by Legalnaija | Sep 20, 2020 | Uncategorized
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by Legalnaija | Sep 19, 2020 | Uncategorized
ABSTRACT
Couple of days ago, I was requested to furnish
legal opinion on a judgement SUIT NO. NICN/LA/160/2017 delivered in June, 2020
by National Industrial Court of Nigeria. In the said judgement, the honourable
trial court, in its respectful wisdom, held that statute of limitation is not
applicable to contract of employment. The nucleus of the judgement was the
court’s heavy reliance on N.R.M.A. & FC vs Johnson (2019) 2 NWLR (P 1656)
SC 247. This piece of writing considers the applicable authorities and
maintains that statute of limitation is applicable to contract of
employment.
1. BACKGROUND
The precis of the judgement under examination is
that, the claimants were dismissed from the employment of the defendant in 2009
-the claimants were natural persons while the defendant was a corporate person.
The claimants instituted an action at National Industrial Court in 2010,
challenging their dismissal. The judgment of the court was delivered in 2016 in
the claimants’ favour. The claimants, yet again, in 2017, approached the same
National Industrial Court, claiming for their employment entitlements via
another fresh suit. The defendant raised, among others, the defence of statute
of limitation. Though finding that the cause of action accrued in 2009, the court
assumed jurisdiction and held that the matter was not statute barred. Relying
on the judgement of the Supreme Court in N.R.M.A. & FC vs Johnson (2019) 2
NWLR (P 1656) SC 247, the Trial court held:
“I have seen the arguments of counsel and without
need to rehash, I find that the position of the law regarding the applicability
of statutes of limitation on employment contracts has been clarified by the
Supreme Court in the case of N.R.M.A. & FC vs Johnson (2019) 2 NWLR (Pt
1656) SC 247 where His Lordship Ariwoola, JSC declared that statutes of
limitation do not apply to employment/service contracts. As the reliefs for the
claimants’ gratuity in this case relate to claims that inured as a result of
contracts of service with the defendant, this court is bound to follow these
decisions of the Appellate courts. I therefore find that this action is not
caught by Limitation law of Lagos State. I so hold.”
The twain questions this paper seeks to answer
are: 1. Was the case of N.R.M.A. & FC vs Johnson (2019) 2 NWLR (P 1656) SC
247 applicable in this case? 2. Does contract of employment now enjoy
perpetuity going by the reasoning of the trial court?
2. EXAMINATION
OF N.R.M.A. & FC vs JOHNSON (2019) 2 NWLR (P 1656) SC 247
Johnson and others were employed by National
Revenue Mobilization Allocation and Fiscal Commission (N.R.M.A. & F.C.) The
Commission later terminated their employment. Johnson and his co-employees sued
the Commission for wrongful dismissal and claimed their salaries and other work
benefits. The Commission raised the defence that, it, the Commission, was a
Federal Government agency and no legal action could be commenced against the
Commission except within three months of accrual of the cause of action as
provided by section 2, Public Officers (Protection) Act. The relevant provision
of the Public Officers Protection Act Cap 379, Laws of Federation of Nigeria
1990 relied upon by the Appellant in Section 2 (a) states:
“Where any action, prosecution or other
proceeding is commenced against any person for any act done in pursuance or
execution of any act or law or of any public duty or authority, or in respect
of any alleged neglect or default in the execution of any such act, law, duty
or authority, the following provisions shall have effect – (a) The action,
prosecution or proceeding shall not lie or be instituted unless it is commenced
within three months next after the act, neglect or default complained of, or in
case of a continuance of damages or injury within three months next after
ceasing thereof.”
The Supreme Court, discountenancing this
argument, held:
“In this matter, while the appellants maintain
that the action is caught by section 2a of the Public officers Protection Act,
the respondents argue that the act is inapplicable. There is no doubt, a
careful reading of the respondents’ claim will show clearly that it is on
contract of service. It is now settled law, that section 2 of the Public
officers Protection Act does not apply to cases of contract.”
This same position of the law has been variously
recognised and echoed by our courts for quite a long period of time before
2019. The Court of Appeal’s decision in NIGERIAN ARMY v. ABAYOMI (2019)
LPELR-47084(CA) buttresses this position when it held, on when the Public
Officers Protection Act will apply:
“Two conditions must coexist before a person can
avail himself of the protection and these are (i) the person must be a public
officer; and (ii) the act done by the person in respect of which the action was
commenced was an act done in pursuance or execution or intended execution of a
law or public duty or authority – Central Bank of Nigeria Vs Okojie (2004) 10
NWLR (Pt 882) 488, Hassan Vs Aliyu (2010) 17 NWR (Pt 1223) 547. Where either of
these conditions is missing, the person concerned does not come under the
provisions of Section 2 of the Public Officers Protection Act and an action
against him is not caught by the three months limitation period.” Per
ABIRU, J.C.A. (Pp. 30-34, Paras. D-B).”
The Johnson’s case in question only excluded
application of three months limitation of action contained in Public Officers
Protection Act and analogous enactments, in contract of employment or where the
defendant government agency does not act in discharge of its duty. The case is
not a precedent on employment contract of six/five-years limitation contained
in various Limitation Act/Law.
3. DISSIMILITUDE
BETWEEN THE TWO CASES
In the Johnson’s case, the party invoking statute
of limitation under Public Officers (Protection) Act was a Federal Government
Agency and the Supreme Court refused to be swayed. Conversely, in the instant
case, the party raising the defence of statute of limitation is not a federal
government agency and did not invoke the provision of Public Officers
(Protection) Act or Law, rather, it invoked the statute of general limitation
i.e. Limitation Law, which is the only limitation law applicable in this case.
For the sake of emphasis and at the risk of
repetition, the position taken by the Supreme Court in Johnson has been
enjoying full compliance of subordinate courts but not in the manner and
instance in which the trial court applied it. The Court of Appeal held in FUTO
v. AMCON & ORS (2019) LPELR-47327(CA):
“On the contention that the 3rd party notice
is against a public officer which is the Appellant, this issue has long been
settled by the Apex Court in a long line of cases that the statute of
limitation does not apply to contract, it is the subject matter that determines
if the public officer is to benefit from the application. It is granted that
the Appellant is established by statute and enjoys the protection of the Public
Officers Act but having admitted that the subject matter is simple contract
therefore it does not apply to it.”
