INTRODUCTION

“Pseudonymisation” is one of those words that sounds more complex than it is, but its implications for data protection compliance in Nigeria are anything but simple. As Nigeria’s data protection landscape continues to mature, particularly following the enactment of the Nigeria Data Protection Act 2023 (NDPA), pseudonymisation has emerged as a critical technical and legal concept that organizations processing personal data can no longer afford to ignore.

 

What is Pseudonymisation?

Pseudonymisation is the process of processing personal data in such a manner that it can no longer be attributed to a specific data subject without the use of additional information, provided that such additional information is kept separately and is subject to technical and organizational measures to ensure non-attribution.

Pseudonymised data, remains personal data; the link to the individual can still be re-established using the separately held key. Pseudonymised data continues to attract the full protections of the applicable data protection framework. An example is a hospital that replaces patient names with unique codes in its research database has pseudonymised that data. The patients remain identifiable to those with access to the coding key, but the data cannot be attributed to them by anyone without that key.

 

The Nigeria Data Protection Act 2023 (NDPA)

The NDPA recognizes pseudonymisation explicitly as a data security measure. Under Section 24 of the NDPA, data controllers and data processors are required to implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk, having regard to the state of the art, costs of implementation, and the nature, scope, context, and purposes of processing. Pseudonymisation is specifically contemplated as one such measure.

Furthermore, Section 25 of the NDPA reinforces the principle of data minimization; that personal data collected must be adequate, relevant, and limited to what is necessary in relation to the purposes for which it is processed. Pseudonymisation directly supports this principle by limiting the exposure of directly identifiable data.

The NDPA also introduces the concept of data protection by design and by default under Section 26, which requires that data controllers implement appropriate technical and organizational measures designed to implement data protection principles effectively and integrate necessary safeguards into the processing. Pseudonymisation is widely regarded as a core component of privacy by design, embedding data protection into the architecture of systems and processes from the outset, rather than as an afterthought.

 

Pseudonymisation and Risk Reduction

One of the most practically significant aspects of pseudonymisation under the NDPA is its role in risk reduction, particularly in the context of data breaches.

Under Section 40 of the NDPA, data controllers are obligated to notify the NDPC of a personal data breach without undue delay and, where feasible, not later than 72 hours after becoming aware of it. However, where the personal data affected by a breach has been pseudonymised, the risk to data subjects is significantly reduced, as the data cannot readily be attributed to identifiable individuals without the separately held key. This may influence the severity of the regulatory response and the notification obligations owed to affected data subjects.

The NDPA, under Section 30, imposes heightened obligations on the processing of sensitive personal data, which includes data relating to health, biometrics, ethnicity, political opinions, religious beliefs, and financial information, among others. The processing of such data is generally prohibited except where specific conditions are satisfied.

These facts create a compelling incentive for organizations to implement pseudonymisation as part of their data security architecture as a practical risk management strategy.

 

Enforcement and Regulatory Guidance

The NDPC, established under Section 4 of the NDPA, has broad enforcement powers, including the authority to investigate complaints, conduct audits, issue compliance orders, and impose administrative fines. Under Section 48 and Section 49 of the NDPA, administrative fines for data protection violations can reach up to 2% of annual gross revenue or ₦10 million, whichever is higher, for general violations, and up to imprisonment for up to one year or both, for more serious breaches.

While Nigerian courts have not yet produced a substantial body of case law specifically addressing pseudonymisation, the broader enforcement landscape is instructive. In the matter of the NDPC’s enforcement action against certain financial institutions for inadequate data security measures, the Commission signaled clearly that technical safeguards, including encryption and data minimization techniques, are not optional extras but baseline compliance requirements.

Organizations operating in Nigeria, whether as data controllers or data processors should therefore consider pseudonymisation not merely as a technical option but as a compliance imperative.

 

Practical Implications for Different Sectors

Data sharing arrangements: Where personal data is shared between organisations for research, analytics, or service delivery, pseudonymisation limits the risk of unauthorized attribution and supports lawful processing.

Cloud computing and third-party processing: Where data is processed by third-party vendors, pseudonymisation ensures that vendors do not have access to directly identifiable data, reducing risk in the event of a vendor-side breach.

Employee and HR data: Organizations processing large volumes of employee data for internal analytics or reporting should consider pseudonymisation as a measure to protect employee privacy while enabling legitimate data use.

Healthcare and research: Medical research institutions and healthcare providers processing patient data are particularly well-placed to benefit from pseudonymisation, enabling data utility while protecting patient confidentiality.

 

Conclusion

As Nigeria’s data protection framework continues to evolve, pseudonymisation has moved beyond being a purely technical concept to becoming a significant legal and compliance consideration for organizations processing personal data. The Nigeria Data Protection Act 2023 makes it clear that organizations are expected to adopt practical and proportionate security measures capable of protecting personal data and reducing exposure to risk. Organizations that invest in pseudonymisation as part of a broader privacy-by-design approach will be better positioned to demonstrate compliance, mitigate the consequences of data breaches, and build the trust of their customers and partners.

 

Ayomikun  Oreoluwa Onabanjo Esq

Regville Associates

INTRODUCTION

In many commercial transactions, intellectual property ownership is often treated as a secondary issue, something to be sorted out later, or addressed only when a dispute arises. This approach is wrong and can be legally dangerous. One of the most overlooked risks in agreements relating to technology, branding, consulting, software development, advertising, and service delivery is the failure to properly distinguish between background intellectual property and foreground intellectual property.

Poorly drafted intellectual property clauses can unintentionally transfer rights far beyond the actual scope of the transaction, exposing businesses to the loss of proprietary tools, systems, methodologies, and independently developed assets that are central to their operations. This article examines the legal distinction between background and foreground intellectual property, the consequences of inadequate drafting, and the framework for protecting intellectual property rights in commercial transactions under Nigerian law.

 

Understanding the Distinction

Background intellectual property refers to intellectual property rights that existed before the commencement of a transaction or project. This includes proprietary software, internal frameworks, methodologies, templates, algorithms, trade secrets, and designs that a party brings to the engagement. As a general principle, background intellectual property remains the property of the party that originally owned or developed it, irrespective of its deployment during the course of the engagement.

Foreground intellectual property, on the other hand, refers to intellectual property created specifically during the course of the engagement or project. This includes project deliverables, campaign assets, newly developed software modules, reports, branding materials, and custom designs created specifically for the client. Unlike background intellectual property, foreground intellectual property is often transferable, depending on the commercial arrangement between the parties.

The distinction matters enormously in practice, as many agreements contain broadly drafted intellectual property assignment clauses stating that “all intellectual property arising from the engagement shall vest in the client” or “all work products shall belong exclusively to the customer.” At first glance, these clauses may appear commercially harmless. However, without proper carve-outs, they can inadvertently transfer ownership of pre-existing systems, proprietary methodologies, internal tools, and independently developed materials merely because they were used or referenced during the project.

 

The Risk of Broadly Drafted Assignment Clauses

The risk posed by broadly drafted intellectual property clauses is not merely theoretical. It frequently arises in several categories of commercial agreements, including Service Level Agreements, Master Service Agreements, technology and software development contracts, creative and advertising engagements, and joint venture arrangements.

Consider a technology company engaged to build a custom software application for a client. In delivering the application, the company deploys pre-existing proprietary frameworks, libraries, and internal tools developed over many years. If the agreement contains a clause providing that “all intellectual property arising from the engagement shall vest in the client,” and there is no carve-out for background intellectual property, the client may assert ownership over those pre-existing frameworks, not because they were specifically created for the project, but because they were used in its execution.

The same risk arises in creative and advertising engagements, where agencies routinely deploy pre-existing templates, design systems, and creative methodologies to deliver client work. A broadly drafted assignment clause could expose those agencies to a claim that their entire creative toolkit, built over years of independent development, has been transferred to a single client by virtue of a single engagement.

This is not merely a legal problem, it is and has always been a commercial and operational one. The loss of proprietary tools and systems can fundamentally impair a service provider’s ability to continue operating and serving other clients.

 

Drafting Effective Intellectual Property Clauses

The most effective protection against unintended intellectual property transfers lies in careful and deliberate drafting. A well-structured intellectual property clause in a commercial agreement should expressly address several key issues.

First, it should clearly define what constitutes background intellectual property for each party and confirm that such intellectual property remains the exclusive property of the original owner throughout and after the engagement. This carve-out must be unambiguous, general savings language is often insufficient.

Second, the clause should define foreground intellectual property with sufficient specificity, identifying the deliverables that are being created for the client and confirming the basis on which ownership will vest, whether by assignment, license, or some other arrangement.

