Law digest issue 8 spring 2015 by Seyi Clement

Africa’s Premier Law Journal

Issue 8

Spring 2015

The Bribery Act bites convictions for foreign bribery Terrorism in Kenya - a new dawn The proposed National Industrial Court of Nigeria (Civil Procedure) Rule 2015

English High Court tackles serious irregularity in LCIA abitral awards Termination of employment in Nigeria - role of notice and fair process

Gbenga Oyebode, MFR

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ISSN 2053-3209

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Seyi Clement editor@nglawdigest.com

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EDITORIAL BOARD

Hon Justice S.M.A Belgore, CON, GCON, FNIALS, LLD(Hon) (Former Chief Justice of Nigeria) 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 D. 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

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The Bribery Act Bites - Convictions for foreign bribery as government publishes anti-corruption plan. This is a review of the UK government’s anti-corruption plan, setting out future steps to tackle corruption and calling for a coordinated approach to bribery prosecutions between the Serious Fraud Office (which leads on serious or complex and overseas cases) and the Crown Prosecution Service (which conducts all other investigations and prosecutions). The article looks particularly at the corrupt payments made by UK firms to overseas officials for business contracts.

EDITORS LETTER

LEAD ARTICLE

P.04

P.34 / 35

NEWS

The Bribery Act bites - Convictions for foreign bribery

P.05 / 10

CASE REVIEW AND LEGAL DEVELOPMENT P.11 / 16

LAW DIGEST AFRICA AWARDS P.17 / 20

INTERVIEW WITH GBENGA OYEBODE, MFR P.26 / 31

ARBITRATION

EMPLOYMENT LAW P.36 / 37 Termination of employment in Nigeria – role of fair process and reasonable notice

PRACTICE AND PROCEDURE P.38 / 41 The proposed National Industrial Court of Nigeria (Civil Procedure) Rules 2015

P.32 / 33

SPECIAL FEATURE

English High Court tackles serious irregularity in LCIA arbitral award

Terrorism in Kenya - A new dawn

P.42 / 45

From the Editor Dear Colleagues, Terrorism in Africa The African continent is confronted by the issue of terrorism like never before, from Boko Haram in Nigeria to Al Shabaab to the East. The question for many jurists is how do we deal with this issue within the ambit of the rule of law. How do we maintain our decorum in the face of such provocation? How do we protect the right to due process, when citizens are baying for retribution and not duly concerned with the rule of law? The challenges facing African Governments cannot be underestimated. At a lecture given on the Terrorism (Prevention) Act 11, by the Attorney General of the Federation and Ministry of Justice of Nigeria, at the British Nigerian Law Forum in London in 2014, Mr Mohammed Bello Adoke, SAN and the Attorney General of Nigeria detailed some of the challenges faced by the Nigerian government in dealing with the issues, including intimidation of judges, prosecutors and witnesses by Boko Haram or persons connected with the organisation, which has led to many trials either being abandoned or delayed incessantly. Understandably, many African States have rushed through their parliaments measures with draconian penal consequences designed to combat the threat of terrorism, however a balance must be struck between the needs to combat terrorism and the rule of law. On another note, the 3rd annual International Litigation and Asset Recovery Forum will be held on 5th November 2015, at the Nigerian Institute for International Affairs, Victoria Island, Lagos, Nigeria. This must-attend event for lawyers specialising in fraud litigation, debt recovery and insolvency litigation is sponsore by Stephenson Harwood LLP. Come and network with forensic accountants, insolvency practitioners, in-house lawyers, risk analysts and heads of financial crime departments from banks and other financial institutions and other recovery specialists.

As an addition to the Forum, we are hosting a pre-conference} reception for our panellists and special guests on 4th November 2015 at Four Point Sheraton, Oniru, Ikoyi, Lagos. To find out more visit our event website at www.nglawdigestevents.com. For table bookings and sponsorship call our sales team on tel. +44 20 32230800 or email sales@nglawdigest.com To contribute articles or commentaries to the Law Digest, please write to me at editor@nglawdigest.com. Yours

Seyi Clement Publisher/Editor

South Africa demands full disclosure pricing by large pharm

Gambian bans gambling with immediate effect

ambia’s Office of the President issued a press release on 2 March 2015 imposing a ban on gambling and the closure of betting shops, lotteries, and casinos across the country with immediate effect. The release referred to gambling operations as “unethical and exploitative”. President Yahya Jammeh is not unknown to made significant public policy decision without consultation or advance notice. In 2013, he announced the immediate withdrawal of Gambia from the Commonwealth after 48 years of membership and cut diplomatic ties with Taiwan. The Commonwealth secretariat and Taiwanese authorities only learned about

Jammeh’s decision in the media. In January 2015, he gave importers, distributors, and retailers two weeks’ notice of the introduction of a new measure demanding the renewal of licences on an annual basis, subject to meeting government policy of “fair and honest pricing.” The potential effect to the ban is still unclear, but sources close to Law Digest express concerns that this may drive away tourism and investment in hotel development in Gambia. Our source advised that many of the hotels in Gambia rely on the casinos to augment their income. Gambia relays heavily on tourism which brings in about one-fifth of GDP.

outh Africa’s Department of Health (DoH) has asked pharmaceutical companies selling patented drugs in the country to disclose the prices of their products in other countries. According to sources, the department noted that firms whose products are being sold at prices that are higher than in other countries will be requested not to include the annual price escalator which attaches to certain patented drugs in South Africa. Although, the department accepts that it would not be able to legally ensure that these companies do not include the price increase, but the department could declare such prices unreasonably high, which could affect the sale of the drugs to hospitals. The disclosure requirement specifically requires disclosure of the prices of patented medicines in the following countries – Australia, New Zealand, Spain, and Canada. In the event that the product is not marketed in the aforementioned countries, the prices in all other countries where the given product is marketed will have to be provided. South Africa has been critical of the price differential of patented drugs between South Africa and countries such as Australia, New Zealand and Canada and the Zuma government has always promised to address the issue as indicated in the published draft International Reference Pricing legislation published on 16 May 2014; still the announcement shocked the pharma industry which had thought that the discussions with the health department about its plans for international price benchmarking were on hold.

Telecel falls out of favour with the Zimbabwean government

he Zimbabwean government announced on 22 February that it had cancelled Telecel Zimbabwe’s mobile network operating licence. The government cited Telecel’s failure to pay a USD137.5 million licence fee agreed in June 2013, and its failure to comply with indigenisation requirements. Telecel is 60% owned by Global Telecom Holding, a unit of Russian telecoms group VimpelCom, and 40% owned by local consortium Empowerment Corporation (EC). VimpelCom announced in December 2014 that it was considering offloading its stake

in Telecel, as the relationship between the authority and Telecel deteriorated. Many observers are not convinced by the reasons given by the authority for the cancellation. They see a power play between Philip Chiyangwa and Patrick Zhuwao, cousin and nephew of President Robert Mugabe respectively. The government’s decision comes a week after minority EC shareholder Philip Chiyangwa’s call for government intervention to allow his firm, Native Telecoms, to buy out existing

shareholders. His push to acquire a larger stake in the firm has probably placed him at odds with Patrick Zhuwao, who reportedly supports the sale of EC’s 40% stake to local investment firm, Brainworks Capital Management. The communications ministry has expressed its reluctance to allow shares to be offloaded without relevant taxes, such as capital gains, being captured by the state, and stated that the government was assessing the viability of buying out existing investors. 05

Swiss firm uncovers illicit capital flight in Congo through shady oil deals

Swiss non-governmental advocacy organisation, the Berne Declaration, claims it has uncovered how the Congolese government is denied millions of dollars from its oil export through alleged shady deal involving a Swiss oil trading firm, Philia SA. Berne Declaration claims that their investigation also reveals Philia SA’s links to the Congolese President’s son, Denis Christel Sassou Nguessoa, and a Nigerian investment banker, Ikenna Okoli.

Mining shaft in Burkina Faso

Referral of draft mining code to Burkinabe parliament increases risk of state participation and local content requirements

he Ministry of Mines and Energy announced on 18 February that the government has adopted the draft of a new mining code to replace the one in effect since 2003. The decision allows for the bill to be passed to the National Transitional Council (NTC), which is acting as parliament. The transitional government is under pressure to pass two major bills: the new mining code and the anti-corruption bill. The World Bank has delayed the release of US$100 million (20% of the budget deficit) in budgetary support until the passage of these bills. Gold accounts for 80% of government export revenues and contributes 20% to the state budget.

Amendments to the mining code first found favour between 2010 and 2011, amid a 41% increase in gold production and rise in gold prices that consolidated the sector’s competitiveness. However, the Burkinabe government’s budgetary position has deteriorated, due to a fall in gold prices and the violent change of government in October 2014, alongside repeated protests and riots demanding for increased social and welfare expenditure. Many donors, including the European Union and Canada, have suspended support until the return of democratic rule.

According to Berne Declaration, the deal mirrors how Nigeria lost over $6.8 billion between 2009 and 2011 through an opaque deal involving the Nigerian National Petroleum Corporation, NNPC, Swiss oil traders and politically exposed fraudsters. Berne Declaration claims its investigation also reveals that just like the NNPC, the Congolese government owned refining company, Coraf, withheld earning from oil sales that was due to the country’s treasures therefore denying the oil-dependent country of needed funds for developmental projects. It cited the 6 million barrels of crude worth over $600 million in 2011 and 2012 Coraf received and made absolutely no return to the Congolese treasury. Though the exact amount of money made by Philia by virtue of this contract is not known, it is believed to be so significant that Philia, a newco and hitherto small player, immediately expanded its operations into other oil frontiers in Africa such as Senegal and Gabon. Before breaking away into its own independent oil trading activities, Philia was part of a joint venture, known as Petronoir Limited. According to Berne Declaration, Petronoir was also engaged in the business of lifting fuel oil and naphtha from Coraf, where Denis Christel serves as the General Administrator. Denis Christel also known as Kiki or Junior is the anointed heir of his father, Denis Sassou Nguessoa, one of the longest serving dictators in Africa. Philia, which started its own independent lifting of fuel oil and naphtha away from the Petronior consortium in 2013, has 15 employees and one manager, Ikenna Okoli – a Nigerian banker and former Head of Investment at Faisal Private Bank, Geneva. Mr. Okoli manages Philia together with the company’s sole shareholder, Jean-Phillip Ndong, a Gabonese, teacher turn oil and timber mogul. Though a minor player, Philia entered the Congolese market with a bang. Coraf granted the firm a term contract renewable after one year to export fuel oil and naphtha. The total oil sold to Philia in its first year was equal to a quarter of all the oil Coraf received that year. In the period, Coraf sold five cargoes to Philia, one of them even before the contract came into force. Philia made a turnover of $140 million from the sales.

Civil society groups demand action on illicit financial flow from Africa

n a statement delivered to the 24th African Union Heads of States Summit meeting in Addis Ababa Ethiopia, a group representing diverse associations such as Oxfam, Actionaid, Transparency International, Ghana Integrity Initiative and Pan African Lawyers Union, commended the African Union Heads of State and Government for the commitment shown over the last couple of years to tackle Illicit Financial Flows (IFFs) from Africa. The group praised the commitment of the Heads for this initiative by the passage of Resolution 896 (XLV) ) on Illicit Financial Flows adopted at the Fourth Joint Annual Meetings of the African Union Conference of Ministers of Economy and Finance and the Economic Commission for Africa Conference of Ministers of Finance, Planning and Economic Development. The Resolution provides for action to be taken to address the problem of such flows. The Resolution was the AU’s response to the report of the High Level Panel on Illicit Financial Flows from Africa by H.E. Former President of South Africa and Chair of the Panel, Thabo Mbeki. Mbeki’s report and the Resolution come at a time of significant evidence of and focus on illicit financial flows from Africa. According to the Global Financial Integrity (GFI) and the African Development Bank (AfDB), Africa is losing more than US$50 billion annually through Illicit Financial Outflows. The group put forward recommendations aimed at ensuring that the work of the Panel translates into meaningful results and achievements towards tackling illicit financial flows on the continent. They called on the AU to adopt the recommendations contained in the High Level Panel report; provide the necessary leadership by putting in place the adequate institutional and political mechanisms to ensure that African governments have a clear vision and roadmap for the implementation of key recommendations aimed at tackling IFFs. In addition, they ask that AU supports the work of and strengthen African institutions working on tackling Illicit Financial Flows at regional and national levels such as the African Tax Administrators Forum (ATAF) and Regional Economic Communities (RECs). They also ask that AU should extend the mandate and fully resource the Mbeki-led High Level Panel to serve either as a standing committee or an AU agency that will oversee and monitor the implementation of the recommendations of the Panel’s report.

WAPco’s gas pipeline between Nigeria and Ghana

Nigeria gets tough on Ghana over failure to pay for gas supply

he Volta River Authority said Nigeria has cut gas supply to Ghana over a US$120-million debt. The cut is likely to cause a 600MW decline in power as gas is used to power the following thermal plants in Tema Asogli Plant (220MW), Cenit Plant (110MW), Tema Thermal 1 Power Plant (110MW) and Tema Thermal 2 Power Plant (50MW). Nigeria supplies Ghana gas via the West African Pipeline Company (WAPco). Nigeria’s gas supply to Ghana has not been constant. Disruption to the supply has been due to sabotage attacks on pipelines in Nigeria and sometimes due to payment delays by Ghana. The power situation is getting worse as many areas in the capital Accra experience at least 12 hours of power cut regularly, in some areas 24 hours, on the basis of a load-shedding schedule. The power crisis has resulted in some firms laying off workers and scaling back production. Firms including Coca-Cola, Mantrac, Cadbury Ghana, and Fan Milk Ghana presented retrenchment plans in February 2015 to the Industrial and Commercial Workers Union (ICU) to reflect the worsening power crisis. The Ghana Chamber of Mines has said that the ongoing power shortages would damage production levels if the situation persists at length. The tough stance taken by Nigeria has been largely supported by Nigerians, who felt that the Goodluck government has been very weak on this issue. However some see it as the last roll of the dice by the Goodluck government to appear tough, especially as many have criticised the continued supply of gas to other West African countries under the WAPco agreement, when some power plants in Nigeria have inadequate gas supplies. We understand that no high level discussion is planned by the two countries to resolve this issue. 07

President Filipe Nyusi on his campaign trail

President Filipe Nyusi consolidates his position

ormer president Armando Guebuza on 29 March resigned as head of the ruling Mozambican Liberation Front (Frente de Libertação de Moçambique: FRELIMO), allowing President Filipe Nyusi to assume leadership of the party and consolidate his position. Although Nyusi was FRELIMO’s presidential candidate at the October 2014 elections, Guebuza had been re-elected as head of the party in 2012, which would have allowed him to retain significant influence over the FRELIMO-led government until

2017, despite being constitutionally barred from running for a third term as President of the Republic. Guebuza’s resignation follows a three-month power struggle within FRELIMO, which publicly erupted over Nyusi’s negotiations with opposition Mozambique National Resistance (Resistência Nacional Moçambicana: RENAMO), which seeks greater autonomy for provinces in central and northern Mozambique. Nyusi was immediately afterwards elected head of FRELIMO unopposed with 98.4% of the vote cast by the Central Committee.

Guebuza remains a member of the party’s Political Commission. After being branded a ‘puppet’ of Guebuza by RENAMO leader, Afonso Dhlakama, Nyusi now has a free hand to negotiate a peaceful settlement with the opposition, therefore reducing the risk of a return to armed conflict in the centre of the country. Nyusi’s strengthened control over the party will also improve government stability, and is likely to establish a clear and unified line in economic policy.

Attorneys from Rex Attorneys join forces with ENSafrica in Tanzania

mbassador Mwanaidi Sinare Maajar and Dr Alex Thomas Nguluma both of Rex Attorneys are joining forces with ENSafrica from 1st May 2015 to form ENSafrica | Tanzania.

Ambassador Mwanaidi Sinare Maajar

Dr Alex Thomas Nguluma

According to ENSafrica’s chief executive Piet Faber, “our vision is for ENSafrica to be the first fully integrated, world-class African law firm – the legal destination of choice when it comes to doing business in Africa. Launching ENSafrica | Tanzania is part of this vision and we plan to open further offices throughout Africa during the course of the year.” Tanzania is an important jurisdiction for those doing business across Africa due to, among others, its stable business environment, its abundance of natural resources and the forecasted growth of its annual GDP over the next five years. ENSafrica | Tanzania is based in Upanga, the country’s commercial capital, Dar es Salaam, and provides a full-service offering, covering a wide range of business areas, including mining; oil and gas; energy; banking and financial services; competition; employment; IP; telecommunications;

insolvency; legislative and regulatory regime review; as well as commercial litigation and arbitration. Ambassador Mwanaidi Sinare Maajar, a seasoned corporate and mining law practitioner who was previously Tanzania’s High Commissioner to the United Kingdom and Tanzania’s ambassador to the United States, is chair of ENSafrica | Tanzania and Dr Alex Thomas Nguluma, a renowned senior corporate and tax law practitioner, will be the Managing Partner. According to Ambassador Maajaur, “the opening of ENSafrica | Tanzania is an exciting step in the Tanzanian legal market. We believe that the combination of our expert knowledge of the local market, and the breadth and depth of experience and specialist expertise which is now available to us across Africa, will provide real value to our clients.” “The launch of ENSafrica | Tanzania has certainly expanded our capability in the country and we are looking forward to offering our clients a new level and depth of legal services spanning all the key corporate areas of law and business,” said Dr Nguluma.