As indicated above, the case of N.R.M.A. & FC
vs Johnson (2019) 2 NWLR (P 1656) SC 247, and similar precedents largely relied
on by the trial court, were based on a special provision of limitation in
special circumstances against public officers or offices.
4. STATUTE
OF LIMITATION REMAINS APPLICABLE TO CONTRACT OF EMPLOYMENT
The general position of the law is that, a suit
initiated outside the prescribed period of time is statute barred and the
potential claimant is deemed to have been slumbering till time lapses and he is
left with no legal remedy in a court of law. Limitations to actions are
basically provided by statutes, though being a form of procedural law. In
Nigeria jurisprudence, there are specific statutes which stipulate time within
which legal action could be instituted against some bodies and in some special
circumstances. Examples of such special provisions are found in statutes such
as Electoral Act, Public Officers Protection Act, Nigerian National Petroleum
Corporation Act or similar Acts/Laws establishing government institutions.
There is also a general statute of limitation titled “Limitation Act/Law”,
which evenly applies to all persons and in all instances.
The scope of applicability of limitation act/law
is to all and general matters of any nature except and save the one excluded by
another parallel statute. In giving nod to this, the court held in CBN v.
HARRIS & ORS (2017) LPELR-43538(CA)
” Now, it is trite that where a statute
prescribes that an action must be filed in Court within a specific period, such
provisions of the law must be strictly complied with, in order to avoid being
caught up by the limitation under the law. In OBA J. A. AREMO II v. S. F.
ADEKANYE & ORS (2004) 19 NWLR (pt. 891) 572; (2004) LPELR – 544 (SC), the
Supreme Court, per EDOZIE, JSC held at 17, paras C – F, thus: “Where a
statute of limitation prescribes period within which an action must be
commenced, legal proceedings cannot be properly or validly instituted after the
expiration of the prescribed period. When an action is statute-barred, a
plaintiff who might otherwise have had a cause of action loses the right to
enforce it by Judicial process because the period of the time laid down by the
limitation for instituting such an action has elapsed….” Per
OBASEKI-ADEJUMO, J.C.A. (Pp. 16-17, Paras. D-D)”
A case on all fours with the case decided by the
court in the judgement under appraisal is TRANSOCEAN SUPPORT SERVICES (NIG) LTD
v. MINA PRAH (2019) LPELR-47249(CA) in which contract of employment of a
claimant was held to be caught by limitation period:
“It is not in doubt that the action was
commenced on 30/11/2000 when the writ of summons was filed. The Limitation Law
of Rivers State Cap 80 Laws of Rivers State 1999, provides in Section 16
thereof that; No action founded on contract, tort or any other action not
specifically provided for in Parts I and II of this law shall be brought after
the expiration of five years from the date on which the cause of action
accrued. From the above provision, it can be seen that the limitation period in
actions founded on contract is five years”.
The holding quoted above remains the true
position of the law; contract of employment is still under the reach of the
long hand of limitation law, to hold otherwise would be giving it an eternal life
which would be inequitable to the adverse party.
5. APPLICATION
OF JUDICIAL PRECEDENT
There is no gainsaying that a trial/subordinate
court is inescapably duty bound to follow decision of a superior court. The
prerequisite for the application of such stare decisis is that there must be
substantial similarity between the case decided by the superior court and the
one present before a subordinate court; similar facts and similar legal
principles, as held in INTEGRATED REALTY LTD V. ODOFIN & ORS (2017) LPELR
48358(SC):
“The application of the principles of stare
decisis or judicial precedent does not involve an exercise of judicial
discretion. It is what must be done; mandatory. The doctrine is based on the
relevant likeness of or between the cases if there is no likeness between the
two, it is an idle exercise to consider whether the previous one should be
followed or departed from. It is settled law that a previous decision is not to
be departed from or even followed, where the facts or the law applicable in the
previous case are distinguishable from those in the latter case.”
Also, in LAWAL v. MAGAJI & ORS (2009)
LPELR-4427(CA), it was held:
“For a previous decision to serve as an
authority in any given case, it must be contextually situated to the facts, law
and rules in the case under consideration. Previous decisions do not apply
generally across board unless the facts are the same or sufficiently similar
and the law/rule applied in the previous case can be said to be in pari materia
with that applicable to the case under consideration.” PER SANKEY, J.C.A. (P.
50, paras. C-E)”
It is settled law that where the facts of a case,
the principle of law stated by Superior Court (Supreme Court in this instance),
is not with exact similitude with the case before a subordinate court, the
subordinate court is not duty bound to apply that principle of law.
6. CONCLUSION
The right to enforce an action on contract of
employment is not a perpetual right but a right generally limited by statute.
Public Officers Protection Law and similar statutes of limitation do not apply
to contracts which a public authority makes but which is not in the discharge
or performance of its statutory duty. However, the protection applies to
contracts or actions which the public authority has a duty under a statute to
make. The application of judicial precedent is inevitable in the predictability
of matter’s outcome as it finetunes our judicial system and makes sensible the
hierarchy of courts. This application is however founded on binary pillars:
substantial similarity of fact and of legal principle.
Author:
Hafeez Folohunsho Zubair is a dynamic lawyer who
practises in Lagos, Victoria Garden City (V.G.C.), Lekki, and can be reached
on: +2347038816822, hafeez4a@gmail.com
by Legalnaija | Sep 17, 2020 | Uncategorized
When a person publishes false statements which seek to defame another’s character, it is referred to as libel. For an action for libel to be successful, one of the grounds is that such writing must have been published.
A true statement on the contrary, can never be defamatory as the written publication must be false and without lawful justification for it to be defamatory.
In such situations anyone who is a victim of libel can sue for damages at the appropriate court. Its however important to note that an action for libel cannot be brought after 6 years from the date of which the action occurred.
Do you have any questions on defamatory statements, post a comment or send us a DM
#nigerianlawyers #aoclegal #defamation #libel #barrister #slander
by Legalnaija | Sep 16, 2020 | Uncategorized
INTRODUCTION
The Nigerian Local Content Development and
Enforcement Commission Bill, 2020, (the “Bill”) is seeking to repeal the Nigerian Oil and Gas Industry Content Act,
2010 (hereinafter referred to as the “Act”). This shortsighted initiative
emerged out of the misconstrued perception of the true purpose behind the
issuance of the Executive Order 03 signed
by the President of the Federal Republic of Nigeria seemingly in support of
Local Content, which mandates all Ministries, Departments and Agencies (MDAs)
to grant preference to local manufacturers of goods and service providers in
their procurement of goods and services.
