the Royal Commonwealth Society and is on the executive committee of the British Nigeria Law Forum. An accomplished public speaker, Boma has written articles for many respected publications and is a co-author of the book, “Sisters- in -Law”, a career guide for Nigerian women lawyers.

EsQ seun abimbola He is the Senior Partner of Prime Solicitors, Ibadan. He holds a masters degree (LLM) in law and has distinguished himself in Litigation, Arbitration, Intellectual Property, Oil and Gas Law Practices. A prolific writer and strategist, Seun is the current Chairman of NBA, Ibadan branch. He is a certified mediator with CEDR (UK), a Neutral of the multi door court houses in Nigeria, and a member of the International Bar Association.

Publisher/Editor-in-Chief

Lere Fashola Business Director

Funmi Ekibolaji Advisory Board

Olurotimi Akeredolu SAN Gbenga Oyebode MFR Kayode Sofola SAN Prof Mrs Yinka Omorogbe Kofo Dosekun Soji Awogbade Dr. Bayo Adaralegbe Editorial Consultant

Seun Abimbola

sola adepetun Sola Adepetun is the Managing Partner of Adepetun, CaxtonMartins, Agbor & Segun. He is also a Partner in the Energy and Project Finance Group of the Firm, specializing in energy and project finance law issues and particularly in relation to oil and gas development project negotiations and the acquisition and disposal of petroleum exploration and production companies and interests.

With 28 (twenty-eight) years of legal experience, Sola is responsible for advising many international companies on foreign investment laws, corporate establishments and accreditation issues, the Nigerian licensing regime and generally on strategic alliances in the Nigerian Oil & Gas Industry. He advises on petroleum taxation, industry and general business compliance and commercial matters ancillary to oil and gas corporate activities. He is a graduate of the University of Lagos and has an LLM from the London School of Economics. He is a member of the Nigerian Bar Association, the International Bar Association Section on Energy & Natural Resources Law, and the News Section Editorial Board of the International Energy Law and Taxation Review. He has also been a member of the Oil and Gas Sector Reform Implementation Committee (“OGIC”) of the National Council of Privatisation and the pioneer board of the African Institute of Petroleum.

IT Gbenga Olotu Graphics

Joel Ibiyemi Kunmi Owopetu Photography

ESQ Studios Circulation Manager

Kehinde Fashola Legal Adviser

Adekemi Edema Finance Manager

Olaosebikan Oyindamola Enterprise Development/Conference Manager

Bolarinwa Olayinka Advert & Subscription Enquiries

08035269055 advert@esqlaw.net subscription@esqlaw.net

abimbola ojenike Abimbola holds a LL.B from the University of Ibadan. A prolific writer, Abimbola is a regular contributor in newspapers and other local and international magazines. He is presently serving as an Associate in a reputable law firm in Lagos.

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editorial

MTN, FORTE OIL, LAW PAVILION TO SPONSOR ESQ NIGERIAN LEGAL AWARDS 2014

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S we ramp up preparations for the 2014 edition of our ESQ Nigerian Legal Awards slated for September 18th 2014, we are proud to unveil our high profile 2014 sponsors which include MTN Nigeria, Forte Oil and Grace Infotech, publishers of the law pavilion.

Recently, MTN announced its interest in sponsoring the Insolvency and Restructuring Team of the Year Award while the law pavilion and Forte Oil are proud to support the award as well.

2014 are demonstrating an investment in the success of the Nigerian lawyers, and we are immensely proud to align the ESQ Nigerian Legal Awards with each of them for the event. The ESQ Nigerian Legal Awards 2014 will also see ESQ Legal Practice Magazine's continuing interest in the development of the future of the legal profession in Nigeria with the recognition of the outstanding young lawyer of the year award.

Funmi continued, “I'd like to take this opportunity to thank all of our sponsors, Judges and partners for their ongoing and invaluable support on behalf of the ESQ Nigerian Legal Awards committee and also our nominees. We have received According to Funmi Ekibolaji, coordinator nominations of high profile deals covering of this year's Award “The support of our various practice areas including Power, sponsors is enormously important to us.

Oil and Gas, Real Estate, Infrastructure, Having such high profile, enthusiastic and Capital Market, Mergers and Acquisition, committed sponsors on board shows the Dispute Resolution, Project Finance, great commitment these organisations Banking, etc. Some of these deals have have in promoting excellence in the legal equally won global awards and have profession in Nigeria. Our sponsors for impacted greatly on the Nigerian economy. It is therefore inspirational to see the noble contributions that the legal business sector is making to the development of the Nigerian economy. It is also apposite to note that the support received from this year's sponsors has been instrumental to celebrating these great feats and success of the Nigerian lawyers.”

Set to recognise the important contribution the legal business community makes, to the development of the Nigerian economy, the ESQ Nigerian Legal Awards will review the various landmark deals undertaken in Nigeria within the period of twelve to eighteen months i.e. June 2012 – December 2013 and will be honouring outstanding law firms, In-House Legal Departments and other legal professionals who made this happen. It will reflect both pre-eminence in key transactions, practice areas, and achievements over the eighteen months period, including notable work, innovations, strategic growth, excellence in client service, and contribution to the legal profession at large.

The 2014 award will be considering deals that set new standards in the Nigerian legal system, legal expertise and services that bring about economic well being of the nation in the period under review.

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To ensure maximum credibility of this award, we appointed highly profiled General Counsel and CEOs from some of the leading multinationals, Supranational and other leading corporations as judges.

We also appointed CEOs and some senior officials of International institutions and Investment Banks as Advisory Board Members for this Award. The panel of judges is led by Dr Adesegun AkinOlugbade, Executive Director and General Counsel at the Africa Finance Corporation.

All submissions are made electronically.

The ESQ Research team will also contact the referees to gather more information about the deals submitted for the award.

All submissions will be validated through the referees submitted by nominees.

Judges will be given a score sheet that lists the criteria and invites them to mark each entry against them. The first five deals with the highest vote from judges will be published as nominees for each category.

There will also be a day conference where judges are expected to meet and debate who should win and why. The final decision on the winner of the award will be decided at the one day judges' conference where judges will meet to justify their votes. Shortlisted nominees will be informed in writing thereafter. The final decision on the award winners will be made by the judges when they meet, and their decision will be final.

“So far we have received entries from some of the country's top commercial law firms and legal departments including Aluko and Oyebode, Olaniwun Ajayi LP, Templars, Banwo & Ighodalo, Adepetun Caxton-Martins, Agbor and Segun, Odujinrin and Adefulu, Paul Usoro & Co, Advocaat, Details Solicitors, Udo Udoma and Bello Osagie, Advisory Legal Consultants, Olajide Oyewole & Co, Aelex Legal Practitioners, Wole Olanipekun & Co, JK Gadzama & Co, Punuka Attorneys, Benchmac & Ince, and many others”.

The 2014 ESQ Nigerian Legal Awards event will take place in Lagos Nigeria on 18th September, 2014 and will host leading lawyers, business leaders, inhouse executives, media, and other entrepreneurs as well as entertainers.

To book your place at the award dinner, please email to awards@esqlaw.net or call Lere on 08035269055 or Seun on 09094639760.

Further details on the award is available at http://www.esqnigerianlegalawards.com

EsQ legal practice I 09

ESQ SPONSORS ANTI-BRIBERY SESSION AT NIGERIAN BAR ASSOCIATION ANNUAL NATIONAL CONFERENCE 2013

Lere Fashola

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Philip Hackett+ QC

Arti Shar, Head of Government & Public Affairs, Thomson Reuters

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TEMPLARS ADVISES NIGERIAN BREWERIES PLC ON A LANDMARK TAKE OR PAY DISPUTE WITH GASLINK NIGERIA LTD

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emplars advised and recently, obtained an award in favor of Nigerian Breweries Plc (NB) - Nigeria's largest beverage (alcoholic and non-alcoholic) brewer - in a dispute with a national gas supplier/pipeline on the appropriate interpretation of the “take or pay” provisions in a Gas Sale and Purchase Agreement (GSPA) between the parties.

This dispute arose between the parties on account of the Claimant's claim to being entitled to have the Respondent settle invoices issued by the Claimant under

the take-or-pay provisions of the Gas Sale & Purchase Agreement (GSPA) under which the parties contracted for the supply & purchase of Natural Gas. Commenting on the arbitral award, Templars senior partner and head of the dispute resolution group said: “the arbitral award in favour of our client is excellent news; it is unique in the sense that this is the first arbitration in Nigeria dealing with take-orpay provisions under GSPAs and Templars is delighted to be part of this ground breaking award”

The Templars team was led by the head of dispute resolution Adewale Atake, dispute resolution partner Godwin Omoaka and senior associate Igonikon Whyte with support from dispute resolution associates Abimbola Atitebi and Omolara Ogungbemile.

involved in the transaction and conducted legal audit in the Nigerian subsidiary of the Issuer, Wasco Oil Service Co. Nig. Ltd.

The Templars team on the transaction was led by Olamide Oladosu, a partner in the Finance & Projects Department, assisted by Templars recently advised Hong Leong Investment Bank Associates Temple Uchegbune Berhad (as Security Agent) to and Frances Emembolu. the issue of RM343.10 (equivalent of USD106.4 millon) sukuk murabaha by KMCOB Capital Berhad (as Issuer).

Templars advised on Nigerian law issues and security

TEMPLARS ADVISES CHINA DEVELOPMENT BANK ON AN US$100 MILLION FINANCING FOR FIRST BANK OF NIGERIA

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emplars very recently advised China Development Bank regarding its $100 million dollar facility to First Bank of Nigeria Limited. The financing is designed for onlending to SMEs in Nigeria in

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order to boost to small and medium scale enterprises and to stimulate economic growth in the country in line with the Federal Government's job creation and general economic development objectives.

transaction was led by Norton Rose Fulbright, who Olamide Oladosu, a partner in acted as Chinese counsel to the Finance & Projects the Lender.

Department, assisted by Associates Temple Uchegbune, Desmond Ogba and Frances Emembolu.

The Templars team on the

The team advised alongside

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INVESTING IN AFRICA: INVESTORS' PROTECTION & GENERAL ISSUES'

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xperts have identified government interference, arbitrary amendment to legislations, weak institutions and rule of law, post-investment changes, and nonperformance of contractual obligations by government, as some factors that pose a risk to investments in Africa.

According to Mr. Afolabi Caxton-Martins, Partner, Adepetun Caxton Martins, Agbor and Segun although Africa is “in sharp focus.”

African states would have to intensify efforts at alleviating the concerns of investors, with the present rise investment disputes for it to be attractive to the massive FDI that it seeks. “The economies of most African states are dominated by the state. The weaker the institution and rule

of law, the greater the investment risk. Postinvestment changes also pose a risk to these investments, and,” he warned.

Also speaking at the event, the Treasurer, IBA Corporate and M&A Law Committee, Guy Harles from Luxembourg, noted that the three key solutions and protection measures for investments and investors in Africa are,

“Political risk insurance, bilateral investment agreements and multilateral investment agreements.”

According to him, the insurance remain an efficient way of getting protection.

Harles noted also that Arbitration, Information Technology (IT) concerns, Intellectual Property (IP) rights, loans, etc., are some of the most significant features of

investment agreements – whether bilateral or multilateral.

Speaking on the issue of Joint Ventures (JVs), another speaker, Rebecca Major Partner, Herbert Smith Freehills advised participants who were made up of members of the legal profession, financial advisers, investment managers, the media and the business community, on ways to have good partnerships between local and international companies or between one local company and another.

“The first thing to do is to get an understanding of the intentions of all parties.” This she noted, would be followed by other considerations, such as funding, a workable exit strategy, dispute resolution, etc.

LINKS TARGETS AFRICA EXPANSION AS FIRM COURTS NIGERIAN ALUKO & OYEBODE

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inklaters has renewed its courtship of Nigerian firm Aluko & Oyebode as it steps up its efforts to build its African footprint.

The firm said it is keen on developing its relationship with Aluko, independently of its alliance with South African firm Webber Wentzel, which went live in February this year.

Discussions have been held recently over how Linklaters can help the Nigerian firm with its technology and working practices as well as developing its lawyers through increasing the number of mutual secondment placements. Although one partner at Linklaters said a formal tie-up with Aluko is

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not "off the cards", the Nigerian firm, which works with several UK counterparts, insists it wants to remain independent.

A partner at Aluko said: "As the biggest firm in the country we need to talk to everyone, including magic circle and US firms.

"We have had talks with these firms on an exclusive and nonexclusive basis, but our market is not as open as Kenya or South Africa and for now we will continue to develop non-exclusive relationships with a number of firms."

Andrew Jones, projects partner and co-head of Linklaters' Africa Group said: "We are open to everything; the way we work depends on the jurisdiction. We like to get

close to particular firms in jurisdictions but that doesn't apply to all countries – in some you have more or less choice and there are also capacity issues to deal with.

You need a certain amount of deal flow in a country to make a tie-up worthwhile for both sides – like with Webbers in South Africa. At the moment there is a real focus on implementing this alliance."

Looking beyond Nigeria and South Africa, Linklaters is currently working in more than 40 jurisdictions across Africa, with countries such as Egypt,

Cameroon, Morocco, Angola, Ethiopia, DRC, Kenya and Mozambique particularly active.

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CC LOOKS TO STRENGTHEN AFRICA TIES BY GIVING TRAINING TO LOCAL LAWYERS

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lifford Chance (CC) has kicked off a training scheme for lawyers at African firms, which it says will give them access to magic circle standards of legal training.

The initiative, called the “Clifford Chance Africa Academy�, aims to give junior and senior associates at CC's relationship firms access to a structured programme based on existing training courses developed by its global training arm, the Clifford Chance Academy, which provides technical and business skills training for its lawyers and business professionals.

Senior partner Malcolm Sweeting, global head of capital markets David Dunnigan and finance partner Edmund Boyo, who co-heads the firm's Africa group, 12 I EsQ legal practice

attended the programme's launch in Lagos, Nigeria earlier this week.

The launch is further evidence of the ambitions of global law firms in Africa, which is fastbecoming one of the most desirable legal markets as lawyers try to profit from the region's high rates of economic growth.

Boyo said: "Our African counsel friends are vital to the success of our Africa practice and having solid, structured training courses will enable them, and us, to deliver the best advice to clients."

The CC programme was developed after the firm's partners identified that lawyers at African firms found it difficult to access highquality training targeted at different career levels.

"Our African colleagues have shared with us that they lack ready access to legal training, particularly for their associates, in their home country,"

Boyo added. "We hope to help fulfill some of their needs."

The first course has already been held in Lagos, where 22 associates from law firms in Ghana and Nigeria participated. Nigerian law firms included: Templars, Banwo & Ighodalo, Udo Udoma & BeloOsagie, Aluko & Oyebode, Aelex, Olaniwun Ajayi, G. Elias & Co. Ghanaian firms included: Oxford & Beaumont, Bentsi-Enchill Letsa & Ankomah, and AB & David Law.

CC opened its first African office in Morocco in 2011 and has said it wants to strengthen its presence in other important regional hubs such as Nigeria and South Africa.

The CC initiative was launched after the firm hosted 60 law firms from Africa at a two-day event in July. CC held the event, put on for the first time, in a bid to strengthen existing ties with firms, improve working practices and develop knowledge sharing and management processes as well as exchange insights on current legal topics.

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STILL AHEAD OF THE PACK: OLANIWUN AJAYI LEADS $3.3BILLION DANGOTE PETROLEUM REFINERY AND FERTILIZER/PETROCHEMICAL PLANT

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n keeping with its tradition of advising on the most complex deals and setting standards, in the Nigerian legal industry, Olaniwun Ajayi LP has yet again advised on a reference deal in Nigeria and in so doing played a pivotal role as legal counsel to a syndicate of Nigerian and international lenders, on the landmark US$3.15 billion dollar financing of Dangote Industries Limited in respect of the construction of a

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fertilizer/petrochemical plant as well as a petroleum refinery. Upon completion, this deal will be the largest refinery in Africa with a capacity of 400,000 bpd and 2.8 million tons of urea for fertilizing crops to produce polypropylene, used to make plastics. The refinery is due to be operational by 2016. The financing of the $3.3 billion project was led by Standard Chartered Bank and Guaranty Trust Bank.

The deal, which holds the led by our Tominiyi Owolabi, record of being single largest who steered the deal to ever syndicated financing in financial close.

Nigeria till date, was consummated in grand style on Wednesday 4 September 2013, at the nation's capital, Abuja, with statesmen, captains of industry and key market players in attendance. “Indeed, this re-affirms Olaniwun Ajayi LP's preeminent position as Nigeria's foremost commercial law practice� The firm asserts Olaniwun Ajayi's team was

EsQ legal practice I 13

TEMPLARS CO-SPONSORS THE OIL COUNCIL AFRICA ASSEMBLY (PARIS, FRANCE)

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emplars cosponsored The Oil Council Africa Assembly, held in Paris on 11-12 June 2013.

The Oil Council's Africa Assembly is a ground breaking oil and gas event,

uniting over 800 oil and gas leaders from across the continent's upstream, midstream, banking, investment, legal and petroleum services sectors.

IOCs and large, mid and small cap independents) with their peers, service providers, financiers and investors looking to invest billions of dollars (Institutional Investors, Private Equity, Investment Banks, SWFs, Hedge Funds, The meeting, the largest Africa ECAs, Multilaterals and O&G event outside of Africa, Indigenous African Banks) in unites CEOs, CFOs and COOs the continent. from O&G companies (NOCs,

Templars was represented at the event by partners Oghogho Akpata , Olumide Akpata and Olamide Oladosu and senior associate, Oladiran Ajayi.

TEMPLARS ADVISES THE ISLAMIC CORPORATION FOR THE DEVELOPMENT OF THE PRIVATE SECTOR ON AN US$28 MILLION FINANCING FOR ORIENTAL FOOD INDUSTRY

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emplars has advised the Islamic Corporation for the Development of the Private Sector (ICD) in connection with its USD$ 28 million Dollars Ijarah financing to Oriental Food Industry Limited (OFIL).

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The facility will be utilized to finance the purchase of equipment for OFIL's proposed dairy factory in Nigeria.

purchases the asset desired by Associate Zelda Akindele and its client and then leases it to Associates Temple Uchegbune the client for a rental fee and Frances Emembolu (calculated by reference to a benchmark such as LIBOR).

In Ijarah financing, asset acquisition is financed on terms compliant with Sharia and the financing party

The Templars team on the transaction was led by Finance partner Chike Obianwu, who was assisted by Senior

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ACTUALIZING NIGERIA S ECONOMIC POTENTIAL TOYIN SANNI

Over the past two years, the capital market committee Retreat has served as an avenue designed to review the challenges, issues and prospects faced in the rather rapid developmental changes on the face of the Nigerian Capital Market. The success of the past annual retreats testifies to the increased collaboration amongst stakeholders, operators and regulators and has played a major role in the recovery of the market up to the tune of 12 trillion naira.

However, the theme of the 2013 Annual retreat tagged 'Actualising Nigeria's Economic Potential' would at best dwell on the significantly untapped potentials which are to be explained to push the frontiers of the national revenue generation further from its current states.

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Why the topic "Actualizing Nigeria's Economic Potential" chosen for the 2013 Retreat.

The CMC Retreat theme is always thoroughly considered with a view to ensuring it is very relevant to the stage of development of our market and indeed of the Nigerian Economy in general at that particular time. Our current theme reflects what the CMC Chairman and the Committee believe we need to be the focused on to make that essential quantum leap required to achieve the much predicted potential of the Nigerian Economy. The massive economic potential of the frontier markets of subsaharan Africa in general and of Nigeria in particular is no new revelation. What we seek to achieve is to make that leap from potential to reality.

organization.

Given the Country's considerable resource endowment and cost allocation, what are the potentials for economic growth?

They're indeed massive.

Nigeria's untapped potentials are quite significant. We are blessed with favourable climatic and demographic factors which if exploited can produce different fields of national revenue generation, each on its own capable of sustaining a nation. From agriculture, to solid minerals, to natural gas to tourism. Then when you consider our huge population, you must factor in the potential for economic growth in each of the untapped areas of public utility privatisation such as power, transportation - eg rail and waterways.

Not to forget - there are huge How has the CMC Retreat affected the capital market as potentials for revenues from oil refinery once the private a whole? refineries take off.

The CMC Retreat which commenced in 2011 has impacted our capital market in From a market development perspective, please consider the following critical ways:the potential for public listing 1. It has helped to focus capital of the shares of all these utility companies, starting for market regulators and operators as a body on critical example with the massively profitable telecommunications next steps to achieve our Providers. market development and reform objectives.

2. It has helped to foster Does the current regulatory greater unity and cohesiveness environment work for today's amongst all capital market market structure? stakeholders.

Regulatory reform is always 3. It has increased awareness an ongoing process. Although and visibility regarding the we are not yet where we role of the various cmc should be we must commend operators, the level of the reform initiatives of this transparency, investor administration and the steady protection structures and implementation of these checks and balances within reforms which has inspired the Capital Market thus aiding the confidence of international the consistent and quite observers and global investors impressive recovery of our who remain very bullish about capital market.

Nigeria.

4. The combined effect of increased awareness and What are the challenges visibility and improved confronting the Nigerian effectiveness and investor Capital Market? And confidence has of also helped Looking forward-where will to grow the level of participathe future challenges for the tion of both domestic and markets develop? foreign investors in our Challenges facing our market market. include erosion of investor confidence after the last global What has been the response economic crisis. Happily, due of the capital market operato the collective efforts of the tors to the CMC Retreat? entire capital market commuCMOs have closely embraced nity, this is steadily being the CMC with much enthusirestored. We still have a asm. This is reflected by fragmented domestic investor increased annual participation base. This needs to be more and sponsorships which have institutionalized, eg through grown significantly every huge Collective Investment year. The introduction this Schemes. That way Investors year of online registration on have a stronger voice at the retreat website has also general meetings and their aided early registration. Last enlightened and empowered year the Retreat Committee representatives can more was honoured by an award effectively hold company from the NSE for the success boards and management of the retreat and quality of its

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Nigeria's untapped potentials are quite significant. We are blessed with favourable climatic and demographic factors which if exploited can produce different fields of national revenue generation, each on its own capable of sustaining a nation. From agriculture, to solid minerals, to natural gas to tourism. Then when you consider our huge population, you must factor in the potential for economic growth in each of the untapped areas of public utility privatisation such as power, transportation - eg rail and waterways. accountable and to raise the standards of corporate governance. We can further improve market infastructure and processes around eg around the dividend payment process and other corporate actions. Like the rest of our region, we continue to grapple with capacity gaps in certain areas but we are catching up faster than many.

What lessons can the industry learn from missteps of the past?

A key lesson must be the need for Operators and Investors alike to adopt a more pragmatic, balanced and long term perspective to capital market investments. Capital markets are cyclical (ie they go up and down) and will always be so, otherwise they would hold little opportunity for profit.

Players must be adequately enlightened on the need to maintain well balanced portfolios, to invest rationally and with realistic (medium to long term) horizons in view.

They must maintain adequate liquidity for short term liabilities during these tenors and must resist the powerful but highly treacherous forces greed and fear which amplified the last global economic crisis.

What are the specific best investment vehicles in Nigeria and the methods of analysing and investing in

them?

Vehicles in our market include Collective Investment Schemes such as Mutual Funds and Real Estate Investment Schemes, Private Equity Funds, Infrastructure Funds and even Retirement Savings Accounts under the National Pension Scheme.

Investors can also participate directly in Equity Fixed Income securities.

There are however no "BEST" investment vehicles. Different vehicles and different asset classes offer different value to investors at different stages of their investment life cycles and for different objectives.

For example equity mutual funds deliver higher returns as part of a long term investment portfolio whilst fixed income vehicles will provide moderate returns, predictable income and preservation of principal investment, if held to maturity. The risk is to have your adviser construct a portfolio for you that contains appropriate proportions required to meet your different objectives in accordance with your priorities eg Capital preservation, liquidity, inflation adjusted returns and safety.

Collective Investment Schemes are however highly recommended for retail investors as these schemes avail them with the expertise EsQ legal practice I 17

of professional fund managers under an SEC regulated structure that separates investment of such funds (by the Fund Manager) from custody (by the Custodian) and from investor representation/governance, by the Trustee.

As a leading woman leader in the capital market, what Insights can you give Nigerian women on Navigating & Creating a Successful Career in Capital Markets.

As with building any other career in a male dominated world, the upwardly mobile capital market woman must realize very early that to stand out and attain/maintain leadership position, she must invariably and consistently outperform her male peers, as they are otherwise more likely to be considered ahead of her. She must fight fair and square to earn the respect of the men around her.

Knowledge is power, so continuous self improvement is of critical importance, Private equity investment in Nigeria, we are we headed?

For a developing economy like ours, Private Equity will continue to be very relevant, for the development of new products, for start up companies and SMEs. The outlook is favourable and the future exciting with our continued commitment to privatization.

What should be the focus of the CMC say in the next three years?