Territorial reconfiguration in DRC reduces the influence of the Katanga province

resident Joseph Kabila on 2 March signed a law into effect that increases the number of provinces in the Democratic Republic of Congo from 11 to 26 provinces. This territorial ‘découpage’ (cut up) was agreed in the 2006 constitution as part of a decentralisation drive. Only the provinces of Kinshasa, Bas-Congo (now renamed Kongo-Central), North Kivu, South Kivu, and Maniema remain unchanged, while Kasai, Kasai-Occidental, Bandundu, Orientale, Equateur, and Katanga have been split up. The measure is facing resistance in the mining province of Katanga, where the découpage will greatly reduce tax revenues from mining to local elites and Katanga’s ability to influence the national politics. There is fear in the DRC that this could lead to another round of civil war with the Katangans who will see this as a direct attempt to curb their powers and finance.

Cameroon to call time on generous tax treatment of mining companies

ameroon’s parliament is set to examine a new mining code bill this month, which could see an end to the generous tax treatment of mining companies. This development followed a week-long consultation in March 2015 in the city of Limbé by representatives of the government, development partners, the mining sector, and civil society. Since 2010, there have been calls, especially from civil society groups, for the government to revise the 2001 mining code, which it is claimed is too favourable to mining firms at the expense of public revenue. Critics of the code claim that mining firms enjoy generous tax exemptions, including from import duty levies at the exploration and construction phases of projects.

President Edgar Lungu issues ministers with two-week deadline to end mining-sector impasse

ambian president Edgar Lungu on 25 March directed Finance Minister Alexander Chikwanda and Mines Minister Christopher Yaluma to review and recommend changes to the mineral royalty tax regime by 8 April. The tax regime, implemented in January 2015, replaced corporate income tax with increased mineral royalties, which jumped from 6% to 20% on open-pit mining and from 6% to 8% on underground operations. The government has been holding talks with the mining sector amid criticism of the increased

royalties, including by the Chamber of Mines, which had warned of the risk of mine closures. On 25 March, Lungu asked the finance and mining ministers to consider several options, including negotiating interim fiscal arrangements on a case-by-case basis under the January 2015 tax regime. Other options included identifying legal or regulatory modifications that could be readily passed and implemented; deferring implementation of the January 2015 fiscal regime; or temporarily reinstating the 2014 tax structure until a more amicable settlement is negotiated.

Corruption fever grips Kenyatta’s government

ands Cabinet Secretary Charity Ngilu on 29 March became the fifth cabinet minister to step down from office within 24 hours following corruption allegations. Ngilu and the four other ministers – Energy Cabinet Secretary Davis Chirchir, Kazungu Kambi (labour), Michael Kamau (transport and infrastructure), and Felix Koskei (agriculture) – were asked to step down by President Uhuru Kenyatta pending an investigation following their inclusion in a 26 March report by the Ethics and Anti-Corruption Commission (EACC).

More than a dozen senior public servants and heads of state parastatals are also suspended after being named in the report with pressure on the remaining public figures, including 13 county governors, to step aside growing. Kenya has suffered high levels of corruption for several years, which successive governments, including Kenyatta’s two-year-old administration, have failed to address despite repeated promises to do so. The ministers that have stepped down have all pleaded their innocence, with the EACC having been given 60 days to investigate the allegations

levelled against them. Most of the ministers and governors named in the EACC report are accused of selling state assets, such as land, at a knockdown price or awarding overinflated contracts, such as for consultation on the new Standard Gauge Railway line or the new Nairobi Metro Transportation system in breach of the country’s procurement laws, to benefit themselves or third parties, increasing the risk of state contract alteration as the allegedly corrupt contracts are reviewed.

Nigerian lawyer to advise Wema on European Capital Market listing

eyi Clement of Augustine Clement has been appointed to advise Wema Bank on raising US $200,000,000.00 Tier II capital on the European capital market. The transaction involves listing of redeemable notes on the Irish Stock Exchange and the Channel Islands Stock Exchange simultaneously. Seyi Clement, a transaction specialist and the editor of Law Digest is a dual qualified solicitor, having been called to the Nigerian Bar in 1987 and re-qualified as a solicitor in the UK in 2000. According to Mr. Clement, “this is one of the most complex transactions ever undertaken on the capital market and sets a precedent in terms of deal structure.” He added that Augustine Clement is proud to have been selected to advise on the transaction and it demonstrates confidence in the ability of UK based Nigerian lawyers to advise on transactions of this nature. He said that, “working with Hedge Funds based in the US and Bermuda and Regulators based in Ireland, Channel Island and Nigeria for 4 months to bring the transaction to a close has been an enjoyable experience”. He stated that there is a growing appetite in Europe and America for Nigerian securities and this transaction a confirmation that the right deal, which is well structured, will always be attractive to foreign investors. He said he had to give credit to the Wema and Butterpot Capital Ltd teams for their expertise and professionalism. He said they were not fazed by the complexity of the transaction nor by the level of due diligence required to bring the security to the European market.

President Muhammadu Buhari

Muhammadu Buhari wins Nigeria’s presidential elections G

en Buhari of the All Progressive Congress (APC) beat incumbent Goodluck Jonathan of the People’s Democratic Party (PDP) by more than 2.5 million votes, in an election conducted on 28 March 2015. APC also gain control of 20 of the 36 States and the Federal Capital Territory, with 3 States declared inconclusive in the gubernatorial elections held on 11 April 2015 representing virtually the whole of the Muslim north and Yoruba-dominated south-west, while the PDP has little representation outside the south-south and the south-east. Buhari and the APC now have a clear mandate to govern by controlling a majority of the States, as well as dominating the Federal House of Assembly and Senate. States control about 50% of government spending and are critical to maintaining the patronage systems on which political support rests in Nigeria. APC notably took the northern states of Kaduna and Katsina, which had been in PDP control since the restoration of democracy in 1999, and held on to Lagos, the commercial capital, which is now controlled by the same party as the presidency for the first time. The impact of the change will be particularly strongly felt in Lagos, which, although considered to be a major success story thanks to reforms instituted under governors Bola Tinubu and Babatunde Fashola, it has been deliberately deprived of federal funds as an opposition stronghold despite its overwhelming importance to the country as its commercial centre. Buhari now also has the necessary level of support to push through the long-awaited Petroleum Industry Bill, which has stalled at the legislative level due to lack of political will by the ruling PDP. However, despite the clear mandate, he is likely to have to offer a greater share of oil revenue to the five oil producing states in the Niger Delta area, if he is to get the Bill unto the statute books. Information received by Law Digest would suggest that his administration would create a Ministry of Niger Delta Affairs to address the Niger Delta issues. How this will be received by the Niger Delta States which are controlled by PDP will be critical to the success of the Ministry. Our sources also confirm that the Buhari administration intends to follow the Lagos State model for major infrastructural development, which is understandable given that the proponents of the model, Bola Tinubu and Babatunde Fashola, SAN, are leading figures within APC and the dire needs for infrastructural development in the country. It is generally accepted that Bola Tinubu would probably not hold a public post in this administration, but the post of Babatunde Fashola, SAN in the administration could go a long way in assuring foreign investors of the intentions of the administration in this area. An issue which the administration would need to grapple with is the removal of oil subsidies. This is an issue that continues to divide the country. In 2014, when the Goodluck administration proposed the removal of subsidies, this was opposed by leading members of the now APC, but information received by Law Digest suggest that the Buhari administration will continue with this policy by removing the remaining subsidies.

Seyi Clement of Augustine Clement

Law Digest Spring 2015

www.nglawdigest.com

Case Review and Legal Development From the Research Desk

CASE REVIEW UK

Common Law Civil Negligence Contributory Negligence Apportionment Jackson (Appellant) v Murray and another (Respondents (Scotland) [2015] UKSC 5 On appeal from [2012] CSIH 100 JUSTICES: Lady Hale (Deputy President), Lord Wilson, Lord Reed, Lord Carnwath, Lord Hodge BACKGROUND TO THE APPEALS: When she was 13 Ms Jackson, the pursuer, was hit by a car driven by the defender. She appeals to the Supreme Court from the Inner House of Session’s assessment of her contributory negligence at 70%. Section 1(1) of the Law Reform (Contributory Negligence) Act 1945 states: “Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.” The collision took place on 12 January 2004 on the A98 road between Banff and Fraserburgh, near its junction with a private road leading to the farm where the pursuer lived with her family. There was a 60mph speed limit, and no street lighting. The pursuer alighted from her school bus, which had just parked on the opposite side of the road from the entrance to the farm road. It was about 40 minutes after sunset and light was fading. The respondent was driving home in the opposite direction, travelling at about 50mph. His lights were on. The pursuer passed between the rear of the bus, which was still stationary, and the car behind it. She paused briefly at the offside rear of the bus, took one or two steps into the road into

the path of the defender’s oncoming car, before breaking into a run. While running she was struck by the defender’s car, still travelling at about 50mph. She was projected into the air, the car passed beneath her and she landed on the road. The pursuer sustained serious injuries. The Lord Ordinary found that the defender had failed to drive with reasonable care and was negligent. If he had been travelling at a reasonable speed the pursuer would have made it safely past him, so the accident would not have occurred. The Lord Ordinary also considered that the “principal cause” of the accident was the ”reckless folly” of the pursuer: either she did not look to the left before crossing or, having looked, she failed to identify and react sensibly to the presence of the car in close proximity. On either scenario the greater cause of the accident was her movement into the path of the defender’s car at a time when it was impossible for him to avoid a collision. The Lord Ordinary assessed the pursuer’s contributory negligence at 90%. On appeal, the Extra Division of the Inner House allowed the pursuer’s appeal and assessed her contributory negligence instead at 70%. JUDGMENT The Supreme Court allows Ms Jackson’s appeal by a majority of 3-2 (Lord Hodge and Lord Wilson dissenting) and awards her 50% of the agreed damages. Lord Reed (with whom Lady Hale and Lord Carnwath agree) gives the lead judgment allowing the appeal. Lord Hodge (with whom Lord Wilson agrees) would have dismissed the appeal. REASONS FOR THE JUDGMENT: • L ord Reed did not accept the appellant’s contention that there was no basis for a finding of contributory negligence at all on the findings made by the Lord Ordinary. [17-18] Section 1(1) of the 1945 Act does not specify how responsibility is to be apportioned. Decided cases show two aspects to apportionment: the respective causative potency of the parties’ acts and their respective blameworthiness. The court consistently imposed a high burden on drivers to reflect the potentially dangerous nature of driving. [20-26] There is no

demonstrably correct apportionment. Since different judges may legitimately take different views of what is “just and equitable” in particular circumstances, those differing views should be respected, within the limits of reasonable disagreement. [27-28]. • Th e lower court must have gone wrong: in the absence of an identifiable error, only a difference of view as to apportionment that exceeds the ambit of reasonable disagreement will warrant that conclusion. [35] Apportionments are not altered because of disagreement as to the precise figure. However, appellate courts have intervened on the basis of disagreement as to whether one party bore much greater responsibility than the other: there is a qualitative difference between a finding of 60% contribution and a finding of 40%. [38]. • Th e Extra Division provided only a very brief explanation of their apportionment of 70%. Given their conclusion that the causative potency of the defender’s conduct was greater than that of the pursuer, the result can only be explained on the basis that they considered the pursuer far more blameworthy. They rightly considered that she did not take reasonable care for her own safety, but regard has to be had to her circumstances. She was only 13. An assessment of the defender’s speed in the circumstances was far from easy. Attempting to cross a relatively major road with a 60mph speed limit, after dusk and without street lighting, is not straightforward, even for an adult. • Th e Extra Division considered that the defender’s behaviour was “culpable to a substantial degree”, with which Lord Reed agrees. Overall the Extra Division’s reasoning does not provide a satisfactory explanation of their conclusion that the pursuer bore the major share of responsibility. Lord Reed considered the defender’s conduct played at least an equal role to that of the pursuer in causing the damage and was at least equally blameworthy. He therefore allows the appeal and awards 50% of the agreed damages to the pursuer. [39-44] • L ord Hodge would have dismissed the appeal. He agrees on the facts and the legal 11

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principles set out in Lord Reed’s judgment. [45] The Lord Ordinary’s assessment of 90% appears to have been influenced by eyewitnesses’ impressions; however the defender’s prior failure to reduce his speed was a potent cause of the accident, which put a different perspective on the matter. The Extra Division was entitled to conclude the Lord Ordinary had gone wrong. The Extra Division’s assessment is not open to the same criticism, given the Lord Ordinary’s findings. [47-49] Not to look or to knowingly run into the path of the car displayed a very high degree of carelessness. The Extra Division were entitled, because of the extent of her blameworthiness, to attribute to the pursuer the major share of responsibility. [57] References in square brackets are to paragraphs in the judgment.

Where the monetary merger thresholds are met, notification to and approval by the competition authorities of these risk mitigation financial transactions and asset securitisation schemes would be required.

from notifying such transaction, and the twelve months period for the disposal of the assets or the business of the debtor will be extended to twenty-four months. The following classes of transactions are included: (i) the general exercise of a security interest; (ii) sale and leaseback transactions; and (iii) Government concessions in infrastructure development.

References in square brackets are to paragraphs in the judgement.

This creates a regulatory and financial burden for banks and other financial institutions seeking to mitigate their risk through the acquisition of control of the debtor’s assets or business, as well as those involved in asset securitisation schemes. It also burdens the competition authorities, which are required to analyse every merger notified to them.

The Commission has indicated that the failure to notify the transaction upon expiry of the twenty-four months period will be construed as an implementation of a merger without competition approval and, as a result, may attract an administrative penalty of up to 10% of turnover of the merging parties. However, parties may apply for an extension of the twenty-four month period, provided they show a substantial basis for non-disposal of the asset or control over the firm in question.

Legal Development

Practitioner Update 4

Practitioner Update 5

South Africa (provided by ENSafrica - Africa’s largest law firm)

The Commission has indicated that it does not wish to burden itself and the parties involved in risk mitigation financial transactions and asset securitisation schemes in the ordinary course of business in regulating such transactions and agreements.

The Commission accepts that Special Purpose Institutions (“SPI”) that acquire control through assets securitisation schemes cannot enjoy a competitive position, due to the limitations imposed upon it, and asset securitisation schemes would thus not likely have any impact on competition (this gives rise to the question as to whether the definition of a merger is properly met in the case of asset securitisation schemes, but the issue is not considered by the Commission in the Practice Notes).

• A mendments to the practitioner

updates in respect of the application of merger provisions of the Competition Act to risk mitigation financial transactions and asset securitisation schemes

On Friday 10 April 2015, the Competition Commission (the “Commission”) amended its Practitioner Update on risk mitigation financial transactions (“Practitioner Update 4”) following its earlier amendment to its Practitioner Update on asset securitisation schemes (“Practitioner Update 5”). The Commission has articulated its expectation that these amendments will contribute towards the lowering of transaction costs in respect of risk mitigation financial transactions and asset securitisation schemes. Practitioner Updates provide guidance on the Commission’s likely approach to policy matters, but are not binding on it or other competition authorities. Section 12(1)(a) of the Competition Act defines a “merger” as occurring when one or more firms directly or indirectly acquire or establish direct or indirect control over the whole or part of the business of another firm. Risk mitigation financial transactions can result in the acquisition of an interest in the assets or the business of another company at the time of sale and/or upon default by such firm. Similarly, asset securitisation schemes legally isolate assets from the institution that transferred the assets, such that the assets and benefits thereof are placed beyond the reach of the transferring institution. 12

If the interest acquired by the financier / provider of funding is a controlling one, risk mitigation financial transactions technically fall within the ambit of the merger control provisions. Similarly, the special purpose vehicle in a securitisation may acquire control over the transferred assets.