Also, another misconception is the
proclamation entitled “Presidential Executive Order for Planning and Execution
of Projects, Promotion of Nigerian Content in Contracts and Science,
Engineering and Technology,’’ by President Muhammadu Buhari, pursuant to the
authority vested in him by the Constitution, which was signed on Friday,
February 2, 2018, the Executive Order
No. 5 (“EO5”) by which all Ministries, Departments and Agencies (“MDAs”) of
Government were directed to engage indigenous professionals in the planning,
design and execution of National Security projects and maximize in-country
capacity in all contracts and transactions with science, engineering and
technology components.
These are directives
which can be easily actualized through the simple release of Guidelines or
modalities to that effect by the concerned MDAs without the need to enact a new
Local Content Law, let alone repeal the existing Act.
While this move
introduced by the Bill could be considered as remotely development-driven on
the surface, however, its bid to repeal the hitherto existing NOGICD Act, by
establishing a Local Content Commission and expanding the scope of Local
Content into all other Sectors of the economy, will only result in the
furtherance of unwarranted bureaucratic bottlenecks, which will hamper the much
desired rapid growth of the economy if assented to. This work exposes the
attendant shortfalls of the Bill, along with the impracticability of the
innovations it seeks to import into the economic structure of the country and
expound on why efforts should rather be channeled along the lane of properly
revamping the NOGICD Act already before the House of Representative and
undergoing some salient modifications, rather than obliterating it completely.
THE EXCLUSIVITY OF LOCAL CONTENT LAW TO THE OIL AND GAS
SECTOR
Local content
requirements are provisions (usually under a specific law or regulation) that
commit Foreign Investors and companies to a minimum threshold of goods and
services that must be purchased or procured locally. From a trade perspective,
local content requirements essentially act as import quotas on specific goods
and services, where Governments seek to create market demand via legislative
action. It ensures that within strategic Sectors particularly those such as Oil and Gas with large economic rents,
or vehicles where the industry structure involves numerous supplier’s domestic
goods and services are drawn into the industry, providing an opportunity for
Local Content to substitute domestic value-addition for imported inputs.
The rationale for
Local Content requirements is especially strong, particularly for the Energy
Sector. Apart from the United Kingdom, very few new energy producers including
Norway, long considered as the gold standard Local Content had, upon discovery
of their Oil and Gas deposits, stated the requisite industrial capacity to
serve as an internationally competitive platform for exploration, extraction,
distribution and export. Given that the Nigerian Oil and Gas industry is nearly
a century old, the dominance of established operators and the sophistication of
energy technology particularly for offshore deposits implies that emerging
energy producers will, at the outset, nearly always depend on foreign firms.
While energy sector investments (if properly managed) can ensure a steady revenue
stream and constant (and in the case of developing countries, rising) demand
levels, its exploitation however, requires sophisticated and cutting-edge
technology, a ready-made demand for a wide network of suppliers in virtually
all areas of manufacturing and services, and ongoing employment for trained
staff, both at home and in other energy-producing countries around the world.
Therefore, the reason
for having a Local Content Development Act specifically enacted for the Oil and
Gas Industry was not just to create more jobs but primarily to ensure
technology transfer of the grossly technical expertise applied in the Oil and
Gas Industry among other industry-based objectives. Countries all over the
world reserve Local Content laws for exploration of natural resources
especially in relation to the energy sector and this is because they desire to
build the necessary capacity to cater for that sector without high dependence
on external bodies.
Similarly, a cursory
look at the regime of Local Content in other Countries such as Ghana, will
reveal that the whole concept of Local Content not only resides with the Oil
and Gas sector, but also focuses on production and utilization of the Country’s
resources, and this puts away the need to have it present in other sectors.
Regulation 49 of its Petroleum (Local Content and Local Participation)
Regulations, 2013 L.I 2204, defines Local Content thus:
“The quantum or
percentage of locally produced materials, personnel, financing, good and
services rendered in the petroleum industry value chain and which
can be measured in monetary terms” (Underlined is ours for emphasis).
Having so defined
local content, the country has no other law on the area, as this will mean an
overstretching of its objectives.
Similarly, Section
106 0f the NOGICD Act defined “Nigerian Content” as thus:
“The quantum of composite value added to or created in the Nigerian
economy by a systematic development of capacity and capabilities through the
deliberate utilization of Nigerian human, material resources and services
in the Nigerian Oil and Gas industry” (Underlined is ours for emphasis).
THE BILL LACKS A CLEAR-CUT APPLICATION AND DIRECTION
Unlike the NOGICD Act
which provides for a clearly-worded spectrum of its application as regulating
activities in the Oil and Gas Sector, and thus makes for ease of its
enforcement, the Bill in question seeking to repeal the Act has failed to
delimit itself to any relevant Sector(s) of the economy or even spell out the
nature of the exact activities it intends to regulate. It equally does not
provide for the purpose its eventual enactment will achieve, which is in sharp
contrast with the NOGICD Act, the focal point of which is the implementation
and monitoring of Nigerian Content, ensure and encourage the full indigenous
participation and transfer of technology to Nigerians and the provision for the
development of Nigerian Content in the Nigerian Oil and Gas Industry, as
vividly indicated by the wordings of the sections that ran through its pages
and even more so, in the clauses of the Bill (NOGICD Act (Amendment) Bill)
seeking to amend it.
The Local Content
Development and Enforcement Commission Bill on the other hand is not Sector
specific and other Sectors of the Nigerian economy comprises of Services,
Mining, Forestry, Agriculture, Transport, Tourism, Energy, etc. Considering
these Sectors are made up of 70% low income earners and striving entrepreneurs,
it is quite an enormous task if not an outright impossibility to implement the
wordings of the Bill. This deficiency it has by itself brought to the fore in
many of its proposed clauses. Prominent among which is the very first Clause
that hinges on the number of objectives it undertakes to achieve. Some
provisions are stated below:
Clause 1
The objectives of
this Bill include —
“(1) The imposition
of the application of Nigerian Local Content to any transaction in which public
fund belonging to the Federal Government of Nigeria or any of its arms and/or
agencies is used in any sector of the Nigerian economy, in donor or loan funded
projects and in activities carried out by any entity in possession of an
investment agreement with any arm of the Federal Government of Nigeria or any
of its agencies;
(2) The imposition of
Nigerian Local Content to transactions in all sectors of the Nigerian economy
where regulated activities are carried out especially in the petroleum, solid
minerals mining, construction, power, information and communication technology,
manufacturing and health sectors of the Nigerian economy;”
The foregoing provisions alone without
addition, are an obvious pointer to the fact that the Bill is certainly biting
a lot more than it can chew. Given that an innumerable percentage of publicly
funded transactions involving the Federal Government, its Arms, Agencies in
various sectors and activities by entities in investment Agreement with these
bodies, are conducted year in and year out, of which an accurate data and
status reports of are unfortunately not obtainable in any of the regulatory or
statutory establishments empowered to oversee and monitor these transactions.
