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NSE ASKS COURT TO STAY ACTION ON SUIT BY SUSPENDED SEC'S MEMBERS

By NBF News
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DISSATISFIED with the ruling of a Federal High Court, Lagos on February 4, 2011, the Nigerian Stock Exchange (NSE) yesterday filed an appeal against the order restraining it and the Security and Exchange Commission (SEC) from suspending some former NSE's Council members from capital market activities, over an alleged N1.36 billion-shared bonus scam.

Justice Okechukwu Okeke of the Federal High Court, Lagos has in the order, restrained the defendants, which include NSE, its Interim Administrator and President, Emmanuel Ikhazoboh and Balama Malu; the SEC and its Director General, Arunma Oteh and their agents from giving effect to the contents of some letters dated October 11 and 15, 2010 written by SEC and NSE, directing the council members, who served between 2006 and 2008 to refund what was paid to them, which the agencies termed shared bonuses.

Justice Okeke, who dismissed the defendants' preliminary objection for lacking in merit, said it was to subsist pending the determination of the substantive suit.

But NSE, Ikhazoboh and Malu in a notice of appeal filed by their counsel, Charles Edosomwan (SAN), at the Lagos Division of the Court of Appeal, urged an order from the appellant court dismissing the suit for want of jurisdiction.

In the appeal, which is predicated on five grounds, the applicants also urged the court to allow its appeal and set aside the orders of the lower court for want of jurisdiction as well as vacating same.

According to the notice of appeal, the applicants contended that the lower court judge erred in law when he assumed jurisdiction over the suit below when the suit related to matters under the Investments and Securities Act, 2007, under which disputes are for the exclusive preserve of the Investments and Securities Tribunal.

The suit, the applicants contended, was about the regulatory action taken by the SEC, the regulator of the Capital market seeking to regulate the NSE's Council.

NSE, alongside its interim administrator and president in the notice of appeal, submitted that the lower court judge erred in law when he made an order of injunction against the appellants without jurisdiction to hear the case.

They further submitted that the lower court erred in law and seriously misdirected itself when it made orders relating to the appellants' motion to convert the suit from a representative action to an action inter se dated November 5, 2010 without hearing it.

They added that the judge also erred in law when he held that the representative action of the plaintiffs (respondents) was properly constituted in spite of the fact that a challenge has been made by the appellants on representative capacity of the named plaintiffs.

While seeking for a stay of the execution of the order pending the determination of the appeal, the applicants contended that Section 284 of the Investment and Securities Act, 2007 confers exclusive jurisdiction on Capital Market issues on the Investments and Securities Tribunal and that the disputes between the parties in the suit arose from the decision of the SEC pursuant to its regulatory powers which the NSE is bound to act on.

It will be recalled that Justice Okeke in his order last Friday upheld all the submissions made by the plaintiffs' counsel, by holding that the plaintiffs effectively made out a case for the granting of their interlocutory prayers.

He rejected the defendants' argument that, by virtue of the provisions of Sections 284 and 289 (1) of Investment and Security Act 2007, the Investment and Security Tribunal (IST) was the proper forum for the resolution of the dispute and assumed jurisdiction to hear the matter.

Justice Okeke, who adjourned hearing in the suit till March 5, 2011, held that such argument was overridden by the provision of Section 205 of the Constitution, empowering the Federal High Court to adjudicate on disputes arising from the exercise of administrative powers by Federal Government agencies, among which are SEC and NSE.