Africa’s Premier Law Journal
Issue 10
Spring 2016
Lawyer in the News:
State controlled entity as a party to an arbitration agreement – issues to consider
Oghogho Akpata Quietly determined sage of Nigeria oil and gas
Beware the “Non-Exclusive” arbitration clause Locus Standi – a clog in class action in tax litigation Damages in Employment/ Labour matters vis-à-vis the Doctrine of Expectation Interest Boosting power generation in Nigeria – a commentary on the Azura-Edo IPP
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Law Digest Spring 2016
I NTE R N ATI O N A L L ITI GATI O N A N D AS S ET R E COVE RY F O R U M 03 November 2016 Civic Centre, Victoria Island 9:00am - 4:00pm
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Contents PUBLISHER
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EDITOR
Seyi Clement editor@nglawdigest.com
BUSINESS DEVELOPMENT Bebe Clement bebe@bebeclement.com
CORRESPONDENTS NORTH AMERICA Ifeoma Uche rauze@yahoo.com MIDDLE EAST John Adetiba johnadetiba@yahoo.com NIGERIA Ranti Thomas lawthomas81@yahoo.co.uk Adijat Ayobami kdjbukky@yahoo.com UGANDA Elias Bwambale Elzbak2@live.com
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EDITORIAL BOARD • Hon Justice S.M.A Belgore, CON, GCON, FNIALS,
LLD(Hon) (Former Chief Justice of Nigeria). • Hon Justice G. Oguntade, CFR, JSC (Rtd) • Dr. Anthony C.K. kakooza Ph.D. Dean Faculty of Law, Uganda Christian University. • Kemi Pinheiro, SAN Senior Partner, Pinheiro & Company. • Professor Dakas CJ Dakas Ph.D, SAN, Ben Nwabueze Distinguished Professor of Law, Director of Research, NIALS. • Dr. Uche Ewelukwa Ofodile LL.M (London, Harvard) S.JD. (Harvard), Professor of Law, University of Arkansas School of Law. • Dr Adetokunbo Derek Obadina B.A. (Hons) (Sussex); LL.M (London) Ph.D (Wales), (Solicitor, England & Nigeria), Dean Faculty of Law, Lagos State University. • Dr. Edwin Egede LLB (Hons), BL, LLM, PhD, Senior Lecturer, Cardiff University. • Njaramba Gichuki, Senior Lecturer, University of Nairobi, member Editorial Board, East African Law Journal
LEGAL LIABILITIES All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher. Any submissions or contribution from readers shall be subject to and governed by XL Nominees Limited’s Terms and Conditions, which are available upon request. The publishers regret that they cannot accept liability for errors or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances.
44 BOOSTING POWER GENERATION IN NIGERIA – THE AZURA-EDO INDEPENDENT POWER PROJECT. This article examines this highly acclaimed project from the advantage point of one of the main advisors on the transaction. It examines the complex structure of the transaction and the potential impact of the project on power generation in Nigeria. It also demonstrates what can be achieved by the collaborative effort of the private sector and the Nigerian government. We believe that this structure has laid the foundation for other projects and with the input of Nigerian firms, this bode well for to the development of expertise in the country. FROM THE BENCH 26 Shifting paradigms in the jurisprudence of dispute resolution in Nigeria
42 Beware the “Non-Exclusive” arbitration clause – Anzen Limited & ors -v- Hermes One Limited (2016) UKPC 1
4. From the Editor 5. News 9. Case Review and Legal Development 32. Lawyer in the News 19. Events in Picture Crystal Ball Africa 2016 AB & David 48. Top Deals - Spring 2016
LITIGATION 15. Locus Standi – a clog in class action in tax litigation: the Nigerian experience
ARBITRATION 12. The state of State controlled entity as a party to an arbitration agreement – issues to consider.
LABOUR LAW 38. Assessment of damages in Employment/Labour matters vis-à-vis the Doctrine of Expectation Interest – a review of the decision in Modilim -v- United Bank for Africa.
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Law Digest Spring 2016
FROM THE EDITOR
Dear Colleagues,
Rule of Law and African Development That Africa has taken centre stage in the development strategies of many international law firms is undeniable. A range of appointments and promotions at Allen & Overy, Freshfields, Hogan Lovells, Holman Fenwick Willan and Fieldfisher show continued interest in the African legal services market. Norton Rose Fulbright expanding its Africa team with the hire of projects partner, Christophe Asselineau from Shearman & Sterling. In February, Baker & McKenzie hired South African competition partner Nick Altini. The rich vein of African mandates secured by these firms suggest that they are right in making this strategic swift, with Linklaters (working alongside Udo Udoma & Belo Osagie) and Clifford Chance (working alongside Aluko & Oyebode) advising on Seven Energy International’s refinancing deal worth USD 445 million. Linklaters also recently advised a consortium of lenders on the 18-year financing of a USD 2.6 billion, 1,386 MW ultra-supercritical coal-fired independent power station near the port of Safi in Morocco. Thanks to its Webber Wentzel links, it is also advising the South African government on its 5000MW renewable energy programme. Similarly, Clifford Chance has advised on a number of major mandates, including advising the sponsors GDF Suez, Nareva and Mitsui on the other side of the Safi deal, one of the most significant power deals of the year and King & Spalding advising the Ghana National Petroleum Corporation on its multimillion pathfinder liquefied natural gas project. With all the focus, investment and array of activities centred on Africa, we are in danger of ignoring deterioration in the observance of the rule of law across the continent.
Law Digest - Expanding Minds
According to the Ibrahim Index of African Governance (IIAG), whilst African countries have experienced widespread human development and improved economic opportunities since 2000, the rule of law has deteriorated in a significant number of countries over the same period. This is a worrying development, which requires the attention of all including the international law firms with their significant resources and influence across Africa. Law Digest Africa Awards On a lighter note, by the time you are reading this issue, nominations for the Law Digest Africa Awards 2016 would have closed. I would like to thank all participants and supporters of this unique initiative. Judging will take place in June and we hope to announce the shortlist in July 2016. The winners will be announced at the award presentation event to be hosted at the Lagos Oriental Hotel on the 4th Nov 2016. For more information and the list of judges, visit, www.legaldigestawards.com.
To contribute articles or commentaries to the Law Digest, please write to me at editor@nglawdigest.com. Yours,
Seyi Clement Publisher/Editor
News
Law Digest Spring 2016
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President Buhari being received by President Hollande at the Elysee Palace
Is the Globetrotting beginning to pay off for Buhari and Nigeria?
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gence Francaise de Development (AFD), a public financial institution that implements French government policy for sustainable development has pledged to increase its spending in Nigeria by 100 per cent to ₦68 billion (about 300 million euros) in 2016. The agency director for sub Saharan Africa, Jean-Pierre Marcelli, disclosed this on 6 April at a media beefing in Lagos at the conclusion of his visit to Nigeria to engage with government and stakeholders on how they can double their intervention in the country. In another development, the Economic and Commercial Counsellor of the Chinese Embassy in Nigeria, Zhao
Linxiang, announced at the recent 2016 China-Nigeria Trade and Economic Forum in Abuja that China and Nigeria have recorded a total bilateral trade volume of 101 billion dollars from 2004 to 2015, Linxiang said that both countries have experienced a steady increase in their bilateral relations. The major commodities imported by Nigeria from China are electrical machinery equipment, machinery and mechanical appliances and vehicles, whereas the major commodities exported by Nigeria to China are mineral resources, wood and agricultural products such as cotton, palm oil seeds and cashew nut.
DRC receives additional development funds worth USD41 mil. from international donors The Democratic Republic of Congo (DRC) received last week a total of USD41.08 million in funds to invest in the country's poor development system. The World Bank approved on 29 March a USD30-million grant for the improvement of and strengthening of DRC's Human Development Systems. Additionally, the DRC received USD10 million from the Global Financing Facility (GFF) Trust Fund and USD1.08 million from the Policy and Human Resources Development Trust Fund of Japan that complement the World Bank's grant in March. According to a World Bank statement, the additional funding will expand the geographical scope and depth of the DRC Education Management Information System. The aim of the new funding is also to cover a financing gap for the two rounds of Service Delivery Indicator surveys. Project financing will support the development of a strategy to modernise the national system for
China Road and Bridge Corporation reviving Kenya’s railways.
The only way is up for C Kenya’s economic growth.
W
orld Bank sees Kenya's economic growth increasing to 6.2% in 2018. World Bank expects Kenya's real economy to sustain its current growth momentum and expand from 5.9% in 2016 to 6.2% in 2018. In its latest Kenya Economic Update, published on 31 March, the World Bank identifies four factors
supporting its growth outlook as: the benefits of prudent monetary policy on inflation and commercial bank lending rates; lower global crude oil prices easing production costs; fiscal consolidation easing pressure on the domestic credit market; and increased agricultural output with favourable weather conditions.
Civil Registration and Vital Statistics (CRVS), which will support activities related to the pharmaceutical regulatory system and to the public supply-chain management system. The additional funds for improving DRC's human development are fundamentally necessary for long-term economic growth. Particularly of value is the effort to strengthen selected management systems for education and health services, as the additional financing will be used for delivery of birth certificates to an expected 600,000 children and monitoring key indicators of the entire country's primary education system through a web portal. Additionally, the development of a logistics management information system will be of great benefit for mediumto long-term economic growth, because it will provide a view of the availability of health products throughout the supply chain to support all levels in anticipating needs to avoid stock-outs.
hina Road and Bridge Corporation has since inception signed contracts worth Sh50 billion with local suppliers for the construction of the standard gauge railway. The deals have led to the creation of over 38,000 jobs, easing the government's unemployment burden. The firm, in its social responsibility report 2015 on the Sh400 billion Mombasa-Nairobi SGR project, revealed that agreements signed with local suppliers (project value worth Sh50 billion) account for half
the total contract amount. "In order to benefit local industries and people during project, CRBC has taken a deep dive into local markets where it has operated for over 30 years and sought co-operation with local suppliers, sub-contractors and service providers," says the report released last week. Among the beneficiaries of the billions are Headstream Construction Co, Jubilee African Limited, Greenersol Landscape, Miangeni Hardware and Contractors and Leaf Base Services Ltd.
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News
Law Digest Spring 2016
Seyi Clement being presented to HRH Princess Anne
Consortium led by a Nigerian UK based lawyer acquires Wema Bank’s UK subsidiary
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consortium led by Seyi Clement of Augustine Clement Solicitors, a UK based law firm has completed the purchase of Marina Nominees (UK) Limited, the UK based subsidiary of Wema Bank. Seyi, a dual qualified lawyer, is also the editor of Law Digest. Marina Nominees (UK)
Limited, was established by Wema Bank as an SPV to raise funds on the international capital market for investment in Nigeria’s financial services. In 2015, Seyi advised the subsidiary and Wema on a US$200,000,000.00 Tier II loan capital on the European Capital Market. The transaction involved the listing
of redeemable Loan Notes on the Irish Stock Exchange and the Channel Islands Stock Exchange simultaneously; a transaction which was described as "one of the most complex transactions ever undertaken on the capital market' and set a precedent in terms of deal structure." Seyi praised the foresight
of Wema Bank in establishing the subsidiary and thanks the bank for entrusting the consortium with the company. He said the consortium hopes to continue with the vision set by Wema for the company, but will expand the investment portfolio to include Nigeria’s real estate and agrocommodities.
Rating blow for Zambia.
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nternational ratings agency Standard & Poor's (S&P) revised Zambia's long-term foreign-currency outlook to Negative, with the credit rating currently set at B. Lower anticipated growth, some fiscal slippage, combined with banking sector vulnerabilities, underscores the rating outlook revision. Lower copper prices and the anticipated decline in mining production assumed in the near term, poor rainfall that could impact agricultural activity
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and manufacturing (through power shortages), combined with some fiscal consolidation in the post-election period as Zambia moves to an expected International Monetary Fund (IMF) staff-monitored programme, lowered S&P's, growth prospects for Zambia. S&P further expects some moderation in Zambia's fiscal deficit during 2016, but consolidation will be slow. Estimates place the budget deficit at 9% of GDP for 2015. "From 2017, we expect that the
implementation of consolidation measures will accelerate, likely under an IMF program, which could also provide an additional source of financing," the S&P statement reports. Financing of the large fiscal deficit has become more problematic due to rising external financing costs and tight liquidity conditions in the domestic banking sector. Treasury bill auctions in Zambia continue to be undersubscribed, increasing the repayment risk of shortterm debt. The slowdown in
economic growth will leave asset quality of Zambia's banking sector less favourable and S&P considers loan restructuring as a high risk for the banking sector moving forward.
Law Digest Spring 2016
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Justice Mahmud speaking at the NJI conference in Abuja
Chief Justice of Nigeria orders speedy trial in corruption cases.
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n a move which has been described by some as a capitulation by the judiciary to the wishes of the executive agenda, the Chief Justice of Nigeria, Justice Mahmud Mohammed has directed Judges handling corruption cases to hear such matters on a day-today basis. The CJN said the National Judicial Council, NJC, would henceforth, descend heavily on any trial
judge found to have stayed proceeding on any criminal matter before his court. Justice Mahmud made the declaration at the 5-day workshop, held at the National Judicial Institute, (NJI), in Abuja, titled “Promoting Judicial Performance through Innovations and Reforms". The CJN, said they must learn to “treat cases related to economic crimes
and corruption with the necessary urgency”. He maintained that the essence of the newly enacted Administration of Criminal Justice Act, ACJA, 2015, was to forestall situations where accused persons use frivolous interlocutory applications to frustrate their trial. The purpose of this Act said the CJN is to ensure that the system of administration of criminal justice in Nigeria promotes efficient management of criminal justice institutions, speedy dispensation of justice, protection of the society from crime and protection of the rights and interests of the suspect, the defendant and the victim. The CJN urge their Lordships to treat cases related to economic crimes and corruption with the necessary urgency. Some of the judges we have spoken to, who do not wish to be identified, whilst supporting the concept of speedy trial, believe that the CJN should be advocating speedy trials in all matters, not just in corruption cases. They felt that in light of limited resources available to the judiciary, priority should be given to
cases of defendants who have spent years in custody without trial or bail, rather than defendants who are on bail, as in almost all corruption cases. They expressed concerns that the CJN did not address the issue of declining budget share for the judiciary. They expressed the disappointment that the Federal Government has proceeded to budget ₦70 billion for the entire nation’s Judiciary in the 2016 Budget, which is less than the allocation for the Ministry for Sport, and is ₦3billion lower than the ₦73 billion appropriated for the Judiciary in 2015. The Judiciary Budget is perhaps the only funding allocation out of the 3 arms of the government’s allocations which has witnessed a steady decline since 2010, from ₦95 billion to the current ₦70 billion. The judges opined that unless the judiciary is adequacy resourced, the agenda of the CJN can only be achieved by prioritising corruption cases over more deserving matters, particularly where the defendant has been in custody for an inordinate length of time without bail.
Ghana bullish about cocoa output T
The demand for Ghana cocoa has been firm
he Ghana Cocoa Board (COCOBOD) says that the country is on track to meet its cocoa output target of 850,000 metric tonnes for the 2015/2016 year. According to officials at the regulatory body, several measures have been taken to help boost higher crop yields in the sector. It has provided free materials to farmers, including seedlings, fertilisers and pesticide sprays. It is
also promoting hi-tech agronomic practices. COCOBOD has significantly increased support to cocoa farmers in a bid to prevent a repeat of last year's dismal performance. Arguably, one of its most important steps is the provision of 60 million hybrid cocoa seedlings to farmers throughout the country which are disease resistant, high-yielding and mature earlier.