If such primary
duties have been so neglected over the years, it automatically follows that
there is absolutely no footing upon which the imposition of the application of
Local Content can possibly thrive, as multiple projects and activities have not
been and are still not being tracked, thus, breeding more avenue for; perpetual looting of funds, low or zero
revenue generation and abandoned or uncompleted public works, the sum of which
could have been positively harnessed towards achieving the fast growth of the
economy and according more impetus to public-private-partnership which will aid
the smooth implementation of government policies, bring about robust economic
and commercial boost and add to the volume of the national wealth.
Conversely, the NOGICD Act has maintained a
solid record since its inception 10years ago, as it has remained focused on
achieving its sole objective, made possible by the specific nature of its
application to the Oil and Gas Sector, the mainstay of the economy and large
contributor to the overall national GDP. Interestingly, about $9 billion has
been retained from the average $20 billion being spent in the Oil and Gas
industry yearly due to the implementation of the Act and about Nine Million
man-hours has been achieving in training, with indigenous players owning about
40% of marine vessels operating in the industry. These are only a few of the
laudable economic transformations ushered in by the Act as a result of the
clarity and narrowed application of its mandates and the powers, functions and
roles exercised by the agency saddled with the onus of giving effect to its
sector-based provisions, the Nigerian Content Development and Monitoring Board.
ADDITIONAL EXPENSES TO THE NATIONAL BUDGET
It is beyond debate
that an Act to make provision for Local Content on all sectors of the economy
would not only be too voluminous and incapable of capturing all necessary
developments it ought to, but it will equally increase the amount of expenses
accruing to the annual national budget in running the costs of the numerous
Directorates and Departments the Bill seeks to establish and in setting up
offices for more Directors. This is especially
because the new Departments are more of a duplicate to the already existing
Departments in the Ministries. Instead of creating new Directorates and
Departments, it is advisable that the provisions in this Bill be used as an
upgrade to the already existing Departments to properly discharge their
administrative functions.
CONCLUSION
Before
the advent of the Bill, the NOGICD Act has withstood the test of time and
ensured developmental breakthroughs in the Oil and Gas Sector it regulates,
piloted by the skillful management of the NCDMB, and it will be an economic
drawback to discard it after a decade of excellence. Also, there are in
existence various Ministries to cover each Sector of the economy all having
regulations governing their activities. The application of Local Content is
indeed, a concept that can only be successfully actualized in the Oil and Gas Sector
alone, as records have exhibited, attempting to drag it into the shores of
other Sectors is fated to being an exercise in harmonic futility.
Mr. Oyetola Muyiwa Atoyebi, SAN is one of the most notable professional Nigerian lawyer,
who has distinguished himself in his professional sphere within the country and
internationally. He is the youngest in the history of Nigeria to be elevated to
the rank of a Senior Advocate of Nigeria. At age 34, he was conferred with the
prestigious rank in September, 2019. Mr. O.M. Atoyebi, SAN can be characterized
as a diligent, persistent, resourceful, reliable and humble individual who
presents a charismatic and structured approach to solving problems and also an
unwavering commitment to achieving client’s goals. His hard work and dedication
to his client’s objectives sets him apart from his peers.
As the Managing Partner of O.M. Atoyebi, SAN &
Partners, also known as OMAPLEX Law Firm, he is the team leader of the Emerging
Areas of Practice of the Firm and one of the leading Senior Advocates of
Nigeria in Local Content Law, where he has worked with various key industry
stakeholders and successfully facilitated transactions in the Oil & Gas and
Energy Sector. He has a track record of being diligent and he ensures that the
same drive and zeal is put into all matters handled by the Firm.
by Legalnaija | Sep 16, 2020 | Uncategorized
INTRODUCTION
International sports law has seen
several developments and changes in the last decade, one of such is the radical
change in the Athlete nationality regime and the remodelling of the
international and municipal concepts of citizenship.
As the world is fast becoming a global
village due to the strong influence of globalization, the stringiest
requirement for citizenship and nationality has been relaxed by various nations
in the alarming race to secure top class athletes or seek dominance in certain
sports.
In
the light of this, athletes have been seen to throw nationality and patriotism
to the wind in an emerging world of marketization of citizenship. The International
Olympic Committee (IOC) have also taken steps to regulate and control this
growing tide. In a fair attempt to regulate same, several legislations and
rules have been made and agreed upon to curb and set a standard for nationality
swapping.
This paper shall examine the principles
governing nationality swapping at the Olympic Games.
THE QUESTION OF NATIONALITY
AND CITIZENSHIP
According to the European
Convention on Nationality (1997), nationality can be defined as ‘the
legal bond between a person and a state’.
Furthermore, the definition does not indicate the person’s ethnic origin that
is ones nationality is nowhere connected to one’s ethnic affiliation or
background.
Although National/domestic laws are
provided to regulate acquisition of nationality status by various states,
International Federations (IF’s) also make provision for attainment of
nationality status.
In international law, citizenship is a
reference to the general nationality of a state acquired by one under the
various citizenship laws of a state. The Universal Declaration of Human Rights
Guarantees the right to swap (change) his/her nationality without deprivation
on any grounds.
It is now no gain saying that the right to swap (change) nationality is one
provided for and protected by International conventions/treaties.
NATIONALITY
SWAPPING UNDER THE OLYMPIC CHARTER EXAMINED
The issue of nationality under the Olympic
Charter is regulated by Rule 41 of the Charter. It is a fundamental
principle that for an athlete to participate/compete at the games such an
athlete must be a national of the country of the National Olympic Committee
(NOC) which is entering such competitor.