Third, where the service provider’s background intellectual property is embedded in or necessary for the use of the foreground intellectual property, the clause should provide for a limited, defined license to the client to use that background intellectual property for the specific purposes of the engagement. The scope, duration, and territorial extent of that license should be expressly stated.

This approach ensures that the client receives ownership of the deliverables it paid for without unintentionally acquiring rights to the service provider’s core intellectual assets, and that the service provider retains the tools necessary to continue operating its business after the engagement concludes.

 

Conclusion

Intellectual property clauses are frequently treated as standard boilerplate provisions in commercial agreements. In reality, they can determine the long-term ownership of some of a company’s most valuable assets. The failure to properly distinguish between background and foreground intellectual property, and to reflect that distinction clearly in contractual language, is one of the most common and consequential drafting errors in commercial practice. Businesses and their legal advisers must treat these provisions with the same importance they bring to the commercial, financial, and liability terms of every agreement they sign.

 

Ayomikun Oreoluwa Onabanjo Esq

Regville Associates

INTRODUCTION

It is well established that upon incorporation, a company assumes a legal personality distinct from its founders, director or shareholders with perpetual succession. In Nigeria, a company obtains a separate personality upon its registration with the Corporate Affairs Commission (CAC). Thus, vested with the legal capacity to carry on business, enter into contracts, own properties, sue and be sued in its own name as though it were a natural person. Put simply, a company is empowered by the nature of its registration to do everything a person can do under the law through its officers

This principle is further established under Section 42 of the Companies and Allied Matters Act (CAMA) 2020, which provides that a company becomes a body corporate upon incorporation with all the powers of a natural person. The doctrine was first enunciated in the celebrated case of Salomon v Salomon & Co Ltd (1897) AC 22 to promote entrepreneurship, encourage investment and limit personal liability. However, this law further affirms that this principle must not be used as a shield for fraud or injustice,. The separation between the company and its members is referred to as the ‘corporate veil’.

The principle of piercing the corporate veil is a vital corrective intervention that was established due to the abuse of the principle of corporate personality. This is because a company, though a juristic person, is not a natural person. As such, it cannot make decisions for or carry on business by itself except through human beings who serve as the directing mind of the company.

 

The Principle of Corporate Personality

The principle of corporate personality was first propounded in Salomon v Salomon & Co Ltd (supra), where the House of Lords held that a properly incorporated company is separate from its shareholders even where an individual controls the majority of shares. The decision established that the company’s debts are its own and not those of its members. As such, the principle serves as the general rule.

This principle has been consistently applied in Nigeria over the years and is reflected in Section 42 of the Companies and Allied Matters Act 2020 which recognizes the company as a separate legal entity with perpetual succession and limited liability see Royal Pet. Co. Ltd. v. F.B.N. Ltd. Nigerian courts have repeatedly affirmed that once a company is legally incorporated, its personality cannot be ignored merely because it is controlled by a single individual or a small group of shareholders.

 

The Principle of Piercing the Corporate Veil as the Exception

The concept of ‘Piercing the corporate veil’ is the situation where a court disregards the separate legal personality of a company going beyond its corporate veil to hold its executives, directors or shareholders personally liable for corporate obligations and liabilities. It is an exception to the general rule established in Salomon v Salomon (supra)

The doctrine operates as a judicial and statutory intervention mechanism established to prevent the abuse of the protection granted to a company by its corporate personality. The “organic theory,” also known as “the directing mind and will theory” propounded by Lord Viscount Haldane in Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, provides the framework for the piercing of the corporate veil of a company. The theory stipulates that the Courts identify the individuals who act as the “directing mind and will” of the company, usually senior executives, directors or shareholders and hold them personally liable for the acts or omissions of the company where such acts are unlawful or fraudulent.

It is important to note that Courts do not take the piercing of the corporate veil of a company lightly, as doing so undermines the protection provided by the separate personality. Hence, caution is exercised in piercing the veil and the exception is applied only where it is necessary for the administration of justice. The rationale behind it is that the law will not allow the corporate structure to be used as an instrument of fraud, illegal activities or to evade legal obligation.

 

Legal Framework for the Piercing of the Veil of a Company under the Companies and Allied Matters Act 2020.

The Companies and Allied Matters Act 2020 makes statutory provisions for corporate personality and corporate veil piercing in Nigeria. Section 42 establishes separate legal personality while Sections 305, 316, 334, 433, 672, 729(3) and 862 of CAMA make provisions imposing personal liability on directors and officers of the company in certain situations.

Statutory lifting of the corporate veil may occur in cases of breach of directors’ fiduciary duties, misuse of company funds or property, secret profits made by company executives or conflict of interests, dividends paid out of the company’s capital, fraudulent trading, improper use of company name or seal, misstatements in prospectus or false statements in company documents. These provisions ensure that the company cannot be used by individuals to carry out unlawful conducts or businesses.

 

Grounds for Piercing the Corporate Veil

The courts in Nigeria recognize several grounds for piercing the corporate veil of a company. Fraud, however, remains the most common and major ground, especially where the company is used to deceive creditors or as a cover for illegal activities. These grounds are highlighted succinctly to include;

1. Fraud – The corporate veil may be lifted where a company is used as an instrument of fraud. Courts will disregard the company’s separate personality where it is established that the company was used to deceive creditors, conceal unlawful acts, make false representations, or perpetuate dishonest trading practices. In such circumstances, directors and controlling shareholders may be held personally liable for the fraudulent conduct carried out under the guise of incorporation.
2. Sham or Façade Company – Where a company exists merely as a sham, façade, or alter ego of its controllers rather than as a genuine independent business entity, courts may pierce the corporate veil. Nigerian courts are inclined to disregard the corporate structure where incorporation is used to conceal the true facts, evade liability, or shield individuals from responsibility for wrongful acts.
3. Tax Evasion – Courts will disregard corporate personality where the corporate structure is deliberately employed to evade tax obligations or avoid lawful tax liabilities. The law does not permit incorporation to serve as a device for circumventing statutory tax responsibilities.
4. Avoidance of Legal or Contractual Obligations – Where incorporation is used as a means of escaping existing legal duties, contractual commitments, or statutory obligations already owed by individuals, courts may pierce the veil to enforce such obligations against the persons behind the company.
5. Public Policy and Interest of Justice – The courts retain equitable jurisdiction to lift the corporate veil where maintaining the company’s separate legal personality would result in injustice or offend public policy. In appropriate cases, the interest of justice overrides strict adherence to the doctrine of separate corporate personality.
6. Fraudulent Trading – Under the Companies and Allied Matters Act (CAMA) 2020, directors and officers of a company may incur personal liability where the business of the company is carried on with intent to defraud creditors or for any fraudulent purpose. In such cases, the courts are empowered to lift the corporate veil and impose liability on the persons responsible.
7. Improper Use of Company Name –The improper or deceptive use of a company’s name, particularly where it violates statutory restrictions or falsely suggests governmental approval or affiliation, may justify disregarding the company’s separate legal identity and imposing liability on those responsible.
8. False Statements in Corporate Filings – Directors or officers who make false declarations or submit misleading statutory filings and corporate documents may be personally liable notwithstanding the company’s incorporation. Courts will not permit the corporate form to shield deliberate misrepresentation in official filings.
9. Company Used as an Instrument of Injustice – Courts may lift the corporate veil where preserving the separate legal personality of the company would shield wrongdoing, perpetuate injustice, or defeat the ends of justice. In such situations, the courts will look beyond the corporate structure to hold the real actors accountable.

While the doctrine of separate legal personality remains a fundamental principle of company law, it is not absolute. Nigerian courts and statutory provisions under CAMA 2020 recognize several exceptions where the corporate veil may be pierced to prevent fraud, injustice, and abuse of the corporate form. The doctrine, therefore, serves as an important safeguard against the misuse of incorporation as a tool for illegality or unfair advantage. The courts will also lift the veil in any instance highlighted above and even in more similar instances. The imaginary scale within which the court uses to determine the veil lifting is whether or not the corporate structure has been abused and if holding the individuals personally liable will aid in the administration of justice. The focus is always on preventing injustice rather than punishing legitimate business operations.

 

Fraudulent Trading and Directors’ Liability

Fraudulent trading is the most compelling statutory ground for piercing the corporate veil under the Companies and Allied Matters Act 2020. Where a company is carried on with intent to defraud creditors or for fraudulent purposes, the directors and officers may be held personally liable.

The main aim of this provision is to protect creditors and ensure that lawfully incorporated companies are not used as instruments of deception. Courts examine financial records, company transactions and directors’ conduct to determine whether there was a fraudulent intent. If it is determined that there was an intent to defraud, the corporate veil is lifted, and personal liability is imposed on those individuals responsible for the acts or omissions of the company.