This will be outlined in greater detail in our Master Plan but will certainly encompass financial inclusion, investor and operator education and protection, infrastructure development and of course product development.

What are the economic issues affecting the potential growth of the capital market?

All factors which affect the performance of the underlying entities that issue securities in our market affect us, such as GDP growth, interest rate stability, exchange rate stability, inflation, unemployment rate, transparency and competitiveness of our economy. We must not forget that we are also affected by developments in global markets due to the interdependence of financial markets.

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THE SECURITIES & EXCHANGE COMMISION CONSOLIDATED RULES

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n a move to enhance capacity and development of the Nigerian Capital Market, the Securities and Exchange Commission (SEC) published new rules in June 2013. The Rules bring under one umbrella, all rules previously issued by the SEC prior to 2013 and contains some new rules which emerged as a result of recent developments in the Nigerian capital market.

The Rules, are geared at promoting market liquidity and vibrancy, focus on increasing transparency and efficiency, supporting innovative technologies, employment of best regulatory practices, openness to foreign investors, market inclusion, investor protection, visible impact and participation in industry associations, and creating an enabling environment for the capital markets industry as acknowledged and rewarded by the simultaneous receipt by the Nigerian SEC of the “Most Innovative Capital Markets Regulator” award at the Africa Index Series Awards (2012 and 2013).

This Paper, highlights in broad strokes the amendments and inclusions to the SEC Rules 2013.

1. Acquisitions: Rule 424(2) of the SEC Rules 2013 now exempts from SEC approval, acquisitions of the shares of private and unquoted public companies with assets or turnover of revenue below

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N500 million. Unlike the previous SEC Rules which sought to regulate all acquisition of shares in private company, the SEC Rules 2013 now provides a threshold for acquisition transactions in private and unquoted companies which would fall within the regulatory purview of the SEC. 2. Accountability of Capital Market Operators: The new Rules provide for higher standards of regulation and accountability of Capital Market Operators (CMOs) and their activities. For example, under the new Rules, every CMO shall seek and obtain the approval of the Commission before the establishment of a new branch and shall notify the Commission of its intention to close any branch.

In addition to the foregoing, the Rules provide that branch offices of Capital Market Operators must also be managed by sponsored individuals. This role of the SEC in this regard is akin to the role of the Central Bank of Nigeria in approving the opening and closure of branches of banks in Nigeria.

3. Risk Management Compliance: The SEC Rules 2013 beefs up the audit and risk management compliance of public companies and provides that all the members of the audit committee of the board of public companies must be financially literate. In respect of insider dealing reporting obligations also, Rule 400 (3) of the Rules expands the definition of 'insider' to include members of the audit committee of a

company who by virtue of having been connected with the company, have obtained unpublished price sensitive information in relation to the securities of the company and thus their trading activities should be monitored.

4. The Rules specifically provide that public companies shall include risk management as part of their accounting policies, disclose any material effect of unmitigated risk on corporate profitability and strategies for preventing risks they are exposed to.

5. Sukuk: In a bid to foster the development of products that would deepen the Nigerian capital markets, Rule 569 of the SEC Rules 2013 recognises and introduces rules governing Sukuk. The Sukuk provisions are in line with the financial inclusion drive of the SEC. The SEC Rules 2013 primarily recognises the Accounting Auditing Organizations of Islamic Financial Institutions (AAOIFI) and provides that all Shariah principles and

concepts applied in structuring an issue, offer or invitation of Sukuk shall be consistent with the general Shariah rulings, principles and concepts as approved by AAOIFI or any other standard setter recognized by Commission. In essence, a Sukuk issuer must comply with SEC Rules as well as the applicable Shariah rules. and must therefore appoint an issuing house, which will ensure compliance with the SEC Rules on securities, and a Shariah adviser who will ensure compliance with Shariah principles. The Rules also provides that Sukuk shall be structured in any of the following ways: 5.1. Sukuk Ijarah – (leased contract); 5.2. Sukuk Musharakah– (sharing contract); 5.3. Sukuk Istisnah– (exchange contract); 5.4. Sukuk Murabahah– (financing contract); and 5.5. Any other form of contract approved by the Commission The SEC Rules 2013 to a significant extent has taken into account the global trends in securities dealing and lays the foundation for a robust securities market. Capital market reform is however a progressive process and the regulator must constantly identify new gaps to fill. It is worthy of note that subsequent upon the publishing of the SEC Rules 2013, the SEC has published rules on the minimum capital requirement for certain CMOs, which supersedes the minimum capital requirements contained in Schedule 1, Part B of the SEC Rules 2013. These Rules are geared at ensuring that CMOs which play a pivotal role have adequate capital buffer to withstand any unexpected losses.

EsQ legal practice I 19

PRIVATE WEALTH MANAGMENT POTENTIALS & CHALLENGES

I

t's almost a year now since the last CMC Retreat held in Warri, Delta State 2012 and now Abuja 2013, which promises to be yet another mind-blowing, intellectual, incisive and vibrant brain-storming sessions on issues revolving round the deepening of our Capital Market. As opportunities abound and innovative ideas are fast changing the Capital Market, several salient issues will be discussed by experts with decades of wealth of experience.

Public Trusts and Corporate Trusts have in recent times boosted activities in the Capital Market and invariably, the fortune of the Nigerian economy via the plethora of medium and long term financing by Government and Corporate bodies ranging from Public infrastructure to Oil and Gas project financing; from Company expansion exercise to the recent Energy Loan syndication. However, my focus in this article is centred on Private Trust or more precisely PRIVATE WEALTH MANAGEMENT.

It is worthy of note that Private Wealth Management is for the wealthy and an entry bar must be set for its clientele to distinguish same from massmarket offering. Though various firms may at one point or the other offer services like Asset management, legal, advisory, financial planning etc, the strict focus on legal solution for a problem that is laden with Investment, commercial and family issues may prove inadequate, just as private banking drifted into mass-market offering and lost its appeal with HNIs.

a term used to describe a comprehensive, specialised and highly customised service rendered to High-Net-Worth Individuals (HNIs). It is a modern phrase that embodies customised professional services that co-ordinate Estate planning, financial planning, Investment advisory, Legal resources, private banking, tax reduction mechanism and Investment management to meet the desires and yearning of an emerging and increasing class of wealthy and influential persons. This involves efficient collation of Assets, use of Estate planning vehicles, investment advisory services and management, business transfer and succession particularly within family ties, financial planning and taxreduction mechanism. HNIs would include individuals with very large personal Private Wealth Management is wealth, small-business

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owners, owners of sizable intellectual property (i.e Patent, Trademark and Copyright) and the families of these groups of people mentioned It is worthy of note that Private Wealth Management is for the wealthy and an entry bar must be set for its clientele to distinguish same from mass-market offering. Though various firms may at one point or the other offer services like Asset management, legal, advisory, financial planning etc, the strict focus on legal solution for a problem that is laden with Investment, commercial and family issues may prove inadequate, just as private banking drifted into mass-market offering and lost its appeal with HNIs. The need for a working relationship, confidentiality, harmony and sustainability make Private Wealth Management

not only desirable but also a necessity for wealthy individuals who are keen to grow their income and investment and safeguard against waste.

Some phrases are salient in the discussion of Private Wealth Management as we further enunciate the potential and challenges lying ahead particularly within the Capital Market Operators; ∙ Investment Advisory and Management ∙ Estate Planning ∙ Financial planning ∙ High-net-worth Individual ∙ Customized and specialized services THE GOAL OF PRIVATE WEALTH MANAGEMENT ∙ Top on the list is to grow and safeguard the net-worth of wealthy individuals (i.e tangible Asset and/or intellectual) through sufficient

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Nigerians need Private Wealth Managers now, more than ever before. The Capital Market and indeed the Nigerian economy is faced with another goldmine, informed by an increasing line of wealthy Nigerians who are becoming wealthier and need their wealth managed professionally.

knowledge, use of a wide array of experts and competently increasing Assets and reducing liabilities. ∙ Sustaining wealth, within the dictates of the client, through effective deployment of Estate planning vehicles and ensuring business transfer /succession, Foundation, Endowment and enduring family legacy. ∙ An all-time fast, easy and effective access point to expert advice on Investment, financial planning, legal solution and tax vacation windows which directly safeguards the Assets of the HNIs and prevents leakages. ∙ To save the enormous amount of time required in manage several Assets, Investments and Estates of HNIs by themselves as well as funds required for paying different professionals engaged.

THE NIGERIAN POSITION Statistics show that there has been Capital flight to the tune of billions of Dollars from Nigeria due to lack of and/or insufficiency of standard Private Wealth Management firms. The figures of wealthy

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Nigerians continues to grow in leaps and bounds as well as its attendant international ranking by notable organizations like FORBES amongst others. However, the dearth of competent PWM services in the Economy is also very apparent. As more established PWM around the world e.g. JP Morgan, Goldman Sachs, Merrill Lynch, HSBC, Deutsche Bank etc reach for our emerging Nigerian “elite class”, the existing and prospecting PWM firms and Units are in a race against time to develop the required competence, skills and platform to cater locally for this growing need.

The resultant Capital flight from Nigeria hurts its economy and boosts the economy of the host Countries of the foreign PWM firms most of whom have presence around the world except in Nigeria. While some Banks and units of financial Institutions have made spirited effort at Private Wealth Management through Private Trust, Elite Banking, Estate planning and several other innovations, the growth therein is still a far cry from the strides achieved in Public and Corporate Trust.

Also, the misconception and dearth of understanding among Operators has slowed the public awareness of such services to the desired clients.

PWM is not portfolio/funds management, though the latter may be a part of it; likewise PWM is more than Private Trust, though Private Trust will play an integral part in PWM – the core need for PWMs is centred on the fact that no single need of a HNI is strictly legal or financial or investment inclined or Estate planning, but cuts across various categories. Below are some of the challenges hindering the growth of the PWM. CHALLENGES ∙ Low level of awareness amongst targeted clientele.

Both the proponent and the target clientele require sufficient information, transferable knowledge etc.

Developed economies have improved greatly on transfer-

able knowledge in respect of PWM E.g International Academy of Financial Management and the Wharton School, University of Pennsylvania (both in the U.S.) offer programmes considered standards for professionals and also serve as accrediting Organizations. ∙ Lack of Professional synergy: PWM demands a life of its own to deliver highly customised services and diverse offerings, the absence of competent hands who are not only experts in their fields but have understanding of how they may utilize their expertise to create value for the HNIs is a key requirement.

From Estate planning to Investment advisory; from Legal guidance to tax reduction, all must work in harmony to raise the bar on PWM. ∙ Non-disclosure of Wealth Status; a key feature of PWM is that it is designed for private Individuals with substantial personal wealth and since every Firm must determine for itself the entry bar to qualify for this service, a personal Wealth Analysis is required. The Wealth status is required not only to determine the service placement but also to allow the Private Wealth Manager formulate an effective long-term wealth management strategy.

Trustees. Hence, the relationship capacity matched with required expertise puts the ball in the court of the Trustees.

A strong relationship capacity entrenched in confidentiality, trust and superior service delivery are the core attributes of any PWM unit or firm. An increase in public awareness, professionalism and innovation are the collective responsibility of the Capital Market.

In conclusion, for the Nigerian Experts in the Capital Market to take over the PWM market thereto dominated by the foreign Managers, I recommend as follows: i. The HNI's faith in the ability of the local Private Wealth Managers to offer robust services like seamless transfer of business from one generation to another needs to be systematically built by the Operators. ii. Access to a wide array of Estate planning vehicles with a clear understanding of our African peculiarities should be communicated to this class of the Society. iii. Sustainable legacy through Foundation and Endowment established for and on behalf of our HNIs, iv. Advance Investment advisory services, Income growth and preservation all built on a solid, Service delivery be rendered to the HNIs by the CMOs. WAY FORWARD The need for, and the developNigerians need Private Wealth ment of PWM is no longer in Managers now, more than doubt as firms in the Capital ever before. The Capital Market strive to make the Market and indeed the most of this glaring opportuNigerian economy is faced nity. Though its impact on the with another goldmine, informed by an increasing line Capital Market and the of wealthy Nigerians who are Nigerian economy may be a becoming wealthier and need discussion for another day, Private Wealth Management their wealth managed has come to stay and will most professionally. Without definitely outlive other areas prejudice to the excellent of Wealth Management. How services rendered by other soon we are able to integrate Capital Market Operators, this into our service offerings, Trust Houses are best is up to the Market players positioned to provide this and proponents! The future is customized service. The here! reasons are not far-fetched.

Most of the services that are geared towards private enhancement of income, growth, successionship, business transfer and estate planning are already in the range of services provided by EsQ legal practice I 21

SIGHTS & SCENES FROM ESQ INTERNATIONAL ARBITRATION SCHOOL 2013

Sponsored by

Gbenga Gbenga Oyebode, Oyebode, Managing ManagingPartner, Partner, Aluko Aluko &&Oyebode Oyebode

ALUKO & oYEBODE

British Deputy High Commissioner, Nigeria

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EsQ legal practice I 23

TARGETING CLIENTS FOR GROWTH

Y

ou know that lawyer and—on your really, really bad days, at least—you probably hate him. He's the one who is always prepared, with all of his transaction or litigation documents neatly organized. He always seems at the top of his game, never seems flustered and, most infuriating of all, always seems to have the nicest clients—the ones who are well-mannered, appropriately engaged in their matters, and 24 I EsQ legal practice

willing and able to pay for legal services. They are the clients who even refer other good clients. And you can't help but ask yourself, what did that guy do to deserve all the luck? Well, maybe it's not luck. Maybe he just has a plan.

A business plan, that is.

Lawyers and firms that seem to have all the good clients and cases may sometimes be lucky, too. But being in the enviable position of having a good book of business requires a lot more than luck.

It takes thought, careful planning and lots of hard

By Laura A. Calloway

geographical area in which they practice. Use resources such as your local chamber of commerce, area business magazines and the Internet to discover the major industries, and the major players in those industries, within your county or metropolitan area.

Delve into population demographic data to create a DO SOME MARKET profile of the various potential RESEARCH. client groups all around you.

I am often surprised by the And look at trends in your number of lawyers I encounter area. Are new businesses who seem to know almost opening every day or do nothing about the civic and existing ones seem to be going commercial life of the under? Is the bulk of the

work to make sure that you are positioned in the right place at the right time—to land the right clients. But first you need to know what you're looking for, to recognize it when you see it. Here are the simple steps you can follow to become that lawyer.

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mechanism. The policy should go on to specify that a signed fee agreement is required and should set out the minimum retainer or cost deposit needed, or other financial arrangements as are appropriate given the type of matter.

You will never be able to build a book of great business if you don't first decide what that book of business looks like.

DEVELOP A REFERRAL NETWORK. Invariably, potential clients who don't fit into your game plan will seek your help.

Someone may not be a good fit for your client roster right now, but that doesn't mean that he or she might not become a good client in the future. So don't burn your bridges. Get to know several other lawyers in your area and USE INTAKE FORMS. find out what their perfect Always use an intake form practice would look like. Then when interviewing a potential forge relationships that will new client. Intake forms can allow you to have good assist you by making sure that alternatives for referring the you get all of the information clients and cases that aren't you need to open the file and quite what you are looking for. get started on the case, but With some time, some they are just as helpful in planning and some determining whether you patience—and the financial should agree to take a capital and will power to particular case. Include avoid getting involved in questions that will help you more easily identify cases that matters that don't fit into your plan—any lawyer can become meet the minimum criteria that lawyer. you have previously set.

You should also consider drafting your intake forms to help determine the client's creditworthiness, such as population aging or becoming nothing but a stable of great where the client works, how younger? What is the median clients and cases—and then much he or she makes, the visualize exactly what they income of people in your length of current residence community? Are there more would look like, demographiand home ownership status. single people or families with cally speaking. Establish a Questions of this type are written set of criteria that a children? useful, not only for the actual case must meet before you This type of information information they provide will agree to take it. should give you an insight about the potential client but into the type of legal services Your policy should state also for the feel they help you clearly and in some detail that are needed, or will soon get for the client's willingness what kind of cases the firm be needed, and may not to be open and responsive to currently be offered by other will and will not take, your requests for sensitive lawyers in the area. including dollar value or other information. Written intake limits the cases must meet, policies and forms will help and include a prohibition on you to weed out the clients ENVISION THE PERFECT taking cases outside the policy and cases that don't fit in with CLIENT. without approval of a your plan.

Dare to dream of having screening committee or other

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EsQ legal practice I 25

A MULTIGENERATIONAL APPROACHTO ENGAGEMENTAND RETENSION

CORPORATE AFFAIRS COMMISSION VS U.B.A & 5 ORS [2013] 5 CLRN 133 - 184 companies in Nigeria, the CAC requested that all commercial banks in Nigeria submit to it records of all loan transactions entered between the banks and their customers.

U, W, C, F, S and Z declined, following which the CAC instituted this action, claiming for declarations that pursuant to Section 7, 197, 198, 199, and 315 322 of the CAMA, the 2. The Federal High Court also CAC was entitled to request established that banks cannot from the Banks information withhold information relating concerning charges required to be registered under Section to a company under 197 of the CAMA and that investigation under the such information could not be CAMA on the ground of validly withheld on the Banker-Customer grounds of banker-customer confidentiality. confidentiality.

The Facts In conducting a special Decision of the Court investigation exercise on all Key Points 1. In a potentially important decision, the Federal High Court recently held that banks have a duty to apply for the registration of charges required to be registered under Section 197 of the Companies and Allied Matters Act Cap C. 20 LFN 2004 (CAMA).

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Investigative Powers The Federal High Court was first called upon to determine whether the CAC was indeed entitled to request for information as claimed, pursuant to their powers of inspection or otherwise.

The relevant provisions of the CAMA under consideration were: Section 7(b) of the CAMA provides that the conduct of investigations into the affairs

Opeoluwa Osinubi of companies is a function of the CAC; Section 197 of the CAMA provides for the registration of specified charges, failing which the said charges would become void against the liquidator, and the money secured under the charge, immediately payable; Section 198 of the CAMA requires the CAC to keep a register of the particulars of charges required to be

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registered under Section 197; Section 199 (1) of the CAMA provides to wit: “it shall be the duty of a Company to send the Commission for registration, the particulars of every charge created by the Company and of the issues of debentures of a series requiring registration under Section 197 of this Act, but registration of any such charge may be effected on the application of any person interested therein.

Section 199 (2) provides to wit: Where registration is affected on the application of some person other than the Company, that person shall be entitled to recover from the Company, the amount of any fees properly paid to him to the commission on the registration….”

Section 314 - 322 sets out the circumstances upon which the power to appoint inspectors can be exercised by the CAC, which in précis are (x) upon the request of members of the company or the company; and (y) pursuant to an order of court, where the company's affairs are being conducted with fraudulently.

Specifically also, Section 317 of the CAMA creates a duty on all officers and agents of a company under inspection to produce to the inspector all books documents and assistance.

be registered.

Accordingly, the Federal High Court held on an interpretation of Section 199 of the CAMA (the provision which permits a person interested to apply for the registration of a registrable charge) that the defendant banks had a secondary duty to apply for registration of particulars of charges required to be registered under the CAMA. The Federal High Court had no doubt that the Bank, who advanced monies under the security were interested persons under the provision, and was satisfied, bolstered by its conclusion banks were 'quasi-public institution created to serve the public,' that banks, and thusly, the defendant banks, had a public duty to ensure that charges required to be registered by Section 197 of the CAMA, were so registered.

commercial understandings of the regime for the registration of resistible charges. Whilst it is the practice, particularly for high value credit facilities, for creditors to ensure the registration of charges, as they stand to lose the most if the charge is voided; this was well understood to be a commercial election, as opposed to a statutory/public duty.

2. Whilst the Court's discernible intention to prevent infractions of the CAMA cannot be faulted, its reasoning is with the greatest respect, decidedly peculiar.

3. On a dispassionate read of Section 199 of the CAMA, its provisions entitle/empower an interested person to apply for the registration of the said charge. As a correlative therefore, the CAC has a duty/liability to consider its application, if so made, by the interested person, and may then effect the registration of This duty on banks to avail the the charge.

CAC of particulars of charges 4. The Hohfeldian construct of apart, the Court also clarified jural relations quite apart, it is that banks were agents for the difficult to see how Section purpose of Section 317 of the 199 can be construed as CAMA, and were under a creating a duty on the person duty therefore to avail interested to apply to register inspectors appointed under the said charges. To my mind, the CAMA with books, if the statute had so intended, documents and assistance having already, within the when an investigation was same Section 199 created an conducted into the affairs of obligation on the company to the principal company. register the charge, it would The Court however have expressed this intention unequivocally.

The thrust of the CAC's claim established that the CAC was 5. On the contrary, on a literal, was not entirely crystal and it not entitled to undertake an and indeed a purposive was unclear whether it was its inspection suo motu, the interpretation of the words of case that the defendant banks preconditions in Sections 314 322 of the CAMA having not the statute, the person were themselves the subjects been satisfied either in relation interested is granted by of the special investigation to the defendant banks or the statute, a right/power to apply exercise or whether the for the registration of a charge; exercise had been directed to chargor companies. and in relation to this, a liberty the companies in whose Confidentiality to elect to do with this grant favour the charges were what he pleases. This is created, and the CAC's request The Court was satisfied that the express provisions of the arguably in keeping with the for documentation was intention of the CAMA in premised only on the alleged CAMA empowering the entitling the person interested conduct of inspections agency relationship between supersede vested rights of to so apply, premised it the said companies and the confidentiality provided appears, on the fact that is the defendant banks. under the common law or by he/she who will stand to For the Court, the material parties' contract. suffer should the charge be issue was whether the voided. defendant banks did not Comments themselves have a duty to avail the CAC of information 1. The decision goes against regarding charges required to the grain of popular,

EsQ legal practice I 27

REFOCUSING THE NIGERIAN STOCK EXCHANGE FOR ECONOMIC PROSPERITY OSCAR ONYEMA, CEO, NIGERIAN STOCK EXCHANGE

W

hat are some of the current developments in the Nigerian Stock Exchange?

The NSE is driving a Transformation Program based on five pillars which are (1) Targeted Business Development, (2) Strong Regulation and Regulatory Environment, (3) 21st Century

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Technologies, (4) First-Rate Investor Protection Strategies and (5) Growth-Enabling Market Structure. Our target really is to work seamlessly to introduce five products across five asset classes, and to achieve a total market capitalization of $1trillion.

A number of transparency initiatives have already been completed, including the development of the X-Compliance report

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I think it is important to understand that for investors to come into the market, the market must offer some perceived value. As such, we are positioning the Nigerian capital market as a market that can create durable wealth for investors. you have to look at macroeconomic circumstances within the country, as well as the kind of fiscal and monetary policies that emanate from the appropriate authorities. All of these things affect the market.

Then looking beyond the country, you must consider what is going on in global On the investor protection economies. We know, for front, the Board of Trustees of example, that the market is the Investor Protection Fund affected by the quantitative (IPF) has been inaugurated, easing (QE-3) activities in the and they are working United States which have diligently to begin operation unleashed a lot of cash into of the fund. the system, with some of that cash finding its way to Nigerian equities. And on the We are also working with various industry regulators on fixed income side, because Nigeria has joined the JP financial inclusion and Morgan Bond Index, we have financial literacy, because a well-informed investor is the seen a significant increase in foreign portfolio inflows into basis for strong investor Nigerian treasury bonds that protection. So, at The Exchange, we have an Investor are included in that index.

Clinic series, as well as an Investor Outreach Program, of Essentially, these are external which we executed about 400 and internal forces that are events last year. playing together to drive price discovery in the marketplace, and thus, affect the market With regards to market itself. structure, we have made a number of changes – we have widened the 'limit up' and How has the global concerns 'limit down' thresholds from and financial worries 5% to 10%. With the introducimpacted on the market and tion of the new trading to what extent can the platform, we have also country be viewed as introduced Opening and decoupled?

Closing Auctions; and we I don't think the country can have introduced Market be viewed as decoupled any Making and Securities more. We have become an Lending. All of these are international market; we are geared towards improving highly integrated into what is market structure, and going on around the globe. therefore, improving the When there was significant quality of the market. concern in the Euro zone, we saw the impact of that What are the key internal and slowdown in our market; external factors affecting when there was a rumour that growth of the market in QE-3 was going to be Nigeria? reversed, we saw the impact around the June timeframe in The market is driven by information, so if you look at our market. Our market is internal factors, first of all, it is also highly correlated to international crude oil prices, information about the company that is most critical: so as crude oil prices fluctuate, how well is a company doing, we see the effects in our market. So, I would say our what are the hard numbers with regards to the company, market is highly coupled and that we are highly influenced and what are the sentiments about the company? Investors by what goes on globally, from an economic perspective. rely on this type of information. and the Broker TraX report.

On the Technology front, we have rolled out X-Gen, which is our next generation trading platform that supports FIX protocol. Tthese are all aimed at driving our market to the next level.

From an external perspective,

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We must also bear in mind that as recent data reveals,

fifty per cent of our market activity is driven by foreign investors.