The Commission highlights that it could have been the intension of the legislature to include risk mitigation transactions, entered into within the ordinary course of business, to fall within the ambit of the merger provisions. Importantly, if a bank or state-owned enterprise intends holding the asset permanently or for a longer period of time, the exemption will not apply. Prior to the amendment of Practitioner Update 4, only registered banks engaging in risk mitigation financial transactions which acquired control over the whole or part of the business of the debtor upon default were exempted from notifying the acquisition of control (the merger) to the Commission, provided that the bank disposed of the assets or its interest in the business of the debtor within twelve months from the date of the acquisition. In terms of the amendment to Practitioner Update 4, state-owned finance institutions authorised to provide finance in the ordinary course of business will now also be exempt

Prior to the amendments, Practitioner Update 5 exempted registered banking institutions from notifying acquisitions of control over the whole or part of another business, when such acquisitions of control arose from asset securitisation schemes. A securitisation scheme is defined in the update as “a scheme whereby a SPI issues a commercial paper and where the payments by the SPI in respect of the commercial paper so issued are made from the cash flows arising from or proceedings derived from the assets, consisting of claims sounding in money, transferred to such SPI by an originator, remote originator or repackager”. In a securitisation scheme, the transfer of assets to the SPI, may result in the SPI acquiring control over “part of the business of another firm” and may therefore constitute a merger as contemplated in section 12 of the Competition Act. In terms of the amendment to Practitioner Update 5, the Commission has extended the exemption from the merger provisions of the Competition Act to asset securitisation schemes entered into by non-banking institutions, provided the asset securitisation scheme is in accordance with the South

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African Reserve Bank’s regulations. The purpose of this amendment to Practitioner Update 5 was to, inter alia, align the Commission’s policy approach to the current regulatory framework governing asset securitisation. • A mendments to the rules for

the conduct of proceedings before the CCMA

Amended Rules for the Conduct of Proceedings before the Commission for Conciliation, Mediation and Arbitration (CCMA) (“the Rules”) were promulgated on 17 March 2015 and will come into effect on 1 April 2015. New ‘Guidelines on Misconduct Arbitrations’ on how commissioners must deal with misconduct arbitrations have also been issued with effect from 1 April 2015, but these will be dealt with in a separate newsletter. Some of the more noteworthy amendments to the Rules are discussed briefly below. a. S erving and filing documents by email and SMS, and registered mail notifications Service and filing of documents may now be effected by way of email. The relevant provisions of the Electronic Communications and Transactions Act, 2002 are, however, applicable in respect of any issues that may arise in relation to service by email. In addition, the CCMA may now provide notification to parties in any manner prescribed in relation to the service of documents (eg by email) and, further, it may provide notice to parties by way of short message service (SMS). The CCMA has been doing this for some time, but this has now been formalised as a valid form of notification. The Rules also state that, in relation to the 14-day and 21-day periods applicable in order to notify parties of conciliation and arbitration proceedings respectively, in instances in which notice of proceedings is sent by way of registered mail, an additional seven days must be allowed. b. Disputes can no longer be dismissed where the referring party fails to attend conciliation The requirement that parties must attend conciliations in person has been removed from Rule 13, as well as the reference to dismissal of the dispute in an instance in which the referring party fails to attend the conciliation proceedings. The “dismissal provision has now been replaced with the words “conclude the proceedings by issuing a certificate that the dispute remains unresolved”. c. Proof of jurisdiction Rule 14 now provides that a conciliating

commissioner must require a referring party to prove that the CCMA has jurisdiction in an instance in which a jurisdictional issue has not been determined, provided that all jurisdictional issues requiring evidence may be deferred to arbitration. Strictly speaking, all jurisdictional issues require evidence, but it seems likely that in instances where the evidence is not common cause and oral evidence is required that it will be deferred to arbitration. d. N on-compliance with a directive to file statements Rule 19(3) now provides commissioners with a discretion to continue with a matter despite non-compliance with the CCMA or a commissioner’s directive that the parties file statements. However, a party’s non-compliance may be taken into account when considering costs at the conclusion of an arbitration hearing. e. Representation at the CCMA Rule 25, which deals with representation before the CCMA, has been amended to separately spell out the rights of representation for employers, unions and employers’ organisations. Representation by an office bearer, official or member of a trade union remains permitted in instances in which the party is a registered trade union, although the rules now provide expressly that such representatives must have been authorised to represent the union. Representation by an office bearer or official or a director or employee of an employer that is a member of the employer’s organisation is permitted for employers’ organisations (although see the new qualification to this below). Representation by a legal practitioner at arbitration continues to be permissible, subject to the same qualification relating to misconduct and incapacity dismissal arbitrations, but the new rules now preclude any person other than a legal practitioner from charging a fee or from receiving any financial benefit for agreeing to represent a party to proceedings before the CCMA. A new, fairly widely framed power has been given to commissioners to exclude the rights of members of an employer’s organisation to represent each other. Such representation can now be precluded where a commissioner believes that the representative joined the employer’s organisation for the purposes of representing parties at the CCMA or where the representative’s participation would be contrary to the purpose of the rule (which is stated as being to promote inexpensive and expeditious dispute resolution in a manner that is equitable to all parties); or is not in keeping with the objectives of the Labour Relations Act, 1995; or may have the effect

of unfairly disadvantaging another party to the dispute. This amendment appears to be aimed at, among other things, labour consultants and the like who join employers’ organisations simply to acquire rights (that they otherwise would not have) to represent employers at the CCMA, but the ambit of the rule goes wider than this and introduces an inquiry into the relative disadvantage to the other party to the dispute of allowing such representation. This may well give rise to litigation that tests the validity and boundaries of these restrictions. f. M aking applications relating to preliminary issues Significant amendments have been made in relation to the filing of documents in applications in terms of Rule 31 (which relates to issues of condonation, joinder, rescission, postponement, jurisdiction and the like). Any party wishing to bring such an application is now required to bring that application 14 days prior to the date of a hearing. A notice of opposition and answering affidavits must then be served and filed within five days after receipt of the application and a replying affidavit must be served and filed within three days from the day on which any notice of opposition and answering affidavit is served on the applicant in an application. g. Digital recording now mandatory for the CCMA Rule 36 now specifically states that a record must be kept by way of digital recording and, if practically possible, legible notes must be kept, whereas previously a digital recording was not mandatory. This will serve to alleviate issues that arise in review proceedings where no recording is available for the purposes of filing a record relevant to the review of arbitration awards, and the parties have to try and reconstruct the record. h. Expert witnesses Rule 37A has been inserted to deal with expert witnesses. It requires a party who wishes to call an expert witness to give seven days’ notice prior to the hearing to the CCMA and the other party, together with a summary of the evidence of the proposed witness, any document that will be relied on and the basis on which the witness is regarded as an expert. This is designed to enable the other party to consider the summary and minimise the need for a postponement in order to deal with expert evidence. i. Costs in arbitration proceedings An extensive new Rule 39 deals with costs orders in arbitration proceedings and stipulates factors to which a commissioner must have regard when making an order for costs. In addition, the rule prescribes that 13

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commissioners may order costs in respect of reasonable disbursements incurred where one party is represented by a legal practitioner, and in relation to legal fees where both parties are represented by a legal practitioner. However, this is limited to R6 000 for the first day of the arbitration proceedings and R4 000 in respect of each additional day of an arbitration. j. Certification of awards Rule 40, dealing with the certification of arbitration awards, has also been amended. In terms of the amendment, any arbitration award that has been certified and which orders payment of an amount of money may be enforced by execution against property of an employer by the sheriff of the court in the magisterial district where the employer party resides or conducts business and, where the award orders the performance of an act, by way of contempt proceedings in the Labour Court. This removes the need for a warrant of execution to be issued out of the Labour Court or the High Court. •

everal important principles were S established in the recent judgment of The Owners of the mv

“Silver Star” –v- Hilane Limited (982/2014)[2014] ZASCA 194, namely: 1. F ull effect must be given to the right to proceed against an associated ship of a charterer in respect of a maritime claim that arises in the course of the Charter. A person that has a claim against a charterer is entitled to arrest an associated ship of that charterer by virtue of a deeming provision in section 3(7)(c) of the Admiralty Jurisdiction Regulation Act, No 105 of 1983 (“the Admiralty Act”), which provides “If at any time a ship was the subject of a charter-party the charterer or subcharterer, as the case may be, shall for the purposes of subsection (6) and this subsection be deemed to be the owner of the ship concerned in respect of any relevant maritime claim for which the charterer or the subcharterer, and not the owner, is alleged to be liable.” The owners of the “Silver Star” contended that the provision ought to be narrowly construed so as to limit its use

to “only those claims against charterers as charterers and which relate to the core of the charterparty” in order not to fall foul of the constitutional guarantee against arbitrary deprivation of property. In that regard, the court held that: 1. a s no narrow construction of the section had been proferred, and no challenge had been made to the constitutionality of the section, full effect had to be given to it in deeming the charterer against which a maritime claim arises in the course of a charter to be the owner of the vessel for the purposes of proceeding against an associated ship of a charterer; 2. t he deeming provision places the unpaid creditor in the same situation vis-à-vis a defaulting charterer as it is in respect of a defaulting owner and it, therefore, follows that any constitutional attack must be an attack on the entire institution of the associated ship, which had not been advanced in this matter and, consequently, was not ripe for determination; and 3. i n any event, claims that arose out of letters of indemnity issued by the charterer to owners for the latter issuing a second set of bills of lading and for delivery of

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cargo without production of bills of lading pursuant to provisions of a charterparty, were claims against the charterer, as charterer and relate to the core of the charterparty.

2. Arbitration Awards relating to a maritime claim in respect of a Ship give rise to a right to proceed in rem In respect of a contention that a London arbitration award extinguishes the original in rem nature of a claim against or in respect of a vessel, which thereafter becomes an in personam claim arising out of the arbitration agreement, thereby depriving a claimant in respect of the award from proceeding with an associated ship arrest, the court held that although it is by no means clear that this is the effect of an arbitration award under English law, on a proper interpretation of the relevant provisions of the Admiralty Act, a claim in respect of an arbitration award relating to a maritime claim is a claim in respect of the ship in respect of which the original maritime claim lay (“The Owners of the mv “Silver Star” v Hilane Limited”)

3. U ntruthfulness, evasiveness and economy on detail by an owner of an arrested vessel in relation to an alleged association will be a relevant factor in determining whether an arresting party has proved an association In an application to set aside an arrest, the onus is on the arrestor and that onus must be discharged on the usual civil standard of proof (balance of probabilities) except for making out a prima facie case in respect of the cause of action concerned. Thus, the arrestor bears the onus of proving on a balance of probabilities that the vessels are associated. If an application is disposed of on the papers, then the court will make its finding on all matters which are to be dealt with on a balance of probabilities based on the evidence put up by the Respondent owners of the arrested property (“owners”), together with that evidence put up by the Applicant arrestor which is not denied by the owners unless: • t he denial by the owners is not such as to raise a real, genuine or bona fide dispute of fact and the owners have not availed themselves of their right to apply for the deponents to be called for cross examination and the court is satisfied as to the inherent credibility of the arrestor’s factual averment; or • other exceptional circumstances apply such as, for example, where the allegations or denials of the owners are so far-fetched or clearly untenable that the court is

justified in rejecting them merely on the papers, in which event the court may proceed on the basis of the correctness of the disputed allegations of the arrestor (see Plascon-Evans Paints v Van Riebeeck Paints 1984 (3) SA 623 (AD). Based on those principles, the court has found that allegations of common ownership or control which are not denied, are sufficient to found an association (see Hasselbacher Papier Import and Export (Body Corporate) & Another v mv “Stavroula” 1987 (1) SA 75 (C)) and that allegations of common ownership or control which are denied, but in respect of which no evidence is led to prove that denial, are sufficient to found an association (see Eridiana SPA v mv “Ya Rab” (unreported judgment, Durban & Coast Local Division, Case No A394/96, 14 April 1997)). In the latter case, common control was denied by Delray, the owner of the “Ya Rab” and the broad structure of the group was put up but the identities of the relevant shareholders and deposition testimony from them was not forthcoming on the basis that they wished to keep that information confidential. The court found, “In my judgment, the absence of direct evidence from Delray of non-association is itself a piece of evidence which is to be taken into account with all the other evidence adduced by the parties.” On that basis, the court found that an association existed. The court in the mv “Silver Star” further recognised the difficulties facing an arrestor in proving an association when it has no direct access to relevant information, and on that basis has found that a response by owners that is untruthful, evasive and economical on detail will be a relevant factor in determining whether the applicant has discharged the onus resting on it. In the context of finding that the owner of the arrested property failed to properly explain how certain factual inaccuracies and inconsistencies in its evidence had occurred, the court further referred with approval to paragraph 21 of the minority judgment of Marais JA in mv “Heavy Metal” : Belfry Marine Ltd v Palm Base Maritime SDN BHD 1999 (3) SA 1083 (SCA) “I do not think that a litigant in motion proceedings who resorts to this kind of response in the face of a powerful circumstantial showing that, on the probabilities, whoever ultimately had the power to control the company which owned the guilty ship also has the power to control the company which owns the ship sought to be arrested as an associated ship can shelter behind the principles laid down in the case of Plascon-Evans Paints Ltd. In a few words, such an approach should not be regarded as giving rise to a genuine dispute of fact.” On that basis it found that an association existed.

Men win maternity right in South Africa In an important judgment on maternity leave for men handed down by the Durban Labour Court on 26 March 2015, in the case of Mia v State Information Technology Agency (Pty) Ltd, which considered whether the State, acting as employer, had unfairly discriminated against a male employee who had applied for maternity leave in terms of the State Agency’s Maternity Leave Policy. In this case, the claimant, a male employee had entered into a civil union with a same-sex partner. A year after the union, the employee and his spouse entered into a surrogacy agreement, which was confirmed as an order of the High Court. In terms of the surrogacy agreement, from the point of birth, the employee and his spouse would be deemed to be the parents of, and responsible for, the child. In anticipation of the birth of the child, the employee applied to his employer for paid maternity leave. The employer’s policy provided for paid maternity leave for a maximum of four months. The employee was initially refused maternity leave on the grounds that the employer’s policy and the Basic Conditions of Employment Act 1997 only covered “female” employees and was silent on the issue of leave for surrogate parents. The employer eventually agreed to grant the employee two months’ paid adoption leave and two months’ unpaid leave. When the matter came before the Labour Court, the employer denied its policy was discriminatory and the word “maternity” defined the character of the leave entitlement and, as such, it was a right to be enjoyed by female employees only. The employer further argued that its maternity leave policy was designed to cater for employees who give birth, based on the understanding that pregnancy and childbirth create an undeniable physiological effect that prevents biological mothers from working during portions of pregnancy and during the post-partum period. The court, in considering the matter, found that the right to maternity leave is not linked solely to the welfare and health of the child’s mother, but must out of necessity be interpreted to take into account the best interests of the child. The court also had regard to the fact that the surrogacy agreement specifically provided for the surrogate parents to assume immediate responsibility for the child from the point of birth. The court observed in passing that legislation such as the Basic Conditions of Employment Act 1997 would need to be amended to properly deal with such matters, as this legislation proceeds from the basis that 15

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only females are entitled to maternity leave. In its judgment, the court found that the employer had unfairly discriminated against the employee by refusing to grant him paid maternity leave. It then went on to find that the employer, in applying its policies regarding maternity, must recognise the status of parties to a civil union and not discriminate against the rights of surrogate parents. The court further ordered the employer to pay the balance of the two months’ maternity leave that had not been paid to the employee. This judgment paves the way for employees in same-sex unions to request maternity leave where they have become parents through a surrogacy arrangement. This would, by implication, arguably also include an adoptive parent of a recently conceived child or a male parent whose partner dies during childbirth. The Basic Conditions of Employment Act 1997 provides as a right that those entitled to maternity leave must be given four months’ maternity leave, but does not require an employer to pay maternity leave. Most employers do pay an employee part or all of that employee’s salary while on maternity leave. With this judgment, employees in a similar position to the applicant in this matter would be entitled to contend for that paid maternity benefit where the employer has permitted its female employees an entitlement to such leave. The judgment may also impact on the position of employees who are not paid by employers and who claim maternity leave benefits through the Unemployment Insurance Fund. It would seem that the Unemployment Insurance Fund would have to fund unemployment insurance benefits lodged by surrogate, adoptive or male parents who have to assume the role of primary care giver.

