INTRODUCTION
Innovation and technology play a critical role in the economic development of any nation. The recent outbreak of COVID-19 and the total lockdown directive issued by the Federal Government/State Government in Nigeria have changed how business transactions are perceived and conducted. Notably, there is a shift from the traditional way of physical gathering to a digitized/virtual means of conducting meetings and other transactions. To this end, organizations have adopted a systemic transmission from their organic office space to a virtual space so as to keep up with the inflow of demand for their services during these unprecedented times. The Nigerian Legal practice has also adapted to innovative trends considered now as the new normal. We shall in this article consider the reaction of some regulatory bodies within the Nigeria business space to these new trends to see if Nigeria laws are receptive to change even post COVID-19.
CORPORATE AFFAIRS COMMISSION
At the dawn of the outbreak of the COVID-19 pandemic the Corporate Affairs Commission (“CAC or Commission”) issued guidelines to public companies on how to conduct its Annual General Meeting (AGM). The guidelines were amongst other things, issued to encourage social distancing and ensure the total number of people present at a meeting does not exceed 20. The Commission also added a proviso that a public company must seek its approval prior to conducting any AGM.
LEGAL ISSUES ARISING
- Whether the Commission can sanction a public company if it fails to follow its guidelines?
- Whether the consent of the Commission must be sort before a Public company can hold its AGM?
- Whether a company would be in default if it decides not to follow the guidelines issued by the Commission on meetings?
COMMENTARY
This innovation by the CAC is timely given that the disruptions caused by COVID-19 present a unique situation in our business law jurisprudence, and we cannot continue with the usual traditional approach to solve the likely legal issues that might arise from adapting to the unique situation . It is noteworthy to state, however, that a Law is different from regulation/guidelines, while the former is an embodiment of the latter; the latter does not have the force of law. Therefore in hierarchy, the law will always rank above[1].Thus a failure to comply with the direction of this guideline will not generate a cause of action. It is merely a guide.
Statutorily the Companies and Allied Matters Act Cap C 20 LFN, 2004 (“CAMA”) does not provide for prior consent from the Commission before a company can hold its AGM. The only instance the Commission may on the application of any member of the company call for or direct the calling of, a general meeting is expressly stated in CAMA[2].
In view of the above, the practicability of calling an AGM during this period is likely to cause some difficulties due to the lockdown directions given by the government at both Federal and State-level and the need to observe social distance. Therefore a default of section 213 of CAMA in our opinion could be remedied by the Commission by simply granting a three (3) months extension to companies who cannot hold their AGM due to the Pandemic[3]. If the situation in the country persists and it is still difficult to hold AGM, it is our opinion that of the strict adherence to Section 213 of CAMA will be tantamount to “the law commanding the impossible” (Les Non-Cogit- Ad Impossibilia) during this period and it has been judicially decided that the law cannot be used to command the impossible[4].Although we are not ignorant of the fact that some tier-one banks in Nigeria recently adopted the CAC guidelines and maximized section 230 of CAMA to conduct their AGM, it is still our opinion that the fact that it worked for the banks does not necessarily make it the generally accepted rule of adoption to conduct meetings during this period.
In conclusion, we encourage the progressive steps by the Commission in ensuring that amongst other innovative ideas during this time, virtual meeting can be introduced to the CAMA as an alternative way of holding meeting provided the existing requirements are complied with[5]
OUR RECOMMENDATIONS.
- We believe the Commission needs to be lenient and/or waive any sanction the law provides for the likely default of section 213 of CAMA during this period
- We strongly advise that the Commission liaise with necessary stakeholders to ensure that virtual means of holding meetings are adopted under the new proposed Companies and Allied Matters bill.
- We also recommend that Companies should update their Articles of Association by making provision for virtual meetings.
THE JUDICIAL SYSTEM
The National Judicial Council (NJC) during its 91st meeting held on the 22nd April 2020 constituted a committee to devise safety guidelines to be observed by the court when sitting during this COVID-19 pandemic period. The committee headed by Honorable Justice Olabode Rhodes-Vivour, JSC, CFR submitted a report on Wednesday 6th May 2020 with a formulated guideline. The Lagos State Judiciary on the other part issued its practice directions on remote hearing of cases in April, 2020 when the Chief Judge of the state signed the law into force. The Chief Judge noted that the decision was necessary due to the COVID-19 and it was an opportunity to maximize the benefit of the social media.
In view of this, the Lagos State Judiciary held its first virtual sitting on the 4th of May 2020 in the criminal matter between the State of Lagos v Olalekan Hammed[6]. This landmark event marked the beginning of an innovative era in the Nigerian judicial sector. While several lawyers welcomed this innovative idea, some other lawyers soon began probing the constitutionality of the hearing.
COMMENTARY
Section 36(4) of the constitution of the Federal Republic of Nigeria provides that:
Whenever any person is charged with a criminal offence, he shall, unless the charge is withdrawn, be entitled to a fair hearing in public within a reasonable time by a court or tribunal:
Provided that
(a) a court or such a tribunal may exclude from its proceedings persons other than the parties thereto or their legal practitioners in the interest of defence, public safety, public order, public morality, the welfare of persons who have not attained the age of eighteen years, the protection of the private lives of the parties or to such extent as it may consider necessary because of special circumstances in which publicity would be contrary to the interests of justice.
It is my opinion that the virtual hearing held on the 4th of May, 2020 is valid. The basis of this assertion is hinged on the above-cited provision of the Nigerian Constitution. The law generally provides that all hearings of courts must be done within the public space,additionally;the law also states instances where the court can discard with the hearing of the matter in public. One of such grounds is if the need to excuse public attendance arises out of public safety and or public order.
The outbreak of covid-19 and the need to observe social distancing (public safety) warranted the court to adopt an innovative means in delivering her judgment, and at the same time did not jeopardize the provision of section 294 of the Constitution of the Federal Republic of Nigeria. Assuming but not conceding that there was no physical person when the court was giving the judgment. Section 200 of the Administration of Criminal Justice Law states that:
“Subject to the provisions of Sections 202 and 217 and any other written law specifically relating to the room or place in which any trial is to take place under this Law, shall be an open Court to which the public generally may have access to as far as it can conveniently contain them”
Flowing from the above,the fact that the online hearing was held via Zoom and that the password and link were posted on the Lagos State Judiciary website and the said hearing was attended by about ninety (90) persons in my opinion complied with all the requirements provided by extant laws.There thus seems to be no reason why the judgement will be regarded as invalid.
In conclusion to the above, it is the view of this writer that this medium of remote hearing should be adopted into our practice guidelines even after Covid-19.
Conclusion
The role of innovation and technology in the implementation of business in Nigeria can be overemphasized.Although it is not uncommon knowledge that there are certain infrastructural limitations with the judicial system, it is opined that stakeholders in the country take steps in ensuring that we develop our infrastructural capacity to accommodate the changes technology will introduce in the way we conduct our business transactions. Additionally, the legislative arm of the government should enact or amend laws to accommodate the innovative trends technology offers.
Footnote:
[1] Abacha v Fawehinmi (2000) 6 NWLR (Pt.660) 228.
[2] Section 214 (2) of the Companies and Allied Matters Act Cap C20 LFN 2004
[3] See Section 213 (1) of the Companies and Allied Matters Act Cap C20 LFN 2004
[4] AG Lagos v Keita (LPELR-40163) (CA)
[5]See Section 217,218 219and 220 of the Companies and Allied Matters Act Cap C20 LFN 2004
[6] ID/9006C/2019
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