 

Judicial Precedents in Nigeria

Nigerian courts have developed a steady approach to corporate veil piercing in judicial precedents, either upholding the separate personality principle or piercing the veil of the company. In Union Bank of Nigeria Ltd v Tropic Foods Ltd (1992) 3 NWLR (Pt. 227) 231 CA, the court emphasized that corporate personality cannot be used to perpetrate fraud or injustice. Likewise, in Adeyemi v Lan & Baker Nigeria Ltd (2000) 7 NWLR (Pt. 663) 33, the court pierced the corporate veil of the company to impose personal liability on directors or shareholders who use the company as a shield for fraudulent activities, breach of trust, or to evade legal obligations.

In the case of Marina Nominees Ltd v Federal Board of Inland Revenue (1986) 2 NWLR 48, the court recognized that where a company acts as an agent of its shareholders, the veil may be lifted to determine the true nature of the transaction. These cases show the recognition of the Nigerian courts to intervene where necessary.

It is important to note that the piercing of the corporate veil of a company is within the exclusive purview of the judiciary. It is noteworthy to state that certain enforcement agencies may, in the process of lifting the incorporation veil, lend a helping hand through their investigative mechanism; the Court still wield the ultimate power to make pronouncements where there is a liability on any officer of the company. Hence, only a court of competent jurisdiction can pierce the veil of a company and hold its executives personally liable.

 

Policy Considerations and Modern Trends

The doctrine of piercing the corporate veil raises important policy considerations. This is because the consideration for public policy and justice may justify veil-piercing when upholding the corporate form would lead to injustice, violate public policy principles or undermine the integrity of the legal system. In essence, the protection of creditors, investors and the public against corporate abuse will be ensured. However, veil piercing in every action may discourage investment and undermine the corporate personality of companies.

It is for this reason the Courts in Nigeria exercise caution and carefully determine such cases, ensuring that veil piercing is applied only in exceptional circumstances. This approach strikes a balance between ensuring justice and maintaining the legal protections and benefits associated with incorporation.

 

Conclusion and Recommendations

Piercing the corporate veil remains an essential safeguard in Nigerian company and commercial transactions. It ensures that the principle of separate legal personality does not become an instrument for fraud or illegal activities. The doctrine upholds the essence of corporate personality while encouraging lawful business practices.

Caution is recommended to be exercised by the courts in the application of veil piercing. There must also be a strict adherence to corporate and legal obligations by the directing minds of a company to avoid personal liability.

 

 

Disclaimer

The article provides general information relating to the legal issues around the corporate veil in Nigerian company and commercial transactions. It is meant for general information only. It is not, and should not be relied upon as legal advice. If you require any assistance or enquiry relating to the above subject, please contact info@regville.com or Regville Associates Key contacts for advisory on Corporate Governance via www.regville.com    

Sharon-Amaka Asiegbu Esq

B. Adejare Adegbite Esq

INTRODUCTION

The recent public warning issued by the Federal Competition and Consumer Protection Commission (FCCPC) is a reminder that merger notification in Nigeria is not a mere procedural formality, but a substantive legal obligation under the Federal Competition and Consumer Protection Act 2018 (FCCPA). The Commission expressly warned firms, legal advisers, transaction parties and other stakeholders that qualifying mergers and acquisitions must be notified to the FCCPC and cleared before implementation. Merger control must therefore be treated as a central component of legal due diligence and transaction planning.

The legal foundation of merger control in Nigeria is principally contained in Part XII of the FCCPA, particularly sections 92 to 102. Section 92 adopts a broad definition of merger, capturing any transaction through which one or more undertakings directly or indirectly acquire control over the whole or part of the business of another undertaking. This functional conception of control ensures that the regime is not limited to straightforward share acquisitions, but extends to asset acquisitions, amalgamations, and joint venture arrangements where control is acquired or established. A similar approach has been adopted in other jurisdictions. In South Africa, the Supreme Court of Appeal in Distillers Corporation (SA) Ltd v Bulmer (SA) (Pty) Ltd confirmed that “control” is not confined to legal ownership but includes the ability to materially influence the policy of a firm.

A critical feature of the FCCPA is the distinction between small mergers and large mergers. Under the FCCPA, not every merger requires mandatory prior notification. Small mergers are generally not notifiable unless the Commission specifically requires notification, while large mergers must be notified in the prescribed manner and form. Accordingly, the duty to notify arises in respect of notifiable merger transactions which meet the applicable thresholds or otherwise fall within the Commission’s notification requirements.

The applicable thresholds are set out in the Notice of Threshold for Merger Notification issued pursuant to section 93(4) of the FCCPA. Under that notice, a merger becomes notifiable where, among other things, the combined annual turnover of the acquiring undertaking and the target undertaking in, into, or from Nigeria equals or exceeds One Billion naira, or the annual turnover of the target undertaking in, into, or from Nigeria equals or exceeds Five Hundred Million naira. These thresholds determine whether a transaction falls within the Commission’s mandatory pre-merger review jurisdiction.

Recent transactional practice in Nigeria demonstrates the application of the FCCPA merger control regime. A notable example is the acquisition of a controlling stake (71.69%) in Honeywell Flour Mills Plc by Flour Mills of Nigeria Plc, a transaction which attracted regulatory review by the Federal Competition and Consumer Protection Commission due to its implications for concentration within the flour milling sector. This transaction illustrates the practical importance of obtaining regulatory clearance in industries with a limited number of significant market participants.

Once a merger is notifiable, the Act is clear that it must not be implemented before the approval of the Commission is obtained. Section 93 provides that a proposed merger subject to the notification threshold shall not be implemented unless it has first been notified to and approved by the Commission. Section 96 further reinforces this position in relation to large mergers, providing that parties shall not implement such a merger unless and until it has been approved, with or without conditions, by the Commission; any step taken in contravention of that requirement is void. The implication is that premature consummation of a notifiable transaction exposes parties to both regulatory sanctions and validity risks.

This position is consistent with merger control regimes in other jurisdictions. In the European Union, the Court of Justice in Ernst & Young P/S v Konkurrencerådet clarified the scope of the standstill obligation, holding that steps capable of contributing to a change of control may constitute unlawful early implementation.

In reviewing a merger, the FCCPC applies the substantive test of whether the transaction is likely to substantially prevent or lessen competition in the relevant market. Where anti-competitive effects are identified, the Commission must then consider whether the merger is likely to generate technological efficiency or other pro-competitive gains that outweigh those effects, or whether the transaction may be justified on substantial public interest grounds.

The inclusion of public interest as part of merger review is an important feature of the FCCPA. Nigerian merger regulation does not focus exclusively on market structure or pricing effects; it also permits consideration of broader economic implications where appropriate.

The statutory framework is complemented by the FCCPC Merger Review Regulations 2021 and related instruments published by the Commission. These instruments govern the filing and review process under Part XII of the Act and underscore the need for careful procedural compliance. The Commission has also encouraged early engagement, including pre-notification consultations where necessary, as a means of facilitating regulatory certainty and efficient review. For transaction counsel, early merger-control assessment is now an indispensable aspect of deal execution.

The consequences of non-notification are significant. In its recent warning, the FCCPC reiterated that any qualifying transaction that meets the prescribed threshold must be notified to the Commission for prior review and approval before implementation, and that failure to notify may attract penalties and other enforcement action. This warning makes clear that the Commission expects compliance not only from merging firms, but also from legal advisers involved in structuring and implementing transactions.

Although Nigerian merger jurisprudence under the FCCPA remains in an emergent phase, the broader enforcement climate is becoming more assertive. A notable illustration is the decision of the Competition and Consumer Protection Tribunal upholding the FCCPC’s 220 million dollars administrative penalty against Meta Platforms Incorporated and WhatsApp LLC. While that matter did not arise from merger control, it reflects the Tribunal’s willingness to affirm the Commission’s authority and enforcement posture under the FCCPA.

Non-compliance with merger notification and approval requirements under the FCCPA exposes parties to administrative penalties, including fines of up to 2% of turnover under the FCCPC Administrative Penalties Regulations 2020. In addition, the FCCPC retains broad powers to review and impose remedies on completed transactions, including requiring a merger to be unwound or restructured where necessary.

For legal practitioners, the implications are straightforward. Advisers must determine at an early stage whether a transaction constitutes a merger within the meaning of section 92, whether it meets the applicable thresholds, and whether any proposed step could amount to implementation before approval. Competition law analysis is therefore central to M&A advisory practice in Nigeria.