• N igeria (provide by Oserogho & Associates) FCT Entertainment and Events Centres Tax To aid the development of Tourism Infrastructure in the Federal Capital Territory (“FCT”), the Federal Capital Territory Authority (“FCTA”) recently published the Entertainment and Events Centres Fees Regulations 2014 (“the Entertainment Fees Regulations 2014”). The Entertainment Tax Act, Cap. 498 Laws of the FCT Nigeria 2007, which is the principal statute from which the FCT Minister derived the authority to publish the Entertainment Fees Regulations 2014, authorises the FCTA to require the proprietors of commercial entertainment establishments to charge the Patrons or Customers of such establishments, on behalf of the FCTA, an Entertainment Tax, which is charged at the rate of 5% of the total invoice issued to a customer, to the 16

exclusion of the 5% Value Added Tax Charge. An Entertainment Tax is not charged on the net proceeds of an entertainment activity devoted entirely to educational, artistic, literary, scientific, philanthropic or other charitable objectives. An Exemption Certification from the FCT Minister is however required for the exempted matters not to be charged to this tax. Penalties and Fines • S ome of the penalties for non-compliance with this law include; not charging and remitting this Tax to the FCTA designated bank accounts; obstructing a Police Officer or other Officer from the FCTA from entering into the entertainment location to check on the property’s due compliance with this Law; fraud or forgeries of any paper-work relating to this Tax; etc. • F ines and Terms of imprisonment apply to any non-compliance with the provisions of this law. Also, where either the Owner or the Manager of the entertainment establishment, and the patron or customer do not charge and pay the entertainment tax on the goods and services provided in such establishment, all the parties connected to the transaction are jointly and severally liable for any non-compliance with the provisions of this law. Entertainment and Events Centres Fee Regulations, 2014 •P ursuant to Section 11 of the FCT Entertainment Tax Act, Cap. 498, the Minister for the FCT has now published the Entertainment and Events Centres Fees Regulations, 2014 (“the Entertainment Fees Regulations 2014”). The commencement date for these Regulations is 1st February, 2013. • Th e Entertainment Fees Regulations imposes on every patron or customer who uses or derives any benefit from any goods or services provided in a hospitality or leisure establishment in the FCT, a Five Per Cent (“5%”) Entertainment Fee on the total bill or invoice to the exclusion of the 5% Value Added Tax (“VAT”) on the same bill or invoice. • Th e goods and services contemplated in the Entertainment Fees Regulations includes the use of any Hotel, other Hospitality or Leisure Facilities or other Events Centres; and any goods and services consumed in any Restaurant; or the subscription to any paid television network, internet facilities or travelling agency services. Registration, Collection and Remittance of Entertainment “Fees” • Th e Owner, Manager or Controller of any hospitality or other leisure business in the FCT is statutorily appointed as the Collecting Agent of this “Fee” on behalf of and to the sole benefit of the FCTA without any deductions made from the fee/tax.

•A ll Hospitality establishments in the FCT are therefore required to, within a period of thirty (30) days of their commencement of business, register with the FCTA Entertainment and Events Centres Unit as a Collection Agent under these Regulations. •A ll Collecting Agents are also required to keep, maintain and preserve all their transaction records using an electronic billing and payment system; and to remit to the FCTA designated bank account, all the Entertainment Fees collected for the preceding week, on or before the close of business of the Monday of the following week. •A ll Entertainment fees are deemed to be a debt due from the Collecting Agent to the FCTA and are recoverable by the FCTA through the normal debt recovery process. Penalties for Non-Compliance •W here a Collecting Agent fails to file a Return and remit the Entertainment “fees” collected within seven (7) days of such collection, as is required by the Entertainment Fees Regulations, such a Collecting Agent shall suffer a penalty of Ten Per Cent (“10%”), plus a additional fine of Five Per Cent (“5%”) on the interest charged Per Annum, over and above the prevailing Central Bank of Nigeria Minimum Rediscount Rate on the amount of the Entertainment fees due for payment. •A lso, any Director, Manager, Senior Officer, Agent or employee of a Collecting Agent who connives to breach any of the provisions of the Entertainment Fees Regulations shall on conviction be guilty of an offence and liable on conviction to a term of imprisonment of Six (6) months, or to a fine of Two Million Naira (N2,000,000.00), or to both the fine and the term of imprisonment. Appeals, Jurisdiction and Distrain •A ny person aggrieved with an entertainment tax assessment issued under the Entertainment Tax Act, must within Seven (7) days of the receipt of the assessment, appeal to the FCTA for a review, amendment or reversal of the assessment. Where the application for a review of the assessment is refused by the FCTA, the Complainant is entitled to institute a law suit against such an assessment at the High Court of Justice in the FCT. If no law suit or other challenge is lodged within Seven (7) days of the service of the assessment, the assessment shall be deemed to be final and conclusive. • Th e FCTA is empowered to seal and confiscate by distrain, the movable goods and other property of any defaulter to the registration, filing of returns and remittance(s) of the Entertainment Tax to FCTA. Where the assets distrained are of an immovable nature, an Order from a FCT High Court must be obtained before such immovable goods or property can be sold to satisfy such a final and conclusive entertainment tax assessment.

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Candidates Shortlist Managing Partner of the Year Gbenga

Oyebode

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South Africa

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Female Managing Partner of the Year Aisha

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Leo Attorney

Tanzania

Donia Hedda

Ellouze

Cabinet Donia Hedda Ellouze

Tunisia

Isabel

Boaten

AB & David

Ghana

Fernanda

Lopes

FL&A Advogados

Mozambique

Olabisi

Soyebo, SAN

Abdullahi Ibrahim & Co

Nigeria

Funke

Aboyade, SAN

Aboyade & Co

Nigeria

Young Managing Partner of the Year

Adeoye

Adefulu

Odujinrin Adefulu & Co

Nigeria

Michael

Orimobi

Tokunbo Orimobi & Co

Nigeria

Babajimi

Ayorinde

The New Practice

Nigeria

Isabel

Boaten

Ola

Alokolaro

Advocaat

Nigeria

Olabisi

Soyebo SAN

Abdullahi Ibrahim & Co

Nigeria

AB & David #lawdigestawards

Ghana

Law Digest Spring 2015

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Law Firm of the Year

Litigation and Dispute Resolution Team of the Year

Anjarwalla & Khanna

Kenya

Aluko & Oyebode

Nigeria

Aluko & Oyebode

Nigeria

Kola Awodein & Co

Nigeria

ENSafrica

South Africa

Templars

Nigeria

Webber Wentzel

South Africa

Aelex

Nigeria

AB & David

Ghana

Wole Olanipekun & Co

Nigeria

Banwo & Ighodalo

Nigeria

Fidelis Oditah & Co

Nigeria

Walker Kontos

Kenya

Punuka Chambers

Nigeria

Udo Udoma & Belo-Osagie

Nigeria

Katende Ssempebwa & Co

Nigeria

Cabinet Maitre Julius Achu

Cameroon

Abdullahi Ibrahim & Co

Nigeria

Strachan Partners

Nigeria

M&A Team of the Year

Banking & Finance Team of the Year

Udo Udoma & Belo-Osagie

Nigeria

Udo Udoma & Belo-Osagie

Nigeria

Odujinrin & Adefulu

Nigeria

Aluko & Oyebode

Nigeria

G Elias & Co

Nigeria

G Elias & Co

Nigeria

Walker Kontos

Kenya

Olaniwun Ajayi LP

Nigeria

Banwo & Ighodalo

Nigeria

Oxford & Beaumont

Ghana

Oxford & Beaumont

Ghana

AB & David

Ghana

Katende Ssempebwa & Co Advocates

Uganda

Walker Kontos

Kenya

George Etomi & Partners

Nigeria

Udo Udoma & Belo-Osagie

Nigeria

AB & David

Ghana

Capital Law Partners

Uganda

Mkono Associates

Tanzania

FL&A Advogados

Mozambique

Engling,Stritter & Partners

Namibia

Olaniwun Ajayi LP

Nigeria

Capital Market Team of the Year

Property, Infrastructure and Construction Team of the Year

Kola Awodein & Co

Nigeria

Banwo & Ighodalo

Nigeria

Odujinrin & Adefulu

Nigeria

Alliance Law Firm

Nigeria

Templars

Nigeria

Punuka Chambers

Nigeria

Banwo & Ighodalo

Nigeria

Oxford & Beaumont

Ghana

Detail Solicitors

Nigeria

Udo Udoma & Belo-Osagie

Nigeria

Babalakin & Co

Nigeria

Engling, Stritter & Partners

Namibia

Hamilton Harrison & Matthews

Kenya

Olaniwun Ajayi LP

Nigeria

AB & David

Ghana 19

Law Digest Spring 2015

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General Counsel of the Year Olatowun

Candide-Johnson

Total Exploration Nigeria

Nigeria

Angela

Omo-Dare

Stanbic IBTC

Nigeria

Michael

Otu

Zenith Bank plc

Nigeria

Andre

Rosetto

Odebrecht

Ghana

Wola

Joseph-Ojoye

Eko Electricity Distribution plc

Nigeria

Paul

Okocha

Corlay Cameroon

Cameroon

Ngozi

Okonkwo

Oando

Nigeria

Dr. Adesegun

Akin-Olugbade

Africa Finance Corporation

Nigeria

Power & Natural Resources Team of the Year Advisory Legal Consultants

Nigeria

Oando

Nigeria

Aluko & Oyebode

Nigeria

Seplat Petroleum

Nigeria

Templars

Nigeria

Sun International

South Africa

Aelex

Nigeria

East African Breweries Group

Kenya

ACAS

Nigeria

MTN

Nigeria

Oxford & Beaumont

Ghana

Corlay Cameroon

Cameroon

Walker Kontos

Kenya

AMCON

Nigeria

A&B David

Ghana

UBA

Nigeria

In-House Legal Department of the Year (Trade & Industry)

In-House Legal Department of the Year (Banking and Financial Services)

Dangote Cement

Nigeria

AMCON

Nigeria

South Africa Breweries

South Africa

Zenith Bank plc

Nigeria

MTN

Nigeria

African Re

Nigeria

Nigerian Breweries

Nigeria

Access Bank plc

Nigeria

Shoprite Holdlings

South Africa

Stanbic IBTC

Nigeria

Odebrecht

Ghana

UBA

Nigeria

Airtel

Nigeria

Vodacom

Tanzania

Support Services Provider of the Year

In-House Team of the Year

In-House Legal Department of the Year (Power & Natural Resources) Oando

Nigeria

Total Exploration

Nigeria

Law Pavillion

Nigeria

Sasol

South Africa

Lexis Nexis

South Africa

Seplat Petroleum

Nigeria

CLRN

Nigeria

Shell Petroleum

Nigeria

LawAfrica

Kenya

Corlay Cameroon

Cameroon

Eko Electricity Distribution plc

Nigeria

Finding the right legal advice can be confusing. Whether you are involved in litigation or arbitration, buying or selling a business or property, you need a team with the right experience, skill, knowledge and flexibility to handle your affairs. We are a specialist commercial practice based in the heart of London, with associate offices in Nigeria, US, India and South Africa. We pride ourselves in the quality of our work and the relationship with our clients. Contact us today to see what we can do for you, email: sclement@augustineclement.com or Tel: +44 203 223 0800

April 29th â&#x20AC;&#x201C; 30th, 2015. Lagos, Nigeria

L-R. Prof. Tawio Osipitan, SAN, Mrs. Badejo-Okusanya, Dr. Abiola

Dr. Adamu Pam

Dr. Rafael Leal-Arcas

L-R, a delegate, Dr. J. Oduwole, Mr. Ade Ipaye, Mr. Afadameh-Adeyemi and Dr. Ayoade

Funke Adekoya, SAN

Cross section of delegates

Ms. Adefarasin - Accenture, Nigeria

Mr. Ade Ipaye, Attorney General, Lagos State, representing Gov Raji Fashola

Prof & Mrs Olumide

Mrs. Edith Kiregu

L-R, Mr. Ipaye and Prof. M. Udombana

Mr. Mr. Afadameh-Adeyemi - President AFIELN

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Law Digest Spring 2015

â&#x20AC;&#x153; I see my role as trying to create opportunities for our people to bridge the gap and to use my experience to encourage social justiceâ&#x20AC;?

Law Digest Spring 2015

www.nglawdigest.com

Lawyer in the News Gbenga Oyebode, MFR

Mr. Gbenga Oyebode, MFR is a founding Partner of Aluko & Oyebode and is also the Chairman of the management board of Aluko & Oyebode.. Over the years, Mr. Oyebode has developed significant experience in project finance, corporate law, energy and natural resources, telecommunications and aviation law. Mr. Oyebode serves as a Non-Executive Chairman of The Okomu Oil Palm Company Plc and Access Bank Plc (formerly, Access Bank Nigeria). He has been a Director of Nestle Nigeria PLC since 24th February, 2014. He also serves as a director on the board of MTN Nigeria Ltd. He is on the Africa Advisory Committee of the Johannesburg Stock Exchange. He is a Fellow of the Chartered Institute of Arbitrators (UK) and the Nigerian Leadership Initiative. He was the Chairman of the Section on Business Law of the Nigerian Bar Association from 2012 to 2014, a Member of the Order of the Federal Republic of Nigeria (MFR).. He is a Barrister & Solicitor of the Supreme Court of Nigeria (admitted June 1980) and Attorney at Law of the Supreme Court of New York State (admitted November 1983), and the American Bar Society of the International Law. Mr. Oyebode was educated at University of IFE (LL. B Honours) and University of Pennsylvania, Philadelphia (LL. M Honours) where he graduated in 1979 and 1982 respectively.

Mr. Oyebode worked as an Associate with White & Case in New York between 1982 and 1983. Mr. Oyebode advised on the Brass LNG Project, a joint venture between NNPC, TOTAL, Conoco Philips and Agip for the construction of a US$3.5 billion LNG plant, and advised on the US$360 million Lekki Concession Infrastructure Project for the construction of toll roads and bridges in Lagos State – the first major PPP initiative in Nigeria. He also advised on the US$1.25 billion financing of the Exxon Mobil Natural Gas Liquid II Project; the US$1.06 billion financing of phases four and five of the Nigerian Liquefied Natural Gas Plant Expansion Project; and the development, financing and implementation of the first IPP project in Nigeria. Glowing as this résumé obviously is, our readers have chosen Mr. Oyebode, MFR as our Lawyer in the News, not for this résumé, but for his commitment to the improvement of standards in the legal profession in Nigeria. This commitment and passion found a home in the NBA Section on Business Law, which he led until recently. Gbenga Oyebode has a passion for education. Specifically his support for the Africa leadership Academy in Johannesburg South Africa and his alma mater, the University of Pennsylvania Law School Philadelphia.

R V

with

Gbenga Oyebode, MFR By Seyi Clement Have you always wanted to be a lawyer and what made you go into law? Yes I have always wanted to be a lawyer, and I can’t think of anything I could have done any better. Who or what has had the most profound influence on your life and your career? There have been lots of influences on my life but the most profound has been living in Nigeria. Nigeria is such a blessed country yet poverty, corruption and income inequality remain big issues and the gap is widening. I have always been impacted by this and see my role as trying to create opportunities for our people to bridge the gap and to use my experience to encourage social justice. our name is virtually synonymous with corporate law in Nigeria, how Y did you get involved with this practice area?

Aluko & Oyebode was nominated in 4 categories in the recent Africa Law Awards. These nominations are unique in the sense that it was the only African firm outside South Africa, nominated in 4 categories. It is also the only Nigerian law firm that ranks in Tier 1 in the IFLR1000 jurisdictional rankings in the major practice areas of banking and finance (as well as Project Finance); energy and infrastructure (in corporate, finance, dispute and project development); and M&A. What is your formula? At Aluko & Oyebode, we are adept at hiring and retaining some of the best brains in the industry. The Firm has a passion for excellence, coupled with a commitment to serving its clients. A Firm is only as good as its employees and Aluko & Oyebode is no different.

fter I finished my post graduate studies, I worked at White and Case A in New York and the Gulf Oil Company in Houston. I moved back to Nigeria in the 1980’s and in partnership with like-minded young lawyers, we noticed that there was a dearth of law firms that provided corporate legal services similar to what I was accustomed to while living in the US. We set out to address this need and those efforts sowed the seeds of what is now known as Aluko & Oyebode.

In addition to maintaining top tier rankings, 6 of the Firm’s partners are also ranked as leading lawyers by IFLR1000

As the Chair of the NBA Section of Business Lawyer, you have guided the Section to the influential position it currently occupies, what would you consider to be the Section’s main contributions to the development of the profession in Nigeria and internationally?

The interest of international firms in Africa is a welcome development for two reasons. Firstly, it demonstrates the attractiveness of the Nigerian and African market for partnerships with global law firms. Secondly, if international firms end up entering into a formal arrangement with local firms, it will encourage local competitors to improve on the already high quality of legal services being provided.

The SBL uses the medium of continuing legal education to enlighten our members and also encourages SBL members to render pro-bono services. The SBL’s annual conference provides its members with opportunities to contribute to discussions and have the benefit of contributing to seminars on topical issues by those most qualified to 28

deliver guidance on those areas. The sessions at the annual conferences encourage continuous legal education.