How will you assess the increasing importance of disclosure and transparency in strengthening market development?

We cannot stress enough the importance of transparency in the running of a good market.

Since the market is driven by information, investors must have all the information they need at their fingertips when they need it, so they can make good investment decisions, quickly. So, to the extent that The Exchange is championing the disclosure of information, The Exchange itself is making sure that we are transparent in our daily dealings -- the more timely the requisite information and data is provided to investors to make decisions, then the better our market is.

We believe this is very important, and we will continue to push to make sure that investors have the information they need in order to make informed investment decisions.

capabilities of market operators. We see subregional integration as a very positive development; in fact, we are championing the growth of a regional market in our sub-region. I am currently the Chairman of the West African Capital Market Integration Council (WACMIC), and we are driving the West African integration effort. By early next year, Phase I of the integration will be effected in the West African zone.

What is the exchange doing to encourage the introduction of new asset classes to the market?

Since The Exchange began its transformation in 2011, we have strengthened our fixed income program, we have introduced exchange traded funds (ETFs), and we are currently working on a feasibility study for derivatives. We hope that towards the end of next year, we will be very close to, if not actually, trading some form of derivatives (futures or options). Our target is that by 2016 we should have rolled out futures and options; the study is just to determine the sequence for rolling them out, but by 2016, we are going to have five (5) products, and we hope that these products, working together, will benefit from the network effect, and make the Nigerian capital market a To what extent will the emergence of a regional stock credible source of capital for companies that are looking to market in Africa impact on access capital. the dynamic of African equities?

It is a very difficult journey, How do we develop a deeper but if we can actualize a Domestic Investor Base? regional market in Africa, it I think it is important to would create a deeper pool of understand that for investors liquidity -- all of a sudden, a to come into the market, the company that is coming to market must offer some raise money on the continent perceived value. As such, we would not just be looking at are positioning the Nigerian one country, but could capital market as a market that consider the whole continent can create durable wealth for as a pool of liquidity. I think it investors. Investors need to is going to be extremely understand that over the long difficult to have one regional run, the equity asset class has pool of liquidity. You are given higher returns than any more likely to see sub-regional other asset class across the pools of liquidity -- a West world. So, the sooner you African integrated capital start putting away money for market zone, an East African your retirement, the sooner zone and a Southern African you should start putting it in zone. There again, the story the capital market as a means would be the same -- a deeper of savings; it is an effective pool of liquidity, a bigger savings mechanism that is population with regards to used (and which has been potential consumers and proven) all over the world. investors, and a wider net with regards to capacity and EsQ legal practice I 29

tion of the new trading platform, we have also introduced Opening and Closing Auctions; and we have introduced Market Making and Securities Lending. All of these are geared towards improving (IPF) has been inaugurated, and the Broker TraX report.

Exchange, we have an Investor market structure, and therefore, improving the and they are working On the Technology front, we Clinic series, as well as an have rolled out X-Gen, which diligently to begin operation Investor Outreach Program, of quality of the market. is our next generation trading of the fund. which we executed about 400 events last year. platform that supports FIX What are the key internal and protocol. Tthese are all aimed external factors affecting We are also working with at driving our market to the growth of the market in various industry regulators on With regards to market next level.

Nigeria? financial inclusion and structure, we have made a financial literacy, because a number of changes – we have The market is driven by well-informed investor is the widened the 'limit up' and On the investor protection information, so if you look at front, the Board of Trustees of basis for strong investor 'limit down' thresholds from internal factors, first of all, it is the Investor Protection Fund protection. So, at The 5% to 10%. With the introduc-

We have to do a better job of educating potential investors about the benefits the capital market provides and the value it can yield, and when I say “we�, I mean the capital market ecosystem -- the market operators, including brokers, issuing houses, registrars; everybody has a job to do, and that includes the statutory regulators too.

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have all the information they need at their fingertips when they need it, so they can make good investment decisions, quickly. So, to the extent that The Exchange is championing the disclosure of information, The Exchange itself is making sure that we are transparent in our daily dealings -- the more timely the requisite information and data is provided to investors to make decisions, then the better our market is.

We believe this is very important, and we will continue to push to make sure that investors have the information they need in order to make informed investment decisions.

information about the company that is most critical: how well is a company doing, what are the hard numbers with regards to the company, and what are the sentiments about the company? Investors rely on this type of information.

From an external perspective, you have to look at macroeconomic circumstances within the country, as well as the kind of fiscal and monetary policies that emanate from the appropriate authorities. All of these things affect the market.

Then looking beyond the country, you must consider

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To what extent will the emergence of a regional stock market in Africa impact on the dynamic of African equities?

It is a very difficult journey, but if we can actualize a regional market in Africa, it would create a deeper pool of liquidity -- all of a sudden, a company that is coming to raise money on the continent would not just be looking at one country, but could consider the whole continent as a pool of liquidity. I think it is going to be extremely difficult to have one regional what is going on in global going on around the globe. pool of liquidity. You are economies. We know, for When there was significant more likely to see sub-regional example, that the market is concern in the Euro zone, we pools of liquidity -- a West saw the impact of that affected by the quantitative African integrated capital easing (QE-3) activities in the slowdown in our market; market zone, an East African when there was a rumour that zone and a Southern African United States which have QE-3 was going to be unleashed a lot of cash into zone. There again, the story the system, with some of that reversed, we saw the impact would be the same -- a deeper around the June timeframe in pool of liquidity, a bigger cash finding its way to Nigerian equities. And on the our market. Our market is population with regards to also highly correlated to fixed income side, because potential consumers and international crude oil prices, investors, and a wider net Nigeria has joined the JP Morgan Bond Index, we have so as crude oil prices fluctuate, with regards to capacity and seen a significant increase in we see the effects in our capabilities of market foreign portfolio inflows into market. So, I would say our operators. We see subNigerian treasury bonds that market is highly coupled and regional integration as a very that we are highly influenced positive development; in fact, are included in that index. by what goes on globally, from we are championing the an economic perspective. growth of a regional market in Essentially, these are external our sub-region. I am currently and internal forces that are the Chairman of the West playing together to drive price We must also bear in mind African Capital Market discovery in the marketplace, that as recent data reveals, Integration Council fifty per cent of our market and thus, affect the market (WACMIC), and we are activity is driven by foreign itself. driving the West African investors. integration effort. By early How has the global concerns next year, Phase I of the How will you assess the and financial worries integration will be effected in impacted on the market and increasing importance of the West African zone. disclosure and transparency to what extent can the in strengthening market country be viewed as What is the exchange doing development? decoupled? to encourage the introduction I don't think the country can We cannot stress enough the of new asset classes to the be viewed as decoupled any importance of transparency in market? the running of a good market. more. We have become an international market; we are Since the market is driven by Since The Exchange began its transformation in 2011, we highly integrated into what is information, investors must have strengthened our fixed EsQ legal practice I 31

INFRASTRUCTURE FINANCING IN NIGERIA: THE DIFFERENCE BETWEEN PUBLIC FINANCING AND PRIVATE CAPITAL

I

nfrastructure services and facilities support society and commerce to operate.

Modern history and the sheer scale of infrastructure development in the more developed countries suggest that these basic necessities were to be provided by the State.

Nigeria Sovereign Investment Authority Act (NSIA) 2011 The NSIA was established to receive, manage and make long term investments from the revenue of all three tiers of government in preparation for when Nigeria runs out of hydrocarbon resources.

Amongst other objectives, Section 3 (b) of the NSIA is charged with the enhancement of and the development of Nigerian infrastructure.

reflects this inherent tension, as well as which side to fall on However, the growing capital depending on the nature of needs in the infrastructure the capital. sector globally has created a gap between the resources Pension Reform Act (PRA) available to the State to provide these services and the 2004 capital required for same. As The PRA provides for the these projects increased in establishment of the National number and became more Pension Commission sophisticated, the need for the (PENCOM) as the regulatory deployment of private capital body to oversee the investin addition to or instead of ment of pension funds in State resources became Nigeria. In line with this apparent. directive PENCOM promulgated a document titled “Regulation on Investment of As earlier stated, society expects infrastructure projects Pension Fund Assets such as roads, power genera- (RIPFA)�, this document tion, hospitals and the like to provides the criteria for investment of Nigerian be wholly or at least mostly pension fund assets in financed by the State, thus infrastructure projects. providing them at minimal cost to users. The resources expended to provide these Section 4.7 of RIPFA provides services will not always give that infrastructure funds into commercial returns. This which pension funds will be creates a dilemma. Private invested be registered with the Capital seeks full economic Securities and Exchange returns wherever deployed.

Commission (SEC).

However, some infrastructure projects are incapable of yielding market based returns. Section 5.1.3 provides for a 20% limit on value of a pension fund to be invested in How can this conundrum be infrastructure bonds whose resolved? ratings must be at least BBB. Infrastructure financing requires significantly deep RIPFA further provides in pockets, as suggested by the Section 5.2.2 (v) that securities provisions of the Pension to be invested in must be Reform Act of 2004 and the listed on a SEC registered Nigeria Sovereign Investment exchange or any credit facility Authority Act of 2011. A brief approved by the Central Bank analysis of the different legal of Nigeria (CBN). Section foundations upon which these 5.2.3 provides that the value bodies can undertake of the infrastructure must be infrastructure financing at least N5 billion; viable and 32 I EsQ legal practice

financially rewarding for the investment of a pension fund; managed by SEC registered managers whose principal officer have at least 10 years of continuous experience in infrastructure financing (these officers are not allowed to leave the management of the fund without giving 90 day notice to the Pension Fund Administrator [PFA] investing in the fund); the fund is to have an advisory board with independent representatives of institutional investors in the majority.

whilst providing that the body shall set up three funds (Future Generations, Nigeria Infrastructure and Stabilisation Funds), develop asset management skills and attract other investors to Nigeria.

Section 4 (2)(f)(x) charges the body to seek the best achievable financial returns having regard to the achievement of its objectives.

Section 31 (b) provides for government contribution to the infrastructure fund as a The foregoing highlights the function of the Gross cumbersome criteria placed on Domestic Product (GDP) and the investment in infrastrucfurther stated that contributure and align seamlessly with tions to the fund would cease the fact that where Private once it attained a certain Capital, especially pension percentage of the GDP (this funds, is deployed safety of percentage is subject to review and return on investment is every two years). paramount.

Another interesting observation is the provision of Section Nigeria Sovereign 41 of the NSIA which sets out Investment Authority Act the investment plan for the (NSIA) 2011 Nigeria Infrastructure Fund (NIF). It provides that the NIF The NSIA was established to is to make investments that receive, manage and make will contribute to the developlong term investments from the revenue of all three tiers of ment of Nigeria; it stipulates government in preparation for in Section 41(4) that proposals by the tiers of government for when Nigeria runs out of investment in infrastructure hydrocarbon resources. projects within their jurisdicAmongst other objectives, tion are to be assessed Section 3 (b) of the NSIA is charged with the enhancement according to criteria of financial returns. of and the development of Nigerian infrastructure.

Section 4 of the NSIA states the functions of the body,

Section 41 (5) provides for an investment of 10% of the NIF in development projects and

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social infrastructure which have less favourable economic returns but are determined sufficiently worthy projects by the National Economic Council (NEC). The NSIA further provides in Section 43 for a lower Internal Rate of Return (IRR) target for NIF investments as opposed to other funds, all which were attempts at

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mitigating the provisions of Section 41(4) by attempting to balance the need for infrastructure development with the need for same to yield economic returns.

objectives, reflecting the traditional role of the government to provide infrastructure, otherwise the profit motive is left firmly in place.

Conclusion There exists a tension between the need for infrastructure development and financial returns from investment of Private Capital in same. The two laws examined put the choices in stark relief. The PRA seeks market rate financial returns on investments in infrastructure project. The NSIA is explicit in its pursuance of development

It is illustrative that each of the laws examined takes an explicit line as to how the relevant capital may be deployed to infrastructure projects. We get exactly what we want. We are concerned with pension funds being safely invested and offering a decent return. For the NSIA funds, we are again very clear as to what each of the funds should do and with a firm focus on infrastructure there is a recognition that the profit motive has to be compromised to achieve infrastructure objectives.

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ARUNMA OTEH: THREE YEARS OF DOGGED PURSUIT OF CAPITAL MARKET REFORMS Since her appointment as Director General of the Securities and Exchange Commission (SEC) in 2010, Ms. Arunma Oteh has worked assiduously to reverse the fortunes of the Nigerian capital market by rescuing it from the vice – grip of crises and positioning it on the cusp of opportunity. She has resolutely led the implementation of a reform agenda which is aimed at elevating the Nigerian market to a world class capital market.

H

er reform effort finds solid foundation in the firm faith that Nigeria has the capacity to better leverage its capital market to fuel entrepreneurship, support the real sector and create jobs which bring about the desired multiplier effect of sustainable economic growth which is socially equitable and inclusive. It is on the breath of the incomparable potential which the capital market offers in radicalizing socio economic growth that it places high premium on the creation of a strong, efficient, transparent, and robust market. This is achievable only through continual raising of the standards of the market's regulatory environment, revitalizing market enforcement programmes, introducing new products, enhancing transaction processes, widening the investor-base and invigorating investor education.

great store by market integrity; on the recognition that integrity and its sibling virtues of honesty, fairness, transparency and sincerity are at the very foundation of transactions in capital markets. The basis of an investor putting vital resources and life savings into a virtual capital market is an uncanny belief and faith that players in the market will conduct themselves on the basis of the modicum of integrity that ensures a fair and orderly market. An investor operates on the very reasonable assumption that market governance would eliminate indiscipline, malfeasance and sundry misconduct on the part of intermediaries between him and the market to the barest minimum. This is faith founded on integrity, on the assumption of its being; i.e. that both the regulator and operators constitute a capital market community in which integrity is the very nucleus of correct and ethical behavior.

into the markets since the dawn of 2010.

The above injurious ramifications of integrity – deficiency in the Nigerian capital markets are the challenges that the Oteh leadership of the Nigerian capital has had to confront. They constitute the backdrop for the reform strategies which were fashioned to lead the market from doldrums to opportunities and from regression to a world class capital market which will constitute the fulcrum of inclusive economic growth that will pool savings and yield affordable medium and long term finance for business expansion and for growing the nation's infrastructural stock; a capital market which would be relevant and indeed play a leading role in enhancing the living standards of our beleaguered peoples.

Oteh's reform programme for the Nigerian capital markets is turnkey and has various This standard assumption of strategies which are intended an investor in any capital Establishing significant address specific facets of the progress on all these fronts is market was combusted by the to complex of challenges with Nigerian experience before necessary to build the world the market is beset. A and leading up to 2008 when, which class market of Oteh's vision primary challenge is a weak and relentless pursuit. A world owing to a pervasive integrity regime of market enforcement deficit, the market nearly class capital market, in her which gave a mere slap on the collapsed, eventuating in words is: wrist for some of the most colossal loss of value for the heinous infractions of laws many investors. The conse“A market where there is and rules. This allowed quences of this development investor confidence, adequate are still with us. They are to be deviant behavior to prosper in product offerings and efficient seen in the still fragile albeit the market as players preprocesses, market integrity, ferred to part with minor improving state of investor sound regulatory framework, confidence in the Nigerian fractions of the gains of sharp strong and transparent practices by way of penalties capital market.

They are to be disclosure and accountability seen in the flight of the retail than submit to the rigors of regime, good corporate rule observance and proper investor from the market. They behavior. governance, and a fair and No single factor was are to be seen in the lope efficient market place”. more responsible for the sided foreign /local investor colossal drain of investor participation ratio in the from our markets market. They are to be seen in confidence To transform the Nigerian this asymmetry between the near ossified resistance of than capital markets from a crisis misconduct and punishment. the market to the cocktail of state to one on the cusp of confidence restoration opportunity, the Oteh therapies and remedies which In the past three years of leadership of the SEC and Nigerian capital markets sets Oteh's reforms have injected continuous sanitization of the

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capital market, one of the measures of recent reforms is the heavy hammer of disciplinary actions used as a veritable tool as an unequivocal signal to the market that it was a new day in which misconduct would not be countenanced.

One of such plethora of cases is the suspension of EcoBank Plc from acting as a receiving banker and from all capital market activities. The suspension comes as a result of the role played by the bank in a complaint by Avil Services Ltd relating to a margin Loan transaction with Arian Capital Management Ltd which was secured by 555,555 units of First bank Nigeria PLC shares belonging to Avil Services Ltd. Although the suspension imposed on Ecobank Nigeria Plc was made on the 5th of February, 2013 for perceived connivance with Arian Capital management Ltd to convert the stipulated shares, the suspension will endure until the bank clears its name as requested by SEC in accordance with Section 13 (r ) & (t) of Investments and Securities Act 2007.

In the same vein, CashCraft Management Ltd, its directors and sponsored individuals were suspended from all capital market activities as a result of the Company's violation of Section 155 of the ISA 2007 in its management of Anchor & Bedrock Unit Trust Scheme.

Furthermore, the closure of the offices of Royal Benchmark Ltd in Ibadan, Oyo state, comes hot on the heels after the same enforcement measures were carried out in Port-Harcourt, Sokoto, Lagos, and Jos for unregistered and unlawful operations in the course of 2013. Accordingly, Ms. Oteh emphatically reiterates thus,

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technology in the capital markets to what is obtainable in peer and non-peer markets.

The pre-reform SEC was characterized by an absolute dearth of computers and a severe scarcity of ICT skills in the Commission's personnel.

In just three years, ICT infrastructure and access ratios have been transformed such that every staff now does his / her work with either a desktop or laptop computer.

Nearly every staff can send and receive an email and the ICT infrastructure which has been procured for the SEC is, by universal acclaim, a rarity in the Nigerian public service space.

The market was doing better than the regulator in terms of ICT infrastructure before Oteh's advent at the SEC. The gap has narrowed significantly. Even then the reform and its high priest, Oteh remain relentless in the pursuit of a higher content of modern technology in the capital markets process. Depth and span of ICT infrastructure is one of the parameters that are emphasized in SEC's periodic onsite inspections of stockbrokers, issuing houses, registrars and other capital market operators.

“The string of closures by the commission should send a strong, unequivocal message to illegal fund managers and sundry perpetrators of indiscipline and malfeasance in the capital markets that it is time they sought worthier endeavor. Illegal entities erode the integrity stock in our markets in addition to introducing hapless investor publics to the agony of loss of value, the SEC frowns severely at their existence.”

Human capacity upgrade both in terms of skill sets and ethical conduct is another critical plank of the multifaceted reform effort. The capacity gap between operators in the market and regulators of the same market presents a significant challenge to the efficient discharge of the regulatory and oversight responsibilities of the latter. There is no gainsaying that information and knowledge deficient regulator offers little prospect of investor protection, the ultimate mandate of the SEC.

Ms. Oteh, who by vocation and orientation is a human capital developmentalist, has strengthened the training and retraining facility in both the SEC and wider capital markets by appeal to local and international resource centers.

“The string of closures by the since been launched which Financial Sector Regulatory The reform process has received critical acclaim from Coordinating Committee, commission should send a strong, unequivocal message renowned international FSRCC, the SEC has collabo- revisited the SEC's in – house to illegal fund managers and figures on the subject. The rated with other regulators of programmes for staff development to ensure that they yield new code compels corporate sundry perpetrators of the financial sector and even more qualitative capital in the indiscipline and malfeasance organizations to much more law enforcement agencies to sense of imbuing personnel in the capital markets that it is stringent levels of information rein – in the potential for with enhanced capacity to disclosure than its precedent untoward conduct. time they sought worthier render better service to the endeavor. Illegal entities erode on the understanding that a markets in the regulator's significant percentage of the integrity stock in our Since the ultimate objective of critical mandate areas. capital market crimes are markets in addition to the reform is to transform the insider abuses. introducing hapless investor Nigerian market to a world publics to the agony of loss of capital market, technol- Also, in furtherance to its call value, the SEC frowns severely The reform effort of the capital class for an internationally ogy has been delineated as at their existence.” acclaimed financial hub in market emphasizes inter – key to attaining efficiency in Africa, the Securities and agency cooperation and the management of transacExchange Commission on the Another element of the reform collaboration on the premise tions and dissemination of 9th of September 2013, that prudential and securities information which define a was a conscious effort to inaugurated a '10-year Capital regulation constitute a strengthen information world class capital market. disclosure and transparency in continuum which is fostered ICT upgrade is a critical plank Market Master Plan Committee', which will among when concerned agencies act of the reform agenda. Oteh the market. A new code of corporate governance has in concert. Through the desires to grow the content of others, articulate a development strategy for the Nigerian 36 I EsQ legal practice

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capital market. This master plan covers major areas bordering on investor protection and education, professionalism, product innovation and expansion of the role of the capital market in economic development.

Speaking at the inauguration ceremony, Director General of the SEC, Ms. Arunma Oteh, said the SEC was working hard to ensure the capital market help the Nigerian economy realise its potential.

She added that the SEC decided to put up a 10-year capital market master plan because of its desire to make the Nigerian capital market a world-class market.

end of the year. This facility according to her would assist the country to increase the number of Nigerians who hold mortgage significantly and also help to reduce the interest rate on housing financing. In addition, a lot has been done to entice more investors particularly retail investors to the market. They include the revamp of the investors Protection Fund of the NSE, a decision by the Board of the SEC to set up and operationalize the National investor Protection Fund (NIPF) as well as complaint management mechanisms that will speedily resolve risks.

Another element of reform is the FMDQ OTC PLC, was officially launched on the 7th of November 2013, in Lagos. It is positioned to become the most liquid, efficient, secure and technology-driven platform in Africa by 2018 with the mission to empower the Nigerian OTC Financial Market to be innovative and credible in support of the economy.

Presenting the FMDQ OTC market to the Public and private sector players in the financial market, Ms. Arunma Oteh laid emphasis on the relevance of the platform on the basis that the FMDQ will set the triggers for increased funding of infrastructure in Nigeria.

The Nigerian stock exchange took another groundbreaking step in its goal of becoming a vast and strategic market by introducing the X-GEN trading platform. It is a new highly sophisticated mechanism that boasts of high performance, robost and scalable, multi-asset, multimarket matching trading engine. Commenting on the beneficial purpose of this new market product, CEO of The Exchange, Oscar Onyema that it will increase Professor Graham Penn of the stated in market transparUniversity of College, London, confidence ency, enable efficient price the lead facilitator on the discovery, enhance surveilworkshop explains that lance system and investors are securitization is a financial afforded the opportunity to practice of pooling various diversify their investment types of contractual debt such portfolios. as mortgages, commercial mortgages, car purchase, loans or credit card debt obligations Subsequently, the reformatory element took the form of the and selling the consolidated debts as bonds, pass-through Launch of the NASD OTC in July 2013 which is an alternasecurities or collateralized tive trading platform created mortgage obligations to various investors. The driving by the National Association of Securities Dealers. It is force therein is the ability to designed to bring more have access to medium and liquidity to Nigeria's Capital long term fund while resources are made available Market. It has been licensed by the Securities and to government to fund other Exchange Commission (SEC) social programmes. to trade a broad range of instrument over-the counter However, Ms. Oteh further including unlisted equities disclosed that apart from and bonds in Nigeria. It also securitization products, a financial perforNigerian Mortgage facility is provides mance of non-listed compacurrently being coordinated and corporate governance by the Honorable Minister of nies companies that hitherto Finance/Coordinator; Minister of might not be in the public of the economy (HMF/CME) would be unveiled before the domain.

Furthermore, between the 28th and 30th of January, 2013, SEC concluded a 3-day capacity building workshop on securitization for some of its workforce. This is an attempt to support the Nigerian government in its effort to address the numerous infrastructural deficits crippling the country, especially in the areas of housing, agriculture, and roads. The rationale behind this sensitization is to spadework the imminent introduction of securitization in the basket of products available in the Nigerian Capital market in line with the product of diversification objective of the ongoing reform agenda which the current leadership of the SEC is leading in the Nigerian Capital Market.

According to the DG of the SEC, Ms Arunma Oteh, the said workshop would enable the FG to come up with a framework on securitization which would not only deepen the capital market but also form a criteria aspect of the transformation agenda of President Goodluck Jonathan.

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Its advent has generated a large interest in the capital market in the past months as operations have commenced in six companies. According to the CEO, NASD OTC, “75 stockbroking firms are expected to on the platform by the end of the year.”

The successful closure of the recruitment process of 52 young professionals in SEC's core disciplines of Accounting, Economics, Finance, ICT and Law to strengthen our baseline personnel cadre through a meritocratic process of intense sifting and sorting from a universe of 30,000 applications highlights a reform induced alignment of the Commission's personnel complement with the professional skills required for discharge of its core mandate.

Despite political pressure, the recruitment process refused to compromise merit and ensured that only the more competitive applicants with the relevant skill sets went through the neck of the funnel. They have since been on – board and are undergoing the tutelage that will convert them to tomorrow's standard bearers of SEC that is a much more responsive and efficient regulator of a world class Nigerian capital market.