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Law Digest Spring 2016
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Kenya Central Bank steps in to ease bank liquidity fears. Life Healthcare hospital in Hilton
South African Competition Tribunal gets tough with Life Healthcare and Joint Medical Holdings merger
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he Competition Tribunal has imposed a record penalty of R10-million on Life Healthcare and Joint Medical Holdings for failure to notify the competition authorities of a merger. The Tribunal conf irmed that a consent agreement had been entered into between the Competition Commission, Life Healthcare Group Proprietary Limited and Joint Medical Holdings Limited, in terms of which the two hospital groups: • admitted to failing to notify the competition authorities of their merger and to obtain the required approval prior to the merger being implemented; and
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• agreed to pay an administrative penalty of R10-million. Before this, the highest penalty for a failure to notify was just over R1-million. For some time, the Commission warned that it intended to materially increase penalties for failure to notify mergers. It is clearly doing so now. Under the Competition Act 1998, transactions that are def ined as “intermediate mergers” and “large mergers” may not lawfully be implemented prior to notif ication to and approval by the competition authorities.
T
he Governor of the Kenyan Central Bank, Patrick Njoroge has stepped in to ease bank liquidity fears with a promise to provide facilities to any bank or microfinance institution that faces liquidity problems through no fault of its own, starting immediately. Fears over the health of Kenya's banking sector have grown since the Central Bank put Chase Bank Kenya into receivership last week, the third lender to be taken over by the central bank in nine months. The mid-sized Chase Bank was put into receivership after its gross non-performing loans rose sharply last year. Mr.
Njoroge said the central bank was working to get Chase Bank open as soon as possible and that Chase had drawn the interest of both local and foreign investors, who he did not name. "The way we are going about that is talking with shareholders. Also with interested parties, that are suitors, possible suitors. We hope there will be a solution for Chase Bank as soon as possible," he said. Mr. Njoroge said the facility, for which he did not give the amount, had no upper limit, would be available for as long as necessary to provide a sense of calm and reiterated that the financial sector was stable.
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Case Review and Legal Development From the Research Desk
UK
Common Law Contract Enforcement of clause Penalty clause Definition
Cavendish Square Holding BV – v- Talal El Makdessi; ParkingEye Limited - v- Beavis [2015] UKSC 67 On appeal from [2012] EWCA Civ 3852 Comm, [2013] EWCA Civ 1539 and [2015] EWCA Civ 402 JUSTICES: Lord Neuberger (President), Lord Mance, Lord Clarke, Lord Sumption, Lord Carnwath, Lord Toulson and Lord Hodge
Court of Appeal, overturning Burton J at first instance, held that the clauses were unenforceable penalties under the penalty rule as traditionally understood. ParkingEye v Beavis ParkingEye Ltd agreed with the owners of the Riverside Retail Park to manage the car park at the site. ParkingEye displayed numerous notices throughout the car park, saying that a failure to comply with a two-hour time limit would “result in a Parking Charge of £85”. On 15 April 2013, Mr Beavis parked in the car park, but overstayed the two-hour limit by almost an hour. ParkingEye demanded payment of the £85 charge. Mr Beavis argued that the £85 charge was unenforceable at common law as a penalty, and/or that it was unfair and unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999. The Court of Appeal upheld the first instance decision rejecting those arguments.
BACKGROUND TO THE APPEALS Cavendish v El Makdessi - By an agreement, Mr Makdessi agreed to sell to Cavendish a controlling stake in the holding company of the largest advertising and marketing communications group in the Middle East. The contract provided that if he was in breach of certain restrictive covenants against competing activities, Mr Makdessi would not be entitled to receive the final two instalments of the price paid by Cavendish (clause 5.1) and could be required to sell his remaining shares to Cavendish, at a price excluding the value of the goodwill of the business (clause 5.6). Mr Makdessi subsequently breached these covenants. Mr Makdessi argued that clauses 5.1 and 5.6 were unenforceable penalty clauses. The
JUDGEMENT The Supreme Court allows the appeal in Cavendish v El Makdessi and dismisses the appeal in ParkingEye v Beavis, thus upholding the validity of the disputed clauses in both cases. Lord Neuberger and Lord Sumption give a joint judgment, with which Lord Clarke and Lord Carnwath agree. Lord Mance and Lord Hodge gave concurring judgments. Lord Toulson agrees that the appeal in Cavendish v El Makdessi should be allowed but dissents in ParkingEye v Beavis. REASONS FOR THE JUDGMENT The penalty rule is an “ancient, haphazardly constructed edifice which has not weathered well”. However, it is of long standing and a similar rule exists in all other developed
systems of law. It also covers types of contract which are not regulated in any other way. It should not therefore be abolished, but neither should it be extended. The fundamental principle is that the penalty rule regulates only the contractual remedy available for the breach of primary contractual obligations, and not the fairness of those primary obligations themselves. The relevant contractual remedy typically stipulates payment of money, but it equally applies to obligations to transfer assets, or clauses where one party forfeits a deposit following its’ own breach of contract. What makes a contractual provision penal? Lord Dunedin’s tests in Dunlop Pneumatic Tyre Company Ltd. v New Garage and Motor Company Ltd. [1915] AC 79 have too often been treated as a code. The speeches of the rest of the Appellate Committee, particularly Lord Atkinson, are at least as important. The validity of a clause providing for the consequences of a breach of contract depends on whether the innocent party can be said to have a legitimate interest in the enforcement of the clause. There is a legitimate interest in the recovery of a sum constituting a reasonable preestimate of damages, but the innocent party may have a legitimate interest in performance which extends beyond the recovery of pecuniary compensation. The law will not generally uphold a contractual remedy where the adverse impact of that remedy significantly exceeds the innocent party’s legitimate interest. The concepts of ‘deterrence’ and “genuine pre-estimate of loss” are unhelpful. The true test is whether the impugned provision is a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement
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of the primary obligation. Lord Mance agrees with that test. The first step is to consider whether any (and if so what) legitimate business interest is served and protected by the clause, and if so and secondly, whether the provision made for that interest is extravagant, exorbitant or unconscionable. The penalty doctrine has been applied to clauses withholding payments, and transfers of moneys worth, and may be considered alongside relief against forfeiture. It should not be abolished or restricted: its existence is justified by its longstanding invocation and endorsement in the United Kingdom, Europe and across common law jurisdictions. Lord Hodge concurs, reviewing the authorities from England and Scotland and the historical development of the doctrine in Scots law. The doctrine only applies to secondary obligations arising out of a breach of contract, but is not confined to cases requiring the payment of money on breach. It applies to clauses withholding payments on breach, clauses requiring the party in breach to transfer property, and clauses requiring payment of a non-refundable deposit if that deposit is “not reasonable as earnest money” (particularly where such a clause exceeds the percentage set by long-established practice). The test is whether the sum or remedy stipulated as a consequence of a breach of contract is exorbitant or unconscionable when regard is had to the innocent party’s interest in the performance of the contract. A clause fixing a level of damages payable on breach will be a penalty if there is an extravagant disproportion between the stipulated sum and the highest level of damages that could possibly arise from the breach [255]. Lord Toulson agrees with Lord Hodge’s formulation of the test above, and with Lord Mance and Lord Hodge on the relationship between penalty and forfeiture clauses. Application to Cavendish v El Makdessi - The court concludes that neither clause 5.1 nor clause 5.6 are unenforceable penalty clauses, and accordingly allows the appeal. Clause 5.1 is a price adjustment clause. It is not a secondary provision but a primary obligation. The Sellers earn
consideration for their shares by (amongst other things) observing the restrictive covenants. Whilst clause 5.1 has no relationship with the measure of loss attributable to the breach, Cavendish also had a legitimate interest in the observance of the restrictive covenants, in order to protect the goodwill of the Group generally. The goodwill of the business was critical to Cavendish and the loyalty of Mr Makdessi was critical to the goodwill. The court cannot assess the precise value of that obligation or determine how much less Cavendish would have paid for the business without the benefit of the restrictive covenants. The parties were the best judges of how it should be reflected in their agreement. A very similar analysis applies to clause 5.6. It is also a primary obligation, and it could not be treated as invalid without rewriting the contract. It was said to be penal because the formula excluded goodwill from the calculation of the payment price. It did not represent the estimated loss attributable to the breach. But it reflected the reduced consideration which Cavendish would have been prepared to pay for the acquisition of the business on the hypothesis that they could not count on the loyalty of Mr Makdessi. Lord Mance, Lord Hodge and Lord Toulson concur on both clause 5.1 and clause 5.6. Application to ParkingEye v Beavis - The court dismisses the appeal by a majority of six to one, and declares that the charge does not contravene the penalty rule, or the Unfair Terms in Consumer Contracts Regulations 1999. Mr Beavis had a contractual licence to park in the car park on the terms of the notice posted at the entrance, including the two hour limit. The £85 was a charge for contravening the terms of the contractual licence. This is a common scheme, subject to indirect regulation by statute and the British Parking Association’s Code of Practice. The charge had two main objects: (i) the management of the efficient use of parking space in the interests of the retail outlets and their users by deterring long-stay or commuter traffic, and (ii) the generation of income in order to run the scheme.
Unlike in Cavendish v El Makdessi, the penalty rule is engaged. However, the £85 charge is not a penalty. Both ParkingEye and the landowners had a legitimate interest in charging overstaying motorists, which extended beyond the recovery of any loss. The interest of the landowners was the provision and efficient management of customer parking for the retail outlets. The interest of ParkingEye was in income from the charge, which met the running costs of a legitimate scheme plus a profit margin. Further, the charge was neither extravagant nor unconscionable, having regard to practice around the United Kingdom, and taking into account the use of this particular car park and the clear wording of the notices. The result is the same under the 1999 Regulations. Although the charge may fall under the description of potentially unfair terms at para. 1(e) of Schedule 2, it did not come within the basic test for unfairness in Regulations 5 and 6(1), as that test has been recently interpreted by the Court of Justice in Luxembourg. Any imbalance in the parties’ rights did not arise ‘contrary to the requirements of good faith’, because ParkingEye and the owners had a legitimate interest in inducing Mr Beavis not to overstay in order to efficiently manage the car park for the benefit of the generality of users of the retail outlets. The charge was no higher than was necessary to achieve that objective. Objectively, the reasonable motorist would have, and often did, agree to the charge. Lord Mance and Lord Hodge both concur. Lord Toulson (dissenting) would have allowed the appeal, on the grounds that the clause infringes the 1999 Regulations, which reflect the special protection afforded to consumers under the European Directive on unfair terms in consumer contracts. The burden is on the supplier to show that the consumer would have agreed to the terms in individual negotiations on level terms. It is not reasonable to make that assumption in this case, and in any event ParkingEye had not produced sufficient evidence to that effect. References in square brackets are to paragraphs in the judgment.
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UK
Common Law Jurisdiction Enforcement of foreign judgment Submission to jurisdiction Default judgement
Vizcaya Partners Limited (Appellant) v Picard and another (Respondents) (Gibraltar) [2016] UKPC 5 From the Court of Appeal of Gibraltar JUSTICES: Lord Neuberger, Lord Mance, Lord Clarke, Lord Sumption, Lord Collins BACKGROUND TO THE APPEAL. In 2008, Mr Bernard Madoff was exposed as the operator of a fraudulent Ponzi scheme, through his company Bernard L Madoff Investment Securities LLC (“BLMIS”). In April 2009 Mr Irving Picard, the trustee in BLMIS’s liquidation in the New York Bankruptcy Court, started proceedings against those investors who had been repaid by BLMIS before the fraud was discovered, to avoid and recover those transfers. This included Vizcaya Partners Limited, a British Virgin Islands registered investment fund which had invested around US$328m with BLIS between 2002 and 2008, but had been repaid US$180m before discovery of the fraud. Amongst the Account Management Documents governing Vizcaya’s investment with BLMIS was a Customer Agreement, which included an express choice of New York law. The trustee obtained a default judgment for $180m against Vizcaya in New York on 3 August 2010, and sought enforcement of the judgment in Gibraltar, where Vizcaya had substantial assets. Vizcaya applied for summary judgment on the grounds that the default judgment could not be recognised and enforced in Gibraltar. The Chief Justice of Gibraltar dismissed Vizcaya’s application,
holding that it was arguable that Vizcaya had submitted to the jurisdiction of the New York courts by (i) its presence in New York at the time when proceedings were commenced and (ii) its agreement to submit to that jurisdiction. The Court of Appeal of Gibraltar allowed Vizcaya’s appeal in part. It dismissed the trustee’s claim to enforce the default judgment in reliance on Vizcaya’s presence in New York. But it held that the claim to enforce in reliance on an agreement to submit to the jurisdiction had a reasonable prospect of success. ADVICE OF THE BOARD The Board advises Her Majesty that Vizcaya Partners Limited’s appeal should be allowed. Lord Collins gives the advice of the Board. REASONS FOR THE ADVICE The issue in this case is the content and scope of the rule that a foreign default judgment is enforceable against a judgment debtor who has made a prior submission to the jurisdiction of that foreign court. This has been the subject of conflicting decisions and dicta. When does a judgment debtor agree to submit to the jurisdiction of a foreign court? There does not necessarily have to be a contractual agreement to submit: the ultimate question is whether the judgment debtor has consented in advance to the jurisdiction of the foreign court. That consent or a contractual agreement may be implied or inferred. The authorities denying the possibility of implied agreement were cases about whether there had to be an actual agreement or consent at all, in the context of the enforcement of foreign default judgments against shareholders of foreign companies or partnerships. In English law a term or agreement may be implied as a matter of fact, or by law. In the context of contracts being considered in foreign proceedings, a term may not be implied from the fact that the contract was made or performed in the foreign country, or governed by its law (even if, under that foreign law, the foreign court would have jurisdiction). Where conflict of laws issues arise in the context of enforcing foreign judgments based on a submission to the foreign
jurisdiction, English law determines that question, and so the agreement to submit to the foreign jurisdiction may arise through an implied term. Terms implied as a matter of fact depend on the construction of the contract, which is governed by the foreign law if that is the law of the contract. A legal expert does no more than prove the rules of construction of the foreign law. Where terms are said to be implied by law, the legal expert on the foreign law would give an opinion on how the term arises. In this case, the trustee submitted evidence that under New York law, Vizcaya submitted to the jurisdiction of the New York courts because (i) the choice of New York law applied New York substantive law to all matters relating to the Account Management Documents and it agreed to those documents and carried on business in New York, and (ii) specific jurisdiction was established under the New York Civil Practice Law and Rules over a non-domiciliary transacting business in New York. But that evidence did not show, as a matter of New York law, that there was a term implied as a matter of fact or law that Vizcaya consented to the jurisdiction of the New York courts. As to an implied term by fact, there was no New York law evidence on any rule of construction that could allow the Gibraltar court to conclude that the choice of law clause amounted to a choice of jurisdiction. As to an implied term by law, there was no New York law evidence on the relevant implied term. The fact that the contract was deemed to have been made in New York made no difference. Even if there had been an agreement to submit, it would prima facie not apply to these proceedings, because they were insolvency-related avoidance proceedings. After the hearing of the appeal but before the advice was tendered, the litigation was settled by the parties, subject to the approval of the New York Bankruptcy Court. The Board decided that the appeal raised issues that were not only of general importance, but were of international importance in other common law countries, and would therefore deliver its advice after the settlement was approved by the New York Bankruptcy Court.