Any dispute arising from the nationality of a competitor at the games relating
to the athlete’s state of nationality is resolved by the international Olympic
committee (IOC) Executive Board.
Due to globalization, many athletes
are very much eligible to represent more than one country. Example, Yamile
Aldama, a world class triple jumper, has been a beneficiary of the fluidity in
nationality at the games which has seen her represent three different countries
i.e Cuba at the 2000 games in Sydney, Sudan at the Athens 2004 games and
Britain at the London 2012 games. This dynamic is recognised by the charter in
Bye-law to Rule 41 (1). But it goes further to the state and specify the
conditionality’s for nationality swapping.
The charter provides that where an
athlete (competitor) is a national of two or more countries at the same time,
he (the competitor) may represent either one of them, as he (the competitor)
may elect. Where such an athlete (the competitor) has opted to represent one
country in the Games (Olympics) or in a continental or regional or world
championship (IAAF World Championship for example) recognised by the relevant
International Federation (IF) he may not represented another country unless he
meets the following requirements:
i)
Three years has passed since
the competitor last represented his former country. Note that this period may
be reduced or even cancelled with the agreement of the NOC and IF concerned, by
the IOC Executive Board.
ii)
The competitor must first
change or acquire a new nationality subject to the nationality laws of the new
state.
If the athlete (the competitor) can fulfil the above
stated requirements then he can be eligible to represent his new nation at the
games.
Another
principle worth noting is the status of ‘Stateless Athletes’. Stateless may be as a result of a refugee
status by an athlete where he fled his country of birth and domicile in another
country. In this situation, if the athlete meets the three year waiting period
and can prove he (the competitor) had severed his ties to his country of birth.
Also, where an
athlete is from a state with no NOC, such an athlete is not deemed as
‘stateless athletes’, such athlete will be regarded as an ‘independent
athlete’. The Charter of the Games provides that an athlete must be sponsored
by a country’s NOC. This situation arose with Guor Mamal, a South Sudanese
Marathon runner at the 2012 London Games, he wanted to join the national team
of the United States, his domicile, but he was not a United States citizen and
his country of birth, South Sudan had no NOC, as South Sudan was in its first
year of independence.
CONCLUSION
In summary, the question of nationality amongst athletes
at the games is a fluid one, which gives a power to bigger, richer and well
established countries to offer better welfare and financial packages to
athletes to entice them to represent them at the games. This has served
countries with rich resources but not much talent pool to draw from, thereby
allowing them to deep into the global athlete market to window shop for willing
athletes who are ready to swap nationality for better working and competing
conditions.
On the other
hand, the IOC is also encouraged to make alterations to the procedure for
nationality swap, i.e the waiting years as this is not really important as the
consensual agreement between the athlete, adopting country and the IF concerned
is of utmost importance.
F. E. OROK (Esq)
Rule
41 Bye-Law (ii) of the Olympic Charter
by Legalnaija | Sep 12, 2020 | Uncategorized
The role played by the Nigerian Bar
Association and lawyers in the development of Nigeria’s economic and societal goals
cannot be overstated. Due to this, the expectations of everyone who
participated in or followed the recent NBA Elections are quite high, a fact
that is not lost on the new officers. The NBA President, Mr. Olumide Akpata, noted
this at his inauguration, when he stated that “As I informed the new national officers during our strategy retreat
last weekend, hitting the ground running immediately will not be enough, we
also need to hit it flying. Nothing short of that would match the expectations
of our members and Nigerians.”
While the new NBA officers have their work
cut out for them, it is important to note that they will not achieve remarkable
success except with the cooperation and support of members of the Bar. The
purpose of this series on NBA Officers, is therefore to ensure that lawyers are
informed of the respective duties of the newly sworn officers to enable easy
communication, and collaboration.
Though the NBA President leads the
Association and is ultimately responsible for the administration of the NBA
under his watch, the ten (10) other officers also play a huge role in the management
of the Association’s affairs.
In this post, we shall therefore be looking
at the duties of the Assistant Publicity Secretary of the NBA. As provided in
Section 5 (k) of the NBA Constitution; the duties of the Assistant Publicity
Secretary shall be as follows:
i.
He/She shall assist
the Publicity Secretary in the performance of his/her duties and shall in the
absence of the Publicity Secretary act in his/her place;
ii.
He/She shall perform
all other duties as may be assigned to him/her by the President or the National
Executive Committee or the Annual General Meeting.
Mr. Ferdinand Naza is the current Assistant
Publicity Secretary of the Nigerian Bar Association. Follow him on Twitter
@ferdinand_naza
by Legalnaija | Sep 11, 2020 | Uncategorized
INTRODUCTION
The Oil and Gas sector of the Nigerian
economy has hitherto, remained the mainstay of the country’s capital value chain
and the most remarkable component of our National Gross Domestic Product. Given
this incontrovertible fact, it has therefore become highly imperative that the
Act be revamped and its provisions brought into compliance with international
industry best practices while still preserving its core objective, which is
provision for the development of Nigerian Content in the Nigerian Oil and Gas
Industry by encouraging participation of Nigerians.
Before the National Assembly, is a
Bill to amend the Nigerian Oil and Gas Industry Content Development Act, 2010,
properly short cited as the Local Content Act (the “Act”). The Act which is
composed of 106 Sections is sought to be amended by the Nigerian Oil and Gas
Industry Content Development (Amendment) Bill, 2020 (HB.838) (the “Bill”). The
move to amend the decade-old Act sprang out of the pressing need to address
certain salient issues which have been either neglected or improperly captured
in the legislation. In a bid to prevent
the enactment of provisions considered inconsistent with the mandate and true
spirit of the Act, the Bill seeking to usher in these amendments has thus, been
subjected to rigorous legal scrutiny to capture enlightened viewpoints that
will allow the fulfilment of its objects before it ascends into law. This paper
is focused on some provisions of the Bill we believe needs to be addressed.
THE
NEED TO DEFINE NIGERIAN INDIGENOUS COMPANIES: FUNDAMENTAL ROLE IN THE
DEVELOPMENT OF NIGERIAN CONTENT
The mandate of the Nigerian Oil and Gas Industry Content
Development Act is primarily to provide for the development of Nigerian
Content in the Nigerian Oil and Gas Industry by encouraging participation of
Nigerians. Indeed, the true measure of the success of content development in
Nigeria is in the amount and complexity of works and role played by Companies
wholly owned and managed by Nigerians, whose focus is on developing
Infrastructure and Technology in Nigeria, thereby encouraging profits to be
retained and reinvested into our economy. Consequently, these Companies are
building and developing capabilities towards ultimately exporting Nigerian
products and services, rather than relying on importation, which is an absolute
characteristic of a Nigerian Indigenous Companies.