In conclusion, the merger control regime established by the FCCPA reflects Nigeria’s commitment to a structured system of competition regulation. Notifiable mergers must be disclosed to and approved by the FCCPC before implementation. Compliance with merger notification requirements is a substantive legal obligation, breach of which may affect both the validity and commercial outcome of a transaction.

Eghonghon Akhimien Esq
Junior Associate
Regville Associates

INTRODUCTION

Micro, Small and Medium Enterprises (MSMEs) occupy a central position in Nigeria’s economic structure. According to various National Bureau of Statistics and SMEDAN reports make up approximately 96%-99% of all businesses in Nigeria, contributing around 46% -48% to the national GDP and accounting for 84% of total employment, yet they remain among the most legally exposed actors in commercial practice. This exposure is most evident in dispute resolution, where the formal justice system, though constitutionally guaranteed, often proves economically inaccessible. The emergence of the MSME Arbitration Scheme by the Chartered Institute of Arbitrators Nigeria Branch is best understood not merely as an institutional innovation, but as a response to a structural imbalance between legal rights and practical enforceability.

The legal and regulatory understanding of MSMEs in Nigeria is rooted in the framework established by the Small and Medium Enterprises Development Agency of Nigeria Act 2003, which designates SMEDAN as the central body responsible for the promotion, coordination, and development of small and medium enterprises in Nigeria. While the Act itself does not prescribe statutory thresholds, the classification framework developed under the National Policy on Micro, Small and Medium Enterprises coordinated by SMEDAN has become the accepted standard in policy and practice. Under this framework, a micro enterprise is typically defined as a business employing fewer than 10 persons with assets not exceeding ₦5 million excluding land and buildings. A small enterprise employs between 10 and 49 persons with assets between ₦5 million and ₦50 million, while a medium enterprise employs between 50 and 199 persons with assets ranging from ₦50 million to ₦500 million.

Although this asset and employment based classification is widely adopted, certain regulatory and financial institutions incorporate additional indicators such as turnover when assessing enterprise size for specific programmes, financing, or compliance purposes. This reflects a broader lack of uniformity across Nigeria’s MSME framework, where definitions may vary depending on the regulatory context in which they are applied.

This regulatory classification is complemented by the Companies and Allied Matters Act 2020, which introduces a more precise statutory concept of a small company under section 394. A company qualifies as small where its annual turnover does not exceed ₦120 million and its net assets do not exceed ₦60 million. Although this definition is primarily intended for corporate governance and compliance, it reinforces the broader legislative recognition that a significant category of Nigerian businesses operate within constrained financial and structural limits.

Read together, the SMEDAN framework and CAMA thresholds establish that MSMEs are not merely smaller versions of large corporations, but entities with fundamentally different operational realities. They often lack internal legal capacity, rely on informal documentation, and are unable to sustain prolonged or complex dispute resolution processes. This context is critical in understanding why conventional mechanisms have historically failed them.

In practice, MSMEs have relied largely on litigation for the enforcement of contractual rights. However, the procedural demands of court processes, combined with delays arising from congested dockets, often render litigation commercially irrational. A small business pursuing a claim risks expending more in legal costs and time than the value of the dispute itself, leading in many cases to abandoned claims or forced settlements.

Arbitration, though theoretically more flexible, has not traditionally resolved this problem. Under Nigerian law, now consolidated in the Arbitration and Mediation Act 2023, arbitration agreements are binding and enforceable, and judicial intervention is limited. Courts have consistently affirmed this position in cases such as M.V. Lupex v NOC and Statoil Nig Ltd v NNPC. This pro arbitration stance has been reaffirmed in more recent decisions, including NNPC v Fung Tai Engineering Co Ltd, P.E. Bitumen Resources v Cocean Nigeria Integrated Ltd, and NICN Insurance v Brighthouse Estate Ltd, where the courts continued to emphasise the binding nature of arbitration agreements and the limited scope for judicial interference. Yet, despite this strong legal foundation, arbitration has remained functionally inaccessible to MSMEs due to cost, procedural formality, and institutional complexity.

The MSME Arbitration Scheme operates within this gap. Rather than creating a new legal regime, the Scheme adapts existing arbitration principles to the realities of small scale commercial activity. Its jurisdiction is deliberately limited to disputes with monetary values between ₦250,000 and ₦5,000,000, thereby aligning the process with the scale of disputes typically encountered by MSMEs.

Access to the Scheme is dependent on the existence of an arbitration agreement, but the approach adopted is notably flexible. In addition to formal contractual clauses, arbitration agreements may be evidenced through signed invoices, receipts, or post dispute submission agreements. This reflects a practical recognition of the informal documentation practices common among small businesses.

The procedural structure of the Scheme is designed to ensure both speed and accessibility. A party initiates the process by notifying the other party and applying to the Chairman of the Chartered Institute of Arbitrators Nigeria Branch for the appointment of a sole arbitrator, accompanied by a modest administrative fee. The appointment is typically made within seven days, and the arbitrator is required to issue a timetable shortly thereafter.

Proceedings are conducted with a high degree of procedural flexibility, with the arbitrator retaining discretion over the process subject to the overriding objective of efficiency. The Scheme contemplates documents only proceedings and the use of online dispute resolution mechanisms in order to minimise cost and delay. Written submissions are expected to be concise, and legal representation is not mandatory, thereby lowering barriers to participation.

A defining feature of the Scheme is the strict timeline imposed on the arbitral process. The arbitrator is expected to deliver a final, reasoned award within 90 days of appointment, or as soon as practicable. This emphasis on speed directly addresses one of the most significant weaknesses of both litigation and conventional arbitration from the perspective of MSMEs.

A defining feature of the Scheme is its cost structure, which introduces a level of predictability rarely seen in arbitration and directly addresses one of the primary barriers to MSME participation. Unlike conventional arbitration, where fees may be negotiated or accrue unpredictably, the Scheme adopts a fixed and tiered cost regime tied to the monetary value of the dispute.

For disputes with a value between ₦250,000 and ₦1,000,000, the arbitrator’s fee is fixed at ₦50,000, while all other recoverable arbitration and party expenses are capped at a maximum of ₦25,000. For disputes exceeding ₦1,000,000 but not more than ₦2,000,000, the arbitrator’s fee increases to ₦100,000, with recoverable expenses capped at ₦50,000. For disputes above ₦2,000,000 and up to ₦5,000,000, the arbitrator’s fee is fixed at ₦250,000, while recoverable expenses are capped at ₦100,000.

In addition to these amounts, a party initiating arbitration is required to pay a non refundable administrative fee of ₦10,000 at the point of application for the appointment of an arbitrator.

This structured approach ensures that parties are able to determine, at the outset, the maximum financial exposure associated with the arbitration process. It also reflects a deliberate policy choice to align dispute resolution costs with the economic scale of MSME transactions, thereby preventing situations in which the cost of enforcement exceeds the value of the underlying claim.

Despite its simplified procedures, the Scheme retains full legal validity. Awards issued are final, binding, and enforceable in the same manner as arbitral awards under Nigerian law. Courts continue to play a supportive role through enforcement and limited supervisory jurisdiction, reinforcing confidence in the process.

The significance of the MSME Arbitration Scheme lies in its practical orientation. It does not seek to redefine arbitration in doctrinal terms, but rather to recalibrate it in a manner that aligns with the economic realities of MSMEs. By reducing cost, simplifying procedure, and compressing timelines, it addresses the long standing disconnect between the existence of legal rights and the ability to enforce them.

In this respect, the Scheme represents a pragmatic shift in Nigeria’s dispute resolution landscape. It transforms arbitration from a mechanism primarily utilised by large commercial actors into a functional and accessible tool for small businesses, thereby advancing a more meaningful conception of access to justice within the Nigerian legal system.

 

REFERENCES

1. Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Act 2003.
2. National Policy on Micro, Small and Medium Enterprises (MSME Policy Framework).
3. Companies and Allied Matters Act 2020, Section 394.
4. Arbitration and Mediation Act 2023.
5. V. Lupex v NOC(2003) 15 NWLR (Pt. 844) 469.
6. Statoil (Nig.) Ltd v NNPC(2013) 14 NWLR (Pt. 1373) 1.
7. NNPC v Fung Tai Engineering Co Ltd(2023).
8. E. Bitumen Resources v Cocean Nigeria Integrated Ltd(2024).
9. NICN Insurance v Brighthouse Estate Ltd(2025).
10. Chartered Institute of Arbitrators (Nigeria Branch), MSME Arbitration Scheme Guidelines.

