IMPACT OF THE RECENT ACTIONS OF THE FEDERAL GOVERNMENT OF NIGERIA AGAINST MTN NIGERIA ON INVESTOR CONFIDENCE – AN INSIGHT

The Central Bank of Nigeria (‘CBN’) recently indicted MTN Nigeria alleging that it collaborated with Standard Chartered Bank Nigeria, Citibank, Stanbic IBTC Bank and Diamond Bank Plc to illegally repatriate $8.134 billion between 2007 and 2015 from Nigeria to its parent company in Johannesburg, South Africa.

As a consequence of the said indictment, the CBN slammed a fine of N5.87 billion on the four banks over flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006. In line with the fine on the banks, the CBN also directed MTN Nigeria to immediately refund $8,134,312,397.63 it alleged was illegally repatriated by the telecoms company to the coffers of the CBN.

MTN Nigeria denied the allegation insisting that the apex bank vetted and approved the transactions in question. In a statement (widely circulated by the news media) by MTN Nigeria, it was stated that “No dividends have been declared or paid by MTN Nigeria other than pursuant to CCIs issued by our bankers and within the approval of the CBN as required by law”.

In its official response to the CBN, Stanbic IBTC Bank described the conclusions reached by the regulator as based on “factually incorrect premises”. It reminded the CBN of the outcome of its findings on the same issue following a special examination that was conducted in March this year. The finding reportedly cleared the bank of any wrongdoing claiming that its actions were in line with extant rules and regulations. The other banks have also issued statements in similar vein to that of Stanbic IBTC Bank.

Almost concurrently with the said CBN’s action, the office of the Attorney General of the Federation (‘AGF’) also wrote to MTN Nigeria demanding the company should pay $2bn as tax arrears on imported equipment and unpaid VAT on payments made to suppliers. This was conveyed in a letter signed by Mr Abubakar Malami (the AGF) which was circulated by the news media. In the said letter, the AGF notified MTN that his office made a high-level calculation that revealed that MTN Nigeria should have paid approximately $2bn in taxes for importation of foreign equipment and unpaid VAT on payments made to foreign suppliers over the last 10 years.

However, MTN Nigeria, in reaction, said that an initial assessment of the period indicated that total payments made to the tax authorities with regard to the foreign imports and payments amounted to $700m, adding that it had fully settled all taxes on the imports under scrutiny.

As a direct consequence of the actions by the CBN and the AGF, the shares of the MTN Group plunged by 25 per cent to a nine-year low of R86.50 (South African Rand). Also, the much anticipated MTN Nigeria initial public offerings (‘IPO’), which was an initiative to absorb the hit of the Nigeria Communications Commission (‘NCC’) fine earlier paid by the telecoms giant, has been put on hold.

There is no doubt that the said actions against MTN Nigeria have had a negative consequence on its brand and also threatens its corporate existence in Nigeria as the company may go under if the Nigerian Government insists that all the imposed fines and demands on the company are complied with, without an opportunity for a review or negotiations.

It is noteworthy that the value of the current claims by the Nigerian government at R150 billion outstrip the total value of all the shares in MTN listed on the Johannesburg Stock Exchange in South Africa. As it is, MTN Nigeria may be wondering that even if it succeeds in convincing the Nigerian authorities that they had the permission it claims it was given to move $8.1 billion in dividends out of the country and even if it manages to prove that its tax affairs are in order despite a $2 billion demand from the Nigerian Government its investors will constantly be wondering where the next brickbats will be coming from. This is bad for investors’ confidence. The actions of the Nigerian Government may look like a shake down to the South African investors of MTN Nigeria.

This article is not to apportion blame or say who is right and wrong as between the Nigeria Government and MTN Nigeria rather, it is to highlight the impact of the actions taken by the Nigerian Government on investor(s) confidence, bilateral relations with South Africa and the obligations of the Nigerian Government to foreign investors operating in the Nigeria economy. In other words, this article aims to critically examine the implications of the actions of the Nigerian Government under customary international law as it pertains to protection and security for foreign investments under which category MTN Nigeria falls.

International investment law is designed to promote and protect the activities of private foreign investors like MTN Nigeria and three of the four sanctioned banks. Globally, foreign investment is regulated by a Bilateral Investment Treaty (‘BIT’) between two countries desirous of trade, or a regional treaty, such as the Economic Communities of West African States (‘ECOWAS’) or the North American Free Trade Agreement (‘NAFTA’).

