Court Confirms Ruling on CAC's Control Over Religious Groups

The Court of Appeal in Abuja has supported a Federal High Court decision that canceled parts of the Companies and Allied Matters Act (CAMA), 2020. These parts gave the Corporate Affairs Commission (CAC) powers over incorporated trustees, including religious groups and other associations.

A three-member panel agreed that sections 839, 842, 843, 844, 845, 846, 847, and 848 of CAMA violated people's constitutional rights to freedom of thought, conscience, religion, association, and peaceful assembly.

The court also confirmed that Emmanuel Ekpenyong, a constitutional lawyer with Fred Young & Evans LP, had the right to challenge these provisions. He argued they violated his fundamental rights.

The three-member bench delivered the judgement on September 17. But PREMIUM TIMES got a copy of the judgement on Friday.

The dispute

The argument over the amended CAMA began right after the late President Muhammadu Buhari signed it into law in August 2020.

While the Act brought several changes to Nigeria's business environment, its rules on incorporated trustees, which include churches, mosques, charities, NGOs, and other groups, faced strong pushback from religious organizations and civil society groups.

At the heart of the issue was Section 839. This section gave the CAC the power to suspend trustees and appoint interim managers under specific conditions, such as alleged misconduct, fraud, or when intervention was needed for the public interest.

Religious groups worried this provision could give the government too much control over their internal matters. The Christian Association of Nigeria (CAN) called for changes to the law. The CAC insisted it would not arbitrarily suspend trustees and that its actions could be challenged in court.

In the midst of these issues, Mr Ekpenyong filed a lawsuit on August 31, 2020, at the Federal High Court in Abuja. He sued the National Assembly, the CAC, and the Attorney General of the Federation (AGF) over parts of CAMA that he claimed violated his constitutional rights.

In his case, Mr Ekpenyong challenged the sections involved, asking the court to rule that they violated his freedom of thought, conscience, and religion, freedom of association and peaceful assembly, as well as his right to access the court. He based his argument on Sections 38 and 40 of the Nigerian constitution.

What the Federal High Court ruled

Judge James Omotosho agreed with Mr Ekpenyong in a ruling made in April 2023. He decided that the powers given to the CAC to manage incorporated trustees under sections 839 to 848 were too much and violated Mr Ekpenyong's constitutional rights.

The judge also found that Mr Ekpenyong had the right to challenge these provisions and declared the challenged sections unconstitutional, null, and void. Judge Omotosho added that Section 851, which allowed the Administrative Proceedings Committee to handle matters under CAMA, did not match Section 251(1)(e) of the Constitution. This section gives the Federal High Court the relevant power.

The CAC was unhappy with the ruling and took the case to the Court of Appeal through its lawyer, Jibrin Okutepa, a Senior Advocate of Nigeria (SAN).

CAC’s appeal

On appeal, the CAC claimed the Federal High Court was wrong to hear Mr Ekpenyong's fundamental rights case. The agency argued that Mr Ekpenyong did not have the legal right to start the case.

But Mr Ekpenyong opposed the appeal. He stressed that the rights to freedom of thought, conscience, and religion, as well as freedom of association and peaceful assembly, are essential to a democratic society.

He argued that the Nigerian constitution protects his right to practice his faith and connect with others in his religious community. He also said the powers given to the CAC in the disputed sections could let the commission interfere with the leadership and operations of religious groups by suspending trustees, appointing interim managers, and managing their finances.

Court of Appeal’s decision

The Court of Appeal largely agreed with the Federal High Court's decision.

Judge Okorowo, who read the Court of Appeal's ruling, stated that voluntary associations usually have control over their internal matters. Courts should not interfere unless an association goes against its own rules.

The appellate court concluded that the trial court was right to cancel the provisions that interfered with the constitutional freedoms protected by Sections 38 and 40 of the Constitution. The court also dismissed the argument that any restrictions from the provisions were justifiable under Section 45(1) of the Constitution.

Judge Okorowo stated that the disputed provisions violated the rights guaranteed by Sections 38 and 40 and were not reasonably justifiable under Section 45(1). The court therefore upheld the Federal High Court's decision to strike down Sections 839, 842, 843, 844, 845, 846, 847, and 848 of CAMA.

However, the Court of Appeal did not support the Federal High Court's complete nullification of Section 851. The appellate court found that this section was unconstitutional only in how it gave the Administrative Proceedings Committee the power to resolve disputes under CAMA and impose penalties like a court.

"The remaining administrative and regulatory functions of the committee continue, under the oversight of the Federal High Court," the court stated.

The court modified the Federal High Court’s ruling on Section 851 while confirming the cancellation of Sections 839 and 842 to 848.

On Mr Ekpenyong’s legal standing, the Court of Appeal agreed with the lower court's finding. It stated he had the legal right to bring the case based on his personal interest and membership in a registered religious group.

"The finding that the 1st respondent had the right to bring the case is confirmed, based on his personal interest and membership in a registered religious association," the court said.

The court then dismissed the CAC’s appeal on most points. Judges Abba Mohammed and Eberechi Nyesom Wike agreed with the judgement.

What the ruling means

This judgement now limits how much the CAC can control incorporated trustees when it conflicts with constitutional freedoms. The Court of Appeal’s decision keeps the CAC's regulatory role but sets boundaries on powers that could disrupt freedom of religion and association.

Still, the aggrieved party can appeal the Court of Appeal’s decision to the Supreme Court, which has the final say on legal matters in Nigeria.