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ARBITRATION Osoro Nick Otieno - Managing Partner Otieno Nick & Co (Kenya)
The State or State controlled entity as a party to an arbitration agreement – Issues to consider Introduction In this paper we will attempt to examine some of the issues that parties and their legal advisers need to consider where one of the parties to a proposed arbitration agreement is a State or a State controlled entity. These issues need to be addressed prior to entering into the arbitration agreement, because the concept of finality and party autonomy would suggest that the court is unlikely to interfere thereafter, as was highlighted in the case of Nyutu Agrovet Limited v. Airtel Networks Limited.1
Osoro Nick Otieno
Managing Partner Otieno Nick & Co (Kenya)
Where one party to the arbitration is a State or a State controlled entity, performance may be hampered by certain steps taken by the State or State controlled entity both in its own national courts or external thereto to prevent the enforcement of the award.
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Issues to consider Capacity When a private party concludes a contract or any other engagement with a State or a State controlled entity, it is important to ascertain from the outset the exert nature of the contracting State or State controlled entity, as it is not unusual for that States, and/ or State controlled entities involved in international commercial arbitrations, to later seek to rely on State immunity to avoid recognition and/or enforcement of arbitral awards.2 Understanding of the nature of the State or State controlled entity should influence the drafting of the arbitration agreement to minimise the risk of such argument being successfully deplored at the point of enforcement. In the case of Bridas SAPIC v. Turkmenistan3 the arbitral tribunal upheld its jurisdiction over both Turkmenneft, a State instrumentality,
Law Digest Spring 2016
and the Government of Turkmenistan, though the latter was not formally party to the underlying contract, on grounds, inter alia, that the contract contained undertakings which only the Government could fulfill. Therefore, the act of Turkmenneft was in essence the act of the Government of Turkmenistan. In ICC Case No. 9762 4 where only a ministry of the country was a party to the agreement though the agreement also referred to the “government”, the arbitral tribunal decided to extend the arbitration agreement to cover the “State,” even though the contract had been concluded only with the ministry, which had a separate legal personality under the applicable law. The reasoning was that the parties by using the word government meant the State. It is desirable for the issue of capacity to be addressed at the contracting stage to mitigate against the uncertainties and the expensive litigation parties in these two cases had to endure in addressing these issue at the enforcement stage. Procedure The fact that one of the parties is a State or a State controlled entity does not raise particular procedural issues, however it is generally recognised that a State might need more time than a private party to collate relevant information and evidence, identify potential witnesses and other sources of information, and to instruct counsels.5 The delay that this could engender must be borne in mind and parties may wish to agree a procedure for any arbitral tribunal in the arbitration agreement. The importance of an agreed procedure cannot be underestimated in arbitration, as it will give an opportunity for the parties to have a clear guide, on what rules will be applied, when steps are taken, which would go a long way to avoid uncertainties and delays. Enforcement against State or State controlled entity. Article 5 of the International Law Commission’s Articles on State Responsibility, provides that the conduct of a person or entity which
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The importance of an agreed procedure cannot be underestimated in arbitration, as it will give an opportunity for the parties to have a clear guide, on what rules will be applied, when steps are taken, which would go a long way to avoid uncertainties. is not an organ of the State under the article, but which is empowered by the law of that State to exercise elements of the governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in that particular instance. It is within this context that we will consider enforceability of an award, where a State controlled entity was a party to the agreement, but did not specifically refer to the State or vice versa. A successful party in an arbitration reasonably expects the award, which is the ultimate goal of arbitration, to be performed without delay.6 The losing party may refuse to carry out the award, thereby necessitating the winning party to seek enforcement and execution of the award, through the national courts. Where one party to the arbitration is a State or a State controlled entity, performance may be hampered by certain steps taken by the State or State controlled entity both in its own national courts or external thereto to prevent the enforcement of the award. Section 36 of the Arbitration Act7 provides that a domestic award shall be recognised as binding upon application in writing to the High Court and shall be enforced subject to Section 37. Section 37 sets out the limited instances in which the High Court may decline to enforce an arbitral award. The New York Convention,8 at Article V also provide for instances where recognition and enforcement of an arbitral award
may be refused. One of the issues that has come up in matters where States or State controlled entities are involved, concerns situations where the successful party seeks to enforce the award against a State or a State controlled entity even though the State or State controlled entity was not party to the arbitral award. In Société Nationale Des Pétroles Du Congo (SNPC) v. Walker International Holdings Ltd9 and Winslow Bank & Trust Company Ltd. v. Société Nationale Des Hydrocarbures (SNH)10 enforcement of arbitral awards against the States concerned (the Republic of Congo and Cameroon) were allowed through assets belonging to a national company controlled by these States. The court held in the former case that though supervision or even control by a State over a legal person exercised through its directors, and the public interest function assigned to it, are not usually sufficient to consider that a company is a State instrumentality entailing its merger with the State, the entity in question here was in reality a fictional legal person and therefore an instrumentality of the Republic of Congo. The Court followed essentially the same reasoning in the SNH’s case, considering that the SNH was de facto part of the State, even if formally a separate legal entity. It is in line with these decisions that issues of enforcement and execution of arbitral awards where one party is a State or State controlled entity must be considered at the outset. If parties believe that enforcement, if necessary, could be against a State or State controlled entity, consideration must be had to making that State or State controlled entity party to the arbitration agreement, rather than run the risk of the uncertainty inherent in the SNPC’s case and SNH’s case. State Immunity Sometimes, a State or State controlled entity will invoke issues of immunity to avoid execution, as both the New York Convention and the Model law do not prohibit an unsuccessful
party from raising it as a ground for refusal. However, in the 1965 Washington Convention itself, Article 25(1) provides that consent to ICSCD11 arbitration, once given, cannot be unilaterally revoked. Consent to ICSID arbitration therefore constitutes an irrevocable waiver of immunity from the jurisdiction of the arbitral tribunal. However, where the State or State controlled entity is not a party to the arbitration agreement,
Sometimes, a State or State controlled entity will invoke issues of immunity to avoid execution, as both the New York Convention and the Model law do not prohibit an unsuccessful party from raising it as a ground for refusal. Even where the defence of State immunity is not available to a State or State controlled entity, it is still able to plead public interest defence. and enforcement is sought against it, it would be difficult to prove that the State or State controlled entity gave its consent, which would bring Article 25(1) into play unless one is able to rely on the rule in SNPC’s case and SNH’s case. Contracting with the appropriate parties from the outset could avoid these uncertainties. Public Interest Even where the defence of State immunity is not available to a State or State controlled entity, it is still able to plead public interest defence. The case of World Duty Free Company Limited v. The Republic of Kenya12 is one of the notable ICSID decisions that involved Kenya, where the defence of public interest has be raised.
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While the position of the law is quite clear, it would appear that the DPR has forgotten or rather has decided to be wilfully unmindful of the decision of the apex court in Chukwuma vs. Shell (supra) and Shell vs. Nwawka (Supra). The arbitral tribunal dismissed the claimant’s case, and held that the contract was unenforceable, because it was procured through corruption and thus against public policy. It is within this context that a court may refuse to enforce an award where it goes against public policy. This affirms the provision of Article V (2) (b) of the New York Convention.13 Confidentiality and Secrecy Confidentiality is one of the main benefits of arbitration and most arbitration rules stipulate that the hearings are to be in camera. However,
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where a State or State controlled entity is involved, this often means that the issues in dispute are of a public nature and could be of public interest. A balance may therefore need to be struck between privacy and public accountability. Public interest groups or other third parties may also demand to be involved in the process in line with the role of keeping the citizens informed. This may persuade the Tribunal, in the absence of any prohibition in the agreement, to wave confidentiality of the proceedings. Conclusion The general expectations by clients imply that clients expect lawyers to possess more than legal skills; they expect lawyers to be problemsolvers, regardless of the nature of the problem, provided it has what they consider to be legal aspects. Lawyers play an important role when handling arbitration, where one party is a State or State controlled entity, to ensure proper advice is given to facilitate the process to its finality, whilst minimising uncertainty and unintended consequences.
Civil Application No. 61 of 2012 [2015 eKLR]. Lawrence W. Newman et al (ed), The Leading Arbitrators' Guide to International Arbitration (Juris Publishing Inc 2014) 139 4 ICC Case No. 9762, Final Award of 22 Dec. 2001, 29 Y.B. INT’L COM. ARB. 26 (2004) 5 Veijo Heiskanen (n 3) 6 Redfern, A et al, International Arbitration, 5th ed., (New York: Oxford University Press Inc, 2009) 621 as cited in Mboce Njoki ‘Enforcement of International Arbitral Awards: Public Policy Limitation in Kenya’ (LLM Thesis University of Nairobi 2014) 11 7 Government of Kenya (n2) 8 New York Convention 1958 9 Paris Court of Appeals, 8th Chamber, Section B, Decision of 3 July 2003, 10 Case No. 2002/20287, unpublished 11 International Centre for the Settlement of Investment Disputes 12 ICSID Case No. ARB/00/7 13 New York Convention(n 20) 14 Kariuki Muigua, ‘The Lawyer as a Negotiator, Mediator and Peacemaker in Kenya’ (2015) (Paper Presented at the 2015 LSK Annual Conference, Leisure Lodge & Beach Resort, Diani Mombasa 12th - 16th August 2015) 5-6 1 2
LITIGATION Theophilus Alao
Law Digest Spring 2016
Locus Standi - a clog in class action in tax litigation: the Nigerian experience
I Theophilus Alao1
In this seminar paper, we shall examine the potency of class action litigation in tax matters.
t is a well-known legal maxim: where there is a wrong, there must be a remedy2. Therefore if there is a constitutional and civil duty to pay taxes, there should also be a correlative right to, question misuse of tax payers’ money or resist an oppressive tax regime. Sometimes an alleged wrong may be suffered not only by one person but by a group of persons who have a common interest or common cause. In this seminar paper, we shall examine the potency of class action litigation in tax matters. The concern of this paper is whether or not a group of taxpayers can bring an action in court to exonerate themselves from paying the tax in question or seek reliefs that will be of benefit to the entire class of the tax payers. If so, what are the issues to be considered by the plaintiffs and the court? Class action law suits have been successfully initiated in other climes but its efficacy in Nigeria, as far as taxation is concerned has been largely, unsuccessful. See the case of Bewaji v. Obasanjo 3, a decision which is perverse in our view4. The origin of class action law suits can be traced back to around 13th century, when group litigation started in England. In 1833, Equity Rule 48 was passed which allowed for group litigation, known as representative litigation, to be carried out when an excessive number of similar, individual cases have been filed5. Class action litigation has found its way into the Nigerian legal system as
well, and has been successfully used to challenge administrative authorities.6 The various States High Court Civil Procedure Rules have also recognised the desirability of class action law suits by a few members of a group in the overriding interest of all the members of the group. Therefore, where there are numerous persons having the same interest in one cause or matter, one or more of such persons may, with the leave of court, sue or defend the suit on behalf of, or for the benefit of all others7. The rule on representative or class action is that all the parties must have a common interest (though not necessarily similar interest), common grievance and the relief sought must, in its nature, be beneficial to all the representatives and those represented8. Where this is not the case, the competency of the suit may be challenged for the fundamental defect in the pleading 9. Under the
Class action law suits have been successfully initiated in other climes but its efficacy in Nigeria, as far as taxation is concerned has been largely, unsuccessful. See the case of Bewaji v. Obasanjo , a decision which is perverse in our view. High Court of Lagos State (Civil Procedure) Rules, 201210, class action procedure can be used in proceedings involving administration of estates, property subject of trust, land held under customary law and construction of a written instrument including a statute. The Rules of Court are silent on application of this procedure to tax matters, possibly because tax matters are vested in special revenue court as court of first instance and not necessarily the High Court11. In any of the preceding instances mentioned, a Judge can appoint a
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person or a class to sue on behalf of the entire class. Under the Federal High Court (Civil Procedure) Rules, 2009,12 the instances where the class action procedure may be used are proceedings involving intellectual property such as trademark, copyright, patents or designs. The Rules also stipulate conditions precedent before a Judge can appoint a person or class of persons to represent the entire class.
It is disappointing that the court did not consider a purposive interpretation of locus standi as was done in the case of in the case of R v. Inspectorate of Pollution Exparte Greenpeace (No.2), where the court allowed an organisation to challenge British Nuclear fuel decision to test its new Thermal Oxide reprocessing plant at Sellafield, Cumbria. If the Judge finds that it is expedient, for the purpose of efficient procedure, that a person or members of a class be appointed to represent the class, then he must also be satisfied that the class of persons interested is not capable of being ascertained; or that if it can be ascertained, the persons cannot be found; or that the persons in the class cannot be found and ascertained13. Potency of class action litigation in tax matters Class actions whilst rare in tax matters in most jurisdictions including Nigeria, are not unknown. In the case of Adam Steele and Ors v. United States of America,14 for instance, over 700,000 plaintiffs represented by only two plaintiffs brought a class action suit against the Internal Revenue Service
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(IRS) for the defendant’s attempts to regulate tax preparers. The two plaintiffs, Adam Steele and Brittany Montrois, are both certified public accountants (CPA) licensed by the States of Minnesota and Georgia respectively. The remaining plaintiffs, as part of the class, are paid tax preparers who have paid the initial preparer identification number (“PTIN”) issuance user fee and one or more PTIN renewal user
have been directly interfered with by or under a law has sufficient interest to sustain the claim16. A person can therefore, only be said to have locus where: the action is justiciable; and there is a dispute between contending parties.17 In the US for instance, public and quasi-public interest tax litigants must seek non-statutory review.18 Plaintiffs seeking non-statutory review
Class action on tax issue has been successfully employed in the US
fees. Those fees are the result of final regulations issued by the IRS in 2010 requiring paid tax return preparers to register with the IRS and pay a user fee to obtain a PTIN. In order to keep the PTIN, preparers must re-register each year and pay an additional fee; failure to pay the fee results in a loss of the PTIN; and paid preparers may not prepare federal income tax returns without a valid PTIN. The Court agreed with the plaintiffs and granted them an injunctive relief prohibiting Treasury from charging the issuance and renewal user fees in the future. The Plaintiffs who had paid the fees were also held entitled to a refund of the user fee paid via restitution15. Locus Standi The first legal hurdle for the Plaintiff in a class action is the issue of locus standi. It has been held that only a person who is in imminent danger of coming into conflict with the law or whose business or other activities
of administrative actions, whether a Treasury ruling or any other agency action, must satisfy the standing test set forth in section 10(a) of the Administrative Procedure Act (APA). This section provides that “(a) person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof."19 Although the same test applies to all non-statutory review plaintiffs, courts are more reluctant to grant standing to public and quasi-public interest tax litigants because of the established doctrine that, "in assessing and collecting taxes and utilizing predictable revenue gathering procedures, the government must be free from premature judicial interferences.” 20 In Nigeria, many public interest suits have been thrown out of court for want of locus standi. One of such suits is the case of Abraham Adesanya v. President of Nigeria 21, where
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In recognition of the delimiting effect of the strict interpretation of locus standi in the citizenry’s ability to challenge government action, Ghana has made great stride on this issue. In Ghana, any citizen of the country can bring an action for a declaration of an act which is considered unconstitutional. although the issue of locus standi was not canvassed in the High Court, the Federal Court of Appeal suo motu, invited counsel for both parties to address it on the issue of locus standi. Having heard counsel for both sides, the Court of Appeal dismissed the appeal for want of locus standi. On ultimate appeal to the Supreme Court, the Supreme Court in agreement with the Federal Court of Appeal, also dismissed the appeal and held, per Fatayi-Williams, CJN: By coming to court to ask for a declaration, the plaintiff/appellant in these circumstances, has completely misconceived his role as a Senator. In short, Senator Adesanya has no locus standi in the particular case. He participated in the debate leading to the confirmation of the appointment of the second defendant/respondent and lost. For him, that should have been the end of the matter. The position would have been otherwise if he was not a Senator. Although, the locus standi rule has moved from the Adesanya’s case, with a more purposive interpretation of the concept particularly in human right case22, unfortunately, the potency of class action suits in the tax realm has not been fully embraced by the Nigerian court where the strict interpretation of locus standi still holds sway. In order to be vested with locus standi in tax matters, the litigant must show to the
court that he has suffered some kind of prejudice by the taxing authority over and above those suffered by other tax payers. This was the major reason for the dismissal of the celebrated tax payer’s case of Bewaji v. Obasanjo.23 In that case, the Appellant had instituted a suit at the Federal High Court sitting in Abuja to challenge the imposition of the petroleum consumption tax by the Respondents who were respectively, the then President of the Federal Republic of Nigeria, the Petroleum Products Pricing & Regulatory Agency; and the Attorney-General of the Federation and Minister of Justice. In this case the Plaintiff/Appellant had deposed in the Affidavit in support of his Originating Summons among others: that the National Assembly had not passed the budget proposal into an Appropriation Act and the 1st Defendant could therefore, not implement it; and the National Assembly did not have the power to impose consumption Tax not being an item of taxation under the exclusive or concurrent legislative list. Construing section 6(6) (b) of the 1999 Constitution, the court held that that section does not confer locus standi on the persons. Under the section, the courts have to adjudicate on a justiciable issue touching on the rights and obligations of a person who brings the complaint to court. With due respect, we believe that the court misinterpreted section 6(6)(b) and failed to consider the whole of section 6(6) in its judgement. For ease of reference, we have reproduced the whole of sections 6(6)(a) & (b) below: (6) The judicial powers vested in accordance with the foregoing provisions of this section (a) shall extend, notwithstanding anything to the contrary in this constitution, to all inherent powers and sanctions of a court of law (b) shall extend, to all matters between persons, or between government or authority and to any persons in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person; The court interpreted, “that person” in section 6(6)(b) to refer to the plaintiff.
