In the Supreme Court of Nigeria Holden at Abuja On Friday, the 11th day of June, 2021

Before Their Lordships
Amina Adamu Augie
Uwani Musa Abba Aji
Mohammed Lawal Garba
Samuel Chukwudumebi Oseji
Emmanuel Akomaye Agim
Justices, Supreme Court



Nospetco Oil and Gas Ltd Appellant


Prince Matiluko Emmanuel Olorunnimbe & 15 Ors. Respondents

(Lead Judgement delivered by Honourable Mohammed Lawal Garba, JSC)


The Appellant was registered solely for the importation, sale and distribution of petroleum products and cooking gas. Between the year 2004 and 2005, it entered into an agreement with the first to fourteenth Respondents, and many others, by way of “Memorandum of Understanding for Joint Venture (J.V.) Supplies of Industrial Fuels”. The parties, who were referred to as Joint Venture Partners (J.V. Partners), were to invest N450,000 per slot, with a promise of a monthly N40,000 return on investment on each slot.

In May 2007, after the Respondents had invested in the JV, the Securities and Exchange Commission (SEC) published a Public Notice titled “Illegal Investment Scheme operated by Nospecto Oil & Gas Ltd”, and using its position as the apex regulatory body in the capital market, it stopped the business activities of the company and ensured that the Appellant’s accounts in all commercial banks were frozen. Since the directive of SEC in 2007, the billions of Naira invested by the JV Partners remained in the custody of the Central Bank of Nigeria (CBN).

After several efforts at retrieving their investments from the 15th and 16th Respondents (SEC and CBN) proved abortive, the 1st to 14th Respondents filed an application at the Investment and Securities Tribunal, Suit No. OA/17/07, claiming inter alia, a Declaration that they are entitled to know the amount frozen from the Appellant’s account, and that the refusal to release the salvaged funds to them on demand is unlawful, and contrary to the statutory duty of the SEC.

The Appellant, as the 3rd Respondent at the Tribunal, filed its processes, including a Notice of Preliminary Objection, wherein it urged the Tribunal to dismiss/strike out the suit, on the grounds inter-alia, that the 1st to 14th Respondent lacked locus standi to institute the suit; the suit was an abuse of court process; and that there was no compliance with conditions precedent to activate the jurisdiction of the Tribunal to adjudicate on the matter.

In its ruling on the Objection, the Tribunal relied on its earlier decision in Case No. IST/OA19/07 between NOSPECTO v SEC wherein it held that the Tribunal had jurisdiction to entertain the suit, given that the nature of the transaction carried out by the Appellant and the JV Partners is a Collective Investment Scheme, which comes within the ambit of Section 284(1)(f) of the Investment and Securities Act (ISA) 2007.

Displeased with the ruling above, the Appellant appealed to the Court of Appeal. One of the issues posed for determination of that court was whether Exhibit A, the document attached to the Originating Application, established a Collective Investment Scheme/Agreement as contemplated by the provisions of the ISA, 2007. The Court of Appeal resolved this issue against the Appellant. However, regarding the issue of jurisdiction of the Tribunal to entertain the issues as framed before it, the appellate court found that since the principal claims were against SEC and CBN, the Tribunal had no jurisdiction to determine them.

Though the appeal was allowed, the Appellant was still dissatisfied with part of the decision wherein the appellate court held that Exhibit A, attached to the Originating Application established a Collective Investment Scheme in line with the provisions of the ISA. Hence, the Appellant further appealed to the Supreme Court. The 1st to 14th Respondent, who split themselves into two, filed two separate Cross-Appeals.

Issues for determination

The Supreme Court considered the following issues in its resolution of the appeal:

Main Appeal

1. Whether Exhibit A is conclusive and valid evidence to deduce that a Collective Investment Scheme existed between the Appellant and the 1st to 14th Respondent.
First and Second Cross-Appeal
2. Whether the principal claims of the Cross-Appellants against SEC and CBN falls outside the jurisdiction of the Investment and Securities Tribunal.


Main Appeal

The Appellant’s contention is that Exhibit A is not conclusive and valid evidence to deduce that the relationship that existed between it and the Respondents is that of a Collective Investment Scheme as contemplated under the Investment and Securities Act, and as such, the Tribunal cannot exercise jurisdiction to determine the suit. It argued that the relationship between parties was contractual; hence, it was the State High Court that had jurisdiction to deal with suit, relying on Sections 13, 38, 54, 152- 196 and 284(1)(f) of the Investment and Securities Act. It contended further that Exhibit A, a written agreement (which was only between it and Mrs. S.A Umar) is the basis of the Respondent’s cause of action, and that following the doctrine of privity of contract, the Respondents, who were not parties or signatories to the said Exhibit, had no locus to file the suit at the Tribunal. It relied on A-G FED v A.I.C. LTD (2000) 4 WRN 96 at 103; (2000) 10 NWRL (Pt. 675) 293 at 311.

