Whither Corporate Affairs Commission?

By Sonnie Ekwowusi

The CAC should sit up

It is unfortunate that despite the revolutionary technological innovation brought about by the Companies and Allied Matters Act 2020 (CAMA 2020) coupled with the innovative technology at the disposal of the Corporate Affairs Commission (CAC), Abuja, the Commission is still dysfunctional, inefficient and incompetent. Instead of enhancing the ease of doing business and promoting entrepreneurship and economic prosperity, the CAC has become a big obstacle to doing business in Nigeria. For example, company documents filed at the CAC oftentimes are lost within the precinct of the CAC. Searches for availability of company names at the CAC, which is supposed to be a very simple exercise, now drags on for about four months. You cannot apply for ordinary certified true copies of documents at the CAC and get them within a reasonable time. Confusion reigns at the CAC. Things got so bad at the CAC last year that some Abuja lawyers staged a peaceful protest in front of the commission’s headquarters at Maitama, Abuja. Whereas registration of private limited liability companies lasts not more than one day in other countries, at our CAC it could take between six months and one year unless the applicant is to ready to pay “extortion fee”.

On several occasions the CAC had announced to the public that company registration in Nigeria could be expeditiously done on-line and that the certificate of such registered company could be printed online in one’s office or bedroom. But this is just a ruse. In practice, online company registration is still a mirage. You may succeed in filling the requisite forms for the company incorporation online quite alright but you can hardly complete the incorporation exercise in one month or even two months. Why? Because the CAC Server is epileptic. Ditto for the CAC Portal. Some 50% of company information on the CAC portal are incorrect and need to be updated. Right now the complaint unit of the CAC is inundated with endless customers’ complaints. It is obvious that the Commission can no longer cope with the numerous customers’ complaints lodged every day. The CAC does not even acknowledge receipt of these complaints. The matter is worsened by the fact that the Commission does not have dedicated phone lines to address customers’ numerous complaints. More importantly, under the watch of CAC, many scammers operate fictitious companies and even use them to commit all sorts of scam undetected.

The scandalising aspect is that under the guise of exercising its statutory powers, especially its power under section 41 (7) of CAMA 2020, the CAC is now undermining the integrity of the judiciary and disobeying court orders. For example, you may be aware of the sporadic shooting that took place at the Balogun Market, Lagos last two weeks. That shooting indirectly sprang from the abuse of powers of the CAC. Lately there has been simmering leadership tussle between the Balogun Business Association and some disgruntled officers and members of the association. This tussle has so deteriorated that it has given rise to multiple law suits in courts: the Balogun Business Association has instituted several law suits against some of its disgruntled officers and members as well as the CAC. Specifically, in one law suit brought at the Court of Appeal, the Balogun Business Association seeks, inter alia, an Order of Interlocutory Injunction restraining the CAC from meddling with the subject matters of the suits brought by the Association against some disgruntled officers and members of the association.

Despite being a party to these suits pending in law courts and being served with the necessary court processes relating to the suits, the CAC has been resorting to self-help in order to foist on the courts a fiat accompli – the CAC has cancelled the certificate of the Balogun Business Association as well as imposed some new officers on the association whilst the suits are still pending in courts. Rather than wait for the determination of the suits instituted by the association against the CAC and others as required by law, the CAC, in violation of the doctrine of lis pendens, threw probity, due process and self-restraint to the wind and brazenly resorted to self-help in order to overreach the courts and foist a fiat accompli on the courts. In other words, while the aforesaid suits were still pending in law courts, the CAC proceeded to cancel the certificate of the association and took other actions evidently to usurp the powers and functions of the court. It is instructive that prior to the usurpation of the powers of the court, the attention of the Commission was drawn to the pending court cases instituted against it in courts as well as the court orders in the matter yet the CAC still proceeded to usurp the powers and undermine the integrity of the courts. Ostensibly emboldened by the Commission’s self-help, the aforesaid disgruntled officers and members of the Balogun Market Association recently recruited some Area E, FESTAC policemen and went to the Balogun Market, Lagos to forcibly foist an illegal leadership on the association. In order to accomplish this illegality, the FESTAC police invaded the Balogun Market and sporadically opened fire in the market resulting in many traders and their customers scampering for safety.

It is incomprehensible that a statutory body such as the CAC which is a party to a law suit can throw decency overboard and descend to the level of resorting to self-help and over-reaching itself both the High Court and the Court of Appeal and other litigating parties in the suits. It is trite law that once a party submits himself to the jurisdiction of a court for the purpose of adjudication of a suit, whatever actual or perceived rights he has or may think he has are subsumed under the jurisdiction of the court and the parties must maintain the status quo until the court pronounces on their rights. The party must not dispose of or tamper or attempt to tamper in anyway with the res or the subject matter of the dispute through self-help or otherwise, so as to render the courts’ decisions on the suit nugatory. See the popular case of Ojukwu v Governor of Lagos State (1986)1 SC. Pages 227-324: John A Osagie v Alhaji S. O Oyeyinka and Ors SC 194/1985; Ogundami v Arabia & Barclays Bank of Nigeria Ltd (1978) 6 & 7 SC; Alakija v Abdulai (1998) 5 SC 1 at page 7; Iheka V Njoku (2017) LPELR-42002. Specifically in the case of Ezegbu v First African Trust Bank Limited (1992) 1 NWLR (PT. 220) page 699 at 724 the court held: “It is trite law that where a matter is before a court of law, none of the parties can legally or wrongfully take any unilateral action that will prejudice or tend to prejudice the hearing or adjudication of the matter by the court. Parties who have submitted to the jurisdiction of the court are under a legal duty not to do anything to frustrate or make nonsense a possible court order… They must, whether they like it or not, wait for the court to take a decision one way or the other…the parties cannot jump the gun and do their own thing in their own way. That will be tantamount to undermining the integrity of the court.”

It is high time the CAC sat up to discharge its duties efficiently, diligently, competently, timeously and incorruptibly. The Commission should adorn the breastplates of efficiency, competence and integrity in the discharge of its duties in order to enhance the ease of doing business in Nigeria. It should desist from usurping the functions of the court and undermining the integrity of the court. It should obey court orders. Resort to self-help or force in the settlement of disputes is a recipe for anarchy. The function of the judiciary as a dispenser of justice, sustainer of good governance and economic growth is endangered by undermining of the integrity of the court and disobedience to court orders.