The interest of international law firms in Africa has polarised opinions, what is your position on the issue and how has the growing presence of international law firms, particularly from the UK and US, affected the dynamics of the African legal services market?

Many African jurisdictions are suspicious of the international law firms and have taken protectionist stance against entry to their markets, are their suspicions justified and is this protectionist stance suitable?

“ The Firms’ current policy is to remain independent in its relationships with international law firms”

Gbenga Oyebode, MFR speaking at the BNLF Annual Lecture on the Petroleum Industry Bill, in London

It is only natural for local law firms to view potential entrants with a bit of suspicion. Most potential entrants into the market do not want to practise local law. Their primary interest is in providing support to their clients. This should give local law firms some comfort. recent survey of Africa’s law firms, found that many consider the lack of A capacity as the main inhibiter of growth of African law firms, how do you think this capacity issue can be addressed and what role could international law firms play in capacity building in Africa? I mproving capacity is something that has to be done by all the stakeholders, starting with the local universities and the law schools. Law firms also need to train new employees to build their capacity. International law firms can also aid in capacity building by sharing their experiences with local law firms and through training, internships, and seminars. I t is being suggested by some, that one of the ways that African firms could thrive in the face of international competition is to form formal or informal alliance either with local or international firms, what is your position on this? Different approaches will work for different firms depending on their structure and what benefits they can derive as a result of forming alliances. Local firms must make sure there is benefit to be derived as a result of such partnerships both professionally in the practice of law and also in the management of law firms. ere are three major African legal networks on the continent (the Th African Legal Network, ALN; Lex Africa and the Miranda Alliance); Aluko & Oyebode is not a member of any of these networks and it’d be interesting to know why the firm has maintained this strategic stance. luko & Oyebode is always on the lookout for opportunities to expand A its local and international reach and the Firm will take advantage of the best alliances which will aid in the attainment of its strategic objectives.

I t is no big secret that Aluko & Oyebode 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 need to happen for the firm to consider entering into either a local or international alliance? e Firm’s current policy is to remain independent in its relationships Th with international law firms. Given our preeminent position in Nigeria, we think it is to our advantage to continue our arm’s length relationship with all international law firms. our firm is quite unusual in the traditional African legal services Y market, outside South Africa with such an extensive workforce and large structure; the firm is noted as having 12 Partners and 55 lawyers – was this always the business / operating strategy for Aluko & Oyebode and do you foresee the firm continuing to grow? The Firm currently has 16 partners and 59 lawyers, with 3 offices across Nigeria. Our strategy is to build a strong institution which will continue to grow and expand across Africa, compete favourably with other top law firms in other markets and remain committed to providing world class legal services to our local and international clients. We note that whilst firms such as Oxford & Beaumont, AB & David, which are relatively smaller than Aluko & Oyebode have established presences in other countries in Africa and abroad, Aluko & Oyebode has not, what is the reason for your reluctance and would the firm consider establishing presence in other countries? The Firm is always looking at its options across the African legal market and opportunities for expansion of the Firm across other countries in Africa. We are particularly focused on establishing our presence in other countries in West Africa for a start. It is important to note that Nigeria is such a big and important market that continues to grow and requires our full attention. 29

The Firm is always looking at its options across the African legal market and opportunities for expansion of the Firm across other countries in Africa. We are particularly focused on establishing our presence in other countries in West Africa for a start. It is important to note that Nigeria is such a big and important market that continues to grow and requires our full attention. ou are very close to the banking sector in Nigeria, both as a provider Y of legal services and as Chairman of Access Bank plc, the banking sector in Nigeria has undergone extensive reform in the recent years the governmentâ&#x20AC;&#x2122;s policy of consolidation reducing the number of banks from over 88 to about 20. What were some of the legal issues and risks that have arisen from the banking legal reform and how has the shrinking numbers of the local banks affected the nature, structure and sourcing of financing in the market? e legal issues and risks which have arisen from the reform include Th building a robust and strong compliance and corporate governance framework, and the change from the Universal Banking Structure which had existed hitherto. The reduction in the number of local banks has not adversely affected the nature, structure and sourcing of financing in the market. With the reforms, the banks are now stronger and better capitalised to meet the challenges of supporting growth in the Nigerian economy. Are there any new or uncommon unregulated financing structures arising in the market or which clients should be made aware of or consider given the increasing participation in the global market? No. I am not aware of any new or uncommon unregulated financing structures arising in the market. A lot has been said about the derivative market in Nigeria, what does the country have to do to finally establish this market? I n order to establish a viable and sustainable derivative market in Nigeria, there is a need to reform and amend the tax and corporate laws in Nigeria, such that non-operating special purpose companies/vehicles are recognised and are given special tax status/exemption. In addition,

â&#x20AC;&#x153; The banks are now stronger and better capitalised to meet the challenges of the Nigerian economyâ&#x20AC;?

Gbenga Oyebode, MFR speaking at Linklaters in London

there is a need to develop capacity and knowledge amongst parties (i.e. prospective issuers, consultants and regulators) that would be involved in derivative transactions. Foreign legislative development such as FATCA has undoubtedly caused a rippling effect in the international tax regime, given its extraterritorial reach/effect. What are the legal challenges and issues that have so far arisen from this, if any, for your clients, whether financiers, borrowers or investors? There has not been any legal issue arising from FATCA for any of our clients. However, there has been an increased awareness of our clients, especially lenders, on the implications of non-compliance with FATCA. Increasingly, local banks which are subsidiaries of multinationals are asking us to include FATCA provisions in their Facility Agreements with borrowers. n area where corporate Nigeria has always been criticised is in the A area of corporate governance, you sit on various board within corporate Nigeria, and would be considered as part of corporate Nigeria, are these criticisms justified and how can we improve corporate governance in the country? There is an increased awareness of compliance and corporate governance in the country and several regulations have come up with guidelines and regulations to deal with this issue. Specifically the Securities Exchange Commission, the Central Bank of Nigeria and the Nigerian Stock Exchange have put in place rules to ensure compliance and there is also significant private sector led compliance regimes to assist. These effects have started to change perception and the reality is that Governance is becoming a key component of our corporate life. ocal Content laws serve to protect and promote local L professionals and entrepreneurs. How have Local Content laws achieved this in the Nigerian legal services market and how have they impacted key sectors such as finance and energy? What issues do they raise for your international clients and services?

e Nigerian Oil and Gas Industry Content Development Act Th promotes the development of Nigerian content encourages local participation of Nigerians, for instance - legal services can only be provided by Nigerian legal practitioners. Though local participation is encouraged under the Nigerian Content Act, I think there is too much emphasis on form rather than substance. The local content laws in practical terms have shown the gaps in skill and capital required specifically in the cabotage and oil and gas regime. For instance, the cabotage regime is in dire need for a review; there is need for the harmonisation of the cabotage and local content regimes so that the benefits of local content are not rent seekers. egulatory risk is seen as a major issue in the emerging African R markets, what regulatory issues/risks have affected your clients, particularly in the banking and energy sectors and how can these risks be ameliorated? I nvestment and changing government policies are some of the regulatory issues affecting our clients. Government policies are usually inconsistent, as I stated earlier, the lack of harmony in the cabotage and local content regimes is a significant example. I n 2013, at the lecture you delivered at the British Nigerian Law Forum in London, you gave an impassionate speech on the effect the Petroleum Industry Bill 2012 would have on the industry. Are you surprised that the Bill has not made it onto the statute book? No I am not surprised. The Bill had set out to achieve too many objectives and became stalled in the National Assembly. In addition it appeared that the government did not have the political will to enact the legislation. The Nigerian petroleum sector needs significant attention and I hope the new government will present new legislation after May 29 2015. What are the salient points in the Bill and in what way would the Bill affect the Nigerian petroleum and natural gas industry and how would these affect investors? The salient features of the Bill include the: i.

Unbundling and commercialisation of the Nigerian National Petroleum Corporation (NNPC);

What would you say are your greatest achievements in your professional career so far? My greatest achievements so far are working with my Partners to build Aluko & Oyebode to what it is today. I also point to Also my chairmanship of the Section on Business Law of the Nigerian Bar Association. Aluko & Oyebode has become one of the largest and leading integrated law firms in Nigeria, with a clientele that is highly diversified and includes top-tier domestic, international and multinational clients. We continue to maintain our leadership across all our practice areas. Notwithstanding competition in our market, our Firm remains the leading practice with a reputation for good work and solid advice. The Section of Business Law of the NBA was my way of giving back to the profession. We needed to focus on the continuous legal education in our profession and also send the signal that Nigerian Bar Association membership did not have to be reactionary but could be progressive and proactive with the focus of showing the world the strengths of our legal profession and our country in good light. I am extremely happy that I was able to contribute my quota in this regard. What are your career highs and lows so far? The highs in my career include the growth of Aluko & Oyebode as an institution, serving on the board of various companies, including the Section of Business Law of the Nigerian Bar Association and being on the Africa Advisory Committee of the Johannesburg Stock Exchange (JSE). The death of our founding partner, Bankole Aluko, in 2002 was a traumatic event in the life of Aluko & Oyebode, which had an impact on all of us that had worked in him at the Firm. It was a very difficult time and we kept going through this period because it was clear that he would have wanted us to build the Firm into one of Africa’s leading law firms. ou are involved in various philanthropic activities, which of those Y philanthropic activities are you most passionate about? I am passionate about providing scholarships and supporting various educational institutions. Our society is challenged by not being able to provide education for all.

ii. Transformation of the existing joint venture between multinational oil companies and the NNPC;

If, in any way, I am able to create opportunities for more people to achieve their dreams through the acquisition of skills and learning I would be satisfied with that I have achieved that purpose.

iii. Deregulation of the downstream sector;

How would you describe Gbenga Oyebode?

iv. Creation of new regulatory bodies; and v. Introduction of a new fiscal regime that seeks to increase overall government take. If the Bill achieves its objectives, the Nigerian oil and gas sector will become more attractive to existing and prospective investors. Care must also be taken by the legislature to ensure that the Government’s legitimate interests in seeking a progressive fiscal framework that optimises revenues for the Government are balanced against the need for renewed foreign investment in the industry.

Gbenga Oyebode is a simple and positive person who believes in not settling for the obvious but being unique. I believe that life is not a sprint but a marathon and that by working hard, you make your own luck as you proceed. W hat do you do to relax and unwind? I enjoy the time I spend with my family and watch a lot of football, I support Arsenal Football Club. I am also a collector of African art. I have a passion for developing and encouraging young African artists. What’s next for Gbenga Oyebode? We’ll just have to wait and see!!!

Law Digest Spring 2015

Arbitration – Damian Watkin – Jones Day

pressed substantial damages claims against the Home Office. A London seated LCIA arbitration was commenced by the Home Office, and a tribunal was constituted comprising UK and US wing arbitrators and a Canadian chair. A 42-day substantive hearing on liability and quantum took place, with oral evidence of fact and opinion drawn from a total of 58 witnesses, following which the tribunal rendered its Partial Final Award in August 2014 (“Award”). In agreeing that the contract had been unlawfully terminated, the tribunal directed the Home Office to pay Raytheon damages of approximately £225 million including costs and interest. The Challenge

English High Court Tackles Serious Irregularity in LCIA Arbitral Award Damian Watkin

Of Counsel - Jones Day

hallenges to arbitral awards on serious irregularity grounds are rarely pressed and very seldom succeed. The recent English High Court judgment in The Secretary of State for the Home Department v Raytheon Systems Limited (“First Judgment”) is however one such occasion where a challenge, advanced under sections 68(1) and 68(2)(d) of the English Arbitration Act 1996 (“Act”), met with success. Consequent upon that ruling and in a further judgment (“Second Judgment”), the High Court set aside a London Court of International Arbitration (“LCIA”) award of approximately £225 million. Key Aspects There are two components to these related judgments of most interest. First is the serious irregularity ground for challenging arbitral awards pursuant to Section 68 of the Act. Section 68 lists various forms of serious irregularities which, individually or cumulatively, potentially provide for grounds of challenge. At first blush, the ambit of those grounds appears to be relatively wide. However, any party seeking to rely upon a Section 68 ground must demonstrate the further threshold ingredient that “substantial injustice” has been, or will be, caused by its

Invoking Section 68 of the Act, the Home Office applied to the High Court (Technology and Construction Court) for the Award to be set aside and declared to be of no effect on grounds of serious irregularity having occurred. The Home Office contested that there existed a serious irregularity affecting the tribunal, the proceedings or the Award arising from a “failure by the tribunal to deal with all the issues that were put to it” —specifically, the tribunal’s omission to deal with various matters essential to the Home Office’s case on both liability and quantum. Upon hearing the challenge, Akenhead J handed down two judgments. First Judgment—Serious Irregularity?

occurrence. Although that ingredient was successfully demonstrated in the instant case, Mr Justice Akenhead nonetheless affirmed that the bar is set very high and that curial relief will be exercised only where, among other matters, the tribunal has gone so wrong in the conduct of the arbitration that “justice calls for it to be corrected”. Second is the issue of what the appropriate relief ought to be where serious irregularity (causing substantial injustice) is properly established —specifically, whether the award should be remitted or set aside and the factors weighing for and against each option. In this regard, His Lordship’s judgment provides some very useful, and relatively rare, guidance on this issue. Arbitration Background In 2007, the Secretary of State for the Home Department (“Home Office”) engaged US defence company Raytheon Systems Limited (“Raytheon”) to design, develop and deliver a £750 million electronic border control system. However, under a new Government, the Home Office purported to terminate Raytheon’s contract in 2010, citing, among other matters, the significant delays suffered to the milestone deliverables. Raytheon denied that the termination was lawful and, on that basis,

Of the various serious irregularity grounds advanced by the Home Office, Akenhead J determined that the tribunal had failed to address two essential matters that had been put to it. Questions Concerning Liability. The tribunal had not assessed whether entire or substantial responsibility for the delay (including associated disruption and inefficiencies) rested with Raytheon. In His Lordship’s view, there was “little doubt however that, if the tribunal had considered the issue in such terms, there is a real chance that it would have to reconsider some of its key findings”. Stemming from that failure, Akenhead J was satisfied that substantial injustice had bee established, not only as relates to the delay issue having not been addressed, but also in light of the large amount of time, resources and cost spent by the parties in presenting their respective cases and evidence on the issue before the tribunal. Questions Concerning Quantum. Resultant of the tribunal’s omission to deal with liability on the delay issue, the Home Office could credibly contend that it should not have been on the hook for the attendant costs awarded against it. Substantial injustice had occurred because had the tribunal dealt with liability, those costs may have been excised from the overall quantum equation... Accordingly, the Home Office’s challenge was upheld.

Law Digest Spring 2015

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Second Judgment—Appropriate Relief? Having therefore concluded that serious irregularity was fully made out, it fell upon Akenhead J to determine what the appropriate relief ought to be—specifically, whether the Award (in whole or part) should be remitted, set aside or declared to be of no effect. On analysis of the Act’s Section 68(3) wording, among other observations, His Lordship stated that where serious irregularity had been found to have occurred: • Plainly, remission is the “default” option, and the Court cannot set aside unless it would be “inappropriate” to remit • Th e burden of establishing that it would be inappropriate to remit must be on the party seeking relief other than remission, and what must be established is that where proven serious irregularity exists, it would be inappropriate to remit to the existing arbitral tribunal • There is no authority which suggests that it will invariably be inappropriate to set aside the Award where Section 68(2)(d) is the relevant serious irregularity ground • There is little or no difference in practice between the setting aside and declaration of no effect remedies • In deciding whether to remit or set aside, it is incumbent upon the court to consider all the circumstances and background facts relating to the dispute, the Award, the arbitrators and the overall desirability of remission and setting aside including all attendant costs, time and justice ramifications • There is no previous authority which substantially mirrors the facts of the instant case, and there are relatively few reported decisions on Section 68(2)(d) of the Act Akenhead J proceeded to consider various cases where the underlying facts led to a conclusion that setting aside was the appropriate relief. The cases highlighted potentially material factors such as where a serious miscarriage of justice affecting evidence had occurred and the arbitrators could not reasonably be expected to be able to approach the matter afresh, where confidence in the arbitrators was lost, where remission would require a full re-hearing or where remission would inevitably lead to the award being reversed. Concluding that the Award in this instance ought to be set aside in whole for re-hearing by a fresh arbitral tribunal, His Lordship reasoned a number of determinative factors, including: • Th e grounds advanced by the Home Office under Section 68(2)(d) of the Act were towards the more serious end of the spectrum of seriousness in terms of irregularity. That the tribunal took some 16 months after final oral submissions to produce the Award “might lead

a fair minded and informed observer to wonder (rightly or wrongly) at least whether (sub-consciously) the tribunal was seeking some sort of shortcut”. • It would be “invidious and embarrassing [for the tribunal] to be required to try to free [itself] of all previous ideas and to re-determine the same issues”, and such exercise could well create undesirable tension and pressure • If the tribunal were to again reach exactly the same conclusions, albeit conscientiously and competently, that “might well lead to a strong belief objectively that justice had not been or not been seen to have been done” • Any significant re-drawing of the issues in the arbitration appears improbable. Much of the factual and expert evidence adduced before the existing tribunal would be re-deployed before the fresh tribunal.