In reaction, the Respondents argued that Exhibit A must be read together with all the paragraphs of the pleadings. It was also their position that the Appellant failed to appreciate that their cause of action, arose out of the continuous refusal of the 15th (SEC) and 16th (CBN) Respondents to release funds salvaged from Appellant to them. It was also their position that the subsisting judgements, rulings and/or order of a court remains valid and subsisting until same is set aside – AKINYEMI v SOYANWO (2006) 13 NWLR (Pt. 998) 496. To this end, they argued that the nature of business existing between the Appellant and the 1st to 14th Respondent was the Collective Investment Scheme as contemplated under the provisions of the ISA. On the submission on their locus standi, they responded that Exhibit A, which was in Mrs. Umar’s name, buttresses the fact that the action instituted at the Tribunal was done in a representative capacity, contrary to the position of the Appellant, and that Exhibit A was a mere sample to show the wordings that established the Scheme.

First and Second Cross-Appeal

The Cross-Appellant’s contention was that the validity of the executive or administrative actions/decisions of the 6th (SEC) and 7th (CBN) Cross-Respondents is not being challenged, so as to make their claims fall within the jurisdiction of the Federal High Court. They contended that their claim is primarily, against the freezing of their (Cross-Appellants’) accounts. They argued further that there is an exception to the exclusive jurisdiction given to the Federal High Court by the proviso in Section 251(1)(r) of the 1999 Constitution, and that regardless of claims instituted against the Federal Government and its agencies in related subject-matter, there is no overall provision that confers exclusive jurisdiction on the Federal High Court. They relied on BRONIK MOTORS v WEMA BANK LTD (1983) 1 SCNLR 296 and ADETAYO v ADEMOLA (2010) 35 SC (Pt. 103), in support of this position.

Responding to the submissions above, the 1st Cross-Respondent argued that the Cross-Appellants’ suit principally seeks declarative and injunctive reliefs against the 6th and 7th Cross-Respondents who are Federal Government Agencies. Counsel argued further that the said action/reliefs (as it relates to the invested money in the frozen accounts) as instituted/sought by the Cross-Appellants, is tantamount to the validity of the executive or administrative actions/decisions of the said Cross-Respondents in respect of its business operations and accounts. Reliance was placed on A-G BAUCHI STATE v A-G FED (2018) 4 SC (Pt. 1) 14.

Court’s Judgement and Rationale

Deciding the issue in the main appeal, the Supreme Court referred to the earlier decision of the Tribunal in Case No. IST/OA/19/07, NOSPECTO v SEC, wherein the Tribunal held that the nature of the transaction resulting in the suit, is a Collective Investment Scheme. The decision of the Tribunal in that case, which was earlier in time to the present case, has not been appealed against. It remains valid until it is set aside – AKINYEMI v SOYANWO (supra). The Appellant had agreed in the referenced case, that it entered into Agreements with thousands of people in respect of the scheme; yet, it questioned Exhibit A, which embodies the same terms and conditions as the Agreements in the previous case, on the ground that the Respondents are not privy to it. The Supreme Court held that privity of contract is the relation between the Parties in a contract, which entitles them to sue each other, but it prevents a third party from doing so. Thus, the doctrine of privity of contract is all about the sanctity of contract between the parties to it, and it does not extend to others from outside – UBA Plc v JARGABA (2007) 11 NWLR (Pt. 1045) 247 SC.

Applying this principle, the court found that no one was sued for breach of contract, neither did any of the claims of the Respondents relate to breach of contract. Thus, the doctrine of privity of contract was not helpful to the Appellant in this case. Further, the Supreme Court held that the Court of Appeal was right in its deduction that, Exhibit A is a “sample” of the Agreement that parties entered into. The concurrent findings made by the lower court and the Tribunal that the said transaction is a Collective Investment Scheme, cannot be faulted.

First and Second Cross-Appeal

In its determination of the issue raised in the first and second Cross-appeal, the court held that there is a distinction between jurisdiction over “principal claims” and “ancillary claims”; and where it is found that the court has no jurisdiction to hear the “principal claims”, then it cannot have jurisdiction to entertain the “ancillary claims” – PDP v SYLVA (2012) 13 NWLR (Pt. 1316) 85. Though the Tribunal may have exclusive jurisdiction over disputes arising from the administration, management and operation of a Collective Investment Scheme, but the “principal claims” in the application that led to this appeal were directed at SEC and CBN, which are the Federal Government Agencies.

By Section 251(1)(r) of the 1999 Constitution (as amended), the Federal High Court shall have exclusive jurisdiction over any action or proceedings for a Declaration or Injunction, affecting the validity of any executive or administrative action or decision by the Federal Government or any of its agencies. Relying on the provision above, the Supreme Court took a cursory look at the Cross-Appellants’ principal reliefs sought at the Tribunal clearly touched on the executive or administrative actions of SEC and CBN, thereby establishing the relief within the provisions of Section 251(1)(r) of the Constitution and outside the ambit of the jurisdiction of the IST as contemplated by the provision of the ISA.

Main Appeal and Cross-Appeals Dismissed.


Mumini Bamidele, Esq. with Tinuke Julius Adegoke (Mrs.), Rilwan Idris, Esq. and Fatima Birmah, Esq. for the Appellant.

Debola Adeleke, Esq. with Dr. Wada Bashir, Esq.; Ebuka Nwaeze, Esq.; and B.T. Akeredolu, Esq. for the First Set of Respondents/Cross Appellants

Roland Otaru, SAN with Oluwatosin Emmanuel, Esq. for the Second Set of Respondents/Cross Appellants.

15th Respondent not represented.

T.O.S Fadahunsi, Esq. with A.A. Abimbola, Esq. for the 16th Respondent.

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Reports (NMLR)(An affiliate of Babalakin & Co.)

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