The reform years have instituted examinations as a parameter for consideration for promotion within the SEC. This is a domestication of extant policy on promotional examinations in the Nigerian public service and an aspect of the effort to migrate the Commission to a meritocracy.

quently provided very helpful recommendations in March 2010.

What is the balanced scorecard of the reform effort?

Although three years is but a short time in the life of a reform effort given the unprecedented decline in the capital markets in 2008 and 2009. But market insiders point to the robust intellectual base which the resuscitation of the Capital Market Committee (CMC) has supplied for ideational engagement across the regulator / operator divide with extant challenges of the market as a solid, even capital gain of Oteh's reforms.

Through the CMC, periodic diagnostics are carried out on aspects of the market's workings; strategic visioning is conducted and plans formulated for realizing objectives defined and identified through such forecasts.

All this is done in an atmosphere of collegial interaction by all facets of the capital markets community which is anchored by Oteh who pairs her cerebral merits with a steely determination. The CMC system has enabled comprehensive radar coverage of the markets to ensure that no dysfunction is left unattended to the point where it goes to seed and heralds fresh investor misery.

There is also consensus that the reform measures are beginning to kick – in.

Investor confidence is returning, albeit gradually.

The rationale for the slow momentum is the universal truth that when investors lose Fillip has been given to significant value as happened collaboration with other in the equities market in 2008 market jurisdictions in and its aftermath, it becomes a knowledge transfer and very hard sell persuading regulatory cooperation. them to re – embrace the Through such partnerships, the reforms are bridging skill market. But the signs of recovery are palpable. gaps in vital areas of the One of such signs is the 2013 Nigerian capital markets edition of the prestigious community across the regulator and operator divide Africa Index Series Award for the category of the continent's for instance the US SEC “Most Innovative Capital facilitated a very successful Market Regulator”, won by market – wide training programme in 2011; Ms. Oteh the Securities Exchange got the US SEC to undertake a Commission (SEC). Winning the award for the second time peer review of the Nigerian running after its emergence in capital market and subseEsQ legal practice I 37

2012, attest to the high regard in which the recent course of three-year long reforms of the Nigerian Capital Market is held in the International market.

The bond market has spiked up in this season of reform. Given the absence of a robust structure for secondary Bond market transactions on the NSE, trading occurred mainly on the OTC market. Analysis of trading activities on the OTC Bond market indicates that total 4.33 billion units of Bonds valued at N3.915 trillion were traded beginning January and end of August 2012. An overwhelming proportion of bond trading volume is in FG bonds, which in 2011 traded 8.95billion units valued at N7.99trillion. The size of the Nigerian bond market, inclusive of FG bonds, subnational, agency and corporate bonds is put at N7.92 trillion. The recent appointment of Stanbic IBTC as broker on FG bonds is a very promising move that will increase liquidity in bond trading.

The sum and substance of the trend in the market is that it is experiencing sustainable recovery and growth because the weaknesses in its foundation are being addressed by the multipronged reform effort. Information disclosure is more prompt, accurate and transparent; participants are more reluctant to commit infractions because they dread the consequences of such actions; asset classes and investment options have widened beyond the traditional equities and fixed income duality; monitoring of use of finance obtained from capital raising exercises in the market is much more stringent, etc.

The Oteh reforms have not spared energy in the strengthening of investor protection.

In particular, in line with statutory provisions, the Commission in March this year incorporated the National Investor Protection Fund (NIPF) as a company limited by guarantee. Rules and regulations are currently being formulated to guide the management of the Fund while also perfecting the necessary documentation that will set out the framework for its operation. The Board of the SEC already approved the sum of N5billion for the takeoff of the NIPF. The Fund is

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expected to “compensate investors whose losses are not covered under the investor protection funds administered by securities exchanges and capital trade points.”

The Oteh years have witnessed defining even revolutionary initiatives in the areas of Market Making, Securities Lending and Improved Market Liquidity. Low liquidity is a challenge for the Nigerian stock market, eliciting calls for introduction of remedial measures. On September 18, 2012 market making finally took off at the Nigerian Stock Exchange with 16 blue-chip shares. The 10 market makers, each of which had a basket of 20 stocks, provide two way quotes which ensure that both buy and sell orders for the affected stocks are promptly executed within the price band stipulated for each stock. To complement this initiative, approval was given for securities lending and short selling rules of the Exchange.

Market making is still in its pilot stage; the process is being closely monitored in line with the SEC's mandate to ensure a fair and orderly market. The market is excited about these developments, which among other initiatives; foster a more robust liquidity profile for the Nigerian stock market.

The reforms have pursued with gusto the adoption of International Financial Reporting Standards. All public companies in Nigeria were mandated under a federal government policy to migrate to IFRS reporting with effect from 1st January 2012.

The SEC, as the apex regulator of the capital market, provided the needed support for the successful implementation of this important milestone.

The scope of the SEC's undertakings in this regard spans training SEC personnel (“train the trainer”), conducting diagnostics, organizing clinics, and ensuring the availability of adequate skill, capacity and ICT infrastructure. In collaboration with the Financial Reporting Council of Nigeria (FRCN) and the Central Bank of Nigeria (CBN), plans have been concluded to set up the IFRS Academy to build the requisite knowledge and skills to ensure the seamless transition to IFRS. Regulatory input to the success of IFRS Academy includes the upgrade of the NCMI into a conducive training facility, a process that is in the final stages of completion.

In addition, the Commission has engaged the services of the Institute of Chartered Accountants of England and

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Wales to provide professional consultancy services for the completion of the transition to IFRS. The initiative, which is being supported by the World Bank, will among others assist in building the necessary skills within the Commission and will ensure the alignment of the Commission's relevant regulations, processes and procedures with the IFRS. The implementation of IFRS will lead to higher quality financial statements, improved reliability of financial data and confidence.

It will also contribute to the strengthening of the business environment and economy.

In the raging debate on whether major telecoms and multinational oil and gas companies should be compelled to list, the reform minded approach favors providing incentives for listing. Along those lines, approval has been given to new listing rules for the Nigerian Stock Exchange to incentivize oil companies with proven reserves, even without track record, and SMEs to list.

Beyond attracting new listings, the objective is to attract more institutional investors to the stock market, particularly pension funds, which have over N2.7trillion under management, the Sovereign Wealth Fund with an initial $1billion to invest, and insurance companies.

Pension funds alone have grown from 1.5% of GDP in 2006 to 8.5 % as of YE2011, one of the largest pools of investible funds.

Constrained by the need to make returns to contributors, PFAs have mostly sought refuge in high-yield government bonds, with very little invested in the stock market.

The PENCOM has recently released draft-amended guidelines, which would allow PFAs to invest up to 25% of pension assets in equities.

In the Q1 2013, the target is to launch the dematerialization of share certificates to facilitate trading. This follows the submission of the report of an industry wide committee on the implementation of dematerialization. When fully operational, e-offers, eallotments, e-transfers of shares and e-dividends will be significantly cut cost and transaction time.

marginable securities on a monthly basis. Towards fulfilling this mandate, the Commission has developed an application that generates on daily basis, the list of marginable securities known as Margin List. This is a list of publicly traded securities/companies that rank highest, relative to their peers, in terms of market trading profile of price, volume, and capitalization, within the review period.

respect to identifying the risks of business activity of Capital Market Operators, particularly Stock broking. This shift from a compliance approach will equally ascertain what risk mitigants are put in place by the company's management to minimize these risks. We are rising to our responsibility as a systemic risk regulator, as espoused in the IOSCO Principles.

Oteh's three year wide ranging reforms have undertaken In the efforts to improve other Market Development market transparency, effiInitiatives such as consistent ciency and competitiveness, lowering of transaction cost by the SEC has approved a reducing fees and advocating number of rules proposed by for tax waivers for a number the NSE in the course of the of capital market transactions. year, and exposed a draft of Encouragement is being consolidated Rules and extended for improvements in Regulations for ease of access trading infrastructure at the to all market participants. The NSE. A new electronic trading process of amending existing platform was recently rules on REITs to further installed at the Exchange. The unleash the potential in Exchange has continued to housing, and mortgage work with the SEC in its bid to finance is ongoing. introduce new products in the A world class market is market, to further deepen and characterized by strong broaden the market. enforcement mechanisms. In this connection, the SEC has strengthened its working relationship with law enforcement agencies especially the Federal Ministry of Justice, Economic and Financial Crimes Commission (EFCC) and the Nigeria Police (NP). The market reform effort has remained intolerant of bad behavior and has continued to bring enforcement action in deserving cases.

Further, the Commission is currently populating the AML/CFT Risk Based Supervision framework with

Finally on technological innovation, pursuant to rules 21& 22 of the approved guidelines and rules on margin lending for banks, brokerage firms, assets managers and other financial institutions, the SEC is mandated to publish the list of EsQ legal practice I 39

PREVENTING LAW FIRM DATA BREACHES

By John W. Simek and Sharon D. Nelson, Esq.

Another day, another data breach. Data breaches have proliferated with amazing speed. Here is a roundup of some of the largest victims making the list in 2011: Tricare, Nemours, Epsilon, WordPress, Sony, HBGary, TripAdvisor, Citigroup, NASA, Lockheed Martin and RSA Security. Clearly, there are some mighty big names on this list.

D

on't be lulled into thinking that law firms (large and small) aren't being attacked by hackers or suffering actual data breaches just because their clients do not seem to be affected. On November 1, 2009, the FBI issued an advisory warning to law firms that they were specifically being targeted by hackers. Rob Lee, an information security specialist who investigates data breaches for the security company Mandiant, estimated that 10% of his time in 2010 was spent investigating law firm data breaches.

Matt Kesner, the CIO of Fenwick and West LLP, who has lectured at ABA TECHSHOW and acknowledged that his law firm has been breached twice. He noted that it is very unlikely that we are aware of most law firm data breaches since firms have a deeply vested interest in keeping breaches quiet. This may be less true in the future now that 46 states have data

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breach notification laws. In fact, by the time you read this, it is possible that a federal data breach notification law will have finally been enacted, as several bills were winding their way through the laborious legislative process in late 2011.

Shane Sims, a security practice director at PricewaterhouseCoopers, has said, “Absolutely we've seen targeted attacks against law firms in the last 12 to 24 months because hackers, including state sponsors, are realizing there's economic intelligence in those networks especially related to business deals, mergers and acquisitions.”

Matt Kesner has noted that China is often responsible for state-sponsored hacking—and that the country doesn't waste its “A” squads on law firms because their security is so dreadful. The rookies on the “C” squads are good enough to penetrate most law firms.

While we agree, don't be misled: garden-variety cybercriminals are interested in law firm data as they engage in identity theft. This is

as true of solos and small firms as it is for the big guys.

For example, imagine the amount of financial data that may be contained in separation agreements drafted by family lawyers, most of whom are solos or small firm practitioners. Those who engage in the black arts of business espionage are also interested, and perhaps hired by a client's business competitor, or the opposing party in litigation.

We hope we've piqued your interest in law firm data security and that your own firm is secure. We wish there was a silver bullet for law firm security, but the truth is that there is no magical cloak to protect your data. You can be the first kid on your block to be infected with some sort of malware in what's known as a “zero day exploit,” meaning that you were infected by the malware before the security companies had a chance to muster a defense against it.

There are some security basics that every lawyer should be familiar with and heed. Be very careful not to accept the

word of your IT provider that you're secure. You need to do your own checking or hire an independent third party to do so. There are legions of stories where law firms have relied upon the word of an IT provider that data was secure, but came to find later that the advice was faulty and actually contributed to subsequent data breaches.

So away we go: Our Top Practical Security Tips: ∙ Have a strong password of at least 12 characters. No matter how strong an eight-character password is, it can now be cracked in about two hours. A strong 12-character password takes roughly 17 years to crack. Use a passphrase so you can remember the password: “EyEluv@B@TeCHSHOW2012!” would be a perfect example. ∙ Don't use the same password everywhere. If they crack you once, they've got you in other places too. ∙ Change your passwords regularly. This will foil anyone who has gotten your password. ∙ Do not have a file named “passwords” on your computer. And do not have your password on a sticky note under your keyboard or in your top right drawer (the two places we find them most

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often)! ∙ Change the defaults. It doesn't matter if you are configuring a wireless router or installing a server operating sys- tem. In all cases, make sure you change any default values. The default user ID and passwords are well known for any software or hardware installation. Apple isn't immune either, since there are default values for their products as well. ∙ Your laptop should be protected with whole disk encryption—no exceptions.

Stolen and lost laptops are one of the leading causes of data breaches. Many of the newer laptops have built-in whole disk encryption. To state the obvious, make sure you enable the encryption or your data won't be protected. Also, encryption may be used in conjunction with biometric access. As an example, our laptops require a fingerprint swipe to power on. Failure at that point leaves the computer hard drive fully encrypted. ∙ Backup media, a huge source of data leaks, should be encrypted. If you use an online backup service, which means you're storing your data in the cloud, make sure the data is encrypted in transit and while being stored. Also, be sure that employees of the backup vendor do not have access to decrypt keys. ∙ Thumb drives, which are easy to lose, should be encrypted. You may want to log activity on USB ports, because it is common for employees to lift data via a thumb drive. Without logging, you cannot prove exactly what was copied. ∙ Keep your server in a locked rack in a locked closet or room. Physical security is essential. ∙ Most smartphones write some amount of data to the phone. Opening a client document may write it to the smart- phone whether or not you save it. The iPhone is particularly data rich. Make sure you have a PIN for your phone. This is a fundamental protection. Don't use “swiping” to protect your phone as thieves can discern the swipe the vast majority of the time due to the oils from your fingers. Also make sure that you can wipe the data remotely if you lose your phone. ∙ Solos and small firms should use a single integrated

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Wireless networks should be set up with the proper security. First and foremost, encryption should be enabled on the wireless device. Whether using Wired Equivalent Privacy (WEP) 128-bit or WPA encryption, make sure that all communications are secure. WEP is weaker and can be cracked. The only wireless encryption standards that have not been cracked (yet) are WPA with the AES (Advanced Encryption Standard) or WPA2.

product to deal with spam, viruses and malware. For solos and small firms, we recommend using Kaspersky Internet Security 2012, which contains firewall, anti-virus, anti-spyware, rootkit detection, anti-spam and much more. For larger firms, we are fans of Trend Micro. ∙ Wireless networks should be set up with the proper security. First and foremost, encryption should be enabled on the wireless device.

Whether using Wired Equivalent Privacy (WEP) 128bit or WPA encryption, make sure that all communications are secure. WEP is weaker and can be cracked. The only wireless encryption standards that have not been cracked (yet) are WPA with the AES (Advanced Encryption Standard) or WPA2. ∙ Make sure all critical patches are applied. This may be the job of your IT provider, but too often this is not done. ∙ If software is no longer being supported, its security may be in jeopardy. Upgrade to a supported version to ensure that it is secure. ∙ Control access. Does your secretary really need access to Quickbooks? Probably not.

This is just another invitation to a breach. ∙ If you terminate an employee, make sure you kill the id, and immediately cut all

possible access (including remote) to your network. Do not let the former employee have access to a computer to download personal files without a trusted escort. ∙ Using cloud providers for software applications is fine, provided that you made reasonable inquiry into their security. Read the terms of service carefully and check your state for current ethics opinions on this subject. ∙ Be wary of social media applications, as they are now frequently invaded by cybercriminals. Giving another application access to your credentials for Facebook, as an example, could result in your account being hijacked.

And even though Facebook now sends all hyperlinks through Websense first (a vast improvement), be wary of clicking on them. ∙ Consider whether you need cyber insurance to protect against the possible consequences of a breach. Most insurance policies do not cover the cost of investigating a breach, taking remedial steps or notifying those who are affected. ∙ Have a social media and an incident response policy. ∙ Let your employees know how to use social media as safely as possible, and if an incident happens, it is helpful to have a plan of action in

place. ∙ Dispose of anything that holds data, including a digital copier, securely. For computers, you can use a free product like DBAN to securely wipe the data. ∙ Make sure all computers require screen saver passwords, and that the screen saver gets invoked within a reasonable period of inactivity. ∙ Use wireless hot spots with great care. Do not enter any credit card information or login credentials prior to seeing the https: in the URL. ∙ For remote access, use a VPN or other encrypted connection. ∙ Do not give your user id and password to anybody. This includes your secretary and even the IT support personnel.

None of these safeguards are hard to implement.

Unfortunately, even if you implement them all, new dangers will arise tomorrow.

The name of the game in information security is “constant vigilance.”

The authors are the President and Vice President of Sensei enterprises, Inc., a legal technology, information security and computer forensics firm based in Fairfax, VA 703-359-0700; senseient.com. jsimek@senseient.com snelson@senseient.com

EsQ legal practice I 41

SANDIE OKORO: THE GLOBAL IN-HOUSE LAWYER WITH A HEART OF GOLD As the year 2013 winds up to a close and the clock ticks ushering in the arrival of the new year 2014, Nigeria's super diva global icon, Sandie Okoro prepares to take up a more challenging role as the global General Counsel at HSBC Asset Management Company.

42 I EsQ legal practice

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With rare insights as a trained barrister and a solicitor, Sandie Okoro is making huge impact in the legal profession globally. From May 2007 to early January 2014, Sandie has served as the General Counsel at Baring Asset Management Limited, a global asset management company based in London, which is part of the MassMutual Financial Group.

The British-born Nigerian is the only known female and ethnic minority lawyer holding such a position in the City of London and this makes her a pride of Nigeria. For the third successive year, Sandie has been named in the Power list, which profiles Britain's 100 most influential people of African or African Caribbean heritage, and reached eighth in 2014. In July 2011, she was named a member of the main board of a new international body based in The Hague Panel of Recognised International Market Experts in Finance (P.R.I.M.E. Finance) as well as being appointed to its panel of experts. She also sits on the P.R.I.M.E Finance Audit Committee.

However, in spite of her intimidating resume, Sandie said that her most passionate and happiest hour is when she is “giving something back by being willing to do pro-bono work at every stage of her career”.

Born in Fulham, west London in 1964, Sandie's father was a teacher and her mother a nurse. Her father went to England from Nigeria on a scholarship, while her mother was from Trinidad. Sandie grew up in Balham, southwest London, and by the age of nine she knew she wanted to be a lawyer.

'I watched Crown Court on television,' she says, referring to the ITV courtroom drama that ran from 1972 to 1984 and starred John Barron – 'CJ' of Reggie Perrin fame. 'I used to go home from school for lunch to watch it. I wanted to be one of the judges.'

'An early test of her willpower by a primary school teacher seemed to do nothing to dent her confidence in pursuing a judicial career, although she describes being 'mortified' by the experience at the time. 'She went around the class asking everyone what they wanted to be. We had footballers, we had princesses, even air hostesses, and I said I wanted to be a judge. She said to me, "Sandie, little black girls from Balham don't become judges." I thought, "what does she know, she isn't a judge. She's a teacher – she could be wrong."

I was never one of those kids who thought that what the teacher said was right. It

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I was never one of those kids who thought that what the teacher said was right. It would have been different if a judge had said that to me, or someone in the law, but I didn't really believe her.

'Comments like that have actually been few and far between in my legal career. But that was the only time somebody told me I couldn't do it. would have been different if a judge had said that to me, or someone in the law, but I didn't really believe her.

'Comments like that have actually been few and far between in my legal career.

But that was the only time somebody told me I couldn't do it. It was in a different era really – you didn't have that many women role models doing things, even on television – apart from in

the books and do so. Instead, she spent three years reading law and politics at the of Birmingham.

Okoro attended Putney High University 'Growing up in the 1970s and School, an all-girls private early-80s, there a lot of school before taking A-levels political activitywas in the in English, history and she says. 'People religious studies. 'History has country,' were much more aware of always been my passion,' she what was going on.' says, and expresses regret at Perhaps the defining event of not having done a history degree – although one of her the era was the miners' strike retirement plans is to return to of 1984-85 – and, during the summer of her first year at Crown Court, where you had the women barristers.'

EsQ legal practice I 43

university, Okoro found herself caught up in it. During a work experience placement at the National Council for Civil Liberties – now Liberty – her job was to sift through letters from striking miners.

'That was when I started to really see how the rule of law worked,' she says.

trial, radiance?"

Okoro's awe was reserved for Denning, however. 'I was probably shaking my sherry glass,' she says, laughing. 'I don't think I said a word.'

After her Call, Sandie was offered pupillages at two prestigious criminal sets of chambers, but turned both Sandie studied Law and down for financial reasons as Politics at Birmingham she needed money to survive.

University, graduating in 1988. 'I just didn't turn up,' she says.

She attended the Inns of Court 'I don't know why – maybe School of Law for the Bar nerves, thinking I couldn't do Finals and was Called to the it – plus you didn't get paid Bar in 1988 (Lincoln's Inn) I had a bit of student debt. became a honourable member and it's something I really of the Lincoln's Inn. “Initially, But regret.' This was perhaps the Okoro said, 'being a solicitor end of her path towards a wasn't attractive to me,' she career, although she says. 'I wanted to stand up in judicial there is a slim possibilcourt and argue.' She recounts admits ity that she might one day don a memory from her call robes and wig. 'Being an ceremony where, according to the in-house lawyer, you're tradition, benchers would slightly removed from the toast new barristers with a academic environment. You're glass of sherry in the old a jack-of-all-trades and a library. Okoro found herself master of none. It's something sandwiched between Lord I haven't given up on, but it's Denning and Mr Justice something I have necessarCaulfield, who, during Jeffrey not ily pegged as a marker on the Archer's 1987-libel trial horizon.' against the Daily Star, famously said of Archer's wife Mary: "Has she elegance? Has Sandie accepted an offer to she fragrance? Would she train as an accountant at have, without the strain of this

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Schroders was an Investment Bank when Sandie joined in 1990 and she was initially in the private client section as Head of their Trustee Company, at the age of just 25.

“During the city boom in the 90s, in-house roles became a burgeoning profession but it wasn't something everyone did in the 90s.

I've always liked the idea of being in the city and in an exciting, fast-paced environment.”

Sandie told the Chamber's recently.

Between 1998 and 2000 Sandie moved on to the institutional side of Schroders (Schroder Investment Management Limited), becoming the Schroder Investment Management International's first lawyer and built up this section.

Coopers & Lybrand. After a year there, however, it was clear that accountancy was not for her. In 1989 Sandie joined a small Mayfair law firm, Stoneham Langton and Passmore where she re-trained as solicitor and in 1990 she disbarred and became a solicitor. The same year she joined Schroders (which in 2007 had over £132billion under management) where she remained for 16 years.

Schroders was an Investment Bank when Sandie joined in 1990 and she was initially in the private client section as Head of their Trustee Company, at the age of just 25.

“During the city boom in the 90s, in-house roles became a burgeoning profession but it wasn't something everyone did in the 90s. I've always liked the idea of being in the city and in an exciting, fastpaced environment.” Sandie told the Chamber's recently.

Between 1998 and 2000 Sandie moved on to the institutional side of Schroders (Schroder Investment Management Limited), becoming the Schroder Investment Management International's

first lawyer and built up this section.

On her return from a ninemonth maternity leave in 2002, it was testimony to Schroders' faith in Sandie that she was made a director within three months of her return, taking on the responsibility for the Private Bank. In 2003 she became the Head of Legal for Corporate Services, a position she held until she left in April 2007. In that role Sandie was responsible for a team of 12, handling most of the operational side of the business which included corporate and transactional, IT and e-commerce, outsourcing, employment, contract, derivatives, litigation, pensions, regulation and taxation.

Also Sandie and Howard Trust, Schroders' Group General Counsel, were responsible for creating Schroders' first ever global legal panel in 2004, reducing the panel from over 150 to 11 (which includes Allen & Overy, Slaughter and May, Berwin Leighton Paisner, Simmons & Simmons,

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man and womankind.”

Sandie is a trustee of the Maisie Sheed Charitable Trust and a Foundation Governor of La Retraite School, President of International Lawyers for Africa (ILFA), a trustee of the Powerlist Foundation, an ambassador for the Law Society's Diversity Access Scheme and a Council Member of JUSTICE. Until recently she was the Chair of the CLO, a trustee LawWorks and a Foundation Governor at La Retraite RC Girls School in Clapham. In late 2013, City University confirmed that Sandie has been awarded an honorary doctorate.

Linklaters and Eversheds).

In January 2005, an employee forum was created by Schroders, one of the first in the financial services industry and Sandie was the sole inhouse legal adviser on the project. Since her departure from Schroders, her role there has been split between four people.

anticipating, mitigating and managing all different types of legal risk facing the firm,” Sandie says. “There wasn't a General Counsel role before I joined Barings. I was the first General Counsel and my role brings together the global legal team. One of the main challenges you face as a General Counsel is that you only have one client and you move in with that client!

In April 2007, Sandie Okoro, That's a real challenge as you was appointed the new Global always have to maintain your General Counsel at Barings perspective. However on the Asset Management. Whilst flip side, you get to know an Barings' history goes back as industry very well and all the far as the 1760s, it is now part other key players in that of the MassMutual Financial industry. You also gain a Group that has over US $400 heightened ability to think billion under management as commercially and get to grips at year end 2005. with all aspects of the law.”