Mr Justice Akenhead nonetheless affirmed that the bar is set very high and that curial relief will be exercised only where, among other matters, the tribunal has gone so wrong in the conduct of the arbitration that “justice calls for it to be corrected”. Observations Some important points arise from this case. First, it timely reminds all arbitrators that, regardless of seniority or experience, it is incumbent upon them to exercise abundant caution by ensuring that awards squarely address all essential matters put by the parties. Any such failure not only runs the risk of attracting curial scrutiny but also has the potential to indelibly stain professional reputations (however unmerited).

, it timely reminds all arbitrators that, regardless of seniority or experience, it is incumbent upon them to exercise abundant caution by ensuring that awards squarely address all essential matters put by the parties. Second, despite the success enjoyed by the Home Office in the instant case, it very much remains the position that any party invoking a Section 68 challenge will be required to surmount a high evidentiary bar—in particular, to meet the requirement that a party must properly establish that substantial injustice has been or will be caused. Third, Mr Justice Akenhead’s thorough analysis and reasoning adds considerably to an otherwise slim corpus of authority on Section 68 serious irregularity challenges. Whilst not setting

a new watermark on the law and practice relating to remission or setting aside of arbitral awards, His Lordship’s instructive judgments will nonetheless provide useful guidance to any parties contemplating similar challenges.

…despite the success enjoyed by the Home Office in the instant case, it very much remains the position that any party invoking a Section 68 challenge will be required to surmount a high evidentiary bar... Of striking interest, in setting aside the Award for the proceedings to be re-heard afresh, His Lordship stated: “…I would anticipate that, on many of the individual issues on which each party lost, the losing party would not seek to re-argue them; the sanction will be costs so that, if a party which lost on a given factual or legal issue before the current tribunal argues it again and loses it before the new tribunal, it should not be surprised when it faces an indemnity cost sanction, whatever the overall result....” At one level, His Lordship’s portent comments carry merit by reminding the parties of their duty to conduct the arbitration fairly, efficiently and expeditiously. Whether a court can reach so far as to augur cost sanctions in relation to what will be, strictly speaking, a de novo arbitral proceeding, however, is slightly more controversial. Finally, His Lordship granted the parties leave to appeal on both judgments. Should any appeal(s) ensue, we will provide a further case update.

All references to England also include Wales, as they together constitute a single jurisdiction.

[2014] EWHC 4375 (TCC). The Secretary of State for the Home Department v Raytheon Systems Limited [2015] EWHC 311 (TCC).

The subject of His Lordship’s First Judgment.

S ee in particular the useful summary provided at paragraph 33 of His Lordship’s First Judgment.

The subject of His Lordship’s Second Judgment.

Per section 68(1) of the Act.

Per section 68(2)(d) of the Act.

eing an alleged failure to address two questions on liability and B three questions on quantum. Specifics of those matters are summarised at paragraphs 34 to 39 of His Lordship’s First Judgment.

At paragraph 48 of His Lordship’s First Judgment.

Amounting to some £126 million.

See paragraphs 3 to 5 of His Lordship’s Second Judgment.

summary analysis of which is contained at paragraphs 5 to 12 A of His Lordship’s Second Judgment.

Law Digest Spring 2015

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LEAD ARTICLE

Daniel Harrison - Associate

Dan Smith of Counsel

The Bribery Act Bites: Convictions for Foreign Bribery as Government Publishes Anti-Corruption Plan Dan Smith of Counsel and Daniel Harrison - Associate - Latham & Watkins LLP

n December 2014, the Serious Fraud Office (the “SFO”) secured landmark convictions in two separate cases: its first convictions against individuals under the Bribery Act 2010 (the Bribery Act) and its first conviction against a corporation after a trial for offences under the Prevention of Corruption Act 1906 (PCA). Previous convictions against corporations for bribery offences had been secured via guilty pleas (Mabey & Johnson in 2009 and Innospec Limited in 2010 ). The key points arising from these convictions are: • Th e SFO will prosecute for bribery that has taken place overseas, and will (successfully) prosecute a corporation for a bribery offence • I nteraction with public officials in regions with a high perception of corruption (here, Africa) presents significant risks •U K individuals and corporates are at risk for bribery involving third-party agents, despite the agent in one of these cases being acquitted

• Th e conviction of corporates for agents’ activities may be significantly easier under the failure to prevent bribery offence in Section 7 of the Bribery Act for activities post-dating 1 July 2011. 34

These convictions came as the UK Government published its 66-point UK Anti-Corruption Plan, setting out future steps to tackle corruption and calling for a coordinated approach to bribery prosecutions between the SFO (which leads on serious or complex and overseas cases) and the Crown Prosecution Service (which conducts all other investigations and prosecutions). The clear statement of intent found in the Plan is welcome, although many of the proposals are imprecise.

The SFO will prosecute for bribery that has taken place overseas, and will (successfully) prosecute a corporation for a bribery offence. Bribery relating to investments in Cambodian biofuel (Sustainable Growth Group) In 2012, the SFO launched an investigation into the mis-selling of investment products between April 2011 and February 2012 relating to biofuel

Jatropha tree plantations in Cambodia by Sustainable Growth Group (SGG) and its subsidiary Sustainable AgroEnergy plc (SAE). The biofuel products were sold to UK investors, who were, according to the SFO, deliberately misled to believe that SAE owned land in Cambodia planted with Jatropha trees, with an insurance policy in place to protect investors if the crops failed. According to the SFO, the total value of the fraud was approximately £23 million. The group of companies went into administration in March 2012. In August 2013, the SFO brought charges for fraud, and bribery offences under the Bribery Act against four individuals connected with SAE: Gary Lloyd West (Chief Commercial Officer and Director), James Brunel Whale (Chief Executive Officer, Chairman and Director), Stuart John Stone (third-party sales agent) and Fung Fong Wong (Financial Controller). These were the first bribery charges the SFO brought under the Bribery Act. The SFO alleged that, in addition to making false representations to investors, Mr. Stone bribed Mr. West to produce false sales invoices of over £3 million, for which Mr. Stone — as a sales agent — received very high

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commission rates of 65 percent on investor’s funds. The fraud was concealed using false e-mail addresses, Swiss bank accounts and companies registered in the Seychelles and British Virgin Islands.

Interaction with public officials in regions with a high perception of corruption (here, Africa) presents significant risks. On 5 December 2014, Mr. Stone and Mr. West were convicted of giving and receiving bribes (under Sections 1 and 2 of the Bribery Act), respectively. Along with Mr. Whale, they were also convicted of various fraud offences. Mr. Wong was acquitted of all charges. A judge imposed custodial sentences of 13 years on Mr. West (including two years for receiving bribes), nine years on Mr. Whale and six years on Mr. Stone (one of Mr. Stone’s three six-year concurrent sentences was for giving bribes). The SFO’s legal proceedings to establish compensation and confiscation orders against the three individuals are ongoing. These are the first sentences for bribery offences to be passed in accordance with the new sentencing guidelines effective from 1 October 2014. These guidelines set out how the courts should determine the category of offence (by assessing culpability and harm) and the sentencing starting points for each category.

UK individuals & corporations are at risk for bribery involving third-party agents, despite the agent in one of these cases being acquitted. The guidelines also list aggravating factors (including attempts to conceal evidence, offences committed across borders and pressure exerted on another party) and mitigating factors (including remorse, voluntary reporting and cooperation with an investigation).

Corrupt payments to overseas officials for business contracts (Smith and Ouzman Ltd) In 2010, the SFO launched an investigation into corrupt payments made to overseas officials to influence the award of business contracts to Smith and Ouzman Ltd, a printing firm based in England specialising in security documents such as ballot papers. On 30 August 2013, the SFO brought charges against Smith and Ouzman Ltd, Christopher John Smith (Chairman), his son Nicholas Charles Smith (Sales and Marketing Director), Timothy Hamilton Forrester (sales manager) and Abdirahman Mohamed Omar (a sales agent) in respect of alleged corrupt payments made between November 2006 and December 2010 - relating to deals in Mauritania, Ghana, Somaliland and Kenya worth £2.25 million. Since the alleged acts pre-dated the coming into force of the Bribery Act, the charges were brought under Section 1 of the PCA. The SFO alleged that commission payments to overseas agents had been inflated in order to hide corrupt payments totalling £395,074 to public officials for business contacts in Kenya and Mauritania. On 22 December 2014, Smith and Ouzman Ltd, Mr. C. Smith and Mr. N. Smith were convicted of three, two and three counts of corruptly agreeing to make payments contrary to PCA, respectively. Mr. Forrester and Mr Omar were acquitted of all charges. This case involved cooperation between the SFO and authorities in Kenya, Ghana and Switzerland, to which the SFO expressed its gratitude. On 12 February 2015, Mr. C. Smith was sentenced to 18 months’ imprisonment (suspended for two years), ordered to carry out 250 hours of unpaid work and given a three-month curfew. Mr. N. Smith was sentenced to three years’ imprisonment. Smith and Ouzman Ltd will be sentenced at a later date and in the meantime may be excluded from participation in public tenders pursuant to Article 45(1) of the European Union Public Sector Procurement Directive. A hearing has been scheduled on 19 October 2015 to deal with confiscation proceedings against the company and the individuals. The UK Anti-Corruption Plan On 18 December 2014, the Home Office and Department for Business, Innovation and Skills

published the UK Anti-Corruption Plan setting out 66 actions with corresponding timescales to tackle corruption.

The conviction of corporates for agents’ activities may be significantly easier under the failure to prevent bribery offence in Section 7 of the Bribery Act, post dating 1 July 2011. One action is to establish a publicly accessible central register of UK company beneficial ownership information to tackle illicit financial flows linked to corruption. Companies will be required to obtain and hold information on their beneficial owners, and provide this information to Companies House with criminal penalties for companies or individuals who fail to provide information or provide false information. This action is due to be completed as soon as practicable after the necessary primary and secondary legislation is in place. Relevant companies and individuals, where applicable, must implement the relevant mechanisms to satisfy to such requirements. The UK Anti-Corruption Plan contains strong messages recognising the need for joined-up intra-governmental activity and cooperation on international development. However, many of the Plan’s proposals are imprecise, and to what extent it is implemented by the next UK Government following the general election on 7 May 2015 remains to be seen. http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2014/city-directors-convicted-in-23m-green-biofuel-trial.aspx and http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2014/city-directors-sentenced-to-28-years-in-total-for-23m-greenbiofuel-fraud.aspx

ttp://sfo.gov.uk/press-room/latest-press-releases/press-releases-2014/ h uk-printing-company-and-two-men-found-guilty-in-corruption-trial. aspx http://www.sfo.gov.uk/press-room/press-release-archive/press-releases-2009/mabey--johnson-ltd-sentencing-.aspx

ttp://www.sfo.gov.uk/press-room/press-release-archive/press-releash es-2010/innospec-limited-prosecuted-for-corruption-by-the-sfo.aspx

https://www.gov.uk/government/publications/uk-anti-corruption-plan

ttps://www.sentencingcouncil.org.uk/wp-content/uploads/Fraud_ h bribery_and_money_laundering_offences_-_Definitive_guideline.pdf

ttp://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEXh :32004L0018&from=en

https://www.gov.uk/government/publications/uk-anti-corruption-plan

Employment Law – Ekpemi Onare Ekhabafe – University of Helsinki

Law Digest Spring 2015

Termination of Employment in Nigeria - Role of fair process and reasonable notice Ekpemi Onaré Ekhabafe - Labour Law Researcher, University of Helsinki

he Labour Act of Nigeria 1990 (the “Labour Act”) provides that a contract of employment shall be terminated -

(a) by the expiry of the period for which it was made; or (b) by the death of the worker before the expiry of that period; or (c) by notice in accordance with section 11 of this Act or in any other way in which a contract is legally terminable or held to be terminated. Unlike the UK’s Employment Right Act 1996 for example, there is no requirement for fairness.

Caselaw and the provisions of Part 1 of the Firth Schedule of the Nigerian 1999 Constitution however would suggest that fair hearing is a prerequisite for termination by notice public servants. The classic Supreme Court of Nigeria decision in Olaniyan v University of Lagos;2 settled the law when it posited that confirmed public employees cannot be removed from office unless and until they have been given a fair hearing. This was also reiterated by the apex court in Shitta-Bey v. Federal Public Service Commission3 per Idigbe JSC where it was held that a public servant had a right to remain in service until properly removed in accordance with the civil service rules applicable to him. In other words, termination notice may only be served after due process, which must be fair and in accordance with the civil services rules. Private employees on the other hand do not enjoy any special protection from termination, save as provided for under section 9(7) of the Labour Act. This is a pure master servant relationship as in common law and the employment terminable by notice from 36

either party or payment in lieu of notice. Despite the known weakness of common law; its failure to protect the rights of workers against harsh, unjust and unreasonable treatment and subsequently termination, Nigeria follows this trend, leaving private employees more unprotected than necessary. It raises the question – why is this distinction still necessary in today’s industrial society? It seems illogical that a system that ensures procedural fairness prior to termination of the employment of a clerical staff under public employment will not extend same to managers in private employment, especially when one considers that one of the goal as stated in the preamble of the Nigerian constitution is equality for all regardless of status. A Senior Advocate of Nigeria5, Dr. Fabian Ajugwu in line with the current position in Nigeria’s employment law, once opined that anything that seeks to tamper with the common law termination of contract position will amount undesirably to law concerning itself with morality6. It is our submission that rather than discouraging the role of morality in regulating employment relationships, it should be given more attention. A combination of both will bring about a fairer application legal principles, and consequently better protection for workers than enjoyed under the present labour law dispensation. Reasonable Notice Presently, private employment in Nigeria is terminable by notice under the Nigerian Labour Act7. The minimum notice period required under the Labour Act is one day,

where the contract has continued for a period of three months or less; one week, where the contract has continued for more than three months but less than two years; two weeks, where the contract has continued for a period of two years but less than five years; and one month, where the contract has continued for five years or more. Parties are free to improve on these requirements through collective agreements or employment contracts8. The Supreme Court of Nigeria’s decision in Layade v. Panalpina World Transport Nigeria Ltd10 was instructive on this in stating that in cases of termination not governed by statute and where either parties can terminate as provided by the contract by given notice of termination or payment in lieu of termination, it prevents the termination from being wrongful and actionable.

Unlike the UK’s Employment Right Act 1996 for example, there is no requirement for fairness. Where a contract doesn’t provide for notice, and in circumstances where the Labour Act will not apply11, the Courts have interpreted into contracts the concept of ‘reasonable notice’. In practice, difficulties arise when determining what constitutes reasonable notice and there have been a lot of contradictory judicial decisions on this issue. Guidance was offered by Lord Denning in Richard v Koefod12 in holding that the periodicity of wages or salary, the nature of the employment, the practice in relation

Law Digest Spring 2015

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to employees in similar position, the status of the employee, the length of service of the employee, are relevant factors to be taken into consideration in deterring what amounts to reasonable notice. This common law position on periodicity of wages does not seem to sit well with that of the Labour Act; which lays emphasis on length of service. However, in a plethora of cases, the judiciary though faced with cases of varying length of employment, has in a number of cases held one month’s notice to be reasonable13, aligning itself with the maximum notice period of the Labour Act.