It is submitted that this interpretation is wrong. We submit that “that person” relates to either the plaintiff or the defendant. In this particular case, the issue to be determined is whether the executive complied with its obligation to seek legislative approval via the Appropriation Bill before imposing the consumption tax. Even if our submission on the interpretation of section 6(6)(b) is incorrect, we submit that the only purposive interpretation that could be given to section 6(6)(a) is to allow the court the flexibility to exercise it's inherent judicial discretion in cases where strict interpretation of the locus standi rule, would prevent a legitimate challenge of an administrative action, particularly where the action of the government might be ultra vires and the on the face of it, no one would meet the criteria for locus standi. It is disappointing that the court did not consider a purposive interpretation of locus standi as was done in the case of R v. Inspectorate of Pollution Exparte Greenpeace (No.2),24 where the court allowed an organisation to challenge British Nuclear fuel decision to test its new Thermal Oxide reprocessing plant at Sellafield, Cumbria. In doing so, the court placed particular reliance on the fact that Greenpeace was a highly respected and responsible environmental organisation which could mount a more focused challenge than an individual. In recognition of the delimiting effect of the strict interpretation of locus standi in the citizenry’s ability to challenge government action, Ghana has made great stride on this issue. In Ghana, any citizen of the country can bring an action for a declaration against the state for an act which is considered unconstitutional.25 Therefore, one does not have to show how the act affects one personally. Once it involves violation of a constitutional provision, any person or organisation can challenge the act. This is in alliance with my view that Bewaji v. Obasanjo 26 is bad law and should be revisited. From the preceding paragraphs, it is clear that in Nigeria, the court always looks at the plaintiff’s claim to
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determine whether or not he has locus standi. Where locus standi is lacking, the case will be dismissed in limine. In other climes, however, the court often distinguishes between private law cases and public law cases. In private law matters, the court will consider the plaintiff’s locus standi while in the public law case, the test is the existence of sufficient interest which is usually given a liberal interpretation, as demonstrated in the Greenpeace (No.2)’s case.27 Although the court has become a bit liberal on the requirement of locus standi in human rights cases, we are yet to see an improvement since the case of Bewaji v. Obsanjo was decided in other areas. LL.B (University of Ibadan, Nigeria); BL (Nigerian Law School); Affiliate of Association of Chartered Certified Accountants, UK 2 See Unreported Appeal CA/A/134/M/06: Bewaji v. Obasanjo delivered on 11th November, 2007 3 Supra. Although the case was initiated for and on behalf of a class; its initiated however implied that if it was successfully prosecuted that it is not only the plaintiff’/appellant that would become exonerated from the fuel consumption tax, the bone of contention, but the generality of Nigerian citizens. 4 This case can still not be taken as final because it cannot stand before a contrary decision of the Supreme Court on the same principle. 5 http://classactionlawsuitcenter.com/historyof-class-action-lawsuits/. Assessed on 3rd March, 2016. 6 Since the abrogation of the Bill of Rights Act. See section 6(6) of the Constitution of the Federal Republic of Nigeria 1999 (as Amended) and cases decided on earlier constitutions with 1
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provisions impari materia with section 6(6) of the current constitution such as Shitta Bey v. Public Service Commission (1981) 1 S.C. 40; Unreported Suit No. CA/E/90/84: Government of Imo State of Nigeria v. Greeco Construction & Engineering Associates Limited. The recent case of Appeal CA/A/134/M/06: Bewaji v. Obasanjo supra was also premised on section 6(6) of the 1999 Constitution but was dismissed on the ground of lack of locus standi. 7 Order 10 Rule 8 of High Court of the Federal Capital Territory (Civil Procedure) Rules 2004. 8 Ukatta v. Ndindeze [1997] 4 NWLR (Pt.499) 251; Idise v. Williams Int. Ltd [1995] 1 NWLR (Pt.370) 142; Egom v. Ono [2008] 11 NWLR (Pt.1098) 320 at 337. The common interest must be pleaded and proved by evidence (Egom v. Ono). 9 Kata v. Ndindeze Supra. 10 Order 13 Rule 13. 11 One of such special courts is the Tax Appeal Tribunal (TAT) established under section 59(1) of the Federal Inland Revenue Service (Establishment) Act 2007. The TAT adjudicates on all tax disputes arising from operations of the various Tax Laws such as companies income tax, personal income tax, petroleum profits tax, value added tax, capital gains tax. 12 Order 9 Rule 4 13 Oghogho Eguasa Assessing the Efficacy of Class Action Regimes in Nigeria http://greymile. perchstoneandgraeys.com/2013/09/24/ assessing-the-efficacy-of-class-action-regimesin-nigeria/. Posted on 24th September, 2013 and assessed on 1st March, 2016. 14 Cited and discussed in 2013 in IRS Hit with Class Action Suit over Tax Preparer User Fees - http://www.forbes.com/sites/ kellyphillipserb/2014/09/08/irs-hit-withclass-action-suit-over -tax-preparer -user fees/#fb7d3d3cbe7f. Assessed on 1st March, 2016. 15 http://www.scribd.com/doc/239085100/ Adam-Steele-Brittany-Montrois-et-al-versusUnited-States-of-America. (Viewed 19 March 2016)
A.G. Anambra v. A.G. Federation (2005) 9 NWLR (Pt931) 572 at 654. 17 Ogbuehi v. Governor of Imo State [1995] 9 NWLR (Pt. 417) p. 53; U.B.A. Plc v. BTL Ind. Ltd. [2004] 18 NWLR (Pt. 904) p.180 and Guda v. Kitta [1999] 12 NWLR (Pt. 629) p. 21. 18 See Ortego v. Weinbeger, 516 F.24 1005, 1009 (1975); Nader v. Volpe, 466 F.2d 261, 266 (D.C. Cir.1972). 19 (U.S.C. 702 (1976). 20 Eric L. Goldberg Standing for Public and Quasi-Public Interest Tax Litigants Washington University Law Review (Volume 1978) issue 3 p. 574. See also Bob Jones University v. Simon 416 U.S. (1974); Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7-8 (1962); Bull v. United States, 295 U.S. 247, 259-260 (1935); Sayder v. Marks, 109 U.S. 189. 193-194 (1883) 21 Supra. 22 In Fawehinmi v. Akilu and Togun, [1987] 2 NWLR (Pt.102) 797 at 846 the Supreme Court per Eso JSC said: “it is the universal concept that all human beings are brothers and assets to one another”. The learned justice applied this concept to ground locus standi. He stated further that we were all brothers was more so in this country where the socio-cultural concept of the family and extended family transcended all barriers. 23 Supra. 24 (1994) 4 All ER 328 25 Tuffuor v. Attorney General (1980) G.L.R. 26 Supra. 27 Okey Ilofuluwa Locus Standi in Nigeria: an Impediment to Justice. Culled from http:// lexprimus.com/Publications. Assessed on 5th March, 2016. 28 Supra. Although the case was initiated for and on behalf of a class; its initiated however implied that if it was successfully prosecuted that it is not only the plaintiff’/appellant that would become exonerated from the fuel consumption tax, the bone of contention, but the generality of Nigerian citizens. 29 (1994) 4 All ER 328 16
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Date: Venue: Theme:
Law Digest Spring 2016
13-15 January 2016 Accra, Ghana Rising with Africa.
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Law Digest Spring 2016
David Ofosu-Dorte, Senior Partner, AB & David Africa
James Asare-Adjei, President, Association of Ghana Industries (AGI)
Bebe Clement - Business Development Director - Law Digest
Vish Ashiabgor - Partner, PriceWaterHouseCoopers (PWC)
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Christopher Healy - Partner, Hogan Lovells
Nana Serwah Godson-Amamoo - Associate Partner, AB & David Africa
L-R: Vish Ashiabgor - Partner, PriceWaterHouseCoopers (PWC) and Howard Barrie - Partner, Eversheds LLP
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Christian Peters - European Union
Michael Cobblah - Cnergy Ghana Limited
George Kwatia - Partner, PriceWaterHouseCoopers (PWC)
Isobel Acquah - Of-Counsel, AB & David Africa
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Isabel Boaten - Managing Partner, AB & David
Nana Ama Duona
L-R: Olufemi Sunmonu - Partner, Qais Conrad Laureate, Michel Brizoua - Partner, BILE-AKA - BRIZOUA-BI & AssociĂŠs, Vish Ashiabgor - Partner, PriceWaterHouseCoopers (PWC) and Howard Barrie - Partner, Eversheds LLP
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Delegate registration
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Martin Agyen-Sampong - Senior Associate, AB & David
L-R: David Ofosu-Dorte - Senior Partner, AB & David Africa, Olufemi Sunmonu - Partner, Qais Conrad Laureate and Babatunde Ajibade SAN - Managing Partner, SPA Ajibade & Co
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Babatunde Ajibade SAN - Managing Partner, SPA Ajibade & Co
L-R: Sharon Ganney - Head of UKTI and Andrew Skipper - Partner, Hogan Lovells
L-R: Isabel Boaten - Managing Partner, AB & David and Allison Diarra - Hogan Lovells
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FROM THE BENCH Honorable Justice H. A. O. Abiru
The African Bull market has been dominated by South Africa
Shifting Paradigms in the Jurisprudence of Dispute Resolution in Nigeria Introduction
Honorable Justice H. A. O. Abiru Justice of the Court of Appeal
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From the dawn of time, disputes have been part of human existence and man has always developed mechanisms for resolving them. The means of resolving disputes varied and changed with the advancement of man from one level to another. Each society developed mechanisms for settling disputes amongst its people and the mechanisms evolved by each society were peculiar to them and they were determined by the religious beliefs and cultural makeup of the people. Thus, in societies where the concept of absolute morals and belief in super natural sanctions held sway, conscience and individual responsibility played a major part in the resolution of disputes.