Ehonghon Akhimien Esq

Introduction

Shareholder disputes are a common occurrence in the Nigerian corporate landscape, often arising from conflicts over control, management, and the distribution of profits. These disputes can have significant implications for the company, its shareholders, and the broader business environment. This article explores the legal remedies available to shareholders in Nigeria, particularly within the framework of the Companies and Allied Matters Act 2020 (CAMA 2020), with a focus on oppression and unfair prejudice.

Shareholder Rights Under CAMA 2020

The Companies and Allied Matters Act 2020 (CAMA 2020) includes several provisions that aim to strengthen the rights and involvement of shareholders in corporate governance.

Shareholder meetings remain a central mechanism for participation. The Act mandates the holding of annual general meetings (AGMs) and extraordinary general meetings (EGMs), allowing shareholders to participate in key decisions. Shareholders are entitled to receive notice of meetings, access relevant materials, and vote on important matters.

Voting rights under CAMA 2020 are proportionate to shareholding. The Act discourages the use of disproportionate voting structures that could undermine shareholder democracy.

Access to information is also strengthened. Shareholders are entitled to key company information such as annual financial statements, statutory registers, notices of meetings, and minutes of proceedings. This access enables shareholders to monitor management decisions, detect fraud or mismanagement, and exercise their voting rights effectively.

Nature and Causes of Shareholders Dispute in Nigeria

Shareholder disputes often arise from recurring governance issues within companies.

Exclusion from management is common in small or quasi-partnership companies, where minority shareholders may be denied participation despite legitimate expectations. Disputes may also arise where directors or majority shareholders divert corporate opportunities for personal benefit or to related entities.

Improper dilution of shares is another frequent trigger, particularly where additional shares are issued to weaken minority interests. Similarly, misuse of corporate funds and mismanagement of company assets often give rise to conflict.

Disputes relating to dividends are also prevalent, especially where financial records are manipulated to deny minority shareholders their entitlement.

Legal Framework Governing Shareholder Disputes in Nigeria

The principal legislation governing shareholder disputes in Nigeria is the Companies and Allied Matters Act 2020 (CAMA). It provides the statutory basis for minority protection, including actions by minority shareholders, derivative actions, and relief against unfairly prejudicial or oppressive conduct.

Jurisdiction over company matters is vested in the Federal High Court under the Constitution and the Federal High Court Act. Nigerian courts also rely significantly on common law principles, particularly those derived from English company law.

Foss v. Harbottle Principle

A fundamental principle of company law is majority rule, derived from the rule in the case of Foss v Harbottle (1843) 2 Hare 461.

The rule establishes that the company is the proper claimant where a wrong is done to it, and that courts generally will not interfere in internal company management where the majority can ratify the act. This principle promotes corporate autonomy and efficiency in decision-making.

However, strict application of the rule can allow majority shareholders to abuse their powers. To prevent injustice, courts developed exceptions covering situations where acts are illegal, ultra vires, procedurally improper, or constitute fraud on the minority. These exceptions form the foundation of modern minority protection mechanisms.

Oppression and Unfair Prejudice Under Nigerian Law

Oppression refers to conduct that is burdensome, harsh, wrongful, and lacking in probity and fair dealing. It typically involves deliberate abuse of majority power against minority shareholders, such as exclusion from management, denial of voting rights, or manipulation of company accounts.

Unfair prejudice is broader in scope. It includes conduct that damages the interests of shareholders or disregards their legitimate expectations, even where there is no deliberate intention to oppress. Courts generally treat unfair prejudice as encompassing both oppressive and inequitable conduct.

Judicial Interpretation of Oppression and Unfair Prejudice

Nigerian courts have demonstrated a willingness to intervene where shareholder rights are threatened.

In Aero Bell Nigeria Ltd v Fidelity Union Merchant Bank Ltd (2006) 19 NWLR (Pt. 1013) 46 (CA), minority shareholders challenged the manipulation of financial records intended to avoid dividend payments. The Court of Appeal held that such conduct could amount to unfairly prejudicial treatment.

Similarly, in Adibua v Storm 360 Ltd (2016) 11 NWLR (Pt. 1524) 1 (CA), the court invalidated the removal of a director carried out in violation of statutory procedures, holding that such conduct was unfairly prejudicial.

In Re Nigerian Bottling Co Ltd, the court affirmed that minority shareholders may challenge decisions of the majority where such decisions are oppressive or unfairly prejudicial. These cases collectively underscore judicial readiness to protect minority interests.

Derivative Actions

A derivative action allows a shareholder to institute proceedings on behalf of the company where those in control refuse to act. This remedy is particularly relevant in cases involving breach of fiduciary duties, misappropriation of corporate assets, or failure of the board to take action.

Under CAMA 2020, derivative actions require the leave of court before commencement. The court will typically consider whether the company has a valid cause of action, whether those in control are unwilling to act, and whether the action is in the best interest of the company.

Personal Actions by Shareholders

Where personal membership rights are infringed, shareholders may institute actions in their own name. Such rights include the right to vote, receive declared dividends, transfer shares, and participate in meetings.

This distinction between personal and corporate rights is important, as it determines whether a shareholder may sue directly or must proceed through a derivative action.

Relief Against Oppression and Unfairly Prejudicial Conduct

CAMA 2020 provides a comprehensive framework for relief where company affairs are conducted in a manner that is oppressive or unfairly prejudicial.

The court is empowered to regulate the affairs of the company, restrain wrongful conduct, set aside transactions, compel the purchase of shares, appoint or remove directors, and award compensation. These remedies are designed to restore fairness without necessarily bringing the life of the company to an end.

Winding up on just and equitable grounds remains available where disputes become irreconcilable, particularly in cases of deadlock, loss of trust, or breakdown of quasi-partnership arrangements. However, courts treat this remedy as a last resort.

Challenges in Minority Protection

Despite the availability of statutory remedies, minority shareholders continue to face practical challenges. Litigation can be costly and time-consuming, and access to company information may be limited. Majority shareholders often retain control over corporate machinery, making enforcement difficult.

These realities frequently discourage minority shareholders from pursuing formal legal remedies.

Practical Strategies for Resolving Shareholder Disputes Without Litigation

In practice, many shareholder disputes are resolved outside the courtroom. Litigation is often expensive, slow, and disruptive to business operations. As a result, corporate lawyers frequently adopt alternative dispute resolution mechanisms.

Negotiation remains the first step in most disputes, allowing parties to reach commercially viable solutions while preserving relationships. Outcomes often include share buy-outs, restructuring, or agreed exit arrangements.

Buy-out arrangements are particularly common where trust has broken down, allowing minority shareholders to exit the company while enabling the business to continue operating.

Mediation provides a structured but flexible process facilitated by a neutral third party, promoting confidentiality and collaborative problem-solving. Arbitration, on the other hand, offers a more formal but private dispute resolution process, particularly useful in complex or cross-border transactions. The framework for arbitration in Nigeria is provided by the Arbitration and Mediation Act 2023.

Shareholder Agreements as a Preventive Tool

Well-drafted shareholder agreements remain one of the most effective tools for preventing disputes. These agreements typically address governance structure, voting rights, dividend policies, exit mechanisms, and dispute resolution processes.

Clauses dealing with deadlock resolution, buy-out mechanisms, and minority protection play a crucial role in managing potential conflicts before they escalate.

Corporate Governance Reforms

Many shareholder disputes stem from weak corporate governance structures. Strengthening governance practices can significantly reduce the likelihood of conflict.

Key measures include the use of independent directors, clear board procedures, transparent financial reporting, defined management responsibilities, and separation of leadership roles within the company.

Conclusion

Although Nigerian law provides robust judicial remedies for shareholder disputes, litigation should often be the last resort. Practical dispute-resolution strategies such as negotiation, mediation, arbitration, and well-structured shareholder agreements offer more efficient and commercially viable outcomes.

Ultimately, these mechanisms contribute to corporate stability, investor confidence, and effective corporate governance.

 

References

• Companies and Allied Matters Act 2020
• Foss v Harbottle (1843) 2 Hare 461
• Aero Bell Nigeria Ltd v Fidelity Union Merchant Bank Ltd (2006) 19 NWLR (Pt. 1013) 46 (CA)
• Adibua v Storm 360 Ltd (2016) 11 NWLR (Pt. 1524) 1 (CA)
• Re Nigerian Bottling Co Ltd
• Adenuga v Arowolo (2015) 7 NWLR (Pt. 1457) 1
• Alhaji Yakubu Eleto & Ors v Alhaji Adebisi Bamgbose & Ors (2012) LPELR-19495 (CA)
• Arbitration and Mediation Act 2023
• Nigerian Law Forum
• Cronfa (Swansea University Repository)
• LegalDoc Nigeria
• Resolution Law Nigeria

 

Ayomikun Oreoluwa Onabanjo Esq.