It seems illogical that a system that ensures procedural fairness prior to termination of the employment of a clerical staff under public employment, will not extend the same to managers in private employment. Damages The implication of this is that upon wrongful termination of contract, there is a good chance that the maximum value of damages available to a claimant will be one month’s notice. This shows the inadequacy of this approach. It is our contention that the concept of ‘reasonableness’ be applied to the determination of adequacy of damages to extend beyond the common law or statutory guidance, but should consider a wider consideration of the fact surrounding the termination in order to make a fairer determination of damages, including motive. The irrelevance of motive in employment termination means that termination which is motivated by spite or one which is discriminatory might not be adequately compensated. This is hardly consistent with common sense and the doctrine of equity which states that “equity will not suffer a wrong without a remedy”. Motive is therefore a essential enquiry in determining the fairness or otherwise of a dismissal, a system that prohibits an inquiry into the motive of an alleged unfair dismissal cannot be consistent with the promotion of the tenets of natural justice and equity. The shortcoming of the Nigerian employment law system to rise to the occasion and protect its workforce can be seen in the following segments; a) Reinstatement There is a clear dichotomy between public and private employees with regards to claims

available for unlawful termination of contract. In the event of unlawful termination of an employment with statutory flavor, an order of reinstatement can be sought, while for private employees the available remedy is damages and never reinstatement. This was advanced by the decision of the Court of Appeal of Nigeria in Olafimihan v. Nova Lay-Tech Nigeria Limited14 in stating that except for in an employment governed by statute, the only claim available to an employee removed contrary to the term of his employment is damages and not reinstatement. The Supreme Court upheld the same view in Union Bank of Nigeria v Ogboh15. Damages in the Nigerian law context are restricted to payment in lieu of notice. The Supreme Court of Nigeria in SPDC v. Olanrewaju16 reiterated this principle and as we have shown above, damages can be inadequate especially where the termination has been motivated by spite or is discriminatory. Several jurisdictions have developed their laws and gotten out of the shackles of common law that dictates that an employee in private employment is only entitled to damages for unlawful termination. Australia is one of those jurisdictions. Under the Fair Work Act 2009 (Cth), reinstatement is the primary remedy for unfair dismissal, and only where this is inappropriate will compensation be awarded in lieu17. Also under the UK Employment Rights Act 1996, reinstatement and re-engagement are two of the remedies open to the employee18.

There is a clear dichotomy between public and private employees with regards to claims available for unlawful termination of contract. Although damages may be the preferred option for some employees, especially in a hostile work environment, it is our argument that if the sole aim of granting damages is to restore the employee to the position he would have been had his employment not been terminated, the court should be open to reinstatement as a claim in private employment disputes.

Damages in the Nigerian law context are restricted to payment in lieu of notice. In JK Iron & Steel Co. v. Mazdoor Union19, the Supreme Court of India held that the industrial tribunals are not unfettered by the limitations of a court bound by the ordinary law of master and servant and that the adjudicator had the jurisdiction to investigate disputes about any discharge and/or dismissal and, where necessary, to direct reinstatement.

S 9 (7) Labour Act 1990

[1985] 2 Nigeria Weekly Law Report (Part 9) 599

[1981] 1 SC 40, [1981] SWC (Reprint) 26

Neil Ress, Simon Rice and Dominique Allen, Australian Anti-Discrimination Law, (Federation Press, 2nd ed, 2014), 1

Senior Advocate of Nigeria (SAN) is a title that may be conferred on legal practitioners in Nigeria of not less than ten years’ standing and who have distinguished themselves in the legal profession. It is the equivalent of the rank of Queen’s Counsel in the United Kingdom, from which Nigeria became independent in 1960 (Republic 1963), as well as in South Australia, the Northern Territory, and Canada (except Ontario and Quebec)

Fabian Ajogwu (SAN), ‘Labour Relations: Termination of Employment’, (Paper delivered at Lagos Business School, Pan African University March 15, 2007), 3

Section 11

ibid

International Labour Office, Termination of Employment Digest (International Labour Organization, Geneva, 2000) 255

[1996] 456 Nigeria Weekly Law Report 544

The scope of the Labour Act of Nigeria 1990 excludes persons employed otherwise than for the purposes of the employer’s business, exercising administrative, executive, technical or professional functions as public officers or otherwise, members of the employer’s family, representatives, agents and commercial travelers in so far as their work is carried on outside the permanent workplace of the employer’s establishment; any person to whom articles or materials are given out to be made up, cleaned, washed, altered, ornamented, finished, repaired or adapted for sale in his own home or on other premises not under the control or management of the person who gave out the articles or the material; any person employed in a vessel or aircraft to which the laws regulating merchant shipping or civil aviation apply; s 72

[1969] 1 W.L.R 1812

Owolabi v Union Beverage Ltd [1988] 68 Nigeria Weekly Law Report 128; Ogunsanmi v C.F. Furniture (W.A.) Co. Ltd [1961] 1 ANLR 862

[1998] 547 Nigeria Weekly Law Report 608

(1995) 380 Nigeria Weekly Law Report 647

The restriction on damages to one month’s pay or payment for period of notice is hardly adequate. Perhaps it is high time Nigeria took inspiration the sort of liberalism in operation in India with regards to the scope of damages available to worker for unlawful termination.

[2008] 1118 Nigeria Weekly Law Report 1

Mr Robert Van Den Enden v Bechtel Construction (Australia) Pty Ltd; Bechtel Construction (Australia) Pty Ltd v Mr Robert Van Den Enden [2013] FWCFB 8053

Sections 114 and 115

1956 AIR 231, 1955 SCR (2)1315

Law Digest Spring 2015

Practice and Procedure – Folabi Kuti – Perchstone & Graeys

The proposed National Industrial Court of Nigeria (Civil Procedure) Rules 2015 A perspective -Folabi Kuti – Partner Perchstone & Graeys

itting to the exclusion of all courts in the resolution of employment, labour and industrial relations disputes, and, arguably a court of last resort on almost all the items it exercises jurisdiction on, the National Industrial Court of Nigeria (NICN) is about to introduce a new set of procedural rules, tow with the National Industrial Court of Nigeria (Civil Procedure) Rules 2015. Jurisprudence of the Rules Much like the overriding objective under the rules of courts modelled after the Woolf ’s Report – and which in turn inspired the

English (Civil Procedure) Rules (CPR), the underlying objectives of the proposed Rules appears intended to further define the culture within which litigation will be conducted. To be sure, the main changes envisaged are in the areas of fast-track case management of all civil matters before the court, greater encouragement of settlement and Alternative Dispute Resolution (ADR) processes, proactive judicial management of litigation timetables (and resources) with respect to the hearing of interlocutory applications, checkmating dilatory tactics by practitioners and so on. It is in light of the foregoing that a few of its

novel provisions are highlighted to see how the proposed Rules are poised at transforming a fundamentally different landscape of civil litigation at the National Industrial Court. Suffice to say that, as with every other human activity, given to some margin of errors, a few pitfalls are also identified. Frontloading system: explicit on details Comparatively, the provisions of the proposed Rules are more explicit on details with respect to the frontloaded processes, contents of the accompanying forms and documents, timescales for delivering the

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frontloaded processes and so on. There is also an emphasis on the particular forms to be employed in the commencement of specific proceedings and requirement of pleading with sufficient particularity.

rule also confers the Court with discretion to nonetheless direct otherwise.

It is helpful to note that there is no requirement of frontloading of a pre-action notice or protocol form by which a plaintiff is expected to show attempt(s) to have the matter amicably resolved prior to instituting a suit.

The federal nature of the Court envisages a single national geographic jurisdiction with judicial divisions being created simply for the purpose of adjudicatory convenience. That is, the NICN has no state jurisdiction but national jurisdiction even as divisions exist in the states of the federation.

A significant matter here, which concerns the discertion of the court as opposed to its jurisdiction, is that the court has a discretion to declare as incompetent where a pre-action notice is statutorily required to have been issued prior to the institution of the action, and there is no evidence of the same being issued before the courty (O.3 r. 21).

Now, the National Industrial Court (NIC) is a superior court of record with co-ordinate status with the Federal High Court and a State High Court. It is also noteworthy to mention that the proposed Rules mandate an opposing party to promptly indicate (by filing an ‘acknowledgment’) any frontloaded document or exhibit whose admissibility he intends to object to at plenary hearing, or he loses the opportunity to take the objection at the hearing as ‘any document and exhibits contained in the schedule which is not objected to by the defendant(s) shall be deemed admitted and shall not be allowed to be objected to at the trial, except as the Court may otherwise direct” (O.3 r. 10 (3). This provision can however be easily faulted as the principle of law is that the admission of documents without objection does not empower the court to admit a document that is in no way or circumstances admissible. Reference is made to the Supreme Court’s decision in Sunday Ogunsina & Ors. v. Sunmonu Matanmi & Ors. (2001) 4 S.C (Pt. 1) 84 at 90. Two points may, however, be made. The National Industrial Court Act, 2006, Section 12 (2) (b) thereof, envisages a situation where the Court may depart from applying the provisions of the Evidence Act 1990 in furtherance of justice, so the Court electing to demonstrate a less inhibited approach in admitting an otherwise inadmissible piece(s) of evidence may arguably be on good stead here. On a related note though, the faint suggestion that parties may by consent render otherwise legally inadmissible evidence, valid is not exactly the full picture here as the enacting

National Industrial Court is one court for (almost) all purposes

See, for instance, decisions of the NICN in Suit NIC/LA/157/2011 Francis Oluyemi Olamiju Esq. v. Local Government State Commission, Ekiti State & Anor (ruling delivered on March 5, 2012); ;Suit No: NICN/CA/75/2012 Bright Chinedu Wodi v. Differential Aluminum and Steel Company Ltd & ors (ruling delivered: 2014-01-21; per Kanyip J.); Suit No: NICN/ PHC/60/2014 Mr. Ohaka Umesi David v. Mr. Kola T. Adefila & Ors (Judgment delivered: 2014-02-06; per Anuwe J.)and Ikeegbulam v Association of Senior Civil Servants of Nigeria (2011) 23 NLLR (Pt. 65) Pg. 263.

Premised on this viewpoint, and as demonstrated by the decisions of the NICN on the point, service of court papers issued in one judicial division on a defendant / party in another judicial division was never intended to be subjected to the formalities /requirements of ‘endorsement for service outside State’ (as provided for in the Sheriffs & Civil Process Act 1990) or obtaining leave of court (under the rules of Court) for issuance for service of court processes within Nigeria.

Happily, Order 7 Rules 15 (1) of the proposed Rule appears to have sounded the death knell on the spate of objections along this line when it (now) expressly provides: ‘All originating processes or other Court processes filed by any party before the Court shall be served on any other party in any part of the Federation without leave of Court.’ It only remains to add here, in passing, that the Federal High Court may want to consider a clear statement along this line when it decides to review its rules of Court.

This, however, was not so expressly stated in the 2007 NICN Rules, and the NICN has, in recent times, been subjected to a spate of preliminary hearings / objections seeking to extend the rule in Owners of the MV “Arabella” vs. Nigerian Agricultural Insurance Corporation reported in (2008) 11 N.W.L.R (Pt. 1097) 182, to the NICN. In MV Arabella, the Supreme Court was emphatic that the arguments of a single national geographic jurisdiction of the Federal High Court notwithstanding, leave is still required for the issuance and service of an originating process from one judicial division of the Federal High Court to another.

Service of court processes via ‘short message services’, telephone calls etc The proposed Rules intend employing advances in telecommunications technology to effect service of court process on parties. Order 7, an elaborate provision on service of processes provides, inter alia, that a party in a matter may be served ‘ by sending a notification by way of hearing notice through telephone short message services (SMS) of a process filed before the Court in which he or she or it has been named as a party’ (O.7 r.1 (1)(f) ).

Now, the National Industrial Court (NIC) is a superior court of record with co-ordinate status with the Federal High Court and a State High Court. Much like the Federal High Court, the coverage of the NIC’s jurisdiction is nationwide, and it is also divided into divisions.

Hearing notice or notice of adjourned date issued by the Court may also be communicated by telephone call to the numbers provided by the parties or their counsel (O.7 r.2 (a). Hearing notice(s) may also be uploaded to the electronic mailing address provided by a party. There is some restriction as to use though: the employment of any of these devices for service is allowed for (all) court processes filed except(ing) originating processes.O.7 r. 1(4).

As may be expected, counsel for the defendant in many of the cases before the court have sought to take advantage of the Arabella’s wicket in arguing that permission of court is required to validate process issued from, for instance, the Lagos judicial division of the court for service on a defendant resident in Abuja. The potential scope of the rule in MV Arabella, the breath of the argument proposed, should be applicable in such circumstance. Regrettably, the NICN has- of late- expended scarce judicial time writing tomes of rulings and judgments declining the invitation by explaining that such a rule has no basis before the court.

Innovative provisions, no doubt. On the flipside however is that even as the rules provide that proof of service of process made using any of these devices will be electronically downloaded and printed copy of the process, proof, or fact of service can still be dogged in hotly contested arguments, not least on the form and shape of admissibility of digital evidence. It is also not foolproof, even as it does not detract from the argument that the Court can ill-afford to ‘shut its eyes to the mysteries of the computer’ in the conduct of its affairs (paraphrasing the Supreme Court in Esso West Africa Inc. v Oyagbola (1969) 1 NMLR 194).

Put simply, Abuja was declared to be ‘out of jurisdiction of the Federal High Court sitting in Lagos.

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It is in this light that the establishment of communication and service centres to enable electronic filing of court processes and documents –with particular reference to O.66- is a welcome idea. Pre-trial Conference: when parties’ case-manage disputes Pre-trial conferencing is a new innovation in the NICN Rules. Unlike what obtains under the rules of the other courts where the active case management idea of pre-trial conference is being utilised, conduct of pre-trial conference envisaged by the proposed Rules endows the parties with much flexibility and management (of their dispute) to attempt settlement of the matter with less intervention by the court. It is largely laissez faire. Upon exchange of originating (and reply) processes, parties may convene/initiate a pre-trial conference, choosing time and venue(away from the court) for the conference. This is an innovative and commendable idea because of the inherent potential of making litigation less adversarial and more cooperative whilst also promoting reconciliation.

Comparatively, the provisions of the proposed rules are more explicit on details with respect to the frontloaded processes, contents of the accompanying forms and documents, timescales for delivering the frontloaded processes and so on. The breadth of areas on which the parties are expected to reach a consensus during pre-trial conference helps to considerably narrow down the issues that should go to trial. Upon conclusion of the pre-trial conference, parties are to file a copy of the report of the pre-trial conference with the Court. Facilitating the integration of Alternative Dispute Resolution One of the central objects of this civil procedure rules is promoting recourse to alternative dispute resolution mediums as an alternative to adversarial litigation. This is evidently nuanced in the provision(s) of the O.24 of the rules on the court making directions with respect to recourse to ADR (O.24). Already in a similar vein, the National Industrial Court of Nigeria (ADR) Centre Instrument 2015 (establishing an Alternative Dispute Resolution (ADR) Centre) and the 40

National Industrial Court of Nigeria (ADR) Centre Rules 2015 being rules to regulate all proceedings referred to the ADR Centre were recently issued by the President of the Court. The provision of O. 42 on ‘Amicable Settlement’, encouraging parties initiating and amicably resolving their dispute(s) out of court may also be cross-referenced with this laudable provision. Pleading with sufficient particularity act(s) constituting sexual harassment, workplace discrimination etc, and reliance on applicable international protocol, convention and treaty S. 254(C)(1)(g) of the Constitution of the Federal Republic of Nigeria (Third Alteration) Act 2010 confers on the NICN juridical powers in ‘matters relating to or connected with any dispute arising from discrimination or sexual harassment at workplace’. Two recent decisions of the Court readily come to mind in this regard. An award of damages was made for sexual harassment in the workplace in Ejieke Maduka v. Microsoft Nigeria Limited & Ors [2014] 41 NLLR (Pt. 125) 67 NIC, whilst termination of employment on account of pregnancy was heavily criticised in Mrs. Folarin Oreka Maiya v The Incorporated Trustees of Clinton Health Access Initiative, Nigeria & Ors. (2012) 27 NLLR (Pt. 76) 110 NIC. In Omeka’s case, reliance was placed on an International Labour Organisation (ILO’s) convention which Nigeria has ratified. In reaching its decision, the Court referred to the Discrimination (Employment and Occupation) Convention, 1958 (No.111) in considering a claim of unlawful termination of employment on the basis of pregnancy. O. 14 of the proposed Rules heightens the discussion on the NICN’s jurisdiction in this regard. A claimant is expected to plead with sufficient particularity the act, action, correspondence, communication, gesture, utterance, manner or mode that constitutes the alleged sexual harassment or workplace discrimination, and where such an action or workplace discrimination involves a breach of or non-compliance with international best practices or international protocol, convention or treaty on labour, employment and industrial relations sufficient materials and particulars relating to international best practices or international protocol, convention or treaty is to be given. Even though endowed with jurisdiction / judicial power to apply international best labour practices, O.23 r. 4 further enjoins a party seeking to invoke same to state the particular principle(s) or authority concerning the international best practices or extant International Labour Standard such a party is seeking the Court to apply. Fast track Even as a stated objective of the rules is the fast-track case management of all civil matters

before the court, Order 25 is specific on cases to be placed on fast-track. It, however maintains fidelity with its stated object with a much wider scope when it allows party(ies) applying to have particular matters not expressly covered designated ‘Fast track’. Urgent relief Order 21 is an interesting provision. This provision is of more than a passing interest, and it is apposite to explain. It makes allowance for certain applications requiring urgent hearing/ relief to be filed at the registry of the court, accompanied by an affidavit and served on the other party. It is not exactly clear if this provision is of much relevance in its stated intent, or scope of application.

