Exclusive Jurisdiction of the Investment and Securities Tribunal Over Capital Market Disputes

In the Supreme Court of Nigeria Holden at Abuja On Friday, the 12th day of December, 2025 Before their Lordships John Inyang Okoro Helen Moronkeji Ogunwumiju Adamu Jauro Festus Obande Ogbuinya Abubakar Sadiq Umar Justices, Supreme Court SC/967/2017 Between Union Bank of Nigeria PLC Appellant And Securities and Exchange Commission (SEC) ` Respondent (Lead Judgement delivered by Honourable Abubakar Sadiq Umar, JSC) Facts Sometime between 2007 and 2008, the Appellant obtained foreign credit facilities totalling USD$270million equivalent to N30,477,210,000 (Thirty Billion, Four Hundred and Seventy-Seven Million, Two Hundred and Ten Thousand Naira) from Merrill Lynch International and HSBC Bank Plc. The Appellant then used the money to fund the purchase of its own shares through a share buyback scheme by which it transferred the funds to its wholly-owned subsidiary, Union Trustees Limited which then funnelled it to Falcon Securities Limited to purchase over 609,852,000 units of the Appellant’s shares, and thereafter, Falcon Securities Limited and Union Trustees Limited executed an Asset Management Agreement by which the same shares were transferred back to Union Trustees Limited. The Respondent flagged these transactions as serious market infractions, specifically that the Appellant’s conduct created a false and misleading appearance of active trading of the Appellant’s shares in the market which artificially inflated the price of the Appellant’s shares and distorted the true value of the Appellant’s shares on the stock exchange market, thus, causing innocent investors to buy artificially overpriced stocks of the Appellant. Consequently, the Respondent filed an Amended Originating Application at the Investment and Securities Tribunal (“Trial Tribunal”), against the Appellant and 10 other companies and persons indicted in its investigations. The Respondent’s position was that the Appellant’s conduct amounted to fictional trading, price fixing, insider trading and capital market manipulation, which violated the Investments and Securities Act 2007 (“ISA”) and undermined the integrity of the securities market. In response, the Appellant, while denying all the allegations, contended that the issues raised by the Respondent were matters governed by the Companies and Allied Matters Act and therefore, fell within the exclusive jurisdiction of the Federal High Court. After considering the case presented by the parties, the Trial Tribunal found the Appellant and 10 other companies and their Chief Executive Officers, culpable of various infractions in respect of the allegations. The Trial Tribunal found that the Appellant’s conduct constituted market manipulation in contravention of the ISA, and granted the reliefs sought by the Respondent. Aggrieved, the Appellant appealed to the Court of Appeal. The Court of Appeal affirmed the decision of the Trial Tribunal in part, in respect of the 10 other Appellants before it, but, wholly affirmed the Trial Tribunal’s decision as it related to the Appellant. Dissatisfied, the Appellant filed a further appeal before the Supreme Court. Issue for Determination In determining the appeal, the Supreme Court considered the sole issue submitted by the Appellant as follows: Whether the Court of Appeal was right in affirming the jurisdiction of the Investment and Securities Tribunal, to hear and determine the action filed by the Respondent against the Appellant. Arguments Counsel for the Appellant submitted that the Investment and Securities Tribunal lacked the jurisdiction to entertain the Respondent’s claims, and the Court of Appeal ought to have set aside the Tribunal’s decision. Counsel contended that the subject matter of the Respondent’s claim raised issues of purchase by a company of its own shares, allegations of lack of corporate governance and professionalism, breach of directors’ fiduciary duties, breach of the Appellant’s Articles and Memorandum of Association, internal operations of a bank as to foreign loans and allegations of failure to comply with the Central Bank of Nigeria’s Regulations on Commission on Transaction, which are matters within the regulatory purview of the Companies and Matters Act and thus, fall within the exclusive jurisdiction of the Federal High Court as stipulated under Section 251(1)(e) of the Constitution. The Appellant’s Counsel urged the Apex Court to so hold, and allow the appeal. In response, Counsel for the Respondent submitted that the Court of Appeal rightly affirmed the jurisdiction of the Trial Tribunal to entertain the Respondent’s claims. In support of the submission, Counsel referred to the reliefs sought before the Trial Tribunal, and contended that they concerned alleged violations of the provisions of the Investment and Securities Act and therefore, fell squarely within the purview of the Investments and Securities Act over which the Trial Tribunal had exclusive jurisdiction. Counsel for the Respondent submitted that the activities of the Appellant presented before the Trial Tribunal indicated an artifice, device or scheme intended to undermine the securities market and the regulatory and supervisory activities of the Respondent, and as such were within the exclusive preserve of the Trial Tribunal. Court’s Judgement and Rationale Proceeding to determine the appeal after parties filed and exchanged their respective briefs of argument, the Supreme Court reiterated the settled position of the law that in considering the subject-matter jurisdiction of a court, the first thing a court must consider is the enabling law, and the Plaintiff’s claim as disclosed in the originating processes. The Apex Court held that by the provisions of Section 284(1) of the ISA 2007, the Investment and Securities Tribunal is clothed with exclusive jurisdiction to hear and determine any question of law or dispute involving a decision or determination of the Securities and Exchange Commission in the operation and application of the Investments and Securities Act, with Section 294 reinforcing this by declaring that the Tribunal has exclusive jurisdiction over matters specified in the ISA. The Court referred to its decision in AJAYI v SEC (2023) 6 NWLR (PT. 1881) 533 AT 558 that all disputes bordering on capital market operations and investments are within the exclusive jurisdiction of the Investment and Securities Tribunal. The Court held further that where the law is settled that where there is a special forum prescribed by a statute for the enforcement of a right, that forum must be used to the exclusion of all others. The Court relied on its decision in FRN v SOLOMON (2018) 7 NWLR (PT. 1618) 201 AT 216 and held that the Investments and Securities Tribunal is a specialised court created to determine capital market disputes, and its jurisdiction is spelt out in the Investment and Securities Act. The Supreme Court held that a careful review of the reliefs sought by the Respondent before the Trial Tribunal revealed that the core allegations raised issues of manipulation of the capital market, operation of a scheme or device to create a false market, unlawful funding of share purchases, undermining the integrity and orderly conduct of the capital market, and breach of the supervisory and regulatory powers of Securities and Exchange Commission, which resulted in the Appellant’s contravention of Sections 105, 106(1) and 110 of the ISA, 2007 and Rules 110(a), (b) and (c) of the Securities and Exchange Commission Rules. The Apex Court held that all these matters fall squarely within the regulatory framework of the Investment and Securities Act and fall within the statutory mandate of the Respondent under Section 13 of the ISA, 2007 and the exclusive jurisdiction of the Investment and Securities Tribunal under Sections 284 and 294 of the Act. The Court held that even if the acts complained of incidentally touch on corporate governance, the gravamen of the Respondent’s action remains a contravention of capital markets law, a domain exclusively assigned to the Trial Tribunal. The Apex Court found that the fact that the issue which gave rise to the Respondent’s action before the Trial Tribunal is with respect to shares and internal operations of the bank is irrelevant, what matters is the subject-matter of the claim which is wholly capital market related and rooted in the Investment and Securities Act, and thus, fell firmly within the exclusive jurisdiction of the Investment and Securities Tribunal. Based on these findings, the Supreme Court upheld the judgement of the Court of Appeal affirming the decision of the Trial Tribunal. Appeal Dismissed. Representation C. I. Umeche with T. Jimoh for the Appellant. Olujoke Aliu with O. H. Ogundiran and Elizabeth Tijani for the Respondent. 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