In the recently decided case, Mufutau Ajayi v Securities and Exchange Commission (2023) (“Mufutau“), the Supreme Court handed down a decision on the long-debated question as to whether exclusive jurisdiction over matters relating to capital and securities market operations vest in the Federal High Court (the “FHC“) or the Investments and Securities Tribunal (the “IST“).
This flash note examines the Mufutau decision, among other things, and its implication on the Nigerian capital markets for the future.
Background as to Question of Jurisdiction
In Nigerian capital markets law, as with other areas of law, the question as to where jurisdiction lies is critical, as “jurisdiction is always a threshold issue, for when the Court has no jurisdiction to entertain a matter, the proceedings are a nullity, no matter how well conducted and brilliantly decided they may have been.” Accordingly, the IST was established pursuant to section 274 of the Investments and Securities Act 2007 (the “ISA“), with jurisdiction over “disputes” or “questions of law” emanating from the capital market, and appeals going to the Court of Appeal. On its face, this conflicts with section 251 of the 1999 Constitution of the Federal Republic of Nigeria (the “Nigerian Constitution“), which vests exclusive jurisdiction over matters relating to the operation of companies under the Companies and Allied Matters Act 2020 (the “CAMA“) in the FHC. Additionally, exclusive jurisdiction is vested in the FHC in respect of “civil causes and matters arising from the operation of CAMA”, which invariably relates to companies. This conflict of laws has hampered the effectiveness of the IST because questions arise as to the validity of its creation in face of section 251 of the Nigerian Constitution.
This implication of this conflict was captured in Wealthzone Limited v Securities and Exchange Commission (2016) (the “Wealthzone Case“), where the court stated:
“The mere fact that the Federal High Court and the Nigerian Investments and Securities Tribunal have their origins rooted firmly in the constitution does not however suggest that there are no jurisdictional conflicts between the duo. Indeed, both institutions have been clearly demonstrated in this judgment and in the briefs of learned counsel to the parties to be greatly enmeshed in jurisdictional conflicts. The two institutions are generally clothed with exclusive jurisdictions in determined borderline areas which clearly overlap and have presented difficulties to the parties in this appeal as well as to the Capital and Securities Investments Community.”
 LPELR-59729 (SC).  Nigerian Stock Exchange v Abiodun (2022) LPELR-56896 (CA).  Section 284 of the ISA.  Section 295 of the ISA.  LPELR-41808 (CA).