The National Industrial Court Act, 2006, Section 12 (2) (b) thereof, envisages a situation where the Court may depart from applying the provisions of the Evidence Act 1990 in furtherance of justice. One: applications requiring urgent hearing are almost invariably such that the applicant cannot indulge in the luxury of service on the adverse party. They are mostly ex parte applications for injunctive orders. As for other forms of interlocutory applications that are prescribed to be made on notice to the other side, there are sufficient provisions in the rules (for example, O.17 on ‘Motions and other Interlocutory Applications’, O.18 on ‘Determination of Motions’O. 22 on ‘Interlocutory Injunctions’) prescribing minute details, such as the way, manner, form and substance of such applications; the hearing (including order of hearing of preliminary objections as to jurisdiction vis-à-vis other applications before the court. O.18); and sundry matters. Holding practitioners personally liable for unnecessary court costs The proposed Rules not only expect parties to behave responsibly, but also –and, this is the first time such a provision will appear in the Rules now it make practitioners personally liable when it provides in O. 55 r. 6(2) that Counsel is to bear the costs arising from his own default or negligent act. There is an appropriate sanction for failure to pay cost awarded: the defaulting Counsel is denied (further) right of audience. ‘Time is always running’. A more nuanced expression aimed at seeking an expeditious determination of matters before the Court can be found in the provision of the proposed rules that the time for filing and service of processes or taking any step required by the rules shall continue to run notwithstanding that the time falls within the court’s annual vacation, Easter or Christmas recess (O.58 r.6 &7).

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The proposed rules not only expect parties to behave responsibly, but also - and, this is the first time such a provision will appear in the rules - now it makes practitioners personally liable when it provides in O. 55 r. 6(2) that Counsel is to bear the costs arising from his own default or negligent act. Conclusion It is safe to conclude again referencing the jurisprudential leaning of the Rules. It is important that practitioners understand the full implications of the set objectives of the Rules stipulating â&#x20AC;&#x2DC;quick, just, fair and efficient fast track case management system of all matters within the jurisdiction of the Courtâ&#x20AC;&#x2122;. To achieve the ethos, the Court may want to consider imposing a stricter approach on latitudes with compliance with the provisions of the rules. Take, for instance, the Rules of the High Court of Lagos State. By virtue of Order 5 rule 1 of the High Court of Lagos State (Civil Procedure) Rules 2012, a claimant, who does not comply with the frontloading requirement

in Order 3 of the same Rules, is visited with consequences ordained therein, namely the nullification of the proceedings. The severe penal measure has largely ensured compliance as many a case had to be struck out of the courtâ&#x20AC;&#x2122;s docket list for non-compliance with the aforesaid provision. There is a regime of compliance in place which guarantees that court processes and proceedings are treated with the seriousness which they deserve; at the pain of stiff sanctions, namely nullification of proceedings. Can the NICN incorporate a similar provision in its soon to be enacted Rules? While the reasoning to give precedence to substantial justice over technical cannot be faulted, it however tends towards levity in commencing an action at the NICN, where it is apparent that even in commencing an action, any defect in proceedings will be treated as a nullity. The case for this is even more compelling when viewed against the provisions of the Rules that make a practitioner liable for personal default in the conduct of proceedings. In introducing a similar sanction as in Order 5 of the Lagos Rules, such provision as found

in the proposed NICN Rules; rendering practitioners and not the litigants liable for their own default, can merely be expanded to provide that a practitioner may be liable for the cost of commencing the new proceedings, where the default in commencement was that of the practitioner to begin with.

One of the central objects of this civil procedure rules is promoting recourse to alternative dispute resolution mediums as an alternative to adversarial litigation. On the whole, the NICN Rules are seemingly well intentioned, and, for the most part, well crafted. In particular, there is coherence and keeping with the overriding objective, which may just guarantee the predictability of culture which the Rules so clearly seeks to inculcate in litigants and Counsel.

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SPECIAL ARTICLE

Terrorism in Kenya – a new dawn Roseline K. Njogu - LLM (Harvard); LLB (Nairobi)

Roseline Njogu - Lecturer – Riara Law School, Kenya & Makambo Makabila – Research Assistant – Riara Law School - Kenya

e are still burying the bodies of some of the 147 students killed on 2 April at the Garissa University terror attack. We are a country in mourning... unfortunately; we seem to be in perpetual mourning. The flag is flying at half-mast too often. The Mpeketoni attack of July 2014 left 80 Kenyans dead. And the notorious West Gate Mall attack of September 2013 left at least 67 persons (including children) dead after a harrowing 80-hour hostage encounter. Al-Shabaab claimed responsibility for the attack, asserting that this was retaliation for Kenya’s offensive attack on it in Somalia1. While Westgate was not the first (or last since) terrorist attack on Kenyan soil, it stood out for several reasons. Firstly, it was the first major attack targeted at Kenyans per se. In the past, Kenya has been targeted for her cordial relations with other countries, specifically, the United States of America and Israel. The US Embassy bombing of 1998 that claimed the lives of over 200 people, mostly Kenyans, was ironically an attack on the US2.

Makambo Makabila - LLB (Kenyatta); PG DipLaw

The 2002 Mombasa attacks comprising of the simultaneous Kikambala Paradise Hotel bombing that killed 13 people and the unsuccessful surface-to-air missile launch against an Israeli aircraft were both attacks against the state and interests of Israel3. For a long time therefore, Kenyans had remained collateral damage in the global war on terror. Westgate changed this. Secondly, the magnitude and severity of this attack was unique. Since the beginning of Operation Linda Nchi, sporadic grenade attacks with few casualties especially along the border towns, was the extent of the ‘repercussions’ of the military campaign that Kenya had felt. Westgate however left 67 persons including children dead. Due to the centrality and up-market nature of the mall that attracted wealthy Kenyans and expatriates and the

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ceaseless media coverage given to the onslaught, the attack moved from the realm of security operations to an everyday encounter of ordinary citizens. Further, unlike a bombing whose horror begins and ends during the explosion, this terror by gunfire lasted eighty hours, during which terrified shoppers were hunted down and killed by the terrorists. Shoppers from thirteen countries were killed in that attack4 whose mother countries tried in one way or another to assist in the rescue operations.

soil5, finger-pointing on the inaction to intelligence provided on the terro attacks, among others.

Thirdly, the response of the Kenyan security forces to this attack exposed several gaps in the policy of terror and in state security. Clashes between the military and the police resulting in cases of friendly fire, unconstitutional deployment of the armed forces on Kenyan

Invariably, in response to Westgate and subsequent attacks, the government has deployed several measures including ordering all urban-based refugees back to the refugee camps, forced repatriation of thousands of refugees living in the camps and elsewhere

The response of the Kenyan security forces to this attack exposed several gaps in the policy of terror and in state security.

contrary to principles of International law on protection of refugees and persons fleeing conflicts7, carrying out citizen-verification campaigns that entailed capturing all “Somali-looking” individuals and detaining them at a Sports stadium until the verification was complete, in utter disregard of the Constitution, deployment of CCTV cameras across major cities, among others. Many of these measures have been seen as unfairly targeting the largely Muslim and ethnic Somali populations in Kenyan. Needless to say, these measures breed extremism, and give credence to the terrorist ideology of victimhood and subalternism. In the midst of all these attacks, the state’s response has exposed two unfortunate truths. Firstly, that the state’s theory of terror is

Scene from the WestGate Mall attack of September 2014

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Mother and children hiding at the WestGate Mall during the attack

inaccurately constructed; is based on a false predicate and therefore attempts to respond to it have failed. The religious extremism rhetoric is faulty. To a large extent, terror, at least in East Africa, has not been about religion only. Secondly, the state is the author of terror through its repression and subjugation of certain people groups. We contend that terror has been about disenfranchisement, lack of citizenship, illegitimacy of the state, and continued subjugation. We have already demonstrated how the Kenyan state, time and again, has responded in a draconian manner that has further alienated marginalised communities. Those same communities then make an excellent recruitment ground for terrorist organisations.

In the past, Kenya has been targeted for her cordial relations with other countries, specifically, the United States of America and Israel. Unfortunately, we have not seen the worst of it yet. The contours of terror are changing. Boko Haram in West Africa has shelved grenade attacks for mass kidnapping of schoolgirls. In Kenya, the suicide bomber gives way to the army of gunmen, carrier pigeons to a superior bird- Twitter, and the target is no longer American, European or Israeli interests, but Kenyans qua Kenyans. Farmers, teachers, doctors, briefcase contractors- the face of Kenya. We submit that next in the terrorist playbook could be environmental terrorism.Environmental terrorism (as distinguished from eco-terrorism) is the use of tactics that destroy 44

or otherwise use the environment to cause death, destruction and political manipulation8. The structural location, infrastructure set-up, the over-dependence on the often strained natural resources coupled with the predictable security lapses create a perfect ground for a lethal attack on environmental resources with unprecedented devastation. For instance, approximately four million }Nairobians depend on the Ndakaini dam for water. If a copious amount of arsenic, sodium fluoride, deuterium oxide, sodium cyanide (as almost happened in Harare) or any deadly poison– a commonly Googled category, by the way- were introduced to the dam, every tap in Nairobi would become a loaded gun. The aftermath would be unspeakable. Granted, research shows that poisons may lose efficacy in such large volumes of water. So, scale that down a little. Large housing developments now have private off-grid water supply. More often than not those water points within these estates are not secured and yet, poison in those tanks could wipe out thousands within a few hours. For the terrorist: low risk venture, high impact. Replicate that in hospitals, prisons, or schools and you will have Pharaonic annihilation. Environmental terrorism tactics vary. Terrorists have used arson for over a century now, with devastating results. Consider, the havoc a strategically set fire could wreak upon any of our expansive unplanned developments. When arson meets the nuances of an unplanned development, poorly served by emergency response systems synonymous with the populous Kibera and Mathare slums and the Eastlands areas of Nairobi, you have a catastrophe.

If this were coupled with the destruction of key service installations like communication infrastructure or the bombing of a major hospital, the devastation would be something straight out of the Old Testament. Unfortunately, while terror is innovating and reinventing itself, the state is adamant and unwilling to change its technologies or theory of terror. Needless to say, this set up is ideal for a disaster of epic proportions. The states lethargy indicates a real indifference to the loss of the lives of its citizens.

This laissez faire attitude is unfortunately neither new nor common in postcolonial Africa. Many states seem to have inherited the colonisers’ disregard for the subjugated African body at decolonisation9. We contend, for three reasons, that the solution in this case, is not in the law, but in re-capturing the monopoly of power. Firstly, while the Prevention of Terrorism Act (2012) considers environmental terror tactics “acts of terror”, terrorists are not your run-of-the-mill criminals. They do not make dinner plans - they die, or plan to die, “on the job”. The law, therefore, however comprehensive, is no deterrent. Secondly, the prescribed penalty of life imprisonment, while “fashionable”, is hardly commensurate reparation for the horrors of terror. And finally, by the time the slow wheels of justice bring the terrorists before a court, it is too late. Unspeakable destruction has already occurred.

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However, if for no other reason, the state needs to re-capture the monopoly of power, because its survival depends on it. Rudimentary social contract theory argues that a state is formed when individual chooses to submit to the authority of a Sovereign in exchange of security, which is conducive to their own survival. Thomas Hobbes in his philosophical masterpiece, Leviathan, while arguing on a purely hypothetical State of Nature contended that men in their natural state are naturally and exclusively self-interested, and equal to one another10. That being the case, none of them was safe (even the strongest one could be killed in his sleep)11. Hobbes’ theory explains the modern government-citizen relationship where the citizens cede their individual autonomy to the Sovereign (Government) through electoral processes or obedience (tolerance) to their rule in consideration for satisfaction of their needs and desires, but above all - security. John Locke, another philosopher treading the path taken earlier by Hobbes, sees the provision of security by the Government to the citizens as the consideration in the social contract12. According to Locke, the provision of security is the primary function of a Government, and any form of insecurity waters down the essential validity of the contract thereby entitling the citizens to walk away from it without repercussions13.

Unfortunately, we have not seen the worst of it yet. The contours of terror are changing.

Shopper escapes through the vent

The Kenya Defence Forces (KDF) have been in Somalia since 16th October 2011 in an operation dubbed Operation Linda Nchi (defend the country) and have routed out the militants from Kismayu and other towns, returning control of these towns to the government of Somalia. While Kenya was the first state to send its troops on this mission, the African Union since 22nd February 2012 among other entities are now currently involved in the campaign against Al-Shabaab in Somalia under the umbrella of AMISOM. See The Kenyan Military Intervention in Somalia, Africa Report N°184 – 15th February 2012. (Accessed 30th April 2015), AMISOM, http://amisom-au.org/kenya-kdf/ (Accessed 30th April 2015)

Unlike Hobbes’ Leviathan, Locke’s sovereign can be overthrown. If the state does not discharge the core duty for which it exists viz. To protect life, property and liberty, then that state is illegitimate, unnecessary and like King Nebuchadnezzar, its reign has been weighed and found wanting. It will be overthrown. Bariyo, Nicholas; Vogt, Heidi; Bryan-Low, Cassell (25 September 2013). “Kenya Starts Probe in Wake of Mall Siege”. Wall Street Journal. http://www.wsj.com/articles/ SB10001424052702304 526204579096713497161006 (Accessed 30 April 2015)

Mathiu, Mutuma (September 18 2014) “Why military response to Westgate attack was delayed” Daily Nation Newspaper. http://www.nation.co.ke/news/Whypolice-response-to-Westgate -attack-was-delayed-//1056/2457462/-/99cdv2z/-/index.html (Accessed 30 April 2015)

Nation Team, (September 27 2013) “Kenya: Blame game over Westgate attack”. http://www.africareview. com/News/Blame-game-over-Westgate-attack//979180/2009320/-/73lam3/-/index.html (Accessed 30 April 2015)

U.S Dept. of Justice (18th November 1998) “Frontline: The trail of evidence - FBI executive summary”. PBS.org. http://www.pbs.org/wgbh/ pages/frontline/shows/ binladen/bombings/ summary.html (Accessed 30th April 2015)

Talbot, Anne ‘Unanswered questions regarding Kenya terror attacks’. World Socialist Web Site. 5th December 2002. http://www.wsws.org/en articles/2002/12/ keny-d05.html (Accessed 30th April 2015)

The 1951 UN Convention and 1967 Protocol to the protection of refugees. See, The Principle of Non-Refoulement, (Article 33(1)

Chalecki, Elizabeth (September 2001). “A New Vigilance: Identifying and Reducing the Risks of Environmental

A scared citizenry will shop around for another protector, and will pay homage to a new supplier of security. Ominously, that competition will most likely take the form of an organised group such as the Mungiki, or, yes indeed, the al-Shabaab. Because of moving at the speed of molasses and failing to re-imagine the causes of terror, the state will have successfully engineered its own coup d’etat.

Unfortunately, while terror is innovating and reinventing itself, the state is adament and unwilling to change its technologies or theory of terror. This might sound farfetched, but dismiss it at your own peril. As scholars of Islamic Law, we never imagined the day would come when we could point to a contemporary caliphate. ISIS has done the impossible. Boko Haram has now pledged allegiance to ISIS, extending the caliphate’s territory to Africa, and expanding its influence and, in certain quarters, its legitimacy. Sovereignty is a double-edged sword. Third World sovereignty is at best a conflicted and deeply problematic concept14. The Kenyan state already faces a myriad of challenges - as do many states in the Global South - without putting its own sovereignty in question at home. It must effectively deal with terror and regain the monopoly of power - its survival depends on it.

Terrorism”. A Report of the Pacific Institute for Studies in Development, Environment, and Security. http://pacinst. org/wp-content/uploads/2013/02/ environmental _terrorism_final.pdf (Accessed 30 April 2015) Alemazung, Joy Asongazoh (September 2010) ‘Post-Colonial Colonialism: An Analysis of International Factors and Actors Marring African Socio-Economic and Political Development’, The Journal of Pan African Studies, vol.3, no.10

Hobbes, Thomas. Leviathan. Oxford University Press (1651)

Friend, Celeste (2004). Social Contract Theory. Internet Encyclopedia of Philosophy Available at http://www.iep. utm.edu/soc-cont/ (Accessed 30 April 2015)

Locke, John. Two Treatises of Government. Ed. Peter Laslett. Cambridge: Cambridge University Press (1988)

Friend, Celeste (2004). Social Contract Theory. Internet Encyclopedia of Philosophy Available at http://www.iep.utm.edu/soc-cont/ (Accessed 30 April 2015)