In her new role at Barings, …“I really enjoy managing the Sandie leads an all-female relationships with our law team of five. Whereas her role firms. When you work with a at Schroders was in the UK number of law firms you get and Europe, at Barings it is to see their different capabiliglobal and she is responsible ties in many ways.” for the management of Barings' legal risk across the Sandie believes there has been UK, Europe, North America, a noticeable change in the Hong Kong, Japan and ways companies deal with Taiwan. “We are a fund manager, we are not part of a business and the associated legal and regulatory risks bank and in that sense, my since she first joined the inteam and I are involved in house world in the 1990s.

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“Companies are more aware of legal and regulatory risks and the need to get the right outcomes for clients; they want to manage their legal budgets better and have a more focused approach to risk management. As these are regulated industries, we need in-house, external expertise as well as market experience. The growth of complexity of business is on a global scale and you need ready access to first class legal advice across the globe and as such advice needs to work and make sense for the business.”

Despite her busy schedule, Sandie mentors young aspiring lawyers by providing bespoke one-to-one mentoring. She co-founded, with a Barings' colleague, the very successful See The Possibilities mentoring programme aimed at young students at further education colleges in and around the London area. Sandie ensures she dedicates time towards one to one mentoring lunches too. “It's really important to make the time and I want to make sure that future lawyers and politicians are people I trust! It is important for both

Sandie is a strong believer in people at the top helping others to rise through the ranks. “Every person who is in a position of success should make sure they are letting down the ladders for the people behind them,... “I had to give a speech at an awards ceremony and a young lady came up to me. She is from the gypsy community and had completed her law degree and the firm she did voluntary work with offered her a training contract. I lent her the money to do her law society finals and she is paying me back every month without interest. She helps people in her gypsy community with their legal problems. I am fortunate enough to be able to lend her the money that will make a huge difference in her life as she can now take up her training contract and become the first female solicitor in her gypsy community.”

Sandie is an avid keep-fit fanatic. She used to do longdistance running and completed the London Marathon in 1997 and 1999.

She is blessed with two children, teenage girl, Sophie who is autistic and a son Max. Sandie was named as one of the HOT 100 lawyers of 2005

by The Lawyer magazine and has won several international recognitions across the globe.

As Sandie Okoro sets to break new grounds in HSBC Asset Management Company Limited, she counsels young lawyers to always 'Aim a few steps above what you want to do. If you want to be a solicitor/barrister, aim to be the Lord Chancellor! Don't set artificial ceilings for yourself.

If you aim very high you end up exceeding your expectations and not working to your limitations.

EsQ legal practice I 45

UNDERSTANDING INVESTMENT RISK This guide is designed to provide you with a better understanding of your own attitude to investment risk. This guide provides you with some generic information. This includes the investment characteristics that affect risk, the different risk levels associated with different investment types and how an investor's personal circumstances can affect their attitude to risk.

Introduction Deciding how to invest hard earned money can be a tricky task. The world of investments can be bewildering and full of mind boggling jargon. In addition, barely a week goes by without the press reporting some form of financial scandal. It can be difficult, therefore, for the individual investor to choose the right investment and be happy that the investment is appropriate for their general objectives.

greater chance that it will meet their long term requirements.

Some investments will offer a higher potential for return but with a higher level of risk. If the individual chooses this type of investment and it performs well then they will be happy reaping the rewards.

If, however, the chosen investment performs less well then it could mean that the individual endures a loss.

understanding of what investment risk is and how they feel in relation to it. It is important to remember when considering an investment that, as well as the prospect of making a gain, all forms of investment involve a degree of risk, some more than others.

Each investment has a different potential for producing returns and will expose the individual to a different level of investment risk. Whilst the relationship between risk and reward can vary, as a general rule:

Investment risk A key factor in deciding what Why is it important to select investment will be right for an the right investment strategy? individual is the risk that Choosing an investment that accompanies it. Investors will Lower risk can mean: find it difficult to choose an matches an individual's Potentially lower gains appropriate investment objectives and expectations Potentially lower losses without gaining some will mean that there is a 46 I EsQ legal practice

Higher risk can mean: Potentially larger gains Potentially larger losses What are the characteristics of investment risk?

In this factsheet we explore briefly the following characteristics of investment risk: Volatility Capital risk Inflation risk Volatility One measure of investment risk is the volatility associated with an investment, or how likely it is to move sharply up and down in value. Investing in funds that are more volatile can mean that an individual's investment can experience significant rises or falls in value over short periods of time. The value of investments linked to, say, the stockmarket may vary and, although the long term trend is usually upwards, if the market falls so

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Bonds are issued by the Government or companies and are a form of will the value of the investment. People who are risk borrowing. The investor effectively provides a “loan” of their funds averse may wish to avoid more volatile investments in to the issuer of the bond in return for the repayment of the loan at a future date, plus a pre-determined level of interest. order to avoid experiencing sudden drops in the value of As a long term investment, It appears that property has their funds. To do so, however, invested in equities (FTSE cash may seem like a safe historically often shown a may mean that they have to 100), fixed interest stocks lower return than equities, but option, but there is the risk accept that they are giving up (IMA Sterling Corporate that the capital value will not a higher return than bonds the potential for larger Bond) or cash (IMA Money keep pace with inflation or and cash.

Property is still an returns.

Market). investment that carries a level that the bank or building It can be seen that, whilst the of risk, as property values can society holding the funds may FTSE 100 has shown the best show price fluctuations in the suffer financial difficulties and Capital risk performance, it has been more short term and property can default. As the capital value of Whether an investment is volatile or not, there may still volatile than the index of fixed also be hard to dispose of in a a cash fund should not fluctuate, this is an ideal home be a risk that the capital value interest stocks. This in turn difficult market. If the for money that may be needed may fall. An individual needs has been more volatile than purchase of a property is at short notice or for specific to be aware before they enter the Money Market index, accompanied by a mortgage which shows little volatility into an investment whether this increases the level of risk. commitments. It is common for each investment portfolio there is a risk that they could but has produced the lowest If rental returns are not to contain an element of cash lose part of their investment. return. We cannot rely upon sufficient to meet at least the as an emergency fund. This For example, it can be possible this graph to tell us what will interest on the loan then cash can then be used when for an investment provider to happen in the future but it managing the mortgage debt indicates how matters have funds are needed and the experience financial difficulcan be an additional risk in progressed in the past and values of investments are low. ties and not be able to repay itself. how equity markets can This avoids selling investall investors. experience both good and bad ments at a loss and allows Bonds or Fixed Interest times. investors to make the most of Inflation risk Stocks investment opportunities.

To confuse matters further an Asset classes Bonds are issued by the individual also needs to be Government or companies Other asset classes aware of inflation risk. Let us Broadly speaking, the average and are a form of borrowing. investor will choose between Whilst equities, property, consider a deposit account The investor effectively investing in four main asset bonds and cash are four of the with a large bank. This provides a “loan” of their classes, namely equities, account may be viewed as a funds to the issuer of the bond main asset classes, there are property, bonds and cash. low risk investment, as it is in return for the repayment of many other types of assets, Each asset class has its own not volatile and there is little the loan at a future date, plus investment arrangements and investment strategies that can prospect of losing capital if the characteristics and risk profile. a pre-determined level of be used within a portfolio. For individual chooses a finaninterest. Historically, bonds cially sound institution. To have produced a better return example, a client may wish to Equities invest in commodities, such as gain a true indication of the than cash but a lower return Equities have historically gold, wheat or oil, or in risk this account may pose we produced the highest returns than equities and property. alternative investment types, should really include the Bonds are, generally, a lower of the four asset classes such as hedge funds or possible effects inflation may mentioned above over the risk investment than equities absolute return funds. There have on the investment. If the long term. They therefore offer or property. interest paid on the account is, a good chance of producing a The main risk involved is that are also more esoteric investment types, which many say, 4% but inflation is the issuer of the bond will be return in excess of inflation. may not regard as an asset running at, say, 5% then in real This asset class does, however, unable to make the interest type at all, such as fine art or terms the individual has lost payments or repay the loan. carry a higher level of risk wine. Each alternative asset 1% during the year. The The risk of this occurring for than the other assets menclass will have its own risks deduction of tax can further Government issued bonds is tioned, and the values of associated with it, and reduce the actual return low. The risk increases equity investments will be investors must understand the experienced. Offsetting depending on the financial volatile.

Equities should likely level of volatility and inflation risk usually means strength of the company normally be considered as a the potential for returns and taking on a level of capital long term investment, giving issuing a bond. The higher losses. risk. risk bonds do, however, tend the investor time to ride out The effect of inflation should the fluctuations in investment to offer a higher level of theoretically be less on funds performance. interest by way of compensa- Mixing asset classes – or “Not investing in assets such as putting all your eggs in one tion for the added risk property or shares in compabasket” associated with them.

Property nies (equities). The logic Bonds can be actively traded. Investing in a number of asset applied is that, as prices This can include residential, classes, and in a number of There is, therefore, the increase in times of high commercial or industrial potential for capital risk. This investments within each asset inflation, so should compaproperty. For many investors, can occur if the bond is class, helps to reduce risk. nies' profits and the rent on the value held in their family purchased at one point in time Each asset class is unlikely to properties. The graph shows home gives sufficient expoand then the value falls, either gain or lose value at the same the relative performance of sure to property within their because interest rates have time and rate and, therefore, three different asset classes investment portfolio. It is very increased (making the bond when one asset class is over the past few decades, difficult to directly compare less attractive to other buyers) showing losses it is hoped that when compared to the rise in the performance of property or the risk associated with the another will show gains to prices over the same period. against other asset classes as bond has increased. compensate. Similarly, for The relative indices show how costs such as insurance, example, a cash element can £100 may have grown in value maintenance and redevelopadd safety to a portfolio, while over that time if it was ment are not always included. Cash an equity element adds the www.esqlaw.net

EsQ legal practice I 47

An investor with a relatively small level of capital to invest may be unlikely to choose very high risk investments. This is because any loss in value may have a large impact upon their financial security. In comparison, an investor who already has a substantial level of secure savings may be able to afford to then place some funds in asset classes that have greater risk associated with them. Any loss in value for this investor, whilst regrettable, is unlikely to place them in financial hardship. potential for growth above inflation. Finding the right balance of asset classes is key to the investor achieving the right balance between risk and reward. This is referred to as “Asset Allocation”.

Deciding on a suitable risk profile There are many factors that individuals must consider when deciding upon the risk profile that will best fit their needs. Much of this decision is based upon the individual's circumstances, but an investor's attitude to risk is also highly personal and past investment experience can influence decisions.

money would not be available to meet the original objective.

Similarly, if investments are made over the long term, for example when funding for retirement, it is important to choose asset classes with sufficient potential for the investment to outperform inflation over that time.

check that their portfolio is still in keeping with their needs. Over time, an investor's attitudes and objectives will change and their portfolio may need to adapt to reflect this. It is important that investors do not “fall in love” with their investments and are willing to change them if Size of investment/capacity circumstances require it. for loss Deciding upon a suitable risk Investor's age An investor with a relatively profile is an important An investor's age may also small level of capital to invest decision. Please now take have an impact on their may be unlikely to choose some time to complete our attitude to risk. A young very high risk investments.

Risk Assessment investor, for example, may be This is because any loss in Questionnaire to determine able to take higher risks as value may have a large impact your own risk 'score'. they have a long investment upon their financial security. period over which to recoup In comparison, an investor losses. In comparison, an older who already has a substantial couple may be more cautious level of secure savings may be with their money as they may able to afford to then place Investment duration wish to preserve their capital some funds in asset classes How long the funds can be as they near retirement. that have greater risk associinvested for can make a ated with them. Any loss in difference to the risk that value for this investor, whilst would be chosen within a Investment objectives regrettable, is unlikely to place portfolio. If the funds will be The level of risk that an them in financial hardship. needed for a specific purpose investor will decide to take within, say, two years, then it will also be dependent upon would be unwise to choose Reviewing a risk profile their investment objectives. volatile investments. The Investors may require a high It is important for an investor investments could fall in value level of capital growth to fund to regularly review their within that period and the some future project, or they attitude to investment risk and 48 I EsQ legal practice

may require a sustainable investment income. A modest level of growth may be needed to maintain the individual's standard of living in the future. The level of risk accepted will need to be matched to each objective.

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EsQ legal practice I 49

single investment.

There are a number of other challenges that exist for the establishment or operation of PE in Nigeria.

CHALLENGES TO PRIVATE EQUITY IN NIGERIA Private Equity means Equity Capital that is not quoted on a public exchange. It consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technology, expand working capital within a company, make acquisitions, or to strengthen a balance sheet.

T

he major players in the private equity market are the investors (fund providers), intermediaries (fund managers) and the Issuers.

several sectors of the economy, such as Real Estate, Banking, Road Construction and Telecommunications.

The private equity market in Nigeria is still at infancy compared to public equity and debt, but this asset class offers substantial opportunities for Private Equity is closely investment in a broad range of related to Venture Capital smaller, rapidly growing (VC). VC refers to money provided by investors to start- companies. While the Nigerian economic climate ups firms and small busimay pose significant risks, a nesses with perceived longterm growth potential. Private number of improvements equity investment should not have been made in corporate governance, accounting, local be confused with Private Placements into which many securities regulations, and the investment infrastructure, Nigerians sunk billions of Naira a few years ago. While such as the creation of the Investment and Securities Private Placements (PP) are forms of Private Equity (PE), Tribunal. All these improvements have significantly not all Private Equities are reduced system risk in the Private Placements. financial market.

Private Equity is very important to the economic growth of any country. It is a The 2011 Consolidated Rules viable alternative for busiand Regulations of the nesses seeking non-debt Securities and Exchange funding and who cannot Commission (SEC) regulate access equity from the stock the regime of PEs in Nigeria. market. PE presents a suitable These regulations contain a alternative investment source. number of challenges that PE firms have been involved appear to be inconsistent with in a lot of businesses spanning any real intention by Nigeria several sectors that cut across to promote PE.

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Tax efficiency, consistency of application and predictability of tax regulations are key.

Whilst the absence of Capital Gains Tax on shares is welcome, the lack of recognition for Limited Partners other than in Lagos effectively restricts the establishment of PE firms in Nigeria to Lagos alone. Such a narrow restriction of where they may be set up in Nigeria does not promote the development of PE in Nigeria.

To set up a PE firm anywhere else in Nigeria is not tax efficient. It is therefore no surprise that people who seek to set up a PE firm, whether the promoters are based in Nigeria or not would ordinarily look for a foreign domicile that is: ∙ By R557 – PE should not ∙ tax-efficient invest in private or unlisted ∙ used to dealing with such companies, which seems to legal structures negate the very raisons d'etre ∙ no restrictions on investment for PE. in unlisted shares and start∙ By R494.2 – partners, ups principals and sponsored Examples of popular destinaindividuals of a PE fund tions to set up a PE firm that should have at least 5 years' ick the boxes include experience, even though it is Mauritius, British Virgin an industry that is only just Islands and Delaware in the starting in Nigeria.

Presumably all of such would USA. have to be people with foreign PE work experience.

These challenges and inadequacies in the framework in ∙ By R494.3 – the target or investee company should have Nigeria for PE firms have been recognized. The Ministry of accounts and profits for 5 Industry, Trade and years, but many PE targets have not been in existence for Investment has set up a committee on a framework for 5 years and may not turn a attracting PE and VC funds to profit until the PE entry.

Nigeria, chaired by Barbara ∙ By R495 – no investment in start ups, unlisted investments James of Henshaw Capital. should be not more than 20% of NAV of fund, no single Urgently needed reforms investment should be more would include loosening up than 5% NAV of fund and not the range of companies in in affiliate of fund manager which PE firms can invest, eg where it owns 10% in affiliate. private, unlisted and start-up companies. Limited Partners ∙ By R558-563 – if PE fund is constituted of more than N1b should also be capable of it may only source funds from being set up in other places qualified investors; invest no than Lagos. more than 30% of the fund in a

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EsQ legal practice I 51

ENFORCEMENT OF FOREIGN JURISDICTION CLAUSES IN NIGERIA 1. Introduction International commercial activity involves the assessment and management of risk. Risk determines transaction costs, and the willingness of the parties to contract. Some risks are financial, concerning a counterparty's creditworthiness or solvency. Others are legal, concerning the effectiveness of a transaction, the nature of the remedies for default, and the enforcement of those remedies. A specie of international legal risk is litigation risk. This is the risk that a court seised of a dispute will decide that dispute by reference to a law other than that which the parties expect, or that the contract's governing law may be ousted in favour of considerations of public policy or mandatory norms of the forum.

Forum Selection Clauses Forum selection clauses are contractual safeguards especially designed to mitigate the incidence of international litigation risk.

It enables parties to choose, in advance, a stable governing law, and a forum with a choice of law regime which respects party autonomy and only exceptionally gives effect to overriding mandatory rules and ambiguous considerations of public policy. This arrangement reduces the scope for forum shopping; time spent on jurisdictional wrangling, and

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promotes the orderliness and principles which determine predictability that is essential when an arbitration clause for international commerce. will be enforced derive from statute.

A forum selection clause can 1. Jurisdiction Agreement: be in the form of either a The seminal case of Sonner jurisdiction clause (i.e. an (Nig.) Ltd. v. Nordwind, agreement that disputes illustrates the Nigerian should be resolved in the Court's disposition towards courts of a particular jurisdiction agreements. In country), or an arbitration this case, the parties to a clause. The two categories are contract of carriage of goods quite similar in law because by sea agreed that any both contain an “implied dispute arising under the negative stipulation� that parties' contract shall be neither party will bring a decided in Germany, where dispute before some forum the carrier has his principal other than the one agreed place of business. A dispute and in the manner agreed. soon arose over alleged non-

Kolawole Mayomi

delivery of the plaintiffs goods on board the 1st defendant's vessel, the M.V. Norwind. The plaintiff claimed for damages at the Federal High Court, Lagos.

The defendant reacted by applying for a stay of proceedings on the ground that the Nigerian court lacked jurisdiction as the action ought to be filed in a German court, pursuant to the agreement between the parties. By affidavit evidence, it was revealed that the suit had become time-barred under the terms of the bill of lading. Furthermore, under German law, an owner

The Nigerian Approach: As would be seen, the principles which apply to the enforcement of forum selection clauses by the Nigerian courts depend on the type of clause. This is because the principles which determine when an exclusive jurisdiction agreement will be enforced have their origin in the common law, while the

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cannot be considered as carrier. However, under Nigerian law, 'carrier' includes owner or charterer who enters into a contract of carriage with a shipper.

The trial court agreed with the 1st defendant's submissions and upheld the jurisdiction clause. The plaintiff's appeal to the Court of Appeal was dismissed. The plaintiff then appealed to the Supreme Court of Nigeria. In its judgment, the Supreme Court reviewed the position of the law regarding the enforcement or otherwise of a foreign jurisdiction clause and, relying on the 'Brandon test' prescribed in 'The Eleftheria' laid down the following guiding principles: (1) Where a Plaintiff sues in Nigeria in breach of an agreement to refer a dispute to a foreign Court, and the Defendant applies for a stay, the Nigerian Court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has discretion whether to do so or not.

(2) The discretion should be exercised by granting a stay, unless strong cause for not doing so is shown.

(3) The burden of proving strong cause for not granting a stay lies on a Plaintiff.

(4) In the exercise of its discretion, the Court should take into account all the circumstances of the case.

(5) In particular, but without prejudice to (4), the following matters, where they arise, may be considered: (a) in what country the evidence on the issues of fact is situated or more readily available, and the effect of that on the relative convenience and expense of trial, as between the Nigerian and the foreign Court; (b) whether the law of the foreign Court applies and, if so, whether it differs from Nigerian law in any material respect; (c) with what country either party is connected, and how closely; (d) whether a Defendant genuinely desires trial in the foreign country, or is only seeking a procedural advantage; (e) whether the Plaintiff would be prejudiced by having to sue in the foreign Court because it would: (i) be deprived of security for that claim; (ii) be unable to enforce any

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judgment obtained; (iii) be faced with a time-bar not applicable in Nigeria; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial.

(6) Where the granting of a stay would occasion injustice to the Plaintiff as where the action is already time-barred in the foreign Court and the grant of stay would amount to permanently denying the Plaintiffs any redress.

Applying the above principles, the Supreme Court stated that ordinarily, the parties should be held to their contractual bargain and that public policy does not bar a Nigerian court from upholding a foreign jurisdiction clause. However, considering the peculiar facts of the Norwind case, notably that the Plaintiff would be permanently deprived of his remedy if fresh proceedings are to be taken out at the German courts (the matter was now time-barred), the Defendant's application for stay of proceedings was refused.

Commendable as the Brandon test may be, treating “convenience” as a relevant factor in the exercise of jurisdiction by a Court in the exercise of its discretion to enforce a jurisdiction clause may be tricky. This is due to the fact that, typically, when parties enter into jurisdiction agreements in international contracts, they are often motivated by factors such as neutrality and advantages offered by the courts of the chosen forum, rather than convenience. Obviously, although the second principle laid down by the Supreme Court requires a party who wishes to resile from an exclusive jurisdiction clause to show “strong cause” why the agreement should not be enforced, convenience when considered as a factor, provides wide latitude that may be exploited by a party who wishes to escape the obligations imposed by a jurisdiction agreement.

Unsurprisingly, this was the major card that was played by the plaintiff in the recent case of Nika Fishing Co. Ltd. v Lavina Corporation.

In the Nika Fishing case, the

plaintiff/carrier contracted to freight frozen fish from Argentina to Nigeria. The contract was duly carried out albeit with some delay during discharge in Nigeria, which resulted in a claim for demurrage. The bill of lading prescribed Argentine law as the governing law and also contained a jurisdiction clause which provided for the exclusive jurisdiction of the Argentine Courts. The carrier brought an action for demurrage at the Federal High Court, Lagos. In response, the defendant filed an application to dismiss the suit for want of jurisdiction or to stay further proceedings in the suit. The trial court dismissed this application.

On appeal, the Court of Appeal accepted the plaintiff's arguments that the application should be approached from the prism of principle (5) of the Brandon test, and held that the proceedings should be left to proceed in the Nigerian court, even though the stipulated forum in the contract was totally different.

The Court of Appeal upheld the trial court's reasoning that apart from the breach having occurred in Nigeria, the circumstances of the matter show that the witnesses and the evidence on the issue of facts are all situated in Nigeria, within the jurisdiction of the Court.

Accordingly, the Court held that the balance of convenience is heavily weighted in favour of the Nigerian court and refused to enforce the jurisdiction clause.

Dissatisfied, the defendant further appealed to the Supreme Court of Nigeria.

In its judgment, the Supreme Court emphasized that the starting point for considering an application to enforce a jurisdiction clause is that, in the absence of a strong reason to the contrary, the court's discretion will be exercised in favor of holding the parties to their bargain. The Supreme Court distinguished the Nordwind case on its peculiar facts, and went on to dismiss the “balance of convenience” arguments as follows: It is the law that parties to an agreement retain the commercial freedom to determine their own terms.

No other person, not even the

court, can determine the terms of the contract between the parties… it is not the function of a court of law either to make agreements for the parties or to change their agreement as made…

Jurisdiction is a very hard matter of law and so cannot be subjected to particular feelings and sentiments of the court. Where a contract specifically provides for the venue of litigation, courts are bound to give teeth to the contract by so construing it, without ado. In this case, the issue of difficulty of assemblage of witnesses, cost of litigation arising from the parties going to Argentina, does not arise because they are mere expression of sentiment and all that.”

From the above judgment, it may be safely concluded that although the Nigerian court retains its discretion to enforce a jurisdiction clause which, in the absence of a strong reason to the contrary, will be exercised in favor of holding the parties to their bargain, “convenience” is not a significant factor that would influence such exercise of discretion.

2. Arbitration clause Section 4 of the Arbitration and Conciliation Act (“ACA”) empowers a Nigerian Court to enforce an agreement to arbitrate by staying any proceeding brought in disregard of that agreement. Section 4 provides: “A court before which an action is brought which is subject of an arbitration agreement shall, if any party so request not later than when submitting his first statement on the substance of the dispute, order a stay of proceedings and refer the parties to arbitration”.

Plainly, the above provision obliges a court to enforce an arbitral clause, as long as the applicant acts timeously. The provision reproduces Article 8 of the UNCITRAL Model Law 1985, which itself is a mirror of Article II (3) of the New York Convention 1958, an international treaty which Nigeria has subscribed to, and fully set out in the Second Schedule to the ACA. However, section 5 of the EsQ legal practice I 53

ACA proceeds, in a somewhat unclear manner, to confer discretion on the court in deciding whether or not to stay proceedings commenced in violation of an arbitration clause. In our view, the seeming contradiction is easily dealt with if one considers the legislative history of both sections: section 4 of the ACA is a recent provision in our law, originating from an international instrument (the UNCITRAL Model Law 1985), and implements a treaty commitment (Article II (3) of the New York Convention) to enforce international commercial agreements on a mandatory basis. Section 5, on the other hand, clearly derives from section 5 the old Arbitration Ordinance of 1914 (made before the Convention came into existence), and thus allows the exercise of discretion in relation to domestic arbitrations alone.