The focus of the Act
primarily is on Nigerian indigenous companies. Therefore, any amendment to the
Act must be to protect and encourage an environment for exponential increase in
their numbers and rapid growth in size, so as to pull along the Nigerian
economy. Just as the most developed Oil and Gas countries have done, they have
prioritized the interests of indigenous companies by enacting laws that will
foster and encourage their participation on the sector that is driving their
economy. The glass ceiling which is preventing our economic growth will go away
when we prioritize indigenous companies in the dealings of the sector that
corners us the most revenue annually.
The Act has fallen short of providing
a comprehensive definition as to what constitute the entities regarded as “Nigerian Indigenous Companies”, rather it
resorted to using terms such as “Nigerian
Independent Operators” and “Indigenous
Service Companies” in making reference to exclusive and first consideration
to Nigerians as stipulated in the Act. Furthermore, Section 106 (interpretation Section), defines “Nigerian Companies” thus:
“A company formed and registered in Nigeria in accordance with the
provision of Companies and Allied Matters Act with not less than 51 % equity
shares by Nigerians”.
A cursory study of judicial
pronouncements on the definition of what constitutes a Nigerian Company, will
reveal that the meaning provided by the Courts over time, appears to be at a
sharp variance with what the Act envisages, which apparently allows room for
foreign ownership of equity shares in a company considered Nigerian. A
classical case in point, is SIKIRU AGBOOLA LASISI v. REGISTRAR OF
COMPANIES [I176] LPELR-SC.301/1975, where the Supreme Court laid down
the correct test for determining whether a company is a Nigerian association or
not, in these words:
“It is clear from the definition under
Section 16(1)(c) of the Nigerian Enterprises Promotion Decree, 1972 that the
correct test for determining whether a company is a Nigerian association or not
is to discover the owners of its capital and other financial interests. If its
capital and other financial interests are wholly and exclusively owned by
Nigerian citizens, then it is a Nigerian Association. If, however, a portion of
its capital or other financial interest is owned by an alien then, except as
otherwise prescribed by or under the Decree, it is an alien association”. (Underlined
is ours for emphasis).
The Act having defined the term
Nigerian Company makes no further mention of a “Nigerian Company” at all, rather it resorted to various vague variations; “Nigerian Indigenous Operator”; “Nigerian Indigenous Service Companies”;
“Nigerian Indigenous Contractors”; “Nigerian Contractors and Service or
Supplier Companies”, and “Indigenous
Companies” to reference sector participants contemplated under each
relevant provision. Although, the Act has implicitly substituted the term “Nigerian Company” with the
above-mentioned phrases, it nevertheless still intends for the word “indigenous” to remain in the Act so as
to portray its very meaning and objective.
The ambiguity created by the above mentioned words has opened the
provision to different constructions, with stakeholders having to rely on the comprehension
of industry best practice or formally recurring to the interpretation of the Nigerian
Content Development and Monitoring Board (the “Board”) in line with S. 70(1) of
the Act, which permits the Board to “provide
guidelines, definitions and measurement of Nigerian Content and Nigerian
Content Indicator to be utilized throughout the Industry”.
The Bill attempts to cure this ambiguity by proposing to replace
the terms “Nigerian Independent
Operators” with “Nigerian Companies”,
and “Nigerian Indigenous Service
Companies” with “Nigerian Service
Companies”. Regrettably, this has failed to fix the uncertainty occasioned
by the Act, instead, it moved further away from the purpose the Act is designed
to attain, which is the exclusive consideration and participation of Nigerians.
Hence, the proposition by the Bill to erase outright, the term “Indigenous”, nullifies the true meaning
and intention of the Act.
Undoubtedly, what gauges the achievement of content development in
Nigeria and especially in the oil and gas industry, rests on the intricacy and
aggregate of works done and the contributions made by Nigerian domestic
companies concerned with the development of infrastructure, technology and
building galvanized human capacity in Nigeria, thereby assuring the reflow,
retention and reinvestment of profits in our economy. Accordingly, these
Companies are forming and expanding the required competence geared towards the
ultimate exportation and transatlantic
trading of Nigerian goods and services, in place of protracted dependence on
importation, which typifies the precise features of Nigerian Indigenous
Companies.
A brief study of some oil producing countries shows how their
Local Content Laws focus on participation of its citizens in the Oil and Gas Sector
and have reflected same in their laws. We can take a cue from our sister
nation, Ghana, having passed a
similar Law three years after the enactment of the NOGICD Act. The Petroleum (Local Content and Local
Participation) Regulation, 2013 (Ghana), passed in 2013, was enacted with
the purpose of enhancing the capacity of indigenous Ghanaian companies and to
promote their participation in the Oil and Gas Industry.
Regulation 49 of the country’s Petroleum (Local Content and
Local Participation) Regulations, 2013, defines an “indigenous Ghanaian Company” as
“A company incorporated under the Companies Act, 1963 (Act 179)
that: a) has at least 51% of its equity owned by a citizen of Ghana; and b) has
Ghanaian citizens holding at least 80% of executive and senior management
positions and 100% of non-managerial and other positions”.
Similarly, resource rich countries;
Kuwait, Qatar, Saudi-Arabia and the United Arab Emirates (UAE) etc. also focus
on local content requirements to maximize the gains of foreign participation in
their Oil and Gas Sectors. The aim is to provide opportunities for local
industries to participate in Oil and Gas activities. Although, several of these
countries do not exactly define the term “local” in their Local Content
Regulation (LCR), generally it means; nationals, and companies owned, or
majorly controlled by nationals.
It is owing to this prevailing reason, that Nigerian Indigenous
Companies must assume a central place within the covers of our Local Content
Act. Therefore, any amendment to it must be anchored on providing and
encouraging an atmosphere for a flooding increase in their numbers and rapid
growth in sizes, in order to redefine the Nigerian economy.
This work recommends that the term “indigenous” be retained and
consequently, the interpretation Clause of the Bill should interpret “Nigerian
Indigenous Companies” to mean;
“A company with
100% equity and assets owned by Nigerian Citizens with its head office/parent
company located in Nigeria”.