Law Digest Spring 2016
These means of dispute settlements in human societies developed to become part of the customary laws of the societies and emphasis of the dispute settlement process was more on the need to promote reconciliation and continued fraternity between the parties than anything else. In an article titled “Natural Justice in Africa” and published at page 25 of 9th Edition of the Natural Law Forum Journal (1964), M Gluckman summarised the objectives of the dispute settlement process in traditional societies thus at page 28: “…when a case came to be argued before the judges, they conceived their task to be not only detecting who was in the wrong and who in the right, but also the readjustment of the generally disturbed social relationships, so that these might be saved and persist. They had to give a judgment on the matter in dispute, but they had also, if possible, to reconcile the parties, while maintaining the general principles of law.” Common Law and its Adversarial Litigation Method The common law was the customary means of settling disputes evolved by the English. In its medieval origins much of the common law was undoubtedly customary and it was flexible and capable of being adapted to new social needs. In this period legislation and judicial precedent were merely regarded as the means of creating new customs. In England at the time, customs came into being very easily and they were described as “instruments for legal change rather than the fossilized remains of a remote past.” But as the royal courts consolidated themselves and triumphed over communal jurisdiction, the creative role of custom in the strict sense diminished, and the mass of legal refinements spun out by the courts became rather a matter of creative judicial development than of the adoption of the actual practices of the community. So that, although the habit persisted, from Bracton to
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FROM THE BENCH Blackstone, of referring to common law as custom, the “common custom of the realm”, this was, and it still remains, law developed by what Bentham called “Judge & Co.” and if bearing some relation to popular sentiment, by no means derived from pre-existing customs or usages. This common law as developed by “Judge & Co” was later spread from England and different variants of it became the means of settling dispute all over the Western world. With the advent of colonialism, the Western countries transported and transplanted their brand of dispute settlement mechanisms to the different territories annexed by them and they enforced these mechanisms in those territories without much regard for the dispute settlement mechanisms hitherto prevalent in the communities. The Western countries believed that they had an obligation to “modernise” the dispute settlement mechanisms in those territories. Thus began the systemic imposition of statutory legislations, the formal court system with its attendant rules of procedure and formalities and other structured mechanisms as the acceptable legal system of dispute resolutions. And as this legal system developed and became more complex, the creative role of the customary dispute resolution techniques diminished and they became reduced to resolving disputes on insignificant issues. Adversarial litigation became the primary means of settling disputes. With time, the legal system of the adversarial litigation ceased to meet the desire and goal of achieving justice. The system became rigid and mechanical in its operation of the law and insensitive to the surrounding moral, social and political conditions. It was bogged down by an antiquated approach to justice delivery and this produced an environment where questions of delay, expense, compromise and fairness were of low priority. Expense became disproportionate and unpredictable. Delay was frequently unreasonable. Litigation was reduced purely to adversarial tactics where the aim of lawyers was to outdo themselves in delaying the hearing and determination of matters on merits. This led to the sacrifice of substantive and meritorious issues and claims. The system became hypocritical, because
one of the often parroted slogans of the legal system is “justice delayed is justice denied”, yet it was a legal system that made itself amenable, and was used, to delay justice. The system emphasised the common law doctrine of contentious procedure. Speaking on this doctrine of contentious procedure which he described as “the sporting theory of justice”, Roscoe Pound, in an address delivered to the American Bar Association on “The Causes of Popular Dissatisfaction with the Administration of Justice” on the 29th of August, 1906 stated thus: “…we take it as a matter of course that a judge should be a mere umpire, to pass upon objections and hold counsel to the rules of the game, and that the parties should fight out their own game in their own way without judicial interference. We resent such
coach with the rules of the sport. It leads to exertion to ‘get error into the record’ rather than to dispose of the controversy finally and upon its merits. It turns witnesses, especially expert witnesses, into partisans pure and simple. It leads to sensational cross-examinations to ‘affect credit’, which have made the witness stand ‘the slaughter house of reputations’. It prevents the trial court from restraining the bullying of witnesses and creates a general dislike, if not fear, of the witness function, which impairs the administration of justice…The inquiry is not, what do substantive law and justice require? Instead, the inquiry is, have the rules of the game been carried out strictly? If any material infraction is discovered, just as the football
A formal court sitting in Kenya
interference as unfair, even when it is in the interest of justice. The idea that procedure must of necessity be wholly contentious disfigures our judicial administration at every point. It leaves the most conscientious judge to feel that he is merely to decide the contest, as counsels present it, according to the rules of the game, and not to search independently for truth and justice. It leads counsels to forget that they are officers of the court and to deal with the rules of law and procedure exactly as a professional football
rules put back the offending team five, or ten or fifteen yards, as the case maybe, our sporting theory of justice awards new trials, or reverses judgments, or sustains demurrers in the interest of regular play. The effect of our exaggerated contentious procedure is not only to irritate parties, witnesses and jurors in particular cases, but to give the whole community a false notion of the purpose and end of law. Hence, comes, in large measure, the modern American race to beat the law. If the law is a mere game, neither the players
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who take part in it nor the public who witness it, can be expected to yield to its spirit when their interests are served by evading it. And this is doubly true in a time which requires all institutions to be economically efficient and socially useful. We need not wonder that one part of the community strain their oaths in the jury box and find verdicts against unpopular litigants in the teeth of law and evidence, while another part retain lawyers by the year to advise how to evade what to them are unintelligent and unreasonable restrictions upon necessary modes of doing business. Thus the courts, instituted to administer justice according to law, are made agents or abetters of lawlessness.” Alternate Dispute Mechanisms
Resolution
The public dissatisfaction with the adversarial model of dispute resolution led invariably to the evolution of the alternative mechanisms for dispute settlement. The first alternative mode to gain massive recognition after the adversarial litigation mode of settling disputes was arbitration. Arbitration had its own baggage and was in fact found to be unsuitable for many types of dispute. This led to the evolvement of other alternative dispute resolution mechanisms. Some of these are: i. Negotiation: ii. Mediation: iii. Mediation-Arbitration: As its name suggests, mediation-arbitration, or med-arb, combines mediation and arbitration. First, a mediator tries to bring the parties closer together and help them reach their own agreement. If the parties cannot compromise, they proceed to arbitration—before that same third party or before a different arbitrator—for a final and binding decision. iv. Mini-trial: The mini-trial, a development in ADR, is finding its greatest use in resolving largescale disputes involving complex questions of mixed law and fact, such as massive construction, and antitrust cases. In a minitrial, each party presents its case as in a regular trial, but with the notable difference that the case is “tried” by the parties
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themselves, and the presentations are dramatically abbreviated. In a mini-trial, lawyers and experts present a condensed version of the case to top management of both parties. Often, a neutral adviser— sometimes an expert in the subject area—sits with management and conducts the hearing. After these presentations, top management representatives—by now more aware of the strengths and weaknesses of each side—try to negotiate a resolution of the problem. If they are unable to do so, they often ask for the neutral adviser’s best guess as to the probable outcome of the case. They then resume negotiations. The key to the success of this approach is the presence of both sides’ top officials and the exchange of information that takes place during the mini-trial. v. Collaborative Law: Here, each party has an attorney who facilitates the resolution process within specifically contracted terms. The parties reach agreement with support of the attorneys (who are trained in the process) and mutually-agreed experts. No one imposes a resolution on the parties. However, the process is a formalised process that is part of the litigation and court system. Rather than being an Alternative Resolution methodology it is a litigation variant that happens to rely on ADR like attitudes and processes. vi. Early neutral evaluation: An early neutral evaluation (ENE) is used when one or both parties to a dispute seek the advice of an experienced individual, usually an attorney, concerning the strength of their cases. An objective evaluation by a knowledgeable outsider can sometimes move parties away from unrealistic positions, or at least provide them with more insight into their cases’ strengths and weaknesses. The practice of ADR is a global phenomenon. The rationale, as earlier stated, is attributable in part to the numerous problems found associated with litigation. For a proper understanding of how ADR really works, it is imperative that certain
fundamental points be made: (i) ADR principles are not rights based. They are not concerned with the law on the issue but rather on finding solutions to the pending problems. ADR is more concerned with finding solutions to disputes rather than assertion of rights; (ii) ADR focuses on the interests of the parties instead of rights of the disputants; (iii) ADR presents creative options; and (iv) ADR provides forum for shift in positions of disputants. In ADR, parties are encouraged to distinguish interests from issues and focus on interests; brainstorm options that have potential for mutual gain; and to evaluate potential solutions. The concept of conflict management through ADR introduced a new mechanism of dispute resolution that is non adversarial. The ADR facilitate parties to deal with the underlying issues in a dispute in a more costeffective manner and with increased efficacy. The Multi Door Court House These ADR mechanisms existed independently of the initial dispute resolution mechanism of the adversarial litigation system of the Courts until 1976 at National Conference in honour of Roscoe Pound where a Professor Frank Sander of the Harvard Law School, while discussing the individual causes of dissatisfaction with the administration of justice identified by Roscoe Pound in 1906, proposed a solution of setting up a dispute resolution center offering a panoply of dispute resolution services. His initial suggestions were external to the court system and he suggested that attempts could be made to prevent disputes from arising in the first place through appropriate changes in the substantive law. He suggested minimising disputes through greater emphasis on preventative law; that persons should instruct their lawyers to anticipate various eventualities and seek, through skillful drafting and planning, to provide for them in advance. But Sander’s fundamental suggestion, and one that is of lasting importance, was to explore alternative ways of resolving disputes to the traditional, adversarial, litigious procedure criticised by Pound and to institutionalise these alternative dispute resolution process in a
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With time, the legal system of the adversarial litigation ceased to meet the desire and goal of achieving justice. The system became rigid and mechanical in its operation of the law and insensitive to the surrounding moral, social and political conditions. It was bogged down by an antiquated approach to justice delivery and this produced an environment where questions of delay, expense, compromise and fairness were of low priority. single dispute resolution center. This suggestion led to the setting up of the Multi Door Court House. A multi-door courthouse is not a courthouse with many doors, but is instead a means of directing cases filed in court to various “dispute resolution doors” or options. It is a court connected ADR program which provides a comprehensive approach to dispute resolution. The concept posits that the ideal courthouse is a multifaceted dispute resolution centre, which offers disputants a number of options or ‘doors’ in resolving disputes. Hence instead of just one ‘door’ leading to the courtroom, such a comprehensive justice centre would have many ‘doors’ through which disputants might pass to get to the appropriate dispute resolution process. Parties are referred to different dispute resolution options in an effort to select that option which best suit the needs of their particular dispute. The dispute resolution options include court annexed mediation, case evaluation, early neutral evaluation, arbitration, and the continuation of litigation. In the multi-door courthouse system, trained intake workers inform
The Lagos Multi-Door Courthouse
the parties of the various alternative dispute resolution programs available and direct the parties towards the most appropriate process or series of processes based on factors such as the relationship of the parties, the amount in controversy, and the type of relief sought. The goal of the multi-door courthouse is to streamline the court process and afford parties various options to resolve their disputes beyond the standard option of litigation. Present Realities The Multi Door Court House concept has been adopted in several jurisdictions today as the only viable solution to the endemic problems associated with dispute resolution. In Nigeria, the Lagos State Government was the first to establish a Multi Door Court House, called the Lagos Multi Door Court House (LMDC) in 2002 and it was formally made a Court connected ADR Center by Lagos Multi Door Court House Law of 2007. The creation of the LMDC in 2002 was followed up by massive reforms to the High Court of Lagos State Civil Procedure Rules in 2004. The focus of the reforms to the Rules was to change the role of a Judge sitting in the High Court of Lagos State from a passive umpire in the litigation process to an active manager of the process
with the responsibility of active case management. The case management responsibility of the Judge was facilitated by the concept of frontloading, which required parties to a dispute to fully and upfront disclose their entire case, and by the concept of pre-trial conference. The frontloaded processes presented to the pretrial conference Judge first-hand the relative strengths and weaknesses of the case of each side and the Judge was expected at the pretrial conference to adopt a “multi-door court house mentality” and to properly cross-match the dispute to either the litigation “door” or the other relevant ADR “doors” at the LMDC. Where the Judge was of the view that the dispute is better suited to the other ADR “doors” at LMDC, it was empowered to refer the dispute and parties there. Where the dispute was located in the litigation “door”, the Judge was still expected, using “mediator type skills” in a “neutral, facilitative and also evaluative” manner but with invasive reality, to test the relative merits of the case of both sides, promote better communication between the disputants so as to bring about an “amicable settlement” of the dispute. Where settlement was impossible, he must narrow the real issues in dispute which are deserving of a formal courtroom trial.
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A traditional court sitting in East Africa
The system became hypocritical because one of the often parroted slogans of the legal system is “justice delayed is justice denied”, yet it was a legal system that made itself amenable, and was used, to delay justice. At the pretrial conference stage the Lagos Judge should physically be in the arena (without his wig and gown) dressed in a regular suit and tie like a mediator and should sit (not on the bench) but at the same level with the parties and their lawyers just as mediators do with a view to enhancing their trust and confidence in the process and in a reasonable bid to achieve settlement as a “by-product” not necessarily as a “primary goal” of the entire process. The statutory concern of the entire process, including the frontloading, the pre-trial conference and the court connected ADR mechanisms, was the achievement of a
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“just, efficient, speedy and economical” dispensation of justice. The reforms made to the High Court of Lagos State Rules in 2004 and the innovations they brought have been transplanted into the High Court Rules of all the States of the Federation including the Federal Capital Territory. The operational modalities of the innovations are, however, yet to be fully imbibed by the Judges and the administrators of justice in all the States. Also, not all the States have set up Multi Court Door Houses; only eleven States and the Federal Capital Territory, have done so. The Lagos State High Court further amended its Civil Procedure Rules in 2012 to expand the reforms. It introduced the need for parties to meet and make attempts at settling disputes before filing actions in Court and parties are required to file along with their court processes, a Preaction Protocol Form stating the steps taken to achieve settlement before commencing action. It also introduced the streamlining of cases into the litigation and ADR “doors” right from the point of filing the action, rather than leaving it to the Judge to do at the pretrial conference. This brought a greater fusion of the activities of the LMDC into the mainstream litigation process and matters screened into the
ADR “doors” went straight to the LMDC and settlements arrived at were brought to appointed ADR Judges to be entered as judgment of the High Court of Lagos State. The expanded reforms retained the pretrial conference model and which it renamed case management conferences. The Court of Appeal also introduced a mediation process into its Court Rules in 2011, but this is yet to become operational. What these reforms demanded, and still increasingly demand, of Judges is that they must, as a matter of urgency, shift their mentality from the passive umpire in the litigation process to active managers of the process and acquire proficiency in “mediation and mediator” type skills. They must become “ADR literate” and without which, within the reform agenda, they cannot be educators of the litigant and Counsel on the practical value and promise of ADR nor can they act as catalysts for the voluntary submission by disputants to ADR. Lawyers and other practitioners in the justice sector are also expected to shift their thinking from the adversarial approach to dispute resolution to mediation and conciliatory approaches. They must seek to promote the interests of the parties instead of the rights of the disputants and encourage the parties
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to distinguish interests from issues and to focus on interests as well as brainstorm options that have potential for mutual gain for the parties. The importance of the ADR mechanisms as an established mode of dispute resolution cannot be over emphasised in present day legal jurisprudence. Nothing underscores the point more than the fact that ADR is now being applied even in the criminal justice system under the concept of restorative justice. Restorative justice simply put is an extension of some ADR processes to criminal matters. The prevailing traditional method of dispensing criminal justice is essentially a retributive one. It is a system of vengeance. The system is based on the belief, though; erroneously that justice is accomplished by assigning blame and administering pain. The question is: “of what practical utility is imprisonment to the individuals who constitute the society where especially those individuals have suffered some pecuniary loss resulting from the commission of criminal acts?” Unlike the traditional criminal
justice system which focuses on the offender, the victim of crime is the focal point of restorative justice and the goal is essentially to heal and renew the victim’s physical, emotional, mental and spiritual well-being. Aside from this, the process also involves deliberate acts by the offender to regain dignity and trust, and to return to a healthy, physical, emotional, mental and spiritual state. The most familiar form of restorative justice practices is the intervention of mediation processes in criminal matters. This is reflected in Victim-Offender Mediation (VOM) and Victim-Offender Reconciliation Program (VORP). Other interventions include Reparative Probation and Restorative Community Service and Community Sentencing Circles. Some of these ideas were included in the Administration of Criminal Justice Law of Lagos State, 2011. Conclusion We conclude by referring to the statement made by Chief Justice Warren Berger of the United States of
America in his Annual Report on the State of the Judiciary of January 24, 1982, when he stated that: “The obligation of our profession is, or has long been thought to be, to serve as healers of human conflicts. To fulfil our traditional obligation means that we should provide mechanisms that can produce an acceptable result in the shortest possible time, with the least possible expense, and with a minimum of stress on the participants. That is what Justice is all about. The law is a tool, not an end in itself. Like any tool, particular judicial mechanisms, procedures, or rules can become obsolete. Just as the carpenters hand saw was replaced by the power saw and his hammer was replaced by the stapler, we should be alert to the need for better tools to serve our purposes.” Changes have occurred in our tools of doing justice. Judges, lawyers and all operators of the justice delivery system must embrace the change and become viable change agents.
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Lawyer in the News OGHOGHO AKPATA QUIETLY DETERMINED SAGE OF NIGERIA OIL AND GAS
O
ghogho Akpata is the Managing Partner and Head of the Energy and Projects Group at Templars. Oghogho represents the new breed of African lawyers pushing the boundaries of legal practice in Africa and raising to the challenges thrown up by Africa's economic and infrastructure developement and the opportunities that these have brought. Oghogho’s name is synonymous with oil and gas law in Nigeria. He possesses over 20 years of experience in the transactional and dispute resolution aspects of the Nigerian oil and gas sector. He advises a broad range of clients including international oil companies, oil service contractors and a number of multinationals operating in Nigeria. Some of Oghogho’s recent transactions include: • Chinese National Oil Corporation on its $15.1 billion acquisition of Nexen Inc. • Sinopec on its S$7.2 billion acquisition of Addax Petroleum Corporation. • The Bureau of Public Enterprises on the restructuring of the now defunct stateowned electricity monopoly, National Electric Power Authority. • In conjunction with Freshfields, successfully obtained a US$2billion plus arbitral award for ExxonMobil and Shell in a crude entitlement dispute with the Nigerian Government. Oghogho has been listed among the leading Energy and Natural resources lawyers in Nigeria by Chambers Global guide to the legal profession from 2005 to date. He is also listed as a leading energy practitioner in the “Legal 500” and in Who’s Who Legal as a leading Project Finance and Oil & Gas lawyer. He is a member of the Association of International Petroleum Negotiators (AIPN); Chartered Institute of Taxation Nigeria, as well as the Section on Energy and Natural Resources Section of the International Bar Association, and an Independent Non-Executive Director at Oando Plc. Oghogho graduated from the University of Benin in 1990 and was called to the Nigerian Bar in 1991 In 2015, he led the Templars Team which was voted the best Power & Energy firm in Africa at the Law Digest Africa Awards.
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I
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with
Oghogho Akpata By Seyi Clement
Have you always wanted to be a lawyer and what influenced your decision? To some extent, I was influenced by my father’s career. It exposed me to the legal profession from an early age and I was able to see the potential in pursuing this path. As I got older and became more business conscious however, I began to understand that the legal profession provides the perfect avenue by which to place one’s self in the centre of commerce. I could see that becoming a commercial lawyer would allow me a deep involvement in corporate and governmental transactions across a wide range of industries, and ultimately, that was where I wanted to be. You seem to have decided to set up on your own from very early in your professional career, why is that? Is there any firm or person you had as an inspiration or model in this thought process?