Accordingly, the conclusion may be drawn that Section 4 deals with international arbitration clauses, while Section 5 relates to domestic arbitration clauses.

Thus, in the leading case of M.V. Lupex v Nigerian Overseas Chartering and Shipping Limited, a case that exemplifies the pro-arbitration stand of the Nigerian courts, the Supreme Court of Nigeria (albeit applying discretionary principles) enforced an international arbitration agreement to resolve a maritime dispute by arbitration in England and emphatically dismissed arguments by the plaintiff that such arbitration will be costly and inconvenient.

3. Section 20 of the Admiralty Jurisdiction Act A major obstacle to the enforcement of forum selection clauses with particular regard to admiralty matters in Nigeria stems from section 20 of the Nigerian Admiralty Jurisdiction Act (“AJA”). This section specifically voids any agreement in maritime contracts that purport to oust the jurisdiction of courts. Clearly, this provision is a congressional policy to prevent all disputes that would otherwise have been adjudicated upon in Nigeria (the country of discharge of cargo) from being heard in the carrier's place of business or some country that may not necessarily have a 54 I EsQ legal practice

Accordingly, Nigerian courts have had to contend with the apparently conflicting legislative policies of two statutes in this area: the policy of the AJA which prohibits agreements which purport to transfer the adjudication of maritime disputes to a foreign forum, on the one hand; and the policy behind section 4 of the ACA which leans in favour of enforcing international arbitration clauses, on the other hand. nexus with the factual matrix of the case.

Accordingly, Nigerian courts have had to contend with the apparently conflicting legislative policies of two statutes in this area: the policy of the AJA which prohibits agreements which purport to transfer the adjudication of maritime disputes to a foreign forum, on the one hand; and the policy behind section 4 of the ACA which leans in favour of enforcing international arbitration clauses, on the other hand.

The case of M.V. Panormos Bay v. Olam Nigeria Plc. highlights the problems inherent in section 20 AJA. The respondent commenced an action against the appellants claiming the sum of US$100,000 or its Naira equivalent being damages for loss of some bags of rice covered by three bills of lading. The appellants applied for a stay pending reference to arbitration having regard to clause 7 of the bill of lading which, inter alia, provided that any dispute arising under the bill of lading shall be referred to arbitration in London. In opposing the application, the respondent relied on section 20 of the AJA. In its ruling, the trial court refused to stay its proceedings.

On appeal, the Court of Appeal held that the true purport of clause 7 of the bills of lading is to deny the Nigerian courts of jurisdiction, especially considering that the word 'shall' used in the clause has mandatory effect. The Court then went on to hold that the intention of the lawmakers as regards section 20 of the AJA is to derogate from Section 4 of the ACA, with the effect that only arbitration agreements that have Nigeria as the forum would not be affected by section 20.

Whilst the ultimate result in Panormos Bay is considered in some quarters as a much needed catalyst for developing

maritime law and practice in Nigeria, the reasoning of the Court of Appeal ought to be deconstructed. Firstly, jurisdiction agreement or arbitration clauses are, strictly speaking, not agreements to oust the jurisdiction of the court. Clearly, the source of the jurisdictional powers of the courts in Nigeria is the Constitution which cannot be abrogated or abridged by private agreement. Thus, if an action is instituted in a forum other than the contractual forum, the agreement is legally effective only if and to the extent that the present forum enforces it by declining to exercise its jurisdiction.

will seek to persuade the Nigerian Court to exercise its inherent powers to temporarily decline jurisdiction by suspending the proceedings filed before it in favour of the parties contractually agreed forum. (b) Anti-suit Injunction – This is an offensive injunctive remedy obtained from the agreed foreign forum, to restrain the person who has filed proceedings in the

Interestingly, in the recent case of Onward Enterprises Limited v. MV “Matrix” & 2 Ors, a different panel of the same Court of Appeal held that the Panormos Bay case was decided per incuriam, and declined to follow it. Rather, the Court chose to apply the Supreme Court decision in the M.V. Lupex case (supra) which enforced a foreign arbitration clause in a charterparty, and held that “it is clear that stay of proceedings could be granted pending reference to arbitration in a foreign country in deserving cases”.

In our respectful view, this decision is equally problematic as the Supreme Court had not given consideration to section 20 of the AJA in the Lupex case.

From the foregoing, it appears that the law is still unsettled with regard to the enforcement of forum selection agreements with regard to maritime contracts in Nigeria.

4. Weapons of enforcing Forum Jurisdiction Clauses There are two major weapons for enforcing a forum jurisdiction clause in Nigeria: (a) Stay of further proceedings – This is a defensive option to halt proceeding brought in breach of a jurisdiction/arbitration clause. As earlier explained, the applicant (usually the defendant)

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Nigerian court, in violation of the forum clause, from continuing with the Nigerian proceedings. Although there has been no reported instance in which the Nigerian courts have had to enforce a foreign anti-suit injunction in aid of a forum selection clause, the Court of Appeal has clearly stated that it would be willing to enforce a Nigeria forum clause by granting an anti-suit injunction to retrain proceedings filed in a foreign court. In our view, implicit in this statement is the argument that a foreign anti-suit injunction would be equally recognized and enforced in deserving instances. Moreover, a similar remedy was enforced by the Court of Appeal in the case of I.F.C. v. D.S.N.L. Offshore Ltd. Here, the English High Court made a worldwide freezing injunctive order in aid of a

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judgment against the respondents. The applicants obtained leave of a Nigerian court to register the judgment in Nigeria. The respondent successfully applied to set aside the registration of the foreign judgment. On appeal, the Court of Appeal restored the registration of the foreign judgment, and also stated that the English Court's injunctive order against the respondents must be upheld and enforced.

however that in enforcing a forum selection clause, the Nigeria courts will usually consider the peculiar facts of each case to strike a right balance between the ideal of unbridled party arbitral autonomy and its residual curial powers, and would not make an automatic genuflection to the forum clause.

Finally, it must be kept in mind that a forum selection clause is not a cure-all solution to the problems inherent in international litigation. It is 5. Conclusion merely a means of steering the The first stage of an internacase before a forum where tional commercial dispute desired remedies are, involves questions of jurisdichopefully, obtainable. tion: which court or tribunal is competent to entertain the claim? This article affirms that forum selection clauses are largely recognised and enforced by the Nigerian courts. It will be noted

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EXPLORING THE ABUNDANT OPPORTUNITIES OF THE SUKUK MARKET

HAJARA ADEOLA CEO, LOTUS CAPITAL The global Sukuk market is estimated at about $100bln as Nigeria considers alternative sources of financing the huge infrastructural deficit in aviation, road and housing; Ajara Adeola, CEO of Lotus Capital shares with Lere Fashola the enormous opportunities of SukuK market in Nigeria.

Give us a brief overview of sukuk Market state of Play Global Market size - Over $100bln Global Issuance in 1st half of year 2013 - $61bln Yield increased by 1st half of 2013 - 40% The global market cannot meet the demand for sukuk.

Locally there has been a private corporate sukuk and a sub sovereign sukuk both arranged by Lotus Capital. The sub sovereign sukuk is on the verge of being listed by the NSE.

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Currently, there is more than adequate regulation in the Nigerian sukuk market. Operators are of the opinion that there should be more supportive of this innovation that could attract substantial FDI to Nigeria.

must be put in place?

Similar to the conventional finance industry, the Shariah supports the notion of trade off between risk and return meaning that the higher your Identifying cross border opportunities. What is the risk, the higher the returns next stage of development in you expect. In addition, Nigeria?

Shariah also supports the concept of collateral and other Naturally the next thing is for modes credit enhancement to Nigeria to Issue a dollar Corporate governance denominated sovereign traditionally built into Islamic mitigate risks sukuk. This instrument will contracts clearly ring fences create cross border fund sukuk transactions thereby In addition there is a fundaraising opportunities to fund supporting the delivery of the mental drive to deliver the the country's infrastructure underlying project as opposed asset or project which is the deficit. to general obligation debts subject of the investment thereby increasing corporate Another crucial next step is the issuance of short term governance.

Although the immediate sukuk as liquidity instruments sukuk requirement can be put for the non-interest banks and at $5billion to meet the current How will you assess the main other financial institutions.

Is the Nigerian economy requirements for existing policies and institutional These opportunities are truly ripe for Sukuk Market? financial institutions and non requirements for the develop- limitless.

The Nigerian Economy is ripe interest mutual funds. The potential for growth can be for Sukuk Market for the Globally, sukuk is found to be the most ideal estimated as the size of following reasons: instrument for developing infrastructure infrastructure deficit in Nigeria which is more than which will bring economic growth and There have been Islamic $200billion. financial institutions since employment.

2006 with demand for Islamic financial instruments to invest Comparatively, what are the in Lotus Halal Fund offered to economic benefits and the public in 2008 now listed features of Sukuk over the on the NSE under memoran- conventional bonds dum listing requires addiForeign direct investment in tional asset classes such as Nigeria will increase. Sukuks sukuk. open up new and varied funding opportunities both The recent oversubscription of locally and internationally. the State of Osun Sukuk with Sukuk brings in non interest investors who have never been the participation of mostly able to invest in the convenconventional institutions tional bonds issued in Nigeria.

The outperformance of the NSE_LII (Islamic Index) over In other words, it brings financial inclusion. the ASI in the last 4yrs Globally, sukuk is found to be the most ideal instrument for Regulating Sukuk, where are developing infrastructure we heading? which will bring economic Currently, there is more than growth and employment. adequate regulation in the Sukuk is just another product Nigerian sukuk market. offering in the financial Operators are of the opinion market broadening and that there should be more deepening our capital supportive of this innovation markets. that could attract substantial FDI to Nigeria.

Given that sukuk are projectbased, they promote financial What are general potentials stability by linking the for growth and pitfalls of the financial sector with the real industry? sector of the economy Potential for growth in the industry is huge, the reason How will you assess the being that sukuks can be concept of risk from Shariah bought by all players in the perspective and what are the market whether the investors risk mitigating factors that prefer non interest returns or What are some of the industry developments and current trends in Nigeria? ∙ One fully fledged Noninterest bank has commenced operations ∙ Two commercial banks have opened non-interest banking ∙ Three Takaful (Islamic Insurance) companies have commenced operations ∙ Draft guidelines that includes a non-interest fund has been exposed by PENCOM ∙ First Sub Sovereign Sukuk led by Lotus Capital, which is the first African sukuk structured by local experts, was oversubscribed

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not. Secondly, this tool opens the market to a growing non interest investor class in the MENA region. In addition, the value at risk in an Islamic investment is lower because Islamic investments have an asset backing every transaction

ment of sukuk markets in Nigeria The main policies that have been issued by the SEC, CBN and NAICOM are adequate for the take-off of the sukuk market. However we urgently need the DMO to set the pace by issuing a benchmark sovereign sukuk.

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EsQ legal practice I 58

WHY CONTRACTING WITH AN INTERNATIONAL ORGANISATION IS DIFFERENT Main issues to consider before entering into contracts with international organisations.

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ontracts between commercial entities and international organisations are increasingly common. An ISDA or a loan agreement with an international organisation such as, for example, the European Bank for Reconstruction and Development (EBRD) may not seem that different from any other such transaction with another commercial entity.

However, there are specific considerations that have to be borne in mind when contracting with international organisations. This article highlights the main issues to consider before entering into contracts with international organisations with a focus on the capacity of organisations to perform legal acts and the privileges and immunities that protect them from being sued or their assets from being seized.

important to check the international organisation's constituent documents to determine if it has: (a) the capacity to enter into a contract, and (b) the requisite legal personality to sue or be sued. For example, Article 104 of the UN Charter provides that the UN shall enjoy such legal capacity as may be necessary for it to exercise its functions. In other instances, the position may not be as clear-cut, and it may be necessary to examine if legal personality can be inferred from the functions of the international organisation.

Even if legal capacity of an international organisation can be established as a matter of international law, it might not be possible to initiate legal proceedings against the organisation in national courts. In particular, some States adopt a dualistic theory to international law and require enabling legislation to give domestic legal force to international treaty rights and obligations. The UK follows such an approach and the Legal Personality legal personality of an Before contracting with an international organisation it is international organisation has

international organisations, which have not been given formal legal recognition through an Order in Council, as if they had distinct legal personality. This approach has been approved of by the English court in JH Rayner (Mincing Lane) Ltd where the court noted that because the legislation giving effect to treaties in the UK has been inconsistent, there is a powerful argument that the courts should assume that the UK wishes to fulfil its international obligations and therefore recognise the status of an international organisation as such despite the However, the position is not absence of an Order in always clear. If no Order in Council.

Council has been made under Once legal personality has the IOA to recognise an been established, national law international organisation, will apply to the international there is scope to argue that the organisation as if it were a organisation is not a recogbody corporate in the nised international organisajurisdiction. However, unlike tion under English law. In other body corporate, such instances, it is important international organisations to consider if the organisation will typically enjoy certain in question is recognised privileges and immunities under other enabling statutes discussed next. such as the International Development Act 2002. The UK has historically treated Privileges and Immunities The main privileges and immunities typically enjoyed Even if legal capacity of an international organisation can be estab- by international organisations are immunities from jurisdiclished as a matter of international law, it might not be possible to and execution, the initiate legal proceedings against the organisation in national courts. tion inviolability of premises and In particular, some States adopt a dualistic theory to international archives, currency and fiscal and freedom of law and require enabling legislation to give domestic legal force to privileges communication. For example, international treaty rights and obligations.

Article 105 of the UN Charter

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to be specifically acknowledged by national legislation.

Under the International Organisations Act 1968 (the IOA), an international organisation can be declared by an Order in Council (a type of statutory instrument) to have the legal capacity of a body corporate under English law. For example, the UN and the International Court of Justice received legal personality under the United Nations and International Court of Justice (Immunities and Privileges) Order 1974/1261 (the UN and ICJ Order).

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justified on the theory of 'functional necessity' – international organisations, their officials and agents enjoy such immunities as are necessary for their effective functioning. Therefore, these privileges and immunities are not intended for personal benefit but for the effective functioning of the organisation.

Not all immunity provisions are as extensive as the UN immunities. For example, the EBRD constituent documents state that "actions may be brought against the Bank only in a court of competent jurisdiction in the territories of a member in which the Bank has an office, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities." The rationale for limiting the immunity from jurisdiction of the EBRD lie in its commercial lending nature, which should allow contractual parties to bring claims against the EBRD for breach of any commercial provides for "such privileges and immunities as are necessary contracts. However, caution for the fulfilment of its purposes". must be taken when entering into a contract with an This subsequently led to the Convention on the Privileges international organisation and Immunities of the United because other immunities may Nations, which says in Section undermine the utility of a legal action, such as immunity 2: of assets from seizure. It is "The United Nations, its also important to note that property and assets wherever some international organisalocated and by whomsoever held, tions may not enjoy any shall enjoy immunity from every immunities and States, form of legal process except particularly those that are not insofar as in any particular case its members, may not obliged it has expressly waived its to grant any immunity to immunity." those organisations. The Such wide immunities are prevailing view is that the

conferment of legal personality on an international organisation implies immunity, but this is by no means always recognised by national courts.

The existence of privileges and immunities must also be considered in terms of national laws. The IOA and the International Organisations Immunities Act 1945 are examples of implementing legislation in the UK and the US, respectively, wherein the empowering provisions are applied to named international organisations by specific secondary acts. For example, the UN and ICJ Order are statutory instruments that confer privileges and immunities to the UN and ICJ that are set out in the IOA, which includes immunity from "suit and legal process".

exist or have been waived whenever they are not necessary to facilitate the functions of an international organisation under the international treaty in question. The functional necessity test is favoured amongst scholars. Second, a developing trend amongst some countries, such as Italy and the US, is to adopt a similar approach to international organisations as they do to States, i.e. by making a distinction between acts that are governmental (acts jure imperii) and those that are commercial (acts jure gestionis).

The idea behind this is that privileges and immunities should not extend to commercial acts.

Finally, international organisations have the ability to waive any immunities they may have when entering into commercial contracts. Such a waiver should be express and caution must be taken that the waiver is broad enough to cover both immunity from jurisdiction or suit and immunity of assets from seizure or the inviolability of an organisation's premises.

Judgments or awards obtained in national courts or from an arbitral tribunal may need to be enforced in third party countries where the organisation's assets are located. In such instances, local law advice would be required to determine whether enforcement is possible.

Waiver of Immunities To the extent an international organisation enjoys certain immunities, the two main ways in which the scope of such immunities can be restricted are: (a) a narrow interpretation of any immunities in implementing legislation by national courts, and (b) a waiver of immunity by the international organisation.

As far as application of immunities by national courts is concerned, two main trends can be observed. First, national courts applying the theory of 'functional necessity' may be willing to find that no Practical Tips privileges and immunities In summary, when contracting an international organiJudgments or awards obtained in national courts or from an arbitral with sation, it is important to tribunal may need to be enforced in third party countries where the consider: organisation's assets are located. In such instances, local law advice ∙ the legal capacity of the organisation to enter into would be required to determine whether enforcement is possible. commercial contracts and submit to the jurisdiction of national courts or an arbitral tribunal; ∙ the legal personality of the organisation to sue and be sued before national courts or an arbitral tribunal; ∙ where applicable, if the relevant enabling legislation has been enacted; ∙ the privileges and immunities of the organisation and appropriate waiver of those immunities; and ∙ the enforcement of any judgments or arbitral awards in countries where the organisation's assets are located.

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SIGHTS AND SCENES FROM ESQ CORPORATE COUNSEL STRATEGY CONFERENCE 2013

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ELECTRONIC OFFER AND ACCEPTANCE AND THE ENGLISH COMMON LAW: THE JOURNEY SO FAR

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enerally, a contract is said to be a twosided bargain which can only be finalized by the actions of two parties. To determine if an agreement is sufficient to form a contract, it is important to analyze the transaction first in terms of a prior offer and a subsequent acceptance. In Gibson v. Manchester City Council the House of Lord emphasized the necessity to always apply the analysis of offer and acceptance in construing whether a contract has been formed particularly regarding the sale of land. I must quickly add that English law is not content with just the two requirements above; we do have other factors which are not covered by this essay.

This article will succinctly discuss the principle of offer and acceptance in the offline world and its application in 61 I EsQ legal practice

the online world. Thereafter I will examine article 11 (1) of ECommerce Directive (ECD 2000), the basis of which a customer is said to be the party making the offer. In addition, I will extensively consider the arguments for and against the confirmation summary issued by the online seller amounting to an offer. A brief comparative analysis with the position in the United States of America (U.S.) would be done and then my conclusion.

An offer must be certain and require nothing to complete it, except an acceptance. An offer is defined as an indication (whether orally, in writing or by conduct) of willingness to contract on stated terms, made with a clear intention that it shall become binding as soon as it is accepted by the party to whom it is addressed. The conclusion to be drawn is that for there to be an offer, the offeror must display the

By Steve Agbiboa (LLM Swansea, BL, LLB (Hons.) AAU)

intention to be bound and the terms he wishes to be bound by. Thus, Mindy contends that no offer is made when an offeror states its proposed terms without the commitment to be bound. The importance of the intention to be bound as a component of a valid offer was stressed by the court of appeal in Storer v.

Manchester City Council where it held that exchange of contract is not necessary to form a concluded contract, where the intention to be bound and the terms are agreed in the correspondence between the parties.

to contract on the terms put forward by the party making the offer. This fact was alluded to by Lord Langdale in Hyde v. Wrench in finding that the plaintiff acceptance operated as a counter offer, as it varied the initial offer of the defendant. The defendant offered to sell his property for ÂŁ1000 and the plaintiff made its own offer to purchase it at ÂŁ950.

That a valid contract can be concluded online is not in doubt. The ECD 2000 mandate member states of the European Union to ensure that contracts are carried out electronically. Drawing from this premise, the common law Legally, an acceptance is the assent to the express or stated concept of offer and acceptance is applied in a special terms of the offer. For an acceptance to be valid, it must kind of way when dealing with web-based contracts. The agree with the terms in the view among academics and offer without any variation.

Professor Atiyah advances the online business owner is that a website is an invitation to position that an acceptance treat, which represents must be absolute, unconditional and with the intention preliminary discussion or pre

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Currently under English law, the application of offer and acceptance in the online world as captured above is lacking judicial sanctification. Article 11 (1) of the ECD 2000 had appeared to provide a statutory guide to online contractual analysis. It states that where a recipient of services places an order through technological means, the service provider must acknowlwebsite business.

offer negotiation. A website is therefore similar to a display in a shop or an advertisement, which is not capable of making an offer. This position was extracted from the case of Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Limited wherein the court had to decide whether a sale of medicine was supervised by a pharmacist. It proceeded to hold that where a customer picks up medicine from the shelves, it does not amount to acceptance of the offer to sell, but rather an offer by the customer to purchase. A further support for this position is found in Partridge v. Crittenden where the issue was whether an advert constituted an offer and the court held that an advertisement in a magazine is an invitation to treat. The offer in a web based contract is made by the customer and the acceptance given by the

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Currently under English law, the application of offer and acceptance in the online world as captured above is lacking judicial sanctification. Article 11 (1) of the ECD 2000 had appeared to provide a statutory guide to online contractual analysis. It states that where a recipient of services places an order through technological means, the service provider must acknowledge receipt. It further provides that the parties must be able to access the order and the acknowledgement before they are deemed received. A closer examination reveals that while it might be safe in certain circumstance to assume that the order is an offer, the acknowledgement however does not amount to an acceptance. The reason adduced for this is that the language of the article when construed in ordinary English does mean that the acknowledgement is not intended to be an acceptance, but rather a confirmation of receipt of an order made by a customer.

The final conclusion that one draws is that the ECD 2000 falls short of providing a predictable statutory roadmap on who makes an offer and who accepts. It is further argued that the ECD 2000 does not stipulate what is known as the contractual trigger; that is the moment at which a consensus ad idem is legally deemed to have occurred.

The jurisprudential basis in which academics posit that the customer makes the offer and the seller or online business owner accepts can be deduced from three vital reasons amongst others: the danger of limitless liability; this arises where the seller has limited stock and his website is deemed an offer, the possibil-

ity of the acceptance by customer or website visitors exceeding the stock available is very high, the effect when this occurs would be a breach of contract on the part of the seller. Secondly, the seller may need to restrict purchase by certain customers who are either within a particular age bracket or from legally inhospitable territory. Thirdly, the seller may want to create regional price differentials.

I would argue that the confirmation summary by a business constitutes a fresh offer when compared against the elements of an offer under English law discussed in paragraph 2 above. My position is hinged on the fact that an offer must disclose the relevant terms, posses the seller's intention to be bound and also display the desire for the offeree (the person to whom it is addressed) to enter into a contract by saying yes to the terms without any variation. The confirmation summary page fits into these requirements. Stretching the issue of intention, Professor Treitel states authoritatively that what determines offer and acceptance is the intention of the parties as displayed to an objective observer. The confirmation summary carries with it the express intention or desire to be bound once accepted by the customer, thus a necessary conclusion an objective observer would draw. Another contention in support of my arguments is that there is no fixed rule in the web based contract that a particular party will always be the offeror; it is simply who makes the offer and who then accepts the same. The position in other European jurisdictions subtly validates my position, in Spain and Belgium the offering of goods and services by a retailer on a website amounts to an offer, the contract is completed

when the buyer accepts the offer.

There are counter arguments ventilated against what I have canvassed. It starts with the issue of certainty of contract formation; to argue that the confirmation summary is an offer after the assertion that it is the customer that makes the offer in the online world, create ambiguity and lack of predictability for the customer and the seller. In addition, the inability of customers to determine when they have entered into a legally binding contract would arise where a confirmation summary denotes an offer because it has the essentials of a valid offer; this lack of knowledge would decrease consumer confidence in E-commerce. Furthermore, this is likely to strongly prejudice a seller who designs his website with information that it is the customer that makes the offer while his web amounts to an invitation to treat.

In the U.S. two acts are particularly relevant when considering electronic contract; they are the Uniform Electronic Transaction Act, 1999 and the Uniform Computer Information Transaction Act (UCITA), 2002. My focus is solely on UCITA as it deals with model rules applicable to the formation of electronic contract. Offer and acceptance are requirements under UCITA, hence it states, 'A contract may be formed in any manner sufficient to show agreement including offer and acceptance or conduct of both parties or operations of electronic agents which recognize the existence of a contract'. It further states that 'An offer to make a contract invites acceptance in any manner and by any medium reasonable under the circumEsQ legal practice I 62

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Law Reform and E-Commerce in Comparative Perspective' European Law Review, Vol. 27(5), (2002).

Nim Razook: 'The politics and promise of UCITA' Creighton Law Review, Vol. 36, (2002 – 2003).

Charlesworth: Information Technology Law (4th edn.), Shawn E, Tuma and Routledge, (2012).