In commercial litigation and pre-suit negotiations, parties frequently engage in settlement discussions to avoid protracted court battles. In an effort to protect such negotiations from later use in evidence, legal practitioners often label correspondence and offers with the phrase “without prejudice”. Despite its widespread use in legal practice, the legal effect of without prejudice communications is often misunderstood; it is not an automatic shield that renders all marked material inadmissible but rather operates within defined statutory and judicial parameters under Nigerian law.

The without prejudice rule refers to the principle that statements made in a genuine attempt to settle a dispute are inadmissible in evidence in subsequent legal proceedings between the parties. Where an offer or admission is made “without prejudice” or a motion is denied or a suit is dismissed without prejudice, it is meant as a declaration that no rights or privileges of the parties concerned are to be considered as thereby waived or lost except in so far as may be expressly conceded or decided……….

The protection applies whether the communication is oral or written.

For the rule to apply, two essential conditions must be satisfied:

1. There must be an existing dispute between the parties; and
2. The communication must have been made in a genuine attempt to settle that dispute.

It is settled law that merely marking a document “without prejudice” is not conclusive. Where a communication is not connected to settlement negotiations, the court may admit it notwithstanding the label. Conversely, where the substance of the communication shows a genuine attempt at settlement, the protection may apply even if the words “without prejudice” were not expressly used.

The without prejudice rule is a common law doctrine rooted in public policy. The rule serves two interrelated purposes:

1. To encourage parties to settle disputes amicably; and
2. To ensure fairness by preventing admissions made for settlement purposes from being used prejudicially.

Nigerian courts, through the reception of English common law, recognize and apply the without prejudice rule as part of the law of evidence. The rule complements statutory provisions on relevance and admissibility by excluding evidence on policy grounds, even where such evidence may otherwise be relevant.

It is therefore important to note that the without prejudice rule is applied to protect the joint interests of the parties engaged in settlement discussions. As a result, the protection is generally regarded as joint, not unilateral.

In light of this, one party cannot unilaterally waive the rule, because the rule protects both parties. Allowing unilateral waiver would undermine the confidence necessary for candid negotiation. Where both parties agree, the protection may be waived. This may occur expressly, through written agreement, or implicitly, where both parties rely on the communications in proceedings without objection.

The main statute governing the principle of ‘without prejudice’ in Nigeria is Section 196 of the Evidence Act which states:

“A statement in any document marked without prejudice made in the course of negotiation for a settlement of a dispute out of court, shall not be given in evidence in any civil proceedings in proof of the matters stated in it.”

This puts the common law principle of ‘without prejudice’ into writing in Nigerian statutes.

Additionally, Section 26 also support this legislation; the statutory foundation of the without prejudice rule may be traced to Section 26 of the Evidence Act 2011, which renders inadmissible any admission made upon an express or implied condition that such admission shall not be given in evidence. The provision reflects the common law policy that parties should be encouraged to engage in frank negotiations without fear that concessions made in the course of settlement discussions will later be used against them. Although section 26 does not expressly employ the phrase “without prejudice,” its effect substantially mirrors the doctrine, as communications made during genuine attempts at compromise are excluded from evidence where the circumstances indicate an intention that they should remain confidential. Accordingly, Nigerian courts have treated section 26 as reinforcing the common law position that the admissibility of such communications depends not on the label affixed to them, but on their substance and the context in which they were made.

In Nigeria, the courts have upheld that communications made in the course of genuine settlement negotiations are excluded from evidence even if they are not expressly labelled “without prejudice”. In Ashakacem Plc v. Asharatul Mubashurun Investment Ltd, the Supreme Court held that a letter written during mediation between disputing parties is inadmissible in subsequent proceedings whether or not it was expressly marked “without prejudice”, on the basis that settlement negotiations should be protected so that parties can speak freely and attempt resolution without fear that concessions will later be used against them.

Similarly, in Obande Obeya v. First Bank of Nigeria Plc, the Court of Appeal confirmed that an offer made “without prejudice” in the course of negotiation cannot be relied upon as evidence in a later suit, reinforcing the public policy underpinning the rule.

For commercial actors and legal practitioners, the without prejudice rule carries important practical implications:

a. Careless wording in correspondence may result in unintended admissions.

b. Parties should avoid mixing open communications with settlement discussions.

c. The misuse of the “without prejudice” label may lead to false expectations of protection.

d. Lawyers must clearly distinguish between negotiation correspondence and formal demands.

In commercial negotiations involving debt recovery, contract termination, or breach of agreement, proper use of the without prejudice rule can significantly affect litigation strategy.

In conclusion, the without prejudice rule plays a vital role in commercial dispute resolution by fostering open and frank settlement discussions. While the rule generally renders settlement communications inadmissible, its application depends on substance rather than form, and it is subject to carefully defined exceptions. Legal practitioners and commercial parties must therefore exercise caution and precision in their use of without prejudice communications to ensure that the intended protection is effectively achieved.

 

Eghonghon Akhimien Esq.

Junior Associate.

 

 

Tenancy takes up a large part of Lagos State. This is because there is a high demand for buildings or apartments for accommodation and commercial purposes.

The housing reality in Lagos is one of the most pressing issues in the state. With millions of people living and working in the city, disputes between Landlords and Tenants are unavoidable. Issues such as disproportionate rent, abrupt eviction and harassment over the rights of tenants to enjoy quiet possession of the property have affected many residents over the years. To address these problems and create balance, the Lagos State government enacted the Lagos State Tenancy Law of 2015. This law was enacted to regulate landlord-tenant relationships, establish their rights and responsibilities, as well as protect and promote peaceful living.

 

THE LAGOS STATE TENANCY LAW 2015

The Tenancy Law of Lagos State is a law that regulates the relationship between landlords and tenants in certain parts of Lagos. It establishes the rules about rent, notices, eviction and the general duties of both parties. In essence, it states what you can do and what you cannot do as a landlord or tenant.

Under the law, a landlord is any person who has a good title to a property and has the right to receive rent for the property. This includes the owners of the property, beneficiaries of their estate, their agents, privies, and personal or legal representatives.

On the other hand, a Tenant is a person who pays rent to occupy a property for a period of time.

IMPACT OF THE LAGOS STATE TENANCY LAW

The Tenancy Law recognizes different types of tenants which include the monthly tenant which refers to a tenant who pays his or her rent on a monthly basis, the quarterly tenant which describes a tenant who pays his or her rent at every quarter of a year, a yearly tenant who pays his or her rent annually and a fixed tenant who occupies a property for a fixed or specifically agreed period. To know the length of notice required to end a tenancy, it is necessary for you to know what type of tenancy it is.

The Tenancy Law also made provisions for the regulation of advance rent. It states how much rent you are allowed to collect in advance as a landlord, the agent or representative of a landlord. It states that a landlord is not allowed to collect more than one year’s rent in advance from a yearly tenant. A Landlord cannot collect advance rent exceeding six months from a monthly tenant. Thus, it is unlawful for your landlord to demand two years’ or three years’ rent in advance from you, as a sitting tenant is under the Tenancy Law.

The Tenancy Law clearly states the rights and responsibilities of a tenant as well as the rights and responsibilities of a landlord. As a Tenant, you have the right to have quiet and peaceful enjoyment of the property you occupy. This means your landlord must not disturb, harass or constitute a nuisance in the property. A Tenant also has the right to receive proper notice before eviction and the right not to be forcibly removed without a court order. The law protects a tenant against the arbitrary actions of a landlord. Your responsibilities as a tenant include paying rent when due, taking reasonable care of the premises, using the property for lawful purposes, complying with the terms of your tenancy agreement and avoid damaging the property.

The rights available to you as a landlord include the right to receive rent, the right to take lawful steps to recover possession of the property through the court where a tenant defaults or violates the terms of the tenancy. The landlord is also charged with the responsibility to allow the tenant have peaceful and quiet possession of the property and not harass the tenant.

The Tenancy Law of Lagos State outlines the proper way to end a tenancy agreement, which involves preparing and serving statutory notices on the tenant. The length of notice differs for each type of tenancy. If you are a yearly tenant, you are entitled to six months’ notice, while you are entitled to one month’s notice if you are a monthly tenant. After the notice expires, further legal steps must be taken before the landlord can evict the tenant.