My early experience was at F. O. Akinrele & Co, and it was exciting and different from the standard law practice I had come to understand. There was a steady pipeline of work and everyday there were new instructions coming in mainly from international clients. I found the whole atmosphere exhilarating and inspiring.
The growth of Templars has been exponential, did you envisage this rate of success when you had the vision to set up the firm and what would you say is the raison d'etre for the success of the firm?
Why the name Templars?
The success of the firm is not founded on any one factor, rather it is a combination of determined focus, hard work, excellent lawyers and a client-driven ethos. Our entire practice is centred on the needs of our clients and all of these factors come into play in servicing those needs.
Those familiar with European history always assume that I chose the name as a reference to the Knights Templar – one of the most prominent Christian military orders during the Crusades. They are not incorrect. At the time of conceiving the firm, I had come across various references to ‘Templars’ as ‘two knights upholding the law’, I liked the implication and given that the firm was originally intended to be set up by myself and a colleague of mine, it seemed fitting.
I certainly had the belief that we would have this level of success and hoped that we would achieve it at the rate that we have done.
What would you say distinguishes Templars in the African legal services market? The fundamental difference in my 33
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view, between Templars and other law firms is that we are all commerciallyminded and we have an acute perception of the dimensions of our clients’ business issues in a way that is considered unusual for lawyers. Simply put, a Templars’ lawyer will always examine and analyse the finer details of the law but we don’t stop there, we go further to make sense of the complexity of the law for our clients in ways which actually fulfil their business needs. Many of our lawyers had a commercial background before joining the firm and we are constantly training our lawyers on economic and business issues and their impact on our legal advice. The result is a firm which is mindful of the implications of the legal options and is able to consistently provide innovative solutions to solving legal problems. Clients want solutions, not chapters of legal opinion and that is one of the things we do best at Templars – we translate legal principles into practical solutions. Your name and Templars are almost synonymous with Oil & Gas transaction, which of the transactions you have been involved with, proved most challenging and rewarding to you as a lawyer and a Nigerian? Over the years, I have been privileged to work on numerous oil & gas projects at different stages and also on some infrastructure projects as well, most of which I have found challenging. However, in Nigeria of recent, the infrastructure projects tend to be more challenging due to the complex nature of the projects, the various parties involved and sometimes, the size of the project. For example, the firm and I personally, have worked on the Eko Atlantic City off the coast of Lagos, the US$1 billion Azura-Edo Power Plant and the Second Niger Toll Road and Bridge. Of these transactions, I would have to say that the most challenging in recent times has been advising the project sponsors on the financing of the Azura Power project. Its
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pioneering role as the first projectfinanced, on-grid IPP in Nigeria coupled with the complexity of the financing - given the myriad of lenders and different strata of debt made it a multi-dimensional project. We had a large role with several responsibilities ranging from the development of template project documents for the industry, to negotiating with various parties and advising on the applicable regulatory framework. Furthermore, the involvement of the World Bank on the partial risk guarantees; the put and call option arrangements with the Federal Government of Nigeria and other complexities made the transaction a very challenging and interesting one for us as a firm and I believe for the other parties on the transaction. It has been suggested that one of the reasons for the infrastructure gap in Africa, is the lack of sufficient deal evaluation and deal structuring expertise within the legal profession. How has Templars been able to overcome these shortcomings and more importantly, what is Templars doing to assist in developing these skill sets. I must first mention that the reasons for the infrastructure gap in Africa is not a dearth of legal expertise. In Nigeria, for instance, I am confident that amongst the law firms there is sufficient competence to structure, evaluate and drive projects and in deserving cases, African law firms partner with international law firms under different arrangements to close deals. So, I don’t think insufficient legal expertise is the issue. The main issue is lack of proper planning by successive governments, inadequate public sector support in some cases and non-liberalisation of certain aspects of the economy with the government overloading itself rather than seeking cooperation with the private sector. Having said that, things are beginning to change and we expect to see a gradual increase in infrastructure development over the next few years.
As a firm, we continuously train our lawyers on emerging aspects of law and related subjects such as basic accounting, project evaluation, corporate finance and so on. The goal of our training is to ensure that our lawyers remain ahead of the pack and are well prepared to take on diverse transaction challenges. In fact, every other year, we increase by a very significant percentage, the amount of our gross revenues which must go towards training and developing our lawyers. That strategy has been successful and I can boldly say that a Templars lawyer has the required skills to advise on any transaction within that lawyer’s core areas of practice. What role can international law firms play in assisting Africa to develop the required expertise in these areas? The international law firms or at least a few of them, have set up training academies for African law firms and from time to time organise training sessions on different hot topics. Also, some of them have established secondment programmes for lawyers to visit for a short term to ramp up on legal expertise. To assist in developing legal expertise in Africa, more international law firms need to institutionalise these kind of arrangements. There is also a need to consciously encourage knowledge exchange and for a more advanced collaboration between the international and African law firms. What challenges do you see for investors in the Nigerian Oil & Gas sector and how can the legal profession assist in meeting these challenges? It is really a challenging period for the oil and gas industry due to the plunge in oil prices, but interestingly, E&P companies within the Nigerian landscape have switched to what I can describe as “survival mode” and professional service providers including lawyers
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Mr. Akpata speaking to our reporter at his office in Lagos
are in a vantage position to assist E&P companies during this time. Most of the indigenous companies that recently acquired assets from the IOCs, are likely to face a taxing phase as most of them financed the acquisition of the assets through debt and their financial models would most likely not have captured scenarios of oil prices below $40. This is a significant challenge as repayment of the facilities would be difficult. Interestingly, a small number of those companies had the foresight to enter into hedging arrangements which are paying off now. In any case, as a result of the current climate, I envisage that there will be a number of refinancing transactions this year as well as more M&A activity in the sector. Lawyers will be required at every stage of these transactions – from initial transaction structuring
advisory work to advising on regulatory requirements to drafting and negotiating the relevant documentation. Lawyers will be instrumental in getting these deals through and I, for one, am looking forward to it. Local Content laws in Nigeria have served to protect and promote local entrepreneurs. How has this impacted key sectors such as oil and Gas and energy and what issues do they raise for your international clients? In 2010 when the Nigerian Oil and Gas Content Development Act (“Local Content Act�) was introduced, it was met with a lot of scepticism especially as to implementation. However, the Local Content Act has witnessed a lot of success and has, to a great extent, achieved its objectives with respect
to development of local capacity within the oil and gas industry. For example, the Local Content Act has fostered a lot of partnerships between local companies and international investors resulting in shared knowledge and processes. The major issue for our international clients is compliance and we have consistently advised them on the need to, and various ways of, remaining compliant with the Local Content Act and related regulations. One of the most controversial Law Content bills in the Nigerian oil & gas industry is the Petroleum Industry Bill. Are you surprised that the Bill has not made it onto the statute books and why has the Bill proven to be so divisive? I am not surprised. There are a lot of stakeholders in the petroleum industry with interests that will
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stem the uncertainty which the rather large piece of legislation has caused in the last decade. There are three major African legal networks on the continent (the African Legal Network, ALN; Lex Africa and the Miranda Alliance); Templars is not a member of any of these networks, is this a deliberate policy decision, if so, why has Templars taken this strategic stance? Over the years, we have worked very hard to establish good working relationships with various international law firms across different practice areas, and to some extent, these relationships afford us similar advantages as we would derive from a legal network. As things currently stand, we have developed such strong relationships that we are satisfied to remain outside of these networks for now. It is no big secret that Templars is being courted by many international law firms. It is also no big secret that the firm has opted to maintain an arm's length relationship with these international law firms. Could this position change, if so, what needs to change for the firm to consider entering into either a local or international alliance?
Mr & Mrs Akpata at the Law Digest Africa Awards ceremony at the Lagos Oriental Hotel
be affected by the passage or nonpassage of the bill. The bill was first introduced to the Nigerian National Assembly about 10 years ago and since then various versions of the bill have been in circulation. The versions circulated suggested that the PIB is a rather ambitious bill as it sought to replace about 17 different pieces of existing legislation. Also there are various aspects of the bill which various interest groups have lobbied against. One of such is the fiscal regime which E&P companies regarded as unfavourable. Also the introduction of the Petroleum Host Communities Fund to benefit oil producing areas is not widely accepted by other areas of the country so as one
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would expect, there has been a lot of resistance from different quarters to such an overarching overhaul of the system. The current government in recognising the challenges of passing an allencompassing piece of legislation has decided to split the bill into various bills dealing with both regulatory and fiscals separately. This has led to the introduction of the Petroleum Industry Governance and Institutional Framework Bill 2016 by the executive to the National Assembly. I believe the piecemeal legislative reforms may be a better approach to
As I mentioned, Templars maintains very strong and satisfactory relationships with some African and international law firms. Entering into a formal alliance will largely depend on our reading of the market. If there is overwhelming evidence to suggest that we would derive more advantage from entering into such an alliance then we would be willing to consider it. What are your career highs and lows so far? Setting up Templars and observing its continued success is a career high that is constant. Every time Templars wins an award, such as the Law Digest Africa Award, or receives recognition, industry acclaim or credit – it’s a high. Every time Templars successfully closes another landmark deal it’s a
Law Digest Spring 2016
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Focused, energetic, business-savvy, industrious, but also shy. I am constantly setting new goals for myself and I am not satisfied until a goal becomes an achievement, but at the same time I have always preferred a low profile whilst conducting my business. What do you do to relax and unwind?
Mr & Mrs. Akpata with the Templars team at the Law Digest Africa Awards ceremony.
high. I am fortunate enough to be able to say that the lows have been few and far between, but would probably be on the few occasions that Templars has lost out on a pitch to a competitor – those are lows that spur me and the rest of the firm to work harder for the highs. You are involved in various philanthropic activities, which of those philanthropic activities are
you most passionate about? I am very passionate about and contribute significantly to sickle cell and cancer causes. I also sponsor golf, music and art events, the proceeds of which are applied towards various charitable causes mainly in the health services sector. How would you describe Oghogho Akpata?
I’m a huge football fan and an ardent supporter of Chelsea FC – I try as much as possible to catch a Chelsea match whenever I’m in London. I also play golf and I love attending Formula 1 races, whenever possible. What’s next for Oghogho Akpata? Well, I am not quite ready to slow down. Seeing what we have achieved over the last 20+ years has only fuelled my passion for the firm. I now have an expanded vision of what we can be and I am eager to get on with it.
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LABOUR LAW Cajetan Osisioma - SPA Ajibade & Co.
Law Digest Spring 2016
contained in the offer letter and letter of commitment both dated 23rd November 2007;
Assessment of Damages in Employment/Labour Matters vis-à-vis the Doctrine of Expectation Interest – A Review of the Decision in Modilim v. United Bank for Africa Plc Introduction The Honourable Justice (Dr.) Benedict Bakwaph Kanyip of the National Industrial Court of Nigeria, sitting in Lagos, on 19th June 2014, delivered a judgment in Mr. Patrick Obiora Modilim vs. United Bank for Africa Plc2, which raises the important issue of assessment of damages in constructive dismissal cases. In this case, the claimant filed a suit against the defendant, United Bank for Africa Plc., and sought the following reliefs, inter alia:
Cajetan Osisioma - Associate1
Loss of expectation interest, whilst not fully appreciated in Nigeria and other jurisdictions yet, has been engaged in a number of common law jurisdictions.
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(a) A declaration that the defendant confirmed the claimant as General Manager on 5th August 2008 via the confirmation letter of 27th August 2008; Or in the alternative to relief (a) supra (b) A declaration that the defendant’s failure to confirm the appointment of the claimant as a General Manager was a breach of his contract of employment contained in the offer letter and letter of commitment both dated 23rd November 2007; (c) A declaration that the defendant’s failure to upgrade and/or review the claimant’s emoluments to General Manager’s level amounted to a breach of his contract of employment
(d) A declaration that the defendant constructively and wrongfully terminated the claimant’s employment; and (e) An order for special damages for unpaid emoluments due to the claimant after his confirmation as General Manager by the defendant, particularised inter alia as follows: Particulars of Special Damages (i) ₦75,535,128.00 being the total sum the claimant ought to have been paid as his emolument for the 20 months he worked for the defendant after his confirmation (excluding the total emoluments he received as Deputy General Manager), at ₦3,776,756.40 per month. (ii) ₦6,833,333.40 being the total cash value for the 2 status cars which the claimant ought to have been given if he had been confirmed as General Manager, for the 20 months that he worked with the defendant after his confirmation. (f) The sum of ₦150,000,000.00 as general damages for breach of contract; and (g) The sum of ₦10,000,000.00 as damages for wrongful termination of the claimant’s employment. Summary of Facts of the Case The claimant was a Deputy General Manager with Zenith Bank Plc., when he was offered employment by the defendant as a Deputy General Manager via a letter of employment dated 23rd November 2007 with effect from 3rd December 2007, subject to the terms and conditions contained in the letter of employment and a letter of commitment also dated 23rd November 2007. The claimant averred that the defendant undertook to confirm his appointment as a General
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The court further held that “what the defendant committed for was that at confirmation it will be willing to review the claimant’s position to the level of General Manager”, adding that “to commit to be willing to do something is not the same as doing that thing; and if that thing is not done, it does not indicate a presumption that the thing has been done”. Manager after a period of six months subject only to the condition that the claimant would meet certain set targets contained in a performance contract duly executed by the parties. The claimant contended that he had met the set targets, and that by a letter dated 27th August 2008, the defendant confirmed his employment with effect from 5th August 2008, which according to him, indicated that he had met all the set targets that were preconditions for his confirmation as a General Manager. In spite of the above, the defendant continued to pay him the salary of a Deputy General Manager for the 20 months he worked after his confirmation. He further contended that the defendant did not accord to him the perquisites of the office of a General Manager that he was entitled to, such as the provision of two status cars. Following his repeated demands to be treated as a General Manager, the defendant, in the presence of one other person, forced the claimant to resign his employment via a letter of resignation dated 31st March 2010. The defendant purportedly accepted the claimant’s resignation via a letter dated 30th March 2010 (pre-dating the date of the claimant’s resignation). The claimant contended that the totality
of the defendant’s attitude and the defendant’s acceptance letter which had already been typed and signed a day before his forceful resignation letter was tendered, clearly showed that the defendant constructively and wrongfully terminated his employment. According to the defendant, it offered the claimant employment as a Deputy General Manager subject to the terms and conditions of the offer of employment dated 23rd November 2007. It, however, denied that the letter of commitment was a contract of employment between the parties and that it never promised or undertook to confirm the claimant’s employment as a General Manager. The defendant further contended that it confirmed the claimant’s employment as a Deputy General Manager after the probationary period in line with the terms of his contract of employment. It further argued that the performance contract was neither an appointment of the claimant as a General Manager nor a confirmation of the claimant’s appointment as a General Manager in the employment of the defendant. The defendant maintained that the claimant resigned his appointment, did not work as a General Manager and therefore cannot be paid the salary of a General Manager. It also denied that the claimant was entitled to the two status cars with a cash value of ₦16,400,000.00 as he was never a General Manager whilst in the employment of the defendant. Issues Submitted for Determination of the Court
the
The claimant submitted the following issues for determination by the court; (a) Whether by the confirmation letter of 27th August 2008, if taken together with the offer of employment letter and commitment letter, the defendant did in effect confirm the claimant’s appointment and promoted the claimant to General Manager? (b) If the answer to issue (a) is in the negative, whether the defendant was in breach of the claimant’s contract of
employment as contained in the offer letter and letter of commitment (both dated 23rd November 2007) when the defendant failed to promote the claimant to the position of General Manager upon confirmation? (c) Whether the defendant constructively and wrongfully terminated the employment of the claimant?