Christopher R. Ward: Gringas C and Nabarro N: The 'Contracting over the internet in Texas' Baylor Law Review, law of the internet, Butterworth's London, (1977). Vol. 52 (2000).

Sylvia Mercado Kierkegaard: Jay Forder and Dan 'E –contract formation: US Svantesson: Internet and Eand EU perspectives' Shidler commerce Law, Oxford Journal of Law, Commerce University Press, (2008).

Lilian Edward and Charlotte and Technology, Vol. 3 (2007) TI Akomolede: 'ContempoWaelde (eds): Law and the rary legal issues in electronic Internet (3rd edn.), Hart commerce in Nigeria' Publishing, (2009).

Lilian Edward (ed): The new Potchefstroom Electronic Law Journal, Vol. 11 (2008). legal framework for ECommerce in Europe, Hart Publishing, (2005).

Mindy Chen-Wishart: Contract law (3rd edn.), Oxford University Press, (2010).

P.S. Atiyah: An introduction to the law of contract (5th edn.), Clarendon Press Oxford, (1995).

Treitel G: The Law of Contract (13th edn.), Sweet and Maxwell, (2011).

It's time to jettison the current position which allows the rules of creation of contracts online to be determined by the national contract law of member states of EU(supplemented by the ECD 2000) and have one regulation which states who makes an offer and who accept.

BIBLOGRAPHY TABLE OF CASES Gibson v. Manchester City Council [1979]1 W.L.R 294.

Grainger & Son v. Gough [1986] AC 325, at p 334.

Hyde v. Wrench [1840] 3 Beavan 334.

Partridge v. Crittenden [1968] 2 All ER 421.

Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Limited In conclusion, e-commerce as [1952] 2 QB 795. a tool for conducting business Storer v. Manchester City in the 21st century has Council [1974] 1 W.L.R 1403. increased at an astronomical speed. Consequently to still TABLE OF STATUTES have jurisdictions within the European Union (EU) where E Commerce Directive: the online seller is deemed to Article 11 (1). make an offer and other Uniform Computer jurisdictions where a confirInformation Transaction Act mation summary issued by a (UCITA) 2002: seller would amount to an Section 202 (a). offer undermines the prosSection 203 (1). pects and growth of ecommerce. It's time to jettison the current position which TABLE OF BOOKS allows the rules of creation of A. Murray: Information contracts online to be determined by the national contract Technology Law: The law and society, Oxford University law of member states of Press, (2010).

EU(supplemented by the Chris Reed: Internet Law: text ECD 2000) and have one and material (2nd edn.), regulation which states who Cambridge University Press, makes an offer and who (2004). accept.

D. Rowland, U. Kohl and A. stances'. The challenge here is that UCITA is silent on who makes the offer, whether invitation to treat exists and what constitutes an offer. The deduction therefore is that an offer can be made by either the seller or the customer, provided a contract is formed.

The approach by the drafters of UCITA is said to be based on the doctrine of freedom of contract.

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TABLE OF ARTICLES Christoph Glatt: 'Comparative issues in the formation of electronic contracts' International Journal of Law and Information Vol. 6 (1998).

JK Winn and J Haubold; 'Electronic Promises: Contract EsQ legal practice I 64

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EsQ legal practice I 66

MULTIPARTY AND MULTI-CONTRACT ARBITRATION: A GLOBAL COMPARATIVE PERSPECTIVE INTRODUCTION onsent is the heart of arbitration.

Hence the term arbitration is defined as a method of resolving dispute or series of disputes without invoking the jurisdiction of a competent court. Arbitration is also termed a bilateral affair, a view not exactly accurate in contemporary times. What is correct however is that, it is based on party autonomy. It is

C

67 I EsQ legal practice

consensual in nature. A position Professor Merkins contend is it major weakness and the dominant reason why we are still grappling with how to deal with multiparty and multi-contract arbitration.

I must quickly add that arbitration is not limited to two parties. Most times it involves several parties under one contract or several connected contracts with different or similar parties. As global business continues to expand, multi-contracts and multiparty disputes have

By Steve Agbiboa (LLM Swansea, BL, LLB (Hons.) AAU)

become a regular feature in most international arbitration forum. At the International Chamber of Commerce (ICC), it is reported that one-third of its caseloads are matters pertaining to multiparty disputes.

briefly the meaning of multiparty and multi-contract arbitration, the second part discusses the position of Section 35 and 82(2) of the Arbitration Act 1996 (Act) with focus on its history, the challenges and reason for being restrictive. The third part would present the Using the above premise, this techniques available under the article seeks to draw out English common law applied viable international developto multiparty and multiments with respect to contract arbitration. The multiparty and multi-contract fourth part discusses instituarbitration. To this end, the tional rules. There is a thing or article is divided into six parts. two we can learn from the The first part would examine

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Multi-contract arbitration connotes several parties engaged in a number of contracts which are interrelated. The question arbitrators and the courts always grapple with is if it is better to consolidate the arbitral proceeding into a single arbitration dealing with all the parties or have separate arbitral proceeding based on the different contracts? The drawback with respect to the noble concept of consolidation is the contractual nature of arbitration. problems with this principle namely; (a) how do you ensure equal treatment of parties with respect to the appointment of arbitrators or arbitral panel? In the French case of Dutco an award was annulled on grounds that each of the parties (multiparty) did not select the arbitrator. (b) How do you join third parties?

Multi-contract arbitration connotes several parties engaged in a number of contracts which are interrelated. The question arbitrators and the courts always grapple with is if it is better to consolidate the arbitral proceeding into a single arbitration dealing with all the parties or have separate arbitral proceeding based on the different contracts? The drawback with respect to the noble concept of consolidation is the contractual nature of arbitration.

2012 International Chamber of Commerce rules of arbitration (ICC Rules) and 1998 London Court of International Arbitration rules (LCIA Rules). The fifth part is an evaluation of multiparty and multi-contract arbitration in France and the Netherlands.

The final part looks at possible reforms and what lessons can be learnt from the jurisdictions considered, with a view to amending the Arbitration Act. MEANING OF MULTIPARTY AND MULTI-

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CONTRACT ARBITRATION Professor Olivier advances the position that defining multiparty arbitration as involving several parties to one contract is restrictive. He prefers that it is seen as one contract with more than two parties with contradictory interest. However the commonly held view is that it is several parties entangled in one contract. The point here is extending the arbitration clause agreed by two parties to non signatory parties.

Generally, we have two

SECTION 35 AND SECTION 82 (2) OF THE ARBITRATION ACT 1996 Leggatt J. in The Eastern Saga found that in the absence of consent from all the parties to arbitration, the arbitrator has no power to order a consolidation of hearings. In The Vimeira Goff L.J captured it with more details as follows 'Yet English arbitration law provides at present no power either to arbitrators or the court to ensure that both arbitrations will be considered by the same tribunal‌'. These cases epitomize section 35 of the Act which provides that arbitral proceedings can be consolidated or concurrent hearings allowed if the parties expressly consent. Strangely, the Act does not define the term 'consolidation' and 'concurrent hearings'. The issue of empowering courts or arbitral tribunal to order consolidation or concurrent

hearing (without parties consent) was considered by the Departmental Advisory Committee (DAC) but refused application on three major grounds namely; (a) protection of party autonomy; (2) the protection of confidentiality and (3) enforceability of the award.

I am in support of the counter arguments ventilated by legal scholars against the DAC position. They are; parties cannot always envisage all those that need to be joined to a dispute or that disputes will need to be consolidated at the initial stage of a transaction.

Again, it is argued that arbitration should be flexible and by extension, allow court or arbitral tribunal ordered consolidation (without the need for parties consent) when there are legitimate grounds for same. A scholar simply describes section 35 as having no teeth.

In The Amazonia Staughton L.J describes joinder of 3rd parties to arbitration as follows 'English law, deplorably in my view, makes no provision for a third party in arbitration proceedings'. The Act has moved from this position; however the effect might just be as indicted by the learned justice. Section 82(2) stipulates that a party to arbitration includes any person claiming under or through a party. A point that can be drawn from this section is that the word 'party' is defined in such a way that it includes a non signatory to an arbitration agreement.

Perhaps the reason why in The Hari Bhum (No. 2) the court held that a person who obtained by assignment the right to pursue a claim under a contract with an arbitration clause is subject to the arbitration clause. Section 82(2) would therefore cover EsQ legal practice I 68

personal representative, trustees in bankruptcy and assignees (whether equitable or legal).

THE ENGLISH COMMON LAW On the basis of section 35 and Section 82(2) of the Act, it is clear that a non signatory to an arbitration agreement can become a party to an arbitration agreement. There are several ways in which a third party can become part of an arbitration agreement under the common law, I would however focus on four scenarios which I consider paramount, namely; (a) rights under the Contract (Right of Third Parties) Act 1999 (1999 Act), (b) novation, (c) agency and (d) assignment.

new contract emerges as a result of novation; hence consent of all the parties must be obtained by the new party.

The new party is expected to furnish consideration to the previous party.

(c) A principal is generally bound by an arbitration agreement entered into by his agent, provided the agent is so authorized. Lord Hoffman in Fiona Trust & Holding Corp v.

Privalov indicated that one of the grounds that would invalidate a contract and an arbitration agreement signed by agent is if the principal alleges that the agent did not have the authority to act. For a non signatory principal to be bound to an arbitration agreement, the agent must be acting within the scope of his authority. There are however (a) The 1999 Act is an exceptimes where an agent may be tion to the common law personally liable, particularly doctrine of privity of contract where the other party to the laid down in the old case of arbitration agreement is not Tweddle v. Atkinson. Section 1 aware of the principal. It is of the 1999 Act states that a important to state that a person who is not a party to a principal could still ratify an contract may enforce a term in agreement entered by an the contract, if the contract unauthorized agent. expressly permit or confer a benefit on him. This is (d) A party to a contract can supported by section 8(1) transfer his rights and which states that the third obligation to another party by party is treated as a party to means of an assignment. The the arbitration agreement as regards the enforcement of his previous position was that an right pursuant to the contract. arbitration clause in a contract The logic of section 8(1) is that that is assignable was not assignable. This position is no if you seek to enforce your longer tenable; the arbitration right under a contract, then clause is transferred notwithyou must comply with the standing the assignment of a arbitration clause in the right in the contractual contract. Coleman J. in agreement or the entire Nisshin Shipping Co. Ltd v.

Cleaves & Co Ltd held that a agreement. This is supported by section 82(2) of the Act and broker (third party) was section 136 of the Law of entitled to advance his claim Property Act 1925(LPA). In for commission and was The Jordan Nicolov Hobhouse bound by the arbitration J. held that a legal assignee can clause in the charterparty enforce the arbitration agreement. agreement in the same manner as the assignor. The implicaIt is important to mention that tion is that an assignee is section 8(1) of the 1999 Act bound by the arbitration covers only contractual claims, clause in the agreement, such while non contractual claims that he must exhaust this right fall under section 8(2) of the in the event of a dispute same Act. before proceeding to court. (b)Novation is replacing a party to a contractual agreement with a new party which assumes the obligation and right of the previous party. In relation to arbitration, the new party assumes the right of the old party and is bound by the arbitration clause in the agreement. A 69 I EsQ legal practice

We do have two types of assignments, (a) Legal assignment; this must comply with section 136 of the LPA and (b) equitable assignment which does not meet the stipulation of the said section of the LPA. Where an assignment has occurred, it is important that the assignee

gives notice of this to the other party and the arbitral tribunal where an arbitral proceeding is pending, this is to prevent the arbitral award been rendered a nullity.

sions dealing with multiparty and multi-contract arbitration.

Article 8(1) state that in a multiparty arbitration, a claim may be made by any party against other party, subject to the provisions of 6(3)-6(7) and 9 of the ICC Rules, while It is important to state that article 9 allows claims arising where there is an Assignment out of several arbitration by means of a merger; the new agreements to be made in a entity assumes the rights and single arbitration. obligation of the previous entity including any ongoing Article 10 ICC Rules deal with arbitration. Longmore J consolidation of two or more upheld this position in arbitration, where any of the Eurosteel Ltd v. Stinnes following requirements are wherein he stated that an met, namely: (a) there is an arbitral proceeding did not lapse or conclude by reason of agreement by the parties to consolidate or (b) all the a merger. claims arise from a single arbitration or (c) you have I contend strongly that the same parties, same legal common law positions relationship and the court considered above are too finds the various arbitration compartmentalized to meet agreements compatible. the needs of modern commerce which often necessitates The LCIA rules were designed the joinder of third parties to to be in harmony with the English Arbitration Act 1996 commercial disputes with or and the UNCITRAL model without consent. Arbitration law. Article 8 of the LCIA rules must be a dispute resolution stipulate that where the mechanism that is open and parties to the arbitration are allows third parties with substantial related interest to more than two and it is not join at will, without requiring clear that the parties represent two sides for the formation of consent of the parties. a tribunal, the LCIA shall appoint the tribunal without ICC AND LCIA regards to the party's nominaPERSPECTIVES tion.

The ICC Rules are the most In addition, joinder of third widely sought after by the parties is dealt with under commercial world. The ICC article 22.1 (h) of the LCIA Rules contain new provisions rules. This rule is unique; the dealing with joinder of arbitral tribunal has the power additional parties and multi- to order a joinder either at the contract and multiparty instance of a party or of its disputes and the broadening own volition. However this of the ICC Court's power to power does not exist if the consolidate arbitration. parties to the agreement agree otherwise. Furthermore the Joinder is the adding of a new application for joinder can be made by a party to the party or parties to the agreement or an independent arbitration by the original party. Article 7(1) & (2) of the third party, provided the third ICC Rules provide that a party party and the applicant party have consented thereto in seeking to join an additional party must submit its request writing. to the secretariat and no joinder would be allowed after The LCIA rules do not have the appointment of an any provision dealing with arbitrator, unless all the consolidation of two or more parties including the addiarbitral proceedings. But I tional party consents. Sub must commend article 22.1 (h) article 2 requires the request to for allowing independent contain the case reference, intervention details of the parties including (joinder) by a non-party. This the additional party and other was not provided for by article information. Article 7(4) 7 of the ICC Rules. requires the additional party to submit an answer to the MULTI-PARTY AND MULTIrequest for joinder.

CONTRACT ARBITRATION IN FRANCE AND THE A vital innovation reflected in NETHERLANDS the ICC Rules are the provi-

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The French courts have been at the forefront of advancing multiparty and multi-contract arbitration. We have three situations where non signatory parties can be joined to an arbitration agreement, with or without their consent. These include; (a) group companies doctrine, (b) participation in the negotiation or performance of a contract and (c) transfer of a contract or right in the contract to a third party by means of an assignment.

The famous case of Dow Chemical v. Isover Saint Gobain entrenched the group companies' doctrine into French jurisprudence. In this matter, the Paris Court of Appeal upheld the decision of the arbitral tribunal which stated that a non signatory member (company) of a group of company was bound by the arbitration agreement signed by another member company, despite the distinct legal status of each of the companies; although legal scholars have argued that it should only be applied if that is the true intention of the parties to the agreement. Professor Bernard Hanotiau does not agree and contends that this doctrine should not be extended without restriction to non signatory companies, as the courts and arbitral tribunals require the existence of consent by all parties.

In ABS V. Amkor the Cour de cassation held that a non signatory would be bound by an arbitration clause where they participated or are involved in the performance of a contract. The court made

it clear that it did not matter if they consented or not.

Professor Pierre Mayer believes that the involvement need not be at the beginning of the contract, but at any stage of the life of the contract.

In the case of transfer of contract or contractual right, the named transferee is subject to the arbitration clause included in the contract.

Article 1045 of the Netherlands Arbitration Act (NAA) allows joinder of a third party to an arbitral proceeding where such a party has an interest in the proceedings. In addition, article 1046 stipulates that arbitral proceedings on connected issues pending before various tribunals in the Netherlands can be consolidated at the request of the parties concerned, by an order of court, except if it is expressly excluded by the parties in their agreement.

This section requires that all the arbitral proceedings must be held in the Netherlands.

A legal scholar contends that court ordered consolidation as seen in the NAA violates the consensual character of arbitration. My view is that it does not matter, if the consolidation is aimed at preventing an inconsistent award and the effective resolution of a matter.

CONCLUSION The drafters of the English Arbitration Act were simply focused on the consensual nature of arbitration. This is satisfactory if arbitration was

designed to be a bilateral relationship only. However the world has become a global village where the needs of the 21st century business man demands multiparty and multi-contract relationships to achieve single commercial venture. This need is recognized in Hong Kong where the court can order consolidation of arbitral proceedings, without requiring the consent of all the parties provided there exist among other factors a common question of facts and law.

We have seen how the ICC Rules deal with multiparty and multi-contract issues and the right of an independent third party to apply for joinder under the LCIA rules.

In addition, French courts have pushed the boundaries of arbitration by extending arbitration to non signatory parties in certain circumstances. Dutch law has empowered its courts to order consolidation under defined parameters.

The point here is that most countries have realized that party autonomy in arbitration should be curtailed where it is efficient and meets the ends of justice. Arbitration should not be self governing, it must as Dr. Stavros maintains '‌communicate with third parties that have legitimate interests‌'. English law sadly is still behind.

BIBLOGRAPHY TABLE OF CASES

Mental Distributor (UK) Ltd v.

ZCCM Investment Holdings Plc [2005] EWHC 156 AG/BKMI Industienlegen GmBH v. Dutco [1992] 1 Bull Civ. The Eastern Saga [1984] 2 Lloyd's Rep. 373 The Vimeira [1984] 2 Lloyd's Rep.66 Samsum Logix Corporation v.

Oceantrade Corporation [2008] 1 Lloyd's Rep 450.

The Amazonia [1990] 1 Lloyd's Rep. 236 The Hari Bhum (NO.2) [2005]EWHC 455 Montedipe SPA v. JTP-RO Jugotanker (The Jodan Nicolov) [1990] 2 Lloyd's Rep. 11; Schiffahrtsgesellschaft Detlev von Appeb GmbH v. Voest Alpine Trading GmbH [1997] 2 Lloyd's Rep. 279 Tweddle v. Atkinson [1861] 1 B&S 393 Nisshin Shipping Co. Ltd v.

Cleaves & Co Ltd [2003] EWHC 2602 Fiona Trust & Holding Corp v.

Privalov [2007] UKHL 40 The Jordan Nicolov [1990] 2 Lloyd's Rep 11 Eurosteel Ltd v. Stinnes [2000] 1All ER (Comm) 964 Dow Chemical v. Isover Saint Gobain [1983] JDI P.899 Societe Alacatel Business System (ABS) & Anor v.

Amkor Technology et al, Cass 1 e civ., [2007] JCP I 168. No.11 TABLE OF STATUTES Arbitration Act 1996 2012 International Chamber of Commerce Rules of Arbitration (ICC Rules) 1998 London Court of International Arbitration Rules (LCIA Rules).

Contract (Right of Third Parties) Act 1999 Law of Property Act 1925 Netherlands Arbitration Act 1986 Hong Kong Arbitration Ordinance 2011 TABLE OF BOOKS Permanent Court of Arbitration (ed.): Multiparty Actions in International Arbitration, Oxford University Press, (2009).

N. Blackaby, C. Partasides, A. Redfern and M. Hunter: Redfern and Hunter on

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EsQ legal practice I 70

International Arbitration (5th JOURNALS edn.) Oxford University Press, Olivier Caprasse: 'The Setting (2009). up of the Arbitral Tribunal in Multi-Party Arbitration', David St. John Sutton, Judith International Business Law Law Journal Vol. 2006 (2006).

Gill and Matthew Gearing: Russell on Arbitration (23rd edn.), Sweet & Maxwell, Bernard Hanotiau: 'Multiple (2007).

Parties and Multiple Contracts in International Arbitration' in Permanent Court of R. Merkins and Louis Flannery: Arbitration Act 1996 Arbitration(ed.): Multiparty Actions in International (4th edn.), Informa, London, Arbitration, Oxford University (2008).

Press, (2009).

Margret L. Moses: The Principles and Practices of International Commercial Maria T. Trofaiser: 'MultiArbitration, Cambridge Party Arbitration: The University Press, (2008).

Organisation of Multi-Party Proceedings – The Problems faced by Parties and Julian DM Lew, L. A. Mistels Arbitrators' Annals and S.M. Kroll: Comparative Fac.L.Belgrade Int'l Ed. Vol.65 International Commercial (2009).

Arbitration, Kluwer Law International, (2003).

Matthew D. Schwartz: 'Multiparty Disputes and Andrew Tweeddale and Keren Consolidated Arbitration: An Tweeddale: Arbitration of Oxymoron or the Solution to a Commercial Disputes: Continuing Dilemma?' Case International and English Law W. Res. J. Int'Ll. Vol. 22 (1990). and Practice, Oxford University Press, (2005).

Chartered Institute of Arbitrators: 'Chartered C. Ambrose , K. Maxwell and Institute of Arbitrators: A. Parry: London Maritime guidelines on multi-party Arbitration (3rd edn.), (2009). arbitrations' Arbitration Journal (2006).

TABLE OF ARTICLES AND 71 I EsQ legal practice

Clive Hardy: 'Multi-party arbitration: exceptional problems need exceptional solutions' Arbitration Journal (2000).

University Press, (2005).

Mark Robertson and Thierry Berger: 'The new ICC Rules of Arbitration: a brief overview of the main changes', International Arbitration Law Review, (2011).

Dr. Stavros Brekoulakis: 'The Relevance of the interests of Third parties in Arbitration: Taking a Closer Look at the Adrian Winstanley: 'London Elephant in the Room' Penn St. Court of International L. Review, 113, (2008-2009).

Arbitration: International arbitration rules', International Tanya Melnyk: 'The extent to Arbitration Law Review which non-contracting parties (1997). can be encouraged or compelled to take part in Thierry Laugier: 'Multiparty arbitral proceedings- the Arbitration and National English (Arbitration Act 1996) Laws', Int'l Bus. L.J. (1989). perspective' International Arbitration Law Review (2003).

Andrew Tweeddale: 'Arbitration under the Contracts (Rights of Third Parties) Act 1999 and Enforcement of an Award', Arbitration International, Vol. 27, No 4 (2011).

ED: 'Question and Answer; Is there a Novation' Construction Newsletter (2010), p1 Andrew Tweeddale and Keren Tweeddale: Arbitration of Commercial Disputes: International and English Law and Practice, Oxford

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EsQ legal practice I 72

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3. Delight Clients with promptness: Yes, Lawyers and Judges are among the most hardworking professionals on earth. But do clients really care how many hours we work? Instead, clients are demanding we use time more efficiently. LawPavilion CMS can enhance efficiency. It automatically generates your cause list, schedules court appearances, appointments and meetings while allowing staff to view tasks, deadlines, appointments, and meetings.

4. Surprise Clients with instant recall of information: It is not enough for law-firms to have archives, clients are more interested in whether their information are kept securely and can be recalled swiftly when critically needed. LawPavilion CMS enables you to create a secured centralized database for electronically storing all your vital records. You will also have access to your library, files, calendars and schedules on multiple devices, such as smartphones, iPad, desktops and laptops, anywhere you are, plus an amazing search engine that will deliver any search in less than one- second!

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5. Treat Clients like persons, not numbers: Today's Clients expect not only results, but also the expression of genuine concern, accessibility, understanding and respect in the process. LawPavilion CMS comes with a Consumer Relationship Management (CRM) enhanced feature to help improve your business relationships significantly. All information on each client is organised into digital files. Implications: the system can recall vital information, such as a client's birthday, and thereby send some personalised emails on your behalf.

6. Entice Clients by performance not excuses: Clients are appealed when they learn that their ma ers have been stalled because partner had travelled, or fallen sick. LawPavilion CMS comes with “Y-Cloud” a technology that enables members of legal team to synchronize or link their computers/devices such that information can be entered – and updated- by any member of the team in one place, and then synchronized across other team members' devices through their law office's central server. This means lawyers can collaborate more, supervise be er, saving time and effort in the process.

7. Prioritize and focus: Lawyers can be so passionate about what they do and sometimes neglect the most important dimensions. Law firms can manage the life cycle of cases more effectively. LawPavilion Case Management System will enable you organize your operations as a business by helping you track and shape your business processes to increase your firm's business advantage. It will track the amount of time spent on each case and automate billings. This is what you need to enhance profitability. Only then can you sustain your practice and keep delighting the client.

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LOOKING BEYOND THE ATLANTIC With an overall annual growth average of about 6%, Africa is emerging as the next big thing for investment. According to the International Monetary Fund (IMF) in a report released in October 2012, 11 of the world's 20 fastest-growing economies are in Africa, and this booming economic growth has helped create the fastest-growing middle class in the world.

Seven out of the world's ten fastest-growing economies will be African: the Democratic Republic of Congo (DRC), Ghana, Ethiopia, Mozambique, Nigeria, Tanzania, and Zambia are all predicted to expand by more than 6% annually until 2015. Foreign investment inflows are predicted to increase from $80 billion 2008, to $150 billion by 2015.