The basic international law governing treaties and their interpretation and application is the Vienna Convention on the Law of Treaties. Like contracts, treaties bind the state parties who have consented to them. Under international law, state actors assume certain responsibilities to respect treaties and protect foreign investments. Under the International Law Commission on State Responsibility, it is provided as follows:

            “Article 4: Conduct of organs of a State

1.       The conduct of any State organ shall be considered an act of that State under international law, whether the organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central government or a territorial unit of the State.

2.      An organ includes any person or entity which has that status in accordance with the internal law of the State.”

Most investment treaties contain provisions granting full protection and security for foreign investments. The wording of these clauses suggests that the host State is under an obligation to take active measures to protect foreign investment from adverse effects. The host State’s duty is not restricted to preventing damaging acts by private actors. The State’s responsibility extends to actions perpetrated by its organs. The applicability of a treaty provision on protection and security to direct attacks on the investor’s person and property by organs of the host State is beyond doubt. In Biwater Gauff v Tanzania (Award, 24 July 2008), the Tribunal said:

“The Arbitral Tribunal also does not consider that the ‘full security’ standard is limited to a State’s failure to prevent actions by third parties, but also extends to actions by organs and representatives of the State itself.”

In Azurix Corp. v The Argentine Republic (Award, 14 July 2006) the Tribunal confirmed that ‘full protection and security may be breached even if no physical violence or damage occurs’. The Tribunal said:

“The cases referred to above show that full protection and security was understood to go beyond protection and security ensured by the police. It is not only a matter of physical security; the stability afforded by a secure investment environment is as important from an investor’s point of view. The Tribunal is aware that in recent free trade agreements signed by the United States, for instance, with Uruguay, full protection and security is understood to be limited to the level of police protection required under customary international law. However, when the terms ‘protection and security’ are qualified by ‘full’ and no other adjective or explanation, they extend, in their ordinary meaning, the content of this standard beyond physical security.”

The two cases summarized above indicate that unjustified coercive measures taken by organs of the host State against the investor and his property constitute violations of the “protection and security” standard if they prejudice the investor to a material degree. Juxtaposing the above restatement of the law on foreign investment to the situation at hand, MTN Nigeria can legally make a claim against the Nigerian Government for state actions which threatens its investment or for damages resulting therefrom if it transpires that the actions of the Nigerian Government were unjustified.

The said actions may also impact on Nigeria South Africa bilateral relations. Since the inception of democratic rule in Nigeria, South Africa and Nigeria have had encouraging bilateral economic relations. Since then, South Africa has emerged among the top investors in many sectors of the Nigerian economy. South African companies' presence is visible in the Nigerian economy, especially in areas such as telecommunication, engineering, banking, retail, hospitality, property development, construction and tourism, to mention a few.

In 1999, the South African and Nigerian governments signed bilateral agreements on trade and investment and established the South Africa - Nigeria Bi-national Commission. These agreements amongst other things, aimed to increase the amount of trade and investment between South Africa and Nigeria. The signing of these agreements witnessed inter-alia (a) improved trade relations between South Africa and Nigeria and (b) South African corporations as big players in the Nigerian economy. Sequel to the signing of the bilateral agreements, the volume of trade between South Africa and Nigeria increased from 1999. Prior to 1999, trade between the two countries was minimal. In 1994, South Africa exported US$8.1 million worth of products to Nigeria; while it imported US$3.1 million worth of commodities from Nigeria.

With the signing of the South Africa - Nigeria Bilateral Trade Agreement, the situation changed. By 2005 South Africa was exporting goods to the value of R3.4 billion to Nigeria and importing R4.2 billion worth of commodities from Nigeria. There are an estimated over 120 South African companies doing business in Nigeria of which the single largest investor is MTN. Its entrance into the Nigerian market came by way of the first telecommunications auctions process in Africa, in January 2001. At that time MTN’s entrance into the Nigerian market was the company’s single biggest investment outside South Africa.

South African companies are also heavily involved in Nigeria's media and entertainment sector. DSTV, as a major force in the television industry, accounts for 90% of the viewers that watch satellite TV in Nigeria between 2005 and 2009. This has seen DSTV growing into the sixth largest company listed on the Lagos Stock Exchange.