We commend this decision, as the strict common law rules of assessment of damages in labour contract which limits damages to payment in lieu of notice generally, might fail to compensate the claimant adequately. (d) Whether the defendant is liable to pay to the claimant, all his unpaid entitlements either as a General Manager or as special damages for the breach of the contract to promote him to General Manager from the date of confirmation to the date of the constructive termination of his employment by the defendant? Judgment of the Court Relying on the Court of Appeal decisions in Fakunde vs. Obafemi Awolowo University Teaching Hospital 3 4 and NITEL vs. Jattau , the court agreed with the claimant’s counsel and held that the claimant’s letter of employment, the letter of commitment and the performance contract, among other relevant documents, constituted the contract of employment between the claimant and the defendant. The court, however, rejected the argument that the claimant’s confirmation was coterminous with a promotion to General Manager. The court further held that “what the defendant committed for was that at confirmation it will be willing to review the claimant’s
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It has been argued by some that the court erred in law in the computation of damages. Thus, since the court held that the confirmation of the appointment of the claimant does not equate to promotion nor was there an agreement to promote to the post of a General Manager, consequently, the expected salary as a General Manager should not have been used in the computation of damages. position to the level of General Manager”, adding that “to commit to be willing to do something is not the same as doing that thing; and if that thing is not done, it does not indicate a presumption that the thing has been done”. The court however held, not surprisingly, that the defendant’s failure to review the claimant’s level to General Manager on confirmation was a breach of his contract of employment contained in the offer letter and letter of commitment both dated 23rd November 2007. The court thus held the defendant liable to the claimant for breach of its commitment and accordingly awarded the sum of ₦75,535,128.00 in favour of the claimant. According to the court, this sum represented the total sum the claimant ought to have been paid as his emolument for 20 months had the defendant reviewed the claimant’s level to that of a General Manager upon confirmation. Assessment of damages constructive dismissal claims
in
The effect of a successful plea of constructive dismissal is that it
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amounts to, and has the same effect as, a wrongful termination, which in essence means that the wrongfully terminated employee will be compensated in appropriate damages. Holding in line with this submission, the Nigerian Court of Appeal in Nigeria Airways Ltd vs. Okutubo 5 had this to say: “…If the dismissal is in breach of a fundamental term of the contract, the servant has firstly to appreciate that the contract stands repudiated, whether rightly or wrongly is another matter and secondly, that his remedy for the breach lies in suing for wrongful termination of his contract of employment…” Thus, in Shell Petroleum Development Company Ltd vs. Olarewaju (2008) 18 NWLR (Pt. 1118) 1 at 27, in determining the measure of damages for wrongful dismissal of an employee, the Supreme Court held as follows: “In cases of wrongful dismissal of an employee, the measure of damages is, prima facie, the amount the employee would have earned had the employment continued according to the contract of employment, subject to the deduction in respect of amount accruing from any other employment which the employee in minimising damages either obtained or should reasonably have obtained…” Similarly, in Isievwore vs. NEPA (2002) 13 NWLR (Pt. 784) 417 at 437-438, the Supreme Court held thus: “Where an employee is able to establish that his appointment was wrongly terminated, he would be entitled to damages. And this would be what was due to him for the period of notice”. In the case under review, it is the writer’s opinion that the honourable court correctly assessed the damages payable to the claimant when it awarded the sum of ₦75,535,128.00 being the sum the claimant ought to have been paid as his emolument for twenty (20) months, had the defendant reviewed the claimant’s level to the position of a General Manager upon confirmation.
The Doctrine of Loss of Expectation Interest and Claim thereof It has been argued by some that the court erred in law in the computation of damages. They argued that since the court held that the confirmation of the appointment of the claimant does not equate to promotion nor was there an agreement to promote to the post of a General Manager, the expected salary as a General Manager should not have been used in the computation of damages. They argued with some support that damages for breach of employment contract should be limited to payment in lieu of notice.6&7 This argument, however, fails to consider the rule relating to loss of expectation interest, which the court evidently relied on in assessing damages. Loss of expectation interest, whilst not fully appreciated in Nigeria and other jurisdictions, it has been engaged in a number of common law jurisdictions. In upholding part of the claimant’s relief, the court said as follows: “Having therefore breached the contract of employment and so entitling the claimant to relief (b) as indicated, the next question is what the remedy of the claimant is. The commitment on the part of the defendant to be willing to review the claimant’s position to the level of General Manager gave rise to an expectation interest on the part of the claimant. The rule, by Tadduggoronno v. Gotom [2002] NWLR (Pt. 757) 453, is that there cannot be a vested right when an exercise is made subject to the fulfillment of some conditions and acceptance of those conditions at the discretion of the affirming body. And in Medical and Health Workers Union of Nigeria & Ors v. Federal Ministry of Health unreported Suit No.NICN/ ABJ/238/2012, the judgment of which was delivered on July 22, 2013, this Court acknowledged that the practice of skipping of salary grade levels by Government can create an expectation interest, which in turn is capable of creating an entitlement or vested right in favour of the complainants who have all this while
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been beneficiaries of the practice. In the instant case, the conditions for the exercise of the commitment on the part of the defendant were all met. In fact, in University of Jos v. Dr. M. C. Ikegwuoha [2013] 9 NWLR (Pt. 1360) 478, the Supreme Court ordered that the respondent’s appointment be confirmed once the conditions for confirmation were met. In the instant case, the claimant is no longer in the service of the defendant, so the question of ordering that he be confirmed does not arise. The claimant in the instant case is accordingly entitled to a remedy regarding the loss of the expectation interest in terms of the breach of the defendant’s commitment to be willing to review his position to the level of General Manager”.
the claimant’s position to the level of General Manager upon confirmation and that the breach gave rise to an expectation interest on the part of the claimant. Judges involved in labour/ employment law disputes should be encouraged to be proactive in granting claims for expectation interests where the facts and circumstances of cases reveal (as in the case under review) that certain benefits would have accrued to a claimant had the defendant kept to its commitment as contained in a contract of employment and the strict application of common law rules of assessment of damages for breach of contract will not adequately compensate the claimant.
We submit that the Court was right in holding that the defendant was in breach of its commitment to review
We commend this decision, as the strict common law rules of assessment of damages in labour contract which
Conclusion
limits damages to payment in lieu of notice generally, might fail to compensate the claimant adequately. Since the inherent role of the court in assessing damages is to “award such amount as it is just and equitable in all the circumstances having regards to the loss sustained by the claimant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer” 8 , in labour matters, compensation for loss of expectation interests could be a fairer assessment of damages. Associate at SPA Ajibade & Co., Lagos, Nigeria: 2 Suit No. NICN/LA/353/2012 3 (1993) 5 NWLR (Pt. 291) p. 47 4 (1996) 1 NWLR (Pt. 425) p. 392 5 (2002) 15 (Pt. 790) pages 379 at 393, paras. B-C. 6 Isievwore -v- NEPA supra 7 see Chaplin -v- Hicks (1911) 2KB 786 8 Cowen -v- Rentokill UKEAT 0473/07 1
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ARBITRATION Daniel Harrison - Latham & Watkins LLP
Beware the “Non-Exclusive” Arbitration Clause Anzen Limited and others (Appellants) v Hermes One Limited (Respondent) (British Virgin Islands) [2016] UKPC 1
Daniel Harrison Associate, Latham & Watkins LLP1
Ultimately, parties would be well advised to avoid “non-exclusive” arbitration clauses and opt for exclusive arbitration clauses, if what they really want is for their disputes to be resolved by arbitration.
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“Non-exclusive” arbitration clauses provide that disputes “may” be referred to arbitration (rather than “shall” or “should” be so referred). The Privy Council clarified the nature of these clauses in a recent case but uncertainties about their effect still remain. Ultimately, parties would be welladvised to avoid “non-exclusive” arbitration clauses and opt for exclusive arbitration clauses, if what they really want is for their disputes to be resolved by arbitration. If the parties choose a “non-exclusive” arbitration clause, then they should make sure that they avoid issues by making express provision for the litigation costs in the event of a stay and expressly naming a litigation forum. Facts of the case Anzen and Hermes One were parties to a shareholders’ agreement relating to a BVI company, which contained a “non-exclusive” arbitration clause. Hermes One claimed that it had suffered unfair prejudice due to Anzen’s management of the affairs of the company and started proceedings in the BVI High Court.2 Anzen applied to stay the proceedings, relying on the arbitration clause, but the court dismissed the application. It found that the “non-exclusive” arbitration clause meant that Anzen could only stay the court proceedings by starting arbitration proceedings, which it had not done. On appeal, the Privy Council
Law Digest Spring 2016
considered whether the BVI court had erred as to the meaning of the arbitration clause. The Privy Council decision The Privy Council considered three possible interpretations of an arbitration clause providing that “any Party may submit the dispute to binding arbitration” 1. The parties are prohibited from starting litigation, meaning that this is no different from an “exclusive” arbitration clause where the parties agree that they “shall” or “should” arbitrate their disputes. 2. Any party is allowed to start litigation, but another party could start arbitration proceedings, at which point the court proceedings are to be stayed 3. Any party is allowed to start litigation, but another party can force a stay of those court proceedings by either “making an unequivocal request to that effect” or applying to the court for a stay. The Privy Council dismissed Option 1 on the basis that depriving a party of the right to bring court proceedings required clear language and the use of the word “may” was not clear. Option 2 was unworkable; it was too onerous to expect a party to start arbitration proceedings in order to stop the court proceedings when it would simply be seeking a declaration of no liability. It considered Option 3 to be the most preferable; Anzen only needed to “insist on arbitration“, by starting arbitration proceedings, applying to the court to stay proceedings, or “making an unequivocal request to that effect”. Notice to the other side would be sufficient for such a request. What are the implications for this decision? Although a “non-exclusive” arbitration clause may be valid in the manner described by the Privy Council in this case, it poses significant uncertainties for parties
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1. Liability for costs. On one hand, the party that started litigation may argue that it should not be liable for costs because it was entitled to start litigation at the time. On the other hand, the party that stays the litigation may argue that the other party should be liable for costs because the litigation was unnecessary 2. Proper litigation forum. If the
parties do not identify an agreed forum for litigation (in addition to the forum for arbitration), then either party could find itself brought into proceedings in an unfavourable jurisdiction and this may have complicated and costly consequences.
their disputes to be resolved by arbitration. “Non-exclusive” arbitration clauses provide that disputes “may” be referred to arbitration (rather than “shall” or “should” be so referred). This paper was prepared with the assistance of Mihail Krepchev in the London office of Latham & Watkins 2 BVI HC (COM) 2014/001 1
As noted above, parties should opt for exclusive arbitration clauses, if what they really want is for
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PROJECT FINANCE Russel Wells - Clifford Chance LLP
Law Digest Spring 2016
capital through independent power plants is a vital part of the solution to the chronic power shortages in Nigeria. The successful closing of the Azura transaction has demonstrated that this international support exists. WHAT MAKES THE PROJECT ATTRACTIVE TO INVESTORS?
Boosting power generation in Nigeria – the Azura-Edo independent power project
Russel Wells Clifford Chance LLP
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The Azura-Edo independent power project (IPP) lays claim to a number of firsts. It is Nigeria’s first fully privately financed IPP – the first of a new wave of project-financed greenfield IPPs currently being developed in the country. It is also the first power generation project in Nigeria to receive World Bank Partial Risk Guarantee and Multilateral Investment Guarantee Agency (MIGA) support. The 450MW open cycle gas-fired Azura project is due to come on-stream in 2018 and represents the first phase of what will ultimately be a 1,500MW power plant. The project will deliver much needed electricity to almost 12 million people in Nigeria, where the lack of power currently limits economic potential. Mobilising international
World Class Developers The project’s lead sponsor was Amaya Capital Limited, a principal investment firm that, over the past 8 years, has been at the cutting edge of market development in both the gas infrastructure sector and the IPP sector. Amaya’s co-sponsors also included several African-focused infrastructure funds with exemplary track records in financing and developing large-scale infrastructure projects. A strong PPA The project may be important for Nigeria, but what’s in it for investors? Firstly, and perhaps most importantly, the Azura project benefits from a strong, long term power purchase agreement (PPA), which has a classic tariff structure familiar to investors, split out into capacity and energy components. The capacity payment is payable so long as the plant is available to generate electricity (or, in certain circumstances, where it is deemed to be available) and covers, among other things, the scheduled principal and interest under the financing documentation. Government support The Federal Government of Nigeria (FGN) provides support to the project in the event of an early termination of the PPA through the mechanism of a put and call option agreement (PCOA). The PCOA allows the project company to ‘put’ the plant (or its shares) to the government in nearly all circumstances where the PPA is terminated early (including in circumstances where there has been a prolonged gas supply failure). In these circumstances the government is obliged to pay a
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SPECIAL FEATURE ‘purchase price’ which, at a minimum, covers the outstanding debt. The PCOA started off as something more akin to a letter of support. However, at a relatively early stage in the deal, the FGN decided to adopt a put and call option structure, not least because it ensured that the FGN was always receiving something (the plant or the shares) in return for the amount it paid out – (early), as opposed to simply guaranteeing the payment by the offtaker of a termination sum, as is traditionally the case with PPAs. The PCOA was heavily negotiated during the course of 2014, resulting in a robust agreement which is rapidly becoming the template for all future IPPs in Nigeria. The success of the Azura PCOA structure is also spreading further afield as it is now starting to be used in other jurisdictions within Africa (and beyond). Credible counterparties The project benefits from an engineering, procurement and construction (EPC) contract with a consortium comprised of Siemens, an internationally recognised and experienced contractor, and Julius Berger, Nigeria’s preeminent construction company. It also has a long term gas sales and purchase agreement with Nigerian Petroleum Development Company (NPDC), a fully-owned subsidiary of the Nigerian National Petroleum Corporation (NNPC) and with Seplat, a leading independent oil and gas exploration and production company in Nigeria. Seplat is the first indigenous company to acquire and become an operator of onshore oil and gas assets from international oil companies, in 2010. It was listed on both the London (SEPL) and Nigerian (SEPLAT) stock exchanges in April 2014. World Bank support An important aspect of the project was the availability of substantial support from the World Bank in the form of both political risk insurance and direct funding. The political risk support included: • Political risk cover for the commercial debt through a MIGA insurance policy and an IBRD political risk guarantee. The MIGA policy covers transfer/
inconvertibility, expropriation, war and civil disturbance and breach of contract by the host government and the IBRD political risk guarantee covers breach by either NBET of the PPA or FGN of the PCOA; • Political risk cover for the equity in favour of the shareholder, Azura Edo Limited, through a MIGA equity policy; and • An IBRD liquidity political risk guarantee which supports the letter of credit issued by JP Morgan on behalf of NBET to cover its tariff obligations under the PPA. On the funding side, International Finance Corporation is one of the lead DFI arrangers as well as being both a senior and mezzanine lender. OPIC also provided both senior and mezzanine debt.
would have prevented it from converting these Naira receivables to US dollars on the official currency markets, particularly where required to fund various US dollar offshore reserve accounts, which are a typical requirement in the financing of an IPP. To address these challenges, the lenders engaged with the Central Bank of Nigeria (CBN), which has oversight of foreign exchange regulations, in order to seek special regulatory dispensations. Following a series of productive meetings with the CBN and correspondence explaining the impact of the foreign exchange regulations on the proposed structure of the project, the CBN granted the dispensations requested by the lenders in order to facilitate the successful closing of this important project. It is hoped that this will pave the way for future large IPP (and other infrastructure) projects.