It is only a clearly worded and purpose-driven definition of this
kind that can adequately foster the existence of a truly Nigerian Indigenous
Company and guarantees an all-round local content development in our dear Oil
and Gas Sector.
INCREASE OF
PERCENTAGE TO BE CONTRIBUTED TO THE NIGERIAN CONTENT DEVELOPMENT FUND
The
Act makes provision for the establishment of a Nigerian Content Development
Fund (the “Fund”) under Section 104(1),
for the purposes of funding the implementation of Nigerian content development
in the Nigerian Oil and Gas Industry. In other words, it is provided to ensure
the absolute achievement of the goal for which the Act was enacted in the first
place.
Having
so established the Fund, Section 104(2)
of the Act further categorically spells
out the major source from which the fund will be generated and placed at 1%
deductible at source, of every awarded contract to any of the listed entities
who are concerned with all the goings-on in the Upstream Sector of the Nigerian
Oil and Gas Industry, to be paid into the fund. This arrangement has worked
perfectly well for the fund itself and provided a considerable measure of ease
to all concerned parties in the undertaking of their business operations within
the spheres of the industry.
Conversely,
the Bill by virtue of a new Clause 105
(2) proposes a coinage of this provision, such that the major source of the
fund will now be derived from the deduction of 2% at source of every contract
awarded to any operator, contractor, subcontractor, alliance partner or any
other entity involved in any project, operation, activity or transaction in the
Upstream Sector and designated Midstream and Downstream projects operation of
the Nigeria Oil and Gas Industry, which is to be paid into the fund.
Flowing
from the foregoing is the overt fact that, while the initiative to extend the
spectrum of application of this provision by the Bill to include “designated Midstream
and Downstream projects operation” is by far a commendable one, as it will
automatically open the floodgate of more income pooling into the fund and in
turn, speed up the implementation of content development in the industry.
However, an increase in the contributory funds from 1% to 2% of every contract
awarded, is outrageous and can be regarded as double taxation on so many
levels. It can be argued that the sector is indeed already significantly
overburdened by a plethora of levies and fees; Education tax, Nigeria Police
Trust Fund (NPTF) levy, Nigerian Capital Development Fund (NCDF) Levy, Niger
Delta Development Commission (NDDC) Levy, Nigerian Export Supervision Scheme,
and Offshore Safety Permit, others include Cargo & Stevedoring Dues, Waste
Reception Facilities Levy, Value Added Tax among others, and the proposed
minimum of 0.5 per cent of participants respective gross revenues for Research
& Development (R&D) activities in Nigeria. Industry Stakeholders have
expressed concern that any additional financial imposition as proposed by the
Bill on the industry, will very negatively impact Nigeria’s competitiveness and
affect the viability of projects and investments.
It is a bit alarming that while the Government
seems to want to
achieve lower costs, it is imposing
multiple taxes and levies. This is without consideration for high security
costs, assets fixing and environmental remediation costs, that follows asset damages. The Government is expected to support the
industry to remain a viable partner for the economic development of Nigeria and
not impose unnecessary burden.
In
addition, an increase to 2% smacks of unaccountability, given that there are no
detailed developmental returns on previous contributions to the Fund, published
by either the Board or any other responsible regulatory body. It then becomes
valid to recommend that contributions be retained at 1% as provided in the Act.
APPLICATION
OF THE NIGERIAN CONTENT DEVELOPMENT FUND
Unequivocally, the landmark success in the Nigerian economy over the breadth of
the last decade is attributable to the enactment of the Nigerian Oil and Gas
Industry Content Development Act. The
proposed amendment, which is channeled along the lane of enhancing better
participation of Nigerian citizens, rests on how the industry, local businesses
and state institutions create the needed synergy to overcome the obstacles
militating against the actualization of local content opportunities. `
Clause 105(3) of the Bill provides that;
“The Fund shall be managed by the
Nigerian Content Development and Monitoring Board and employed for projects,
programmes, and activities directed at increasing Nigerian Content in the Oil
and Gas Industry.”
While it can be argued that the
reasoning behind the above clause is progressive, however, it has merely
replicated the provision of the same clause it seeks to substitute, which fails
to address the evident flaw in the application of the fund.
The resources released for funding by
the Board is commendable in most cases but usually are totally insignificant
for some projects. Bringing into account the yearly generated revenue of the
Board, which is earmarked at $360 million from commercial ventures for the year
2020 alone,
it will be most ideal to allocate a percentage of the yearly generated revenue
to the advancement of indigenous companies; large projects, laudable
programmes, capacity building solutions, activities and services of robust
advantage to indigenous companies from whose operations the source of the
generated fund is derived.
Therefore, in order to realize and meet the full objectives of the Fund, for the purpose of
unceasing advancement in the Sector, at least one major project considered
instrumental to the exponential expansion of indigenous companies should be initiated
and executed in the industry, every fiscal year. Thus, not only would it be
highly profitable to set aside a minimum percentage of the total generated
contribution to be spent on projects each year, but it will also prepare the
fertile ground for the acceleration of these companies into the league of their
counterparts with multi-national repute, the economy will be better enriched,
and the multiple returns can then be directed towards stretching the boundaries
of research and development in the industry and even ultimately financing the
process of diversifying into and promoting other sectors in the not too long
run.
Similarly, the Board
should through the Fund, provide
low-Interest Loans to Nigerian Indigenous Companies operating in the Upstream
Sector, to enable them deliver services at competitive pace, intentionally proceed on ceaseless capacity building programs for local
companies in order to both build and boost the right structures to enable them
compete favorably in the Industry, ensure effective enforcement of the
Act to enhance in-country value creation, retention, reinvestment, and
generation of employment for Nigerians
across the Industry value chain, especially at such a time when the revenue
accruable to the Federal Government from other key sectors of the economy is
degenerating at an alarming rate.
Suffice it then to assert that, the provision of Clause 105(3) is
the key to attaining all of these promising potentials which the whole
amendment process portends for the Oil and Gas industry in particular and the
economy as a whole, only if it is redrafted to encapsulate the pertinent
enabling words in the manner described hereafter:
“The Fund shall be managed by the Nigerian Content Monitoring
& Development Board, and 50% of the total generated fund thereof shall be
employed for projects, programmes and activities beneficial to Nigerian
Indigenous Companies and directed at increasing Nigerian content in the Oil and
Gas Industry”
The Local Content Development Fund can only serve its true purpose
if applied to the right course, and the Act must state this in no uncertain
terms.