A

frica's recent successes have been attributed to the surge in prices of its natural resources, and the growing demand for them by the emerging nations including Brazil and China.

China trade with Africa is expected to hit $220 billion in 2012—a 25% growth rate annually—Former ViceMinister of Commerce, Wei Jianguo, told China Daily that Africa will surpass the U.S. and the E.U. to become China's largest trading

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partner. Similarly, at a recent gathering of senior lawyers and judges in Abuja, Nigeria, Vincent Okoedion, the country's Ambassador to Brazil, stated that AGAndrade Guttierrez Group from Belo Horizonte and Queiroz Galvao of Recife both with combined net turnover of more than N3tr ($20 billion) annually, have already invested in Nigeria's oil and gas, energy and mining sectors. Improved political and macroeconomic stability and microeconomic reforms in many countries especially in banking and finance, retail,

agriculture, transport and telecommunications make Africa the toast of international investors. There are new initiatives to improve infrastructure, update legislation and regulation in core areas and promote corporate governance programmes. There has also been a surge of private investment from the African diaspora and from global and Africa-based corporations, banks and investment houses and Western investors from the US, UK and Continental Europe, who previously regarded the African continent

as unattractive and a high risk landscape.

However, despite the existence of various trading blocks, including the Economic Community of West African State (ECOWAS) OHADA, East African Economic Community (EAC) and the Southern African Development Community (SADC), there is still only a limited amount of intraAfrican trade. Indeed most African countries have their biggest trading partners outside Africa. It is clear however that cross-border work is now increasing on the

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editorial focus continent. However, despite this increase, African law firms find it challenging expanding into other parts of Africa. African countries are wary of domination by fellow African countries.

Africa has 54 different countries dominated by several quite distinct legal systems and each of the countries is quite distinct.

Given the enormity of the continent and the number of sectors experiencing rapid growth there – law firms in both Africa and globally — of various sizes and specialisms — are in a position to grow with Africa, should they employ appropriate business development initiatives tailored to the market.

However, this time the rules are being redrawn. Several countries within the continent are proactively adopting initiatives to seek to ensure that, while welcoming outside investment into Africa, programmes are put in place to encourage indigenous ownership and provide incountry job creation and training, so that the local population shares in the benefits of the investment.

With the enactment of the Local Content laws, local big players are emerging. A recent example is the case of an indigenous Nigerian company that financed and acquired oil mining leases from Shell Oil, TOTAL and Eni -- all in line with the Nigerian Content Policy initiatives to encourage indigenous ownership in the Oil and Gas sector.

international law firms seeking to expand their presence in Africa are headquartered in the continent's former colonial rulers.

UK Firms are attracted to South Africa, Francophone firms have made Morrocco their regional hub; while Lusophone players have rushed into Portuguese speaking countries and collaboration between centres is far from straightforward” Lusophone (Portuguesespeaking) countries like Angola and Mozambique largely attract Portuguese firms. Canadian firm Heenan Blaikie is developing a presence in Francophone Africa, via its recently opened office in Paris, which is part of the firm's long-term plan to expand its international practice objectives, particularly in Africa.

International law firms from the US and Europe continue to dominate the big-ticket deals in the continent, however markets are evolving in a number of ways, with greater deal flow between African countries and the rise of the BRICS especially China and Brazil. African governments across the continent are however making efforts to secure greater control over key economic drivers in a so called trend of 'resource nationalisation'. London and Paris are often key conduits for crossborder investments into Anglophone and Francophone Africa, in part, arising from their historical colonial links with large parts of the continent. Consequently the legal systems of many countries in the continent have roots in English common law or the French civil system.

INTERNATIONAL LAW FIRMS EXPANDING INTO AFRICA Recent experience has seen an RECENT OFFICE influx of major international OPENINGS law firms ready to take

2011, technology specialist, Bird & Bird moved into the city through an association with local firms El Amari & Associe`s. While Eversheds added Morocco to its ever expanding network through the launch of CWA in cooperation with Eversheds in early 2011. In July 2012, Baker & McKenzie became the latest addition to the market when it launched an office in Casablanca through the hire of a four-lawyer team from French heavyweight August & Debouzy.

In 1995, UK firm White & Case became the first international law firm to establish a presence in South Africa and its African reach is demonstrated by its recent advice to sponsors, Nigerian National Petroleum Corporation (NNPC), Total, ConocoPhillips and Eni on the financing of the $10bn two-train onshore liquefaction plant in Nigeria.

Phillip Stopford led the team from the firm's London office.

Norton Rose significantly expanded its presence on the continent last year when it combined with South Africa's Deneys Reitz, giving the firm offices in Cape Town, Durban, Johannesburg and an associate office in Dar es Salaam. In September, the firm launched a new Casablanca office. UK firms Allen & Overy and Clifford Chance see Morocco as a key platform in their firms' strategies for Africa.

Allen & Overy has a dedicated 100-lawyer strong Africa practice with finance and corporate focussed practitioners. Paris based Tim Scales chairs the group, which has partners in Australia, Asia, New York, Dubai, Russia, Amsterdam, London and Casablanca. Clyde & Co has handled legal work in all 54 African Jurisdiction and in August 2012, it became the

Nathan Sonnenbergs (ENS), South Africa's largest law firm, recently increased the number of lawyers it employed from 136 to more than 500 as it spearheads an expansion across Africa. ENS wants to become the first fully integrated law firm in Africa.

AllAfrica reported that “Demand for cross-border legal services continues to grow strongly,” according to David Lancaster, senior partner at South African law firm Webber Wentzel. The firm announced recently that it had “signed an agreement to enter a collaborative alliance with global law firm Linklaters, starting in February 2013.”

MAJOR DEALS Clifford Chance advised private equity outfit the Carlyle Group on its $210m (£132m) investment in Tanzania-based agricultural company Export Trading Group (ETG), with Linklaters and South African firm Webber Wentzel also acting for investors. Clifford Chance was led by London private equity partner and Africa practice co-head Kem Ihenacho, alongside antitrust partner Alastair Mordaunt, tax partner Nick Mace and Singapore counsel Valerie Kong. The deal marks the first investment by Carlyle's subSaharan Africa fund. Kenyabased corporate finance specialist Krista Bates of Anjarwalla & Khanna Advocates, a member of the Africa Legal Network (ALN), also advised the consortium, which consists of Standard Chartered, Carlyle and Pembani Remgro, on due diligence issues.

In North Africa, the firm advised Abraaj Capital on the establishment of a regional

this time the rules are being redrawn. Several countries within the continent are proactively adopting initiatives to ensure that, while welcoming outside investment into Africa, programmes are put in place to encourage indigenous ownership and provide in-country job creation and training, so that the local population shares in the benefits of the investment. advantage of the opportunities for business that accompany economic growth anywhere.

Gbenga Oyebode MFR, Chairman Nigerian Bar Association Section on Business Law and Managing Partner of one of Nigeria's largest Commercial Law Firms stated that “many of the

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Allen & Overy recently launched an office in Casablanca and Clifford Chance opened a new office there in February 2012, being the firm's first in Africa even though it has been active on the continent for over 30 years.

This was also quickly followed

by Norton Rose. In October

first international firm to open SME (small and medium size in Libya after the overthrow of enterprise) fund in Algeria, Gaddafi regime with the opening of its Tripoli office.

Baker & McKenzie launched an office in South Africa while in late 2012 Herbert Smith Freehills announced it would open an office in Guinea, West Africa, in 2013. Edward EsQ legal practice I 78

International law firms from the US and Europe continue to dominate the big-ticket deals in the continent, however markets are evolving in a number of ways, with greater deal flow between African countries and the rise of the BRICS especially China and Brazil. African governments across the continent are however making efforts to secure greater control over key economic drivers in a so called trend of 'resource nationalisation'. project in Abu Dhabi, and majority shareholder Ivanplats on Itochu Corporation's increased participation in the $3.5bn Platreef platinumnickel-palladium-gold-copperrhodium project in South Africa. Led by Paule Biensan in North Africa White and Case team advised the Algerian White Cement Company on a facility from a Citigroup led syndicate, and also acted for Moroccan lenders on the Safi Phase I 1,320MW coal fired power generation station and lenders on a series of renewables projects.

In Tanzania, the firm acted for HSBC Financing in a $105 million ECA financing to the Ministry of Finance while in Uganda the team represented the Emerging Africa Infrastructure Fund with its project financing of SN Power's proposed hydropower projects. The firm won oil sector mandates in Ghana 79 I EsQ legal practice

and worked on aspects of the Takoradi Power project on behalf of the International Finance Corporation (IFC), FMO, Proparco, the Africa Infrastructure Fund and DEG, while in Nigeria it advised the state on its debut $500 million international bond issue, which was sold to US investors under Rule 144A / Reg S and listed on the LSE. Stuart Matty, Francis Fitzherbert-Brockholes, Melissa Butler and Yinka Osoba worked on the latter.

London, Partner and Head of EMEA Energy, Infrastructure, Project and Asset Finance Group, Philip Stopford, acted for Egypt Hydrocarbon Corporation (EHC)Ammonium Nitrate Complex on a $350 million financing for a facility in the Suez region while the Paris and London team worked with Sorfert, a joint-venture between Orascom Construction Industries and Sonatrach, on a

€1.1 billion project financing for the construction of a nitrogen-based fertilizer plant in Algeria.

Linklaters and Norton Rose alongside the magic circle firm's new South African ally Webber Wentzel were busy with Johannesburg bank Absa Group in a major buyover of Barclays' African operations. A major deal valued at £1.3bn.

This deal makes the very first deal that the two firms have acted on together in their new exclusive alliance which takes effect from February 1, 2013 .

DLA Piper took on pivotal infrastructure work for the Mtwara energy project in Tanzania. The firm advised the National Development Corporation, which was seeking a $3bn investment to develop a coal mine, power project, iron ore mine and smelter in Mtwara in the south of the country.

Allen & Overy assisted the

International Finance Corporation (IFC) on a €200 million capital raising exercise and advised TAQA and JLEC on the $1.5 billion financing for a 700MW extension to the Jorf Lasfar coal-fired power plant in Morocco while it also worked on the financing of the construction, operation and maintenance of the 120MW Itezhi-Thezi independent power project (IPP) in Zambia,and represented the lenders on $1 billion senior secured term and revolving facilities to Kansanchi Mining, the largest copper mine in the country. The firm acted for Lake Turcana Wind Company and Aldwych International on the development and financing of a 300MW wind farm in Lake Turkana, Kenya, while in Ghana a team advised the IFC and Dutch bank FMO on financing for the expansion of the Takoradi II thermal power plant. The firm also represented Shell on a divestment, worth $1 billion, from its downstream businesses in 14 African countries to a consortium of Vitol Group and Helios Investment Partners. The businesses included retail, commercial fuels, LNG, lubricants, bitumen and aviation marine fuels in countries including Morocco, Tunisia, Egypt, Côte d'Ivoire, Burkina Faso, Ghana, Senegal, Mali, Guinea, Cape Verde, Kenya, Uganda, Madagascar and Mauritius.

Bowman Gilifillan team represented Marsh Inc on its $124 million acquisition of the insurance group of Alexander Forbes in Botswana, Malawi, Mozambique, Namibia, Nigeria, South Africa, Uganda and Zambia, and Eaton Towers on its $150 million equity funding to acquire, build and develop telecom towers across Africa.

Corporate Law Firm Partner Livia Dyer is advising Ericsson in a continent-wide project to off-shore certain network functions provided to a global mobile network, while another team advised Hitachi Data Systems on its 100% acquisition of Shoden Data Systems across five African countries (Nigeria, Tanzania, Uganda, Kenya, Ghana) and the UK while Rob Legh led a team in South Africa to assist Minmetals Resources on a cash offer for Anvil, in South Africa and Zambia. Anton Barnes-Webb and Joshua Janks led a group to advise Barclays Botswana,

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First National Botswana and Stanbic Botswana on a $150 million financing of the expansion of the Morupule Colliery. Working with Nigerian firm Udo Udoma & Belo-Osagie, the firm advised RMB Westport on a share acquisition in the property company developing the Osapa-Lekki Mall.

Cleary Gottlieb Steen & Hamilton advised Gambia River Basin Organization on a public-private partnership (PPP) for $1 billion construction of a hydro-electric project.

The firm is also advising the financial advisors to the deal to put together an international public framework and investment package and is also working with an international finance institution on an IPP (Independent Power Producer) project in West Africa, which entailed the establishment of a jointventure with a West African government to develop the project under a PPP agreement. Another deal saw Barthélemy Faye represent PlusPetrol on its acquisition of interests in oil and gas projects in the Democratic Republic of Congo (DRC) and advise Dangote Cement on a $300 million investment in a quarrying and cement facility in the Republic of Congo along with a project in Gabon.

The combined value of the assets was $600 million.

Edward Nathan Sonnenbergs in a major pan-African deal, Scott Nelson worked with Vitol on its acquisition of an interest in Maputo Coal Terminal and the creation of a coal trading joint venture with Grindrod for $78 million. The firm also advised longstanding client Tiger Brands on its acquisition of Davita Trading, the beverage and food manufacturer which operates in 31 countries, for $152 million. The firm advised Hanglong Mining Investment on its $1.71 billion acquisition of Australian listed Sundance Resources, which owns mines in the Congo and Cameroon and in Mozambique and Botswana, the firm also advised the Central Energy Fund on a proposed participation in LNG assets in Mozambique, a client bidding for a publicprivate partnership (PPP) concession for the construction of an office complex in Botswana, and the government of Botswana on the

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London and Paris are often key conduits for cross-border investments into Anglophone and Francophone Africa, in part, arising from their historical colonial links with large parts of the continent. Consequently the legal systems of many countries in the continent have roots in English common law or the French civil system. proposed privatisation of GEMVAS, the Government Employee Motor Vehicle and Residential Property Advance Scheme, and GLIF, the Guaranteed Loan Insurance Fund.

Eversheds advised Addax and Oryx Group on a €220 million transaction, which involved a €133 million project financing for ethanol and renewable energy developments plus financing from multiple lenders to Addax for renewable and agriculture projects, all in Sierra Leone. The firm also worked with the African Finance Corporation (AFC) on a public-private partnership (PPP) road concession project in Ghana. On the corporate side, the firm assisted Telkom SA on its $452 million acquisition by KT Telecoms of Korea, and First Uranium Corporation on its sale of shares in Ezulwini Mining Company, South Africa, to AngloGold Ashanti and Gold One International for $400 million. The team also worked on large energy and resources M&A in a number of other jurisdictions for clients including Pan African Mining, Glencore and Jubilee Platinum.

Gide Loyrette Nouel in Norway and Senegal , the firm acted to establish Tizir, a jointventure between Eramet Titanium and Iron (ETI) and Grande Côte Mineral Sands.

The deal spanned the jointventure corporate aspects as well as financing issues, and involved the development of a railway system and rights to a terminal at the Port of Dakar, Senegal. The project will oversee developments in both countries.The firm also led a deal for Macquarie Bank, London, on a $30 million bridge facility to Petroceltic International to develop assets in Algeria.

Herbert Smith Freehills [more] advised an oil and gas company on its bid for the acquisition of upstream oil assets in Egypt and acting for OMV on the acquisition of a stake in Anaguid Block in Tunisia. In 2012, a London and Paris team, led by John

Ogilvie, was also busy helping to prepare Gazprom against the fallout on its upstream oil operations from turbulence in Libya while in Nigeria, Nina Bowyer and Martin Kavanagh were leading teams assisting CPS Transcom and the Nigerian Bureau of Public Enterprises on its privatisation process of 17 electricity companies and assets; a crucial project for Nigeria's national power strategy. The firm also advised the African Development Bank (ADB) and other lenders on the $275 million project financing for the Lagos Cable Transit Project, and Standard Bank, Stanbic and Access Bank on a $450 million reserve-based financing for Neconde Energy.

In major pan-African deals, the firm advised Godrej Consumer Products on a series of acquisitions spanning 14 African countries and BP on the sale of its downstream business in Tanzania, Botswana, Malawi and Namibia to Puma Energy.

Hogan Lovells advised TAV Airports on the sale of 38% of its shares and 49% of the shares of TAV Construction for $874 million and $49 million, respectively. The assets included EnfidhaHammamet Airport in Tunisia.

Norton Rose was very active in Morocco throughout 20112012 under Alain Malek, especially on the corporate and M&A side. In West Africa, the team was especially busy in Nigeria and in one of its key deals, Bayo Obubeko and Neil Biswas advised hotel developer Quantum Capital on the development of a 175 room waterfront hotel in Lagos for Marriott. Obudeko also worked with Kingdom Zephyr Management Company on an investment into HydroCarbons Nigeria Company and Development Partners International (DPI) on its investment into Food Concepts. The firm closed deals in Ghana in the oil and gas sector and mining projects in the rest of the region. Also led by Victoria Hobson, the firm acted as counsel to the

Port Authority of Mozambique on matters relating to the outsourcing of marine services and revising regulations, while Pierre Swart, Laurie Hammond and Steven Gamble advised Standard Chartered Bank on a $120 million commodities finance transaction involving 13 African countries.

Orrick Herrington & Sutcliffe in one notable deal, Pascal Agboyibor and team advised the African Development Bank, along with the FMO, DEG and other lenders, on a €228 million financing to Société Sucrière de Markala for the construction and operation of a sugar factory under a public-private partnership (PPP) arrangement in Mali. The firm also acted for the same lenders on a €202 million financing to La Compagnie De Développement Des Energies Renouvelables (CODER) for two run-of-the-river hydroelectric plants in Gabon. The team is also advising the DRC government on the $9 billion Project Inga III 3,500MW hydropower damn, where the firm was working on the entire tender process. The team was also acting for the government of Cameroon in relation to pre-financing of the €75 million adaption of the Chad-Cameroon pipeline to the Lom Pangar Hydroelectric Development Project while The firm was also acting for the government of Mali in relation to hydroelectric and solar power projects, and the government of Cameroon over the Didamba Power Project and Kribi Power Project, the country's first and second ever IPPs. Yves Lepage led teams advising the governments.

Shearman & Sterling, led by London Partner Tim Pick, the firm advised project sponsors, private equity firm Citadel Capital and Egyptian Refining Company on the $3.5 billion financing for the redevelopment of its hydrocracking refinery near Cairo. The refinery, which will convert fuel into light products such as diesel, is the first such project in Egypt and has a EsQ legal practice I 80

It appears that for most International firms, the real aim is to bring deals back to London and the crumbs remain in Africa. Some South African firms are also trying to do the same. However, most African law firms are looking for the opportunity to stay independent. This perhaps forms one of the goals of the ALN (Formerly African Legal Network). diverse lending source. It was the largest ever project financing in Africa at the time.

Staying in North Africa, the firm handled two large cases in Algeria. Paris partner Guillaume Isautier worked with Algeria's oil and gas company Sonatrach to acquire a €515 million stake in Gas Natural Fenosa while German partners Martin Neuhaus and Georg Thoma acted for Aabar Investments in forming a joint venture with German companies in Algeria in the car sector while in South Africa, Nicholas Buckworth and Robin Bayley led cross office teams to advise the winning bidding consortium, which includes Sumitomo, on the €150 million development of the Dorper Wind Farm project in the Eastern Cape.

The firm also worked on another energy project this time in Mozambique, where London and Abu Dhabi teams were busy acting for Vale as project sponsor on the development and financing of the 600MW Mine Mouth Coal Fired Moatize Independent Power Project. The project is potentially worth up to $1 billion.

Webber Wentzel a part of ALN (Africa Legal Network), which operates with network–wide branding and which includes

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tier one firms across many jurisdictions, most notably Anjarwalla & Khanna in Kenya, MMAKS in Uganda and BLC Chambers in Mauritius. The firm was active in Nigeria, advising listed telecommunications group IHS Nigeria on an equity investment by the International Finance Corporation, FMO and Investec Frontier Private Equity Fund; the lenders on the $400 million Lekki toll road public-private partnership (PPP) project; and the African Development Corporation (ADC) on an equity investment into Union Bank Nigeria. Roddy McKean also led teams advising Investec on a proposed equity investment into UT Bank Ghana and FirstRand on its proposed acquisition of Merchant Bank of Ghana.

Steven de Backer and Olivier Binyingo were working with IBM across 16 Sub-Saharan African countries in relation to its role handling all the computing and mobile networks for Bharti Airtel Africa, while a team was also assisting Wal-Mart Stores on its acquisition of a majority stake in Massmart Holdings, which involved 14 African jurisdictions. The firm advised ADC Financial Services and Corporate Development on

the acquisition of a 25% stake in the share capital of Kenyan medical insurance company Resolution East Africa, MTN Uganda on $150 million in syndicated multi-currency term and revolving facilities from a range of global and Ugandan banks and Actis Africa Real Estate Fund on the development of a hotel, leisure and retail real estate project in Lusaka, Zambia, called Waterfalls. Two final interesting deals saw the firm act for the International Finance Corporation (IFC) on an equity investment into MEREC, Mozambique.

Addleshaw Goddard: Led by its London-based M&A partner Christopher Taylor, Addleshaw Goddard recently acted for Diageo on his $225m acquisition of the Meta Abo Brewery in Ethopia LEGAL NETWORKS As the new 'scramble for Africa' deepens, local firms are also re-strategizing to stay strong and relevant. Some firms are moving into neighbouring countries to assert their international links.

It appears most law firms looking to Africa are doing so as part of a medium-term strategy. There is also an interest in having a strong Africa foothold through the opening of local offices, which was the exception until recently, or through best friends networks. It appears that for most International firms, the real aim is to bring deals back to London and the crumbs remain in Africa.

Some South African firms are also trying to do the same.

However, most African law firms are looking for the opportunity to stay independent. This perhaps forms one of the goals of the ALN (Formerly African Legal Network). Led by John Miles.

ALN is an independent alliance of leading law firms in Africa. It is the largest and only grouping of its kind in Africa, with close working relationships across its member and an established network of Best Friends across

the continent. ALN's firms work together to provide extensive coverage and onthe-ground experience.

ALN is a network that brings together leading independent law firms in about 12 African countries, including the recent addition of Webber Wentzel in South Africa and Savjani & Co in Malawi. It is focused on eastern and southern Africa, with Kenya's Anjarwalla & Khanna, historically the driving force of the network.

The network has a relatively high level of integration, and is well placed to help clients with matters spanning several African countries. The ALN receives work from the top 15 firms in the UK as well as South African counterparts, and is currently building cross-border teams in international dispute resolution, IP and banking and finance.

Many African law firms are involved in Legal alliances and networks and some of the most active Legal Networks in Africa include: ENS, is dedicated to being the first Pan African law firm. In August 2012, the firm announced that it will be launching new offices in Burundi and Rwanda. It also houses four offices in South Africa.

LEX Africa, is led by Pieter Steyn of Werksmans. Lex Africa covers 30 countries, with independent firms in southern and especially SubSaharan Africa combining to form a framework for crossborder transactions.

Headquartered in the Johannesburg offices of Werksmans, and founded in 1993, the network aims to provide a platform for those looking to do business in Africa by providing local insight and international coverage. Lex Africa is present in 27 African Countries including Angola and Zimbabwe. Nigeria's, Giwa Osagie & co is a member.

Bowman Gilfillan Africa Group, is an association that calls on the services of over 350 lawyers across South Africa, Tanzania, Uganda and Kenya. The firm also has an alliance with Udo-Udoma in Nigeria.

PLMJ International Legal Network provides access to Angola, Mozambique, Brazil, Macau and cape Verde.

Miranda Law Alliance, was

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As Africa continues to maintain its steady growth, International interest in Africa will continue to increase thereby necessitating the need for African lawyers to re strategize and plan for the future ahead. The bar associations also need to brace us to their primary duties which is regulating the profession. Also there is the need for legal education to be reassessed and refocused to produce the right human capital needed for the competition ahead. established by Miranda Correla Amendoeira & Associados. It is a group of associations that brings together over 170 lawyers across four continents. In Africa, the firm boasts of offices or alliances in Angola, Cape Verde, East Timor, Equatorial Guniea, Gabon, Guinea-Bisau, Mozambique, the Democratic Republic of Congo and Sao Tome and Principe.

Norton Rose Africa Legal, is an alliance set up by South African firm Deneys Reitz – now part of Norton Rose – and includes Tanzanian firm CRB Africa Legal and Shonubi, Musoke & Co in Uganda. The group was heavily involved in the recent launch of the African Loan Market Association.

thereby necessitating the need for African lawyers to re strategize and plan for the future ahead. The bar associations also need to brace us to their primary duties which is regulating the profession. Also there is the need for legal education to be reassessed and refocused to produce the right human capital needed for the competition ahead. Going forward, lawyers expect industry sectors relating to consumer spending to be the big deal drivers in the new year- retail and technology in particular- because of the continent's emerging middleclass population. African law firms should therefore position themselves as a gateway to the continent – and firms outside of Africa, particularly those representing energy, infrastructure and CONCLUSION financial services sector clients As Africa continues to – will be proactively involved maintain its steady growth, in developing effective referral International interest in Africa relationships with African law will continue to increase firms.

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