Siemens turbines supplied for the Azura-Edo project
SOME CHALLENGES Foreign exchange regulations Several aspects of the current Nigerian foreign exchange regulations posed challenges that would have had a direct impact on the proposed financing structure and therefore the feasibility of the project. In particular, the project company’s sole source of income consists of the Naira-denominated receivables due to it under its power purchase agreement but in certain circumstances the current foreign exchange regulations
Gas risk allocation Another challenge facing the project was the overall gas (supply and transportation) risk – and how best to manage and allocate that risk. The gas needs to pass through the EscravosLagos Pipeline System in order to reach the plant. The agreement reached with NBET is that, under the PPA, a failure in the gas supply will not in itself be treated as an availability event, i.e., capacity payments will not be payable during such period. However a prolonged failure will allow the parties to terminate the PPA
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Several aspects of the current Nigerian foreign exchange regulations posed challenges that would have had a direct impact on the proposed financing structure and therefore the feasibility of the project. and, critically, allows for the project company to exercise its put option under the PCOA. A supply failure which is brought about due to an issue with the public gas transportation system (rather than with the gas supplier) is treated in the same way as a ‘gas supply’ failure, other than that NBET has accepted that this is a ‘government risk’ and, as such, capacity payments would remain payable during this period. HOW THE PROJECT WAS FINANCED Overview The financing structure was complex, involving both senior and mezzanine debt and comprises approximately US$687 million of debt from a consortium of 15 international and local banks. Standard Chartered Bank was appointed as the global mandated lead arranger with the International Finance Corporation and Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden (FMO) acting as co-MLAs for the development finance institutions. On the senior side, in addition to international commercial and development finance tranches, there was also a locally denominated tranche provided by a state liquidity fund rather than bilateral funding. The Sponsors, Amaya Capital, American Capital Energy and Infrastructure, the African Infrastructure Investment Fund 2, Asset & Resource Management Company Ltd, Aldwych International Ltd, Pan African Infrastructure Development Funds 2 LLC and the Edo State Government of Nigeria contributed total equity of approximately US$190 million.
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Subterranean gas pipes to the Azura-Edo project
The PAIF tranche A significant portion of the debt financing (NGN 24 billion, approximately US$120 million) was sourced from the Nigerian Power and Aviation Intervention Fund (PAIF) which is administered by Bank of Industry (BOI), under the overall supervision of the CBN. This tranche of debt was arranged by First City Monument Bank Limited (FCMB), which on-lent the money to the project company. The funds were provided subject to certain terms and conditions set out in an offer letter from PAIF. These included a requirement that FCMB comply with PAIF’s guidelines and a right for the BOI to step into FCMB’s position under the financing documents in the event that FCMB did not meet its obligations to BOI under the terms of the PAIF facility or in the event of FCMB’s banking licence being revoked. FCMB, on behalf of the lenders, engaged with the CBN to clarify the terms of the offer letter and apply for certain dispensations in relation to the project. These included a request to freeze the PAIF’s guidelines, so that the PAIF funding could not be withdrawn for any breach of PAIF guidelines that were not in force at the date the offer letter was provided. The lenders also asked BOI to acknowledge that its step-in rights would be subject to the terms of an intercreditor agreement, which limits a lender’s right to receive certain information if such lender is owned or controlled by a Nigerian
public authority. The discussions were successful and the lenders’ requests were accepted. The mezzanine financing Certain development finance institutions (IFC, Proparco, EAIF and OPIC) which are also senior lenders, provided a mezzanine tranche to the project. Aside from the usual intercreditor issues, since the mezzanine lenders are DFIs, they have certain policy requirements which they need to have full control of – notwithstanding the fact that they are mezzanine lenders – and very thorough discussions were had between the senior and mezzanine lenders to agree on a highly bespoke list of entrenched rights available to the DFI mezzanine lenders on the transaction. Gas sales agreement letter of credit The gas sales and purchase agreement (GSPA) required that the payment obligations of the project company be backed by a letter of credit (GSPA LC), issued by a bank with a minimum credit rating. Normally such a letter of credit would have been procured by the equity providers through a form of collateral arrangement but in this case it was provided by one of the lenders, Standard Chartered Bank, as part of the overall financing. • Century Power Generation Ltd., a Nigerian energy company, plans to raise US$700 million to finance the first phase of a 1,500MW gasfired plant power plant in Okija in Anambra state; and • Three or four solar plants (circa
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100MW each) that are spread across the north of the country. Given that the GSPA LC formed part of the overall financing, a highly bespoke intercreditor and project accounts structure was designed to address the different scenarios, taking into account the different phases of the project (e.g. before and after project completion), when the GSPA LC might be drawn, fully or partially, and what the potential exposure of the other senior lenders in the project would be at relevant times. What next for power in Nigeria and Sub-Saharan Africa? Azura has become known as the pathfinder project for the Nigerian
power sector. There is still a huge amount of work to be done to resolve a number of structural, legal and technical issues in the sector which have buffeted the Azura project. For Azura, through the tireless work of all the parties – sponsors, lenders, government agencies and advisors – these challenges were overcome and the project has opened the way for a number of further gas-fired (and solar) IPPs to progress to financial close over the next 12 to 24 months. These include: • the Qua Iboe Power Project currently being developed by Mobil Producing Nigeria; • the OMA Power Project, a 1080MW 3-phase green-field gas-fired power plant located in Abia State,
being co-developed by Geometric Power Limited (GP), a Nigerian independent power producer and General Electric (GE) of the USA; There will understandably still be many challenges ahead in closing these, and other, power projects in Nigeria. Not the least of these will be the strain on the foreign currency reserves caused by the low oil price and the knock on effect that will have on the development of the nascent gas industry. Nevertheless the demand for power is there and the Azura project has shown that the willingness and ability of the private sector to respond to that demand is there too. For the sake of the Nigerian people, we hope that remains the case for a while to come.
Azura Structure Chart PAIF/BOI
Local Lender
IBRD Covered Lenders
DFI Lenders
• Aldwych International Ltd Amaya Capital • American Capital • Energy Infastruture Asset & Resources Management Company Ltd • African Infrastructure Investment Fund 2 • Pan African Infrastructure Development Funds 2 Llc (Original Sponsors)
Mezzanine Lenders
EDO State Government (Shareholders)
EPC Contract
Long Term Maintenance Agreement
2.5%
Azura Power West Africa Ltd (Borrower)
O&M Agreement
97.5%
Gas Supply Agreement
Azura EDO Limited (Shareholder)
Gas Transportation Agreement
Senior & Mezzanine Debt
Miga Covered Lenders
Power Purchase Agreement
Put and call Option Agreement
Project Company/ Shareholders
Grid Connection Agreement
Project Contracts Siemens/ Julius Berger
Siemens
PIC Group
SEPLAT/ NPDC
Nigerian Gas NBET Company
NBET
Federal Government of Nigeria/Nbet
Transmission Company of Nigeria
47
Law Digest Spring 2016
TOP DEALS S P R I N G
2 0 1 6
As part of our programme of promoting excellence in the practice of law, by highlighting accomplishments of African law firms and lawyers, Law Digest is from this issue publishing top four mandates secured by African firms over each of our publication circle. This issue’s top mandates are dominated by Bowman Gilfillan Africa Group. Bowman Gilfillan Africa Group is a leading Pan-African law firm, with eight offices in six African countries and over 400 specialised lawyers, which provides domestic and cross-border legal services in the fields of corporate law, banking and finance law and dispute resolution. In addition, it provides coverage of francophone OHADA jurisdictions from its office in Madagascar. The publication cycle of Law Digest are as follows: 1. Winter issue: 1st Sept - 30th Nov to reach us by 15th Dec 2. Spring issue: 1st Jan - 15th April to reach us by 30th April 3. Autumn issue: 1st May - 31st Aug to reach us by 15th Sept. To be considered for publication for the next issue, the deal must be one commenced or completed within the next publication circle, i.e., 1st May – 31th August to reach us by 15th Sept. Description of each deal must not exceed 500 words, which should include value of the transaction in US$, description of the transaction, your firm’s role, the client(s), the transaction lead and his/her profile, the supporting team, and the firm(s) representing the other side(s). This should be sent with a high-resolution picture of the transaction lead. Entries may be edited to meet space, clarity and style requirements. Deals notification for this column should be sent to editor@nglawdigest.com. 48
Law Digest Spring 2016
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SABMiller / AB InBev Firm: Bowman Gilfillan Deal Value: USD107 billion Lead partners: Charles Douglas and Ezra Davids Supported by: Rob Legh, Derek Lotter and Alan Keep Client: SABMiller
Charles Douglas
Tamara Dini
EQT / Kuoni Firm: Bowman Gilfillan Deal Value: USD1.4 billion Lead partner (Africa Competition notifications): Tamara Dini Supported by: Joyce Karanja, Lital Avivi, Xolani Nyali, Kirsty Dean-Mhlongo and Chloe Woodin Client: EQT Other Advisors: Marcus Glader, Johanna Bjurling, Helena Höök and Emelle Ouahchi at Vinge (counsel to EQT); Richard Stäuber at Homburger (counsel to Kuoni)
Bowman Gilfillan are counsel to Swedish private equity company, EQT Partners AB (“EQT”), in respect of merger notifications in South Africa and COMESA and an exclusion application in Kenya for the acquisition by EQT of Swiss travel company, Kuoni Travel Holding AG (“Kuoni”), a joint-stock holding company incorporated under Swiss law and listed on the Swiss Stock Exchange. This followed EQT’s successful bid for Kuoni in February 2016. Kuoni had reportedly been hit by online competition and unrest in tourist
destinations. The transaction is to be implemented by a voluntary public tender offer, after Kuoni’s board accepted the offer of 370 Swiss francs per share, a premium of 34% over the 60 day volume weighted average share price. The transaction is valued at USD 1.4 billion. Bowman Gilfillan Africa Group acted for EQT, instructed by Advokatfirman Vinge KB (in Sweden), on behalf of EQT to obtain merger approval in South Africa, COMESA and Kenya, on behalf of both EQT and Kuoni.
South African and Rest of Africa counsel to SABMiller plc in the recommended acquisition by AB InBev of the entire issued and to be issued share capital of SABMiller plc. At USD 107 billion this is the largest M&A transaction in South African transaction history and the third largest M&A transaction globally at the date of
announcement. Bowman Gilfillan’s involvement included, the impact of the deal on SAB’s existing BEE arrangements, exchange control arrangements and competition/ anti-trust. It also co-ordinated the competition/anti-trust and securities law aspects in Africa, in conjunction with AB InBev’s counsel.
Halliburton Company Firm: Bowman Gilfillan Deal Value: USD34.6 billion Lead Partner: Derek Lotter Supported by: Gomolemo Kekesi, Shakti Wood and Xolani Nyali Client: Halliburton Company
Derek Lotter
Counsel to Halliburton Company, an oil and gas multinational, in relation to competition approvals in various African jurisdictions, including Cameroon, DRC, Egypt, Ethiopia, Kenya, Libya, Nigeria, Tanzania and Uganda, which are required to implement this USD 34.6 billion transaction involving the acquisition by Halliburton Company of shares in Baker Hughes.
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AngloGold Ashanti Firm: Bowman Gilfillan Deal Value: USD7.1 billion Lead Partner: Ezra Davids Supported by: Charles Douglas, Chris Green, Ryan Wessels, Misty McGillewie and Ross Tasker Client: AngloGold Ashanti
Law Digest Spring 2016
Smile Telecoms Holdings US$315 Million Financing Firm: Aluko & Oyebode (Nigeria) Deal Value: US$315M Lead Partner: Sumbo Akintola Supported by: Kofo Dosekun (Partner), Solagbade Sogbetun (Associate) and Chukwudi Ofili (Associate) Client: African Export-Import Bank Acquisition of a majority equity stake in Mansard Insurance Plc Firm: Aluko & Oyebode (Nigeria) Deal Value: €198M Lead Partner: Olubunmi Fayokun Supported by: Ayodeji Oyetunde (Partner) and Abisayo Olawale-Cole (Associate) Client: AXA S.A Restructuring of various Euro credit facilities provided to Lonmin Plc and its subsidiaries in South Africa. Firm: Werksmans Attorneys (South Africa) Deal Value: US$360 million Lead Partner: Richard Roothman Supported by: Natalie Scott. Client: A consortium of banks including Barclays Plc, Standard Chartered Bank, Citibank, JP Morgan, HSBC and BNP Paribas
Ezra Davids Counsel to AngloGold Ashanti in its proposed restructuring (demerger) of its current portfolio into separate listed vehicles for each of its South African and international mining operations. Based on the market capitalisation of AngloGold at the time, the demerger was valued at USD 5 billion, in addition to the rights offer of USD 2.1 billion, giving a total deal value of USD 7.1 billion.
Other deals of note Reunert / General Cable Corporation – Acquisition of majority stake in Metal Fabricators of Zambia Plc Firm: Bowman Gilfillan Deal Value: US$1.4 billion Lead partner: David Yuill Supported by: Jutami Augustyn, Judd Lurie, Virusha Subban, Michael Vermaak and Lusanda Rampulu Client: Reunert A.P. Møller-Maersk Oil / Africa Oil Corporation – Acquisition of shares in Africa Oil Corporation Firm: Bowman Gilfillan Deal Value: US$845 million Lead partner: Rainbow Field Supported by: Rosemary Maina Client: A.P. Møller-Maersk Oil Accugas IV US$445 Million Financing Firm: Aluko & Oyebode (Nigeria) Deal Value: US$445M Lead partner: Kofo Dosekun Supported by: Oludare Senbore (Partner), Reginald Udom (Partner) and Funmilayo Otsemobor (Senior Associate). Client: Acquisition of Oando Plc’s Downstream Business Firm: Aluko & Oyebode (Nigeria) Deal Value: US$ 460M Lead Partner: Ayodeji Oyetunde Supported by: Olubunmi Fayokun (Partner), Jennifer Martins-Okundia (Senior Associate), Abisayo Olawale-Cole (Associate), Akinkunmi Akinwunmi (Associate) and Yimika Adesola (Associate) Client: Vitol S.A and Helios Investors Genpar III L.P 50
Advised on secured and unsecured facility provided by Investec Bank, Standard Bank, Nedbank and Old Mutual Specialised Finance for the acquisition by Investec Property Fund of a commercial property portfolio from Zenprop. Firm: Werksmans Attorneys (South Africa) Deal Value: ZAR3,200,000 Lead Partner: Richard Roothman Supported by: Candice Morgan. Client: Investec Property Fund Limited Counsel to the lenders in relation to credit facilities provided to Diesel Power Opencast Mining Proprietary Limited. Firm: Werksmans Attorneys (South Africa) Deal Value: ZAR236,000,000 Lead Partners: Tracy-Lee Janse van Rensburg and Kevin Trudgeon Support By: N/A Client(s): Nedbank Limited, Absa Bank Limited and The Standard Bank of South Africa Limited. Acquisition of shares and claims against Plumblink SA Proprietary Limited. Firm: Werksmans Attorneys (South Africa) Deal Value: Confidential Lead Partners: Gerhard Johannes Support By: Ernest Mazansky Client(s): Bidvest Group Limited Acquisition of a business unit forming part of Aspen Pharmacare Limited's pharmaceuticals division. Firm: Werksmans Attorneys (South Africa) Deal Value: Approximately R1,600,000,000.00 Lead Partner: David Gewer Supported by: Brian Price, Adam Pyzikowski, Lureshan Naidoo, Bafana Ntuli, Derek Alexander and Laura Sampson Client: Endo International PLC, acting through Litha Pharma Proprietary Limited Merger of Pembani Group Propriety Limited and the Shanduka Group Proprietary Limited. Firm: Werksmans Attorneys (South Africa) Deal Value: Confidential Lead Partner: Brian Price Supported by: Chris Stevens, Paul Cleland, Bafana Ntuli, Candice Jooste and Laura Sampson Client: Pembani Group Proprietary Limited
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