CONCLUSION
The Bill cannot afford to reenact the
shortcomings it is meant to eliminate. It is therefore required at this crucial
moment for our Legislators to ensure that the Bill underway, is cleared of all
the ambiguities, irregularities, and shortfalls replete in the subsisting
principal Act. A carefully thought amendment of the Act is vital to crystalize
the core intentions of the initial drafters of its letters. While this is being
done, we must balance the interests of the stakeholders in the sector. An
increase in the contributory funds will be burdensome on the already over taxed
stakeholders.
Damilola
Vordah Imong is with Messrs O. M. Atoyebi, SAN
& Partners (OMAPLEX LAW FIRM) where she works in the Corporate and
Commercial Department of the Firm. She has an in-depth understanding of the Oil
& Gas and Energy Sector and has worked with various key industry
stakeholders and facilitated several transactions.
by Legalnaija | Sep 8, 2020 | Uncategorized
There is some confusion
amongst human resources professionals and in-house counsel about the validity
and effect of an employee’s notice of resignation that is short of the period
agreed in the employment contract. Corollary to the foregoing is the issue
regarding whether an employer can reject an employee’s resignation letter for
any reason, including ongoing investigations or disciplinary proceedings
against the employee or inadequacy of the length of notice or other reasons of
the employee’s non-compliance with the employment contracts. In practice, many
employers include the power to reject an employee’s resignation letter in their
#HR policies or Employee Handbook without seeking legal advice on the propriety
of such power.
In law, every employee has
absolute right to resign at any time before termination of, or dismissal from
an employment. An employer has no discretion on whether to accept or reject a
resignation letter. Also, it is immaterial that the employer did not issue a
formal reply or acceptance of the resignation letter. The Courts have held that
all the employee needs to show is that the employer received the resignation
letter and that a rejection letter or email from an employer is an evidence
that the employer received the resignation letter. Whether the length of notice
of resignation is adequate or inadequate, once an employee indicates an
intention to leave an employment, any attempt by an employer to reject that
move or hold the employee down would amount to forced labour and would be
contrary to all known labour standards. In fact, the Court in Taduggoronno
v. Gotom [2002] 4 NWLR (Pt. 757) 453 CA specifically held that no
employer can prevent an employee from resigning from its employment to seek
greener pastures elsewhere.
The only point that needs to
made separately, in addition to the above, for emphatic purpose, is that an employer
cannot dismiss or terminate the employment of an employee who has given a
notice of resignation, notwithstanding the fact that he remains with the
employer during the notice period. This is because a notice of resignation
takes effect from the date it is received by the employer, not on the last
working day as erroneously believed by some employers who still engage in
post-resignation termination or dismissal.
What then is the
effect of inadequate notice of resignation? The
courts have held in Adetoro v. Access Bank Plc and many
other similar cases that where the length of notice of resignation given by an
#employee is less than the period agreed in the employment contract, then, the
notice is deemed to be with immediate effect. So, where, for instance,
the contract provides for termination or resignation by one (1) month’s notice
or salary in lieu, any notice that is short of the agreed period
will amount to RESIGNATION WITH IMMEDIATE EFFECT.
In law, the implication of
“Resignation with immediate effect” vary, depending on whether
the reason for exiting a company is #resignation or #retirement. Resignation
with immediate effect gives the employee the right to leave the employment
immediately and automatically, without any benefit and subject to the employee
paying his outstanding indebtedness (if any) to the employer. Please note that
the fact there is an outstanding indebtedness owed to the employer does not
entitle the employer to insist that the employee must continue to work for the
employer. It merely gives the employer the right to enforce its contractual
right to recover the amount owed. Retirement, however, does not appear to
confer on a retiring worker such a right to leave service immediately and
automatically. In OSHC v. Shittu [1994] 1 NWLR (Pt. 321) 476 CA,
the Court of Appeal (Benin Division) opined that a notice of voluntary
retirement does not entitle the employee to leave the employment immediately or
automatically, and that he or she would still remain in the employer’s service
(especially where the notice is rejected by the employer and the employee
returns to work).
In that case, the employee
submitted his resignation with immediate effect and paid one month’s
salary in lieu of notice. The #employer rejected his
resignation and directed him to return to work immediately, to which the
respondent responded by another letter, wherein he maintained his stand of
resigning. The Court found that the employee never returned to work. The one
(1) month’s salary in lieu of notice paid by the employee was
never returned to him to show that his resignation was not accepted. The only
inference from all these facts, according to the Court of Appeal, was that the
employee never returned to his duty post and it could not be said that he was
back in the employment of the appellants.
But I need to point out the
extent of the effects of law’s prohibition of an employer’s rejection of a
resignation letter. The rejection of the notice of retirement is an unlawful
act, which the employer cannot rely on to make any claim against the employee
because doing so would amount to approbating and reprobating, thus, making the
employer a beneficiary of its own unlawful act. Indeed, the Court of Appeal in
the OSHC v. Shittu case held that”
“If the
cross-appellant (employee) had returned to his work with appellants, then the
appellants would be estopped from saying that he was no longer in their
employment and would have been held liable for any consequences arising from
their illegal conduct towards him with regard to his employment.”
The above statement was
an obiter dictum (a remark made in passing), which does not
command the respect or status of a binding judicial pronouncement. The National
Industrial Court refused to apply the above reasoning in Adetoro v.
Access Bank Plc (which was decided in 2016 by Hon. Justice B. B.
Kanyip of the National Industrial Court), where the employee’s resignation was
rejected by the employer twice for being inadequate and on ground that there
was an ongoing investigation about ATM imbalance against the employee. The
argument of the claimant is that the defendant was wrong to have deducted from
his gratuity and that because his two letters of resignation were rejected by
the defendant he remained an employee of the defendant until 20th March 2012
when his gratuity was paid to him. The National Industrial Court upheld the
argument on the unlawfulness of the deductions but rejected the argument on the
claimant being an employee after submitting his voluntary resignation,
notwithstanding the fact that the resignation letters were rejected by the
employer. The Court held that the employee could not sue for salaries and other
benefits after the date of resignation because he had ceased to be in the
defendant’s employment. The Court relied on Adefemi v. Abegunde
[2004] 15 