The Tenancy Law states the process of evicting a tenant, which involves serving the tenant sufficient notice to quit, depending on the duration of their tenancy and serving notice of the owner’s intention to recover possession of the premises at the expiration of the notice period. A landlord cannot evict a tenant by force, lock the premises or seize the property. It is also important to state that a misconception about the length of notice for every tenancy is 6 months. What the law stipulates is that “where there is no stipulation as to notice to be given by either party to determine the length of notice as stated in the Tenancy law regulating the landlord and tenant relationship. It is worth noting that where a tenancy agreement by itself stipulates a length of notice, parties to that agreement are bound by it.

Only the court has the authority to order the eviction of a tenant. Any attempt by your landlord to evict you from the property you possess as a tenant without a court order is illegal.

The Tenancy law also establishes what constitutes an offence in tenancy. In essence, you must not take the law into your own hands to terminate a tenancy or evict your tenant. The law provides penalties for these offences.

When disputes arise during a tenancy, the parties are encouraged to seek resolution through Alternative Dispute Resolution (ADR). If this fails, the matter may be brought to the appropriate court for resolution.

 

EXCEPTIONS TO AND GAPS IN THE TENANCY LAW

The Tenancy Law does not apply to all properties in Lagos State. Some specific areas are exempted from its application. Government-owned premises, medical facilities, student housing and holiday accommodation are also generally excluded. It is important for a landlord or tenant to know whether a property falls within the scope of the tenancy law. Besides these properties, the tenancy law does not apply in certain areas of Lagos State like Ikoyi, Victoria Island, Apapa and Ikeja GRA. These areas are expressly exempted under the Tenancy Law 2015, making them subject to the Rent Control and Recovery of Residential Premises Law and the Recovery of Premises Law. The lack of uniformity in the laws creates challenges for tenants in those areas and enables exploitation, as the extant laws do not provide certain rights suitable for the modern real estate industry.

 

THE NEW PROVISIONS OF THE LAGOS STATE TENANCY AND RECOVERY OF PREMISES BILL 2025 IN CONTRAST WITH THE LAGOS STATE TENANCY LAW 2015

The provision of the Bill proposes to apply to all areas within Lagos State, including both business and residential premises, with a few exceptions. This will bring about uniformity in the laws regulating tenancy and grant the same rights provided under the Bill to all tenants and landlords in Lagos State.

The Lagos State Tenancy and Recovery of Premises Bill 2025 codifies the provision of the Tenancy law on the collection of advance rent. It provides that it shall be unlawful for a landlord or agent to demand or collect, and a sitting tenant to offer or pay rent in excess of three (3) months for a monthly tenant and one (1) year for a yearly tenant. The Bill imposes a higher penalty to deter landlords and tenants from breaching this provision by imposing a fine of up to N1,000,000.00 (One Million Naira) from the N100,000.00 (One Hundred Thousand Naira) sum under the Tenancy Law 2015 or three (3) months imprisonment.

The Bill makes provisions for the agents in real estate transactions proposing the mandatory registration of anyone acting as an agent on behalf of a landlord or a tenant with the Lagos State Real Estate Regulatory Authority (LASRERA), which was established by the Lagos State Real Estate Regulatory Authority Law, 2021 (LASRERA Law). The bill also proposes the issuance of receipts for all monies received by an agent and caps agent fees at 5%. It also imposes a fine of N1,000,000.00 or a maximum of two years imprisonment as punishment. With these stipulations, new tenants need not be anxious about how much to pay for agency fees.

The Bill also introduces an avenue for faster dispute resolution by stating a clear enforcement process for ADR agreements, providing the option for virtual hearings and granting courts the flexibility to sit on weekends, public holidays and during industrial actions, provided the parties consent.

In conclusion, the Lagos State Tenancy Law 2015 was enacted to help regulate tenancy agreements but the gaps in its provisions have brought about a need for a new and updated law to fill in those gaps. The Lagos State Tenancy and Recovery of Premises Bill 2025 is a great effort at bridging the gaps. However, it is still being considered by the Lagos State House of Assembly and has not yet been passed into law. Hence, the Tenancy Law of Lagos State 2015 is still in effect.

 

Asiegbu Sharon-Amaka Esq.

Junior Associate.

The burden to prove or establish a case or claim in court is the obligation of the party seeking to make such claim. However, the extent the party on whom the burden rests would need to go to prove his case and satisfy the court that his claim has been sufficiently established is what the term, “Standard of proof” seeks to answer. 

Standard of proof refers to the level of certainty or satisfaction required to establish one’s claim. The concept is such that it determines the fate of a Defendant. The standard of proof to be employed by a court depends on the nature of the matter.

 

Types of Standards of Proof

The standard employed by courts depends on whether it is a civil or a criminal matter. There are two standards of proof in Nigeria, which include:

Balance of Probabilities

This standard of proof is used in civil matters. This means that the party adducing evidence is proving that an alleged case or fact is likely not to be true. In civil cases, the burden of proof initially lies on the Claimant making the claim and then shifts to the Defendant. 

In Agu v Nnaji, the Supreme Court held that in law, a plaintiff must show by evidence, a prima facie case before the defendant to adduces his evidence. In essence, the burden is on the plaintiff to prove his case then the defendant adduces evidence in his defense. The court then decides on the matter on the balance of probabilities. 

There are instances where the burden of proof falls on the defendant to call evidence first especially where statutory presumptions are involved. No matter which party adduces evidence first, the matter will be decided based on the evidence before the Court on the balance of probabilities. 

 

Beyond Reasonable Doubt

The standard of proof, “beyond reasonable doubt” is the standard employed to decide criminal matters. It is such that requires the party establishing his case to prove it to the extent that it will be clear beyond reasonable doubt to a reasonable person that the defendant did in fact commit the alleged crime.

In the State vs. Onyeukwu his Lordship, Pats-Acholonu JSC held;

It must be stated and emphasized that proof beyond all reasonable doubt does not mean or import or connote beyond any degree of certainty. The term strictly means that within bounds of evidence adduced and starting the court in the face no tribunal of justice worth its salt would convict on it having regard to the nature of the evidence led and marshaled out in the case. It can be said that evidence in criminal trial that is susceptible to doubt cannot be said to have attained the height standard of proof that can be said beyond reasonable doubt. Regardless of what one might think in a given state of affairs in a given case, neither suspicion nor speculation or intuition can be a substitute for a proof beyond reasonable doubt. It is proof that precludes all reasonable inference or assumption except that which it seeks to support and must have the clarity of proof that is readily consistent with the guilt of the person. The expression beyond reasonable doubt should not be susceptible to any ungainly and abstract construction or understanding. A priori, it is a concept founded on reason and rational and critical examination of a state of facts and law rather than fanciful, whimsical or capricious and speculative doubt.

 

LEGAL FRAMEWORK OF STANDARD OF PROOF IN NIGERIA

Statutes

The standard of proof “beyond reasonable doubt” in Nigeria originated from English common law, which was propounded in the case of Woolmington v. DPP and established later in Nigerian law through the 1999 Constitution (as amended) and the Evidence Act 2011.  

By virtue of Section 36(5) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), the standard of proof came into force in Nigeria based on the principle which guarantees that every person charged with a criminal offence is presumed innocent until proven guilty. The presumption places the burden on the prosecution to prove the guilt of a Defendant, mandating the standard of “beyond reasonable doubt”.

The standard of proof is also codified in Section 135(1) of the Evidence Act 2011 (formerly Section 138 of the 1990 Act) which explicitly states that if the commission of a crime is directly in issue in any proceeding, civil or criminal, it must be proved beyond reasonable doubt. It also set the standard for civil cases which is on the balance of probability by weighing the evidence adduced by the parties before the Court.

 

Judicial Precedents

Nigerian superior courts have consistently applied and upheld the standards of proof in numerous cases, establishing a robust corpus of judicial precedents. Cases such as Bakare v. State (1987), Igabele v. State (2006), and Abeke v. State emphasize that the burden of proof never shifts from the prosecution and any reasonable doubt must be resolved in favour of the accused in criminal matters. In Aiguoreghian & Anor v. State, the Supreme Court emphasized the requirement to prove every element of an offense beyond reasonable doubt.

The case of Mogaji v. Odofin, in which the Supreme Court provided a guideline for judges to weigh the totality of evidence on an imaginary scale to determine which side is more probable. The case of Central Bank of Nigeria v. Ochife & Ors, affirmed that civil cases are proven by the preponderance of evidence and the party with the burden fails if evidence is equally balanced. It was held in Kate Enterprises Ltd v. Daewoo Nigeria Ltd that if a Claimant discharges their burden and the defendant offers no evidence, the Claimant’s evidence is deemed more probable. 