It is hoped that the South African Government and its Nigerian counterpart can find a middle ground to have this MTN Nigeria (which also affects another South African owned company, Stanbic IBTC Bank) issue amicably resolved so that bilateral relations between Nigeria and South Africa are not negatively impacted. This also goes for the affected banks. It is recommended that the Nigerian Government soft pedals and be more amenable to amicable settlement so that wrong signals are not sent to potential investors at a time that FDI is at a low and the rate of unemployment very high.

It is hoped the Nigerian Government will not learn to its cost that if you are not nice to FDI, it ups sticks and finds a new place to live.

NATIONAL AWARDS CANNOT BE AWARDED POSTHUMOUSLY

There have been varied reactions to the recent posthumous national award of the Grand Commander of the Federal Republic (GCFR) on Chief M.K.O. Abiola, and a posthumous national award of Grand Commander of the Order of Niger (GCON) on Gani Fawehinmi – a respected human rights activist, by President Buhari. I personally feel the awardees are most deserving and worthy recipients even if the award was politically motivated. The pertinent question however remains whether the awards are legal in the eyes of the law.

Justice Belgore, who was the Chief Justice of Nigeria (‘CJN’) between 2006 – 2007, opined that honouring Abiola with a GCFR was illegal. He stated that no national award could be awarded posthumously, let alone the GCFR – the highest honour in the land.

“It is for people living,” Belgore had said. “The only thing they could do is to name a place after him, but national honours award, no.”

In reaction to Belgore’s assertion, a prominent Nigerian lawyer, Femi Falana, SAN, observed that the former CJN did not refer to any section of the National Honours Act or any other law that has been violated by President Buhari. He argued that the National Honours Act has not prohibited or restricted the powers of the President to confer national honours on deserving Nigerian citizens, whether such person is dead or alive.

“No doubt, paragraph (2) of the Honours Warrant made pursuant to the National Honours Act provides that ‘a person shall be appointed to a particular rank of an Order when he receives from the President in person, at an investiture held for the purpose…’

“But paragraph (3), thereof, has given the President the unqualified discretion ‘to dispense with the requirement of paragraph (2) in such manner as may be specified in the direction,” the senior advocate said.

He stressed that since the national awards conferred on Abiola and Fawehinmi cannot be received by them in person, the President may permit their family members to receive same on their behalf.

In this rejoinder, I intend to join issue with the learned SAN that the awards of the GCFR on Chief M.K.O. Abiola and the GCON on Chief Gani Fawehinmi were legal in the circumstances in which they were made.

To properly situate the subject matter of this discourse, it will be necessary to give a précis of the relevant provisions of the extant laws on the subject. The enabling legislation is the National Honours Act and the applicable provisions are as follows:

“3. Mode of appointment to Orders, etc.

(1) The President shall by notice in the Federal Gazette signify his intention of appointing a person to a particular rank of an Order.

(2) Subject to the next following paragraph of this article, a person shall be appointed to a particular rank of an Order when he receives from the President in person, at an investiture held for the purpose-

(a) the insignia appropriate for that rank; and

(b) an instrument under the hand of the President and the public seal of the Federation declaring him to be appointed to that rank.

(3) If in the case of any person it appears to the President expedient to dispense with the requirements of paragraph (2) of this article, he may direct that that person shall be appointed to the rank in question in such a manner as may be specified in the direction.”

Falana's position is predicated on paragraphs (3) above where it is provided that the requirement of paragraph (2) above may be dispensed with if it is expedient to the President. The easiest way to dealing with this issue is to first answer the nagging question of who is a 'person' under the law since the enactment is replete with that word.

The enactment says National honours are to be awarded to a 'person'. Flowing from the above, the gravamen of this discourse will lie in determining whether a dead person still has the right to be continued to be addressed as a ‘person’ or whether this right is foreclosed by reason of death. In other words, if we are agreed, and there is no divergent opinion on the unassailable fact the award is to be bestowed on a ‘person’ then the next inevitable question will be whether or not Chief M.K.O. Abiola and Chief Gani Fawehinmi fall within the legal definition of persons in law.

The Interpretation Act, CAP 123 LFN 2004 defines a person as:

"person" includes anybody of persons corporate or unincorporate."

Furthermore, Black's Law Dictionary 6th Edition, pg. 791, defines 'person' as follows: "In general usage, a human being (i.e. natural person), though by statute term may include labor organizations, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers."

To add further fillip to the definition of persons, the following case law authorities are apposite on the point:

The Supreme Court in Ibrahim v. Judicial Service Committee, Kaduna State (1998) 14 NWLR (Pt. 584) 1 at 36 (1998) 12 SCNJ 255, espoused thus:

“The definition of the word "person" in the legal sense under the Nigerian law is not limited to natural persons or human being only. It clearly admits and includes artificial persons, corporation, sole company or any body of persons corporate or incorporate.”

In the case of Udeogaranya v. Adeyi (2010) LPELR-4415(CA), the Court of Appeal also defined a person as follows:

“It is beyond dispute that the word "person" when used in legal practice, such as in a legislation or statute connotes both a "natural person", that is to say, a "human being" and an "artificial person" such as corporation sole or public bodies corporate or incorporate”.

It is respectfully submitted that ‘person’ referred to above is not just anybody but a legal person. If there is no doubt that it is legal persons being referred to in acts and statutes, it follows therefore that a dead person is not a legal person. A legal person is as defined above. It is settled under our laws that a dead person ceases to be a legal person or to have legal personality. The Supreme Court of Nigeria, in Chief John Ehimigbai v. Omokhafe v. Chief John Ilavba Oje Iboyi Esekhomo (1993) LPELR – 2649 (SC) held thus:

“Generally, a dead person is no longer in the eyes of the law a person but in the eyes of the law, he is a person who ceased to have legal personality from the date of his death and as such, can neither sue nor be sued personally or in a representative capacity. The personality of a human being is extinguished by his death. The common law principle expressed in the maxim action personalis moriturcum persona presupposes a cause of action arising when both the plaintiff and the defendant are alive and will regard the cause of action as ceased upon the death of either the plaintiff or the defendant. See Kareem V Wema Bank Ltd (1991) 2 NWLR (Pt.174) 485; Akunmoju V Mosadolorun (1991) 9 NWLR (Pt. 214) 236 (CA) and Hodge V Marsh (1936) A.E.R 484.” 

It follows therefore that persons in the legal sense includes “natural persons or human beings” and also “artificial persons” such as corporate and incorporate bodies. Ipso facto, there can be no doubt therefore that the President may validly bestow national honours on “natural persons or human beings, and on artificial persons (corporations). What is doubtful is whether or not the President can bestow national honours on dead persons who are not legal persons in law.

It is clear that the emphasis above is on living persons as against a dead person. To proceed further we may need to highlight the distinguishing characteristics of a living person as against a dead person. The difference between the two concepts boils down to "existence". Here's what really exists:

1. An arrangement of matter with various traits, such as a metabolism, the ability to process information, etc.

2. An arrangement of matter that once had those traits but now doesn't.

You can choose to label either, both, or none with the word "person," but your choice alters nothing about what actually exists. If you call the second thing a person, it will be an arrangement of matter that once had those traits but now doesn't. If you don't call it a person, it will still be an arrangement of matter that once had those traits but now doesn't.

In a nutshell, a person is a being that has certain capacities or attributes such as reason, morality, consciousness or self-consciousness, and being a part of a culturally established form of social relations such as kinship, ownership of property, or legal responsibility. A dead person is a person who once had those attributes but now doesn’t.

On their demise, could it possibly be argued that Chief M.K.O Abiola and Chief Gani Fawehinmi, SAN continued to share or retained the characteristics of natural persons or human beings? I dare to say it would be preposterous and do violence to language to contend so. In a nutshell, the duo were former 'persons' and former 'Nigerians'. They can only be referred to in past and not present tense.

If the highest Court in the land has affirmed positively that a dead person is no legal personality in the eyes of the law, then to have conferred the respective national honours on both Chief M.K.O. Abiola and Chief Gani Fawehinmi as has been done in this instance is in clear breach of the National Honours Act.

In the interpretation of Statutes, the cardinal rule is that where the provision of a statute is clear and unambiguous, the duty of the court is to simply interpret the clear provision by giving the plain wordings their ordinary interpretation without more. However, where confronted with an ambiguous statutory provision, the basic task before a judge is to ascertain the intention of the legislature.

In ascertaining the intention of the draftsman of the National Honours Act, it is clear that it was never intended that the award is to be conferred on a deceased Nigerian. Paragraph (3) of the Act referenced by Falana, SAN is only applicable if the honouree is unavoidably absent and not dead. If the intention was to confer the honour posthumously, the Act would have expressly stated so. This is so because in the same piece of legislation a provision was made for posthumous awards for dead servicemen.