 

THE RATIONALE BEHIND THE STANDARD OF PROOF IN NIGERIA

The rationale behind the standard of proof, “beyond reasonable doubt” is the fundamental principle that it is better for several guilty persons to escape conviction than for an innocent person to be convicted and suffer punishment which often involves the deprivation of liberty or life itself. It serves as a cornerstone of justice, protecting the presumption of innocence and preventing wrongful convictions.

The Supreme Court held in the case of Ogu v COP: 

‘However, for an accused person entitled to be the benefit of doubt, the doubt must be genuine and reasonable one arising from some evidence before the court’. 

 

IMPACT OF THE STANDARD OF PROOF IN NIGERIA

The impact of the standard of proof on judicial matters in Nigeria include:

Protection of the Defendants in Criminal Matters

The high standard of “beyond reasonable doubt” protects innocent individuals from wrongful conviction preventing the gravity of criminal convictions like the punishment which involves the deprivation of liberty and the potential loss of life.

Fairness in Civil Matters

The “balance of probabilities” standard ensures that decisions are made based on an even consideration of evidence adduced by the parties to a suit determining the most probable version of events and ensuring equity in disputes regarding money or property.

Upholding Constitutional Rights

Standard of proof upholds and enforces the Constitutional rights of a person entrenched in the Section 33 to 46 of the Constitution of the Federal Republic of Nigeria 1999 (As amended) and the Fundamental Rights (Enforcement Procedure) Rules 2009 (FREP Rules). 

Judicial Integrity & Transparency

It guides judges in the evaluation of evidence and compels judicial decisions to be predicated on facts and evidence, not intuition.

Procedural Roadmap 

Establishes clear burdens for parties and states when the burden of proof shifts guiding trial dynamics and prevents the miscarriage of justice.

In essence, Nigeria’s standards of proof are fundamental pillars ensuring that justice is delivered timely, factually, fairly and in accordance with the appropriate procedures for each case. 

Dynamism is a fundamental characteristic of the society as they are not static but living systems that adapt to internal and external pressures. The society is dynamic and constantly changing for as humans evolve so does their environment which in turn influences scientific and technological evolution. The evolution in these areas of science and technology lead to innovation which creates solutions to problems and makes valuable discoveries across various fields. With the success of inventions came Intellectual Theft which allowed other parties enjoy the rewards of an invention other than the original inventor by copying the invented product thus creating the need for Patents.

Patents play a major role in driving innovation and technological advancements. It gives inventors the exclusive right to prevent others from making, using, selling or importing a patented invention for a limited period in return for publicly disclosing how the invention works. It is a tool for protecting the rights of inventors, rewarding inventive effort, encouraging investment in research and development as well as enabling technology transfer through licensing.

The Concept of a Patent

Patents may be described as legal rights exclusively granted to an inventor who creates new and practical products to prevent such invention from being commercially exploited. In Nigeria, it is issued on application by the statutory inventor to the Registrar of Patents and Designs. If after careful examination of the application documents the Registrar accepts, a patent is granted, registered and the rights then subsist for the statutory duration.

The concept of Patents creates monopolization in which a third party can only exploit the patented invention with the authorization of the owner of the Patent (The Patentee). It is important to note that such “invention” could be a product, a process, composition or improvement that is novel and capable of industrial application. However, not all inventions are patentable. Such non-patentable inventions include:

1. Plant or animal varieties or biological processes for the production of plants or animals.
2. Publications or exploitations of inventions contrary to public order or morality.
3. Principles and discoveries of a scientific nature.

The conferment of a Patent brings about a situation of monopolizing innovation by granting exclusivity for a specific period and at the expiration of the duration of the patent, the invention is disclosed to the public to be freely exploited.

The Legal Framework for Patents in Nigeria

In Nigeria, the national laws governing Patents is the Patents and Designs Act (Cap P2 LFN 2004). The Act provides the framework for patent protection in Nigeria outlining the requirements for patentability, the application process, the rights and obligations of patent holders.

According to the World Intellectual Property Organization (WIPO), “the Patents and Designs Act is a crucial legislation that promotes innovation and technological advancement in Nigeria”.

Nigeria is a member of the World Trade Organization and a signatory to several international treaties related to Patent protection including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (1994) and the Paris Convention for the Protection of Industrial Property (1883). These treaties provide a legal framework for patent protection and cooperation among member states.

The Act states the process for patent application which involves several stages including filing, examination and grant. The application is made to the Registrar of Patents and Designs with detailed descriptions of the invention and supporting documents. It must be established by the applicant that such invention meets the requirements provided in Section 1 of the Act which states that such invention must be new and capable of industrial application. The second requirement is that it is a new improvement on a patented invention and capable of industrial application. The Patents and Designs Act also states the duration, compulsory licenses and modes of enforcement.

The Nigerian Intellectual Property Office (NIPO) was established to oversee the administration of intellectual property rights, including patents. Measures have been taken to improve patent application and examination. Despite these efforts, there are still gaps in the Patent laws of Nigeria.

Lacunae in the Nigerian Patent Legal Framework

Nigeria as a member of the World Trade Organization (WTO) is subject to the obligations of treaties like the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property which states the minimum standards for Patent protection that must be put in place. Despite these treaties laying the foundation for patent laws, there are still gaps in the Nigerian patent laws.

1. One of the major challenges is the lack of effective enforcement mechanisms. Patent holders often face difficulties in enforcing their rights. This is because enforcement through the courts is time consuming and costly. Although remedies are provided for, Alternative Dispute Resolution Mechanisms are not utilized for Patent disputes. The Act also provides for compulsory licenses but the rules and procedures are vague and do not provide for certain cases with regard to contemporary issues and industry emergencies.
2. Another gap is the inconsistency of the provisions regarding the restrictions of compulsory licenses. The provision of the TRIPS Agreement regarding the restriction of compulsory licenses to the supply of domestic market has long been reconsidered in the Doha Declaration.
3. The old and outdated provisions of the Act is another gap in the legal structure. At the time the Patents and Designs Act was enacted, technology and software were not as developed as they are now. There is a need to review the Act and enact a new Patents and Designs Act which can cater to the current society.
4. Another gap in the legal framework is in the area of implementation. Due to the fact that the provisions of the Patents and Designs Act are old, its provisions cannot be effectively implemented because they were not made for the current society which has developed over time both scientifically and technologically.
5. Consequently, it has been argued that patents can be used as a tool for anti-competitive behavior by Patentee Companies and Start-ups to maintain market dominance and exclude the entry of new competitors. This raises the need for Nigeria’s Patent laws to be balanced out with competition policies.

Impacts of Patents on Contemporary Companies in Nigeria

The impact of Patents on domestic businesses and multinationals companies operating in Nigeria cannot be overemphasized. Some of these impacts include:

1. Protection of ideas and inventions: As organizations that provide products or services to consumers for money of which some are newly invented, Patents afford such companies the assurance to protect their intellectual ideas, inventions as well as their rewards.
2. Generation of incentives for research and development: Patents through innovative inventions help start-ups and businesses to attract investments as well as recoup their research and development capital by monopolizing the market. It also helps to monetize inventions through licensing.
3. Technology transfer and partnerships: Although, most technologies are developed in a particular country and patented, they are subsequently used in different countries across the world. Thus, it facilitates the transfer of technology. It also enables partnerships though joint ventures, licensing between foreign technology owners and Nigerian companies.

The Business Facilitation (Miscellaneous Provisions) Act and its Efforts to Reform the Nigerian Patent Laws

The Business Facilitation Act (BFA) 2023 was promulgated to simplify the process of doing business by reforming some of the laws governing some corporate areas of law. Some of the reforms it made to the Patents and Designs Act include:

1. It reformed the Patents and Designs Act by adding a new section, 13A, which expressly empowers the Minister of Trade and Tourism to the govern process for application, grant, use and withdrawal of compulsory licenses.
2. It further empowers the Minister of Trade and Tourism the authority to grant compulsory license before the standard time limits of 4 years from filing or 3 years from grant. These compulsory licenses can only be issued for patented products and processes that are very important for public health, the Nigerian economy, or national defense.
3. The BFA also empowered the Minister to streamline the regulatory processes involved in patent application.

Recommendations

1. The Patents & Designs Act needs to be reviewed and reformed to cater to modern technology like biotech, software-related inventions and AI.
2. The laws must be expressly stated with regard to exceptions and compulsory licensing rules.
3. Intellectual property enforcement needs to be improved and other alternative dispute resolution mechanisms needs to be encouraged.

Conclusion

Patents remain an important tool for protecting inventions and fostering commercialization in Nigeria. However, the lacuna in the laws need to be reviewed, reformed and enacted according to modern technology. A cogent Patent law depends on a legal and administrative regime that is timely, clear and well-resourced. Only when these changes are made can the impact be better.