If the legislation pertaining to the Armed forces makes specific provision for posthumous award while the preceding provision for award on deserving persons make no such provision. One would have thought that the lawyers advocating so vociferously for posthumous award would have asked themselves one simple question: “why would one provision be silent on the issue of a posthumous award whilst another provision in the same piece of legislation is specific on the point"?

Premised on the foregoing, it is my candid opinion that the awards bestowed on Chief Abiola and Chief Gani respectively, though deserved are illegal. The National Assembly may need to amend the law to accommodate posthumous awards like the instant one.

The FG May also do well to rename historical or national monuments after these deserving former personalities.

Whether the Nigeria National Assembly have powers to suspend a law maker?

In the aftermath of the senate saga resulting in the forceful entry into the senate chambers and the attendant 'stealing' of the mace, so many commentaries have been running particularly as it concerns the legality of the suspension of Senator Omo-Agege by his peers. Some notable legal practitioners like Falana, SAN and even Prof Sagay are of the view that the NASS has no power to suspend a law maker citing inter alia the case of Senator Ndume, Dana vs Bauchi House of Assembly, etc. Falana said that it is only a court of law or a law maker's constituency that can exercise the right to suspend or remove a law maker.

I doubt if this is the current position of the law as it pertains to the power of the NASS to dicsipline and sanction erring members. Of course the constitution in section 60 expressly provides that:

‘’Subject to the provisions of this Constitution, the Senate or the House of Representatives shall have power to regulate its own procedure, including the procedure for summoning and recess of the House".

Pursuant to the powers donated to it under the constitution, the NASS presented to President Buhari and the latter signed into law on January 26, 2018 a bill known as the ‘’Legislative Houses (Power and Privileges), Act 2018’’. Section 21 (2) of the law states that ‘’where any member is guilty of contempt of a Legislative House, the House, may by resolution, reprimand such member or suspend him from the service of the House for such period as it may determine’’.

Section 22 further says that, ‘’Suspended member excluded from Chamber and precincts:

‘’A member of a Legislative House who has been suspended from the service of that House shall not enter or remain within the Chamber or precincts of the House while such suspension remains in force, and, if any such member is found within the Chamber or precincts of the House in contravention of this section, he may be forcibly removed therefrom by any officer of the House and no proceedings shall lie in any court against such officer in respect of such removal’’.

In a nutshell, the senate acted under extant laws made pursuant to section 60 of the constitution in suspending Senator Omo-Agege. By his suspension, Omo-Agege was not supposed to be within the precinct of the NASS or even gain access into the chambers.

I am not aware that the Legislative Houses (Power and Privileges), Act 2018 was the subject of Senator Ndume's law suit culminating in the reversal of his suspension. The law was validly passed with the president signing it into law only this year. I am not aware that any court has invalidated the law at it stands so i do not know the basis or justification of Falana's assertion that the NASS cannot suspend a law maker.

The power of the legislature to regulate itself is universally acknowledged and practiced . For instance, Article I, Section 5, of the U.S. Constitution provides that "Each House [of Congress] may determine the Rules of its proceedings, punish its members for disorderly behavior, and, with the concurrence of two-thirds, expel a member".

Even statutory and corporate bodies have internal regulating rules which our law courts have given validation to. In the case of Chinwo v. Owhonda (2008) 3 NWLR (Pt. 1074) 341, 361 which dealt on the issue of freedom of association and the implication of subscription to membership of associations, it was held that "In the exercise of their constitutional rights under sections 39 and 40 of the 1999 Constitution, which guarantee freedom of thought, assembly, association, etc., individuals elect to and do subscribe to membership in associations, which sometimes curtail their rights. The appellant, while exercising his right, joined an honourable profession of formidable societal influence and relevance which of necessity has rules and regulations to guide his professional conduct and which along the line curtail some of his choices. The appellant was not compelled to take up the profession of law and its attendant compulsory membership of the Nigerian Bar Association. However, once he made the choice to study and practice law and thereby placing his name on the roll of honour of belonging to the profession, he stands bound by the internal rules and regulations of the Association..."

Omo-Agege as an individual has fundamental rights to freedom of association and expression but as a senator those rights are curtailed by the Rules of the NASS. No law maker is compelled to remain in the NASS if he/she disagrees with those Rules. The Rules stands until amended or removed by the majority of NASS members. No single law maker can decide to ignore or rubbish those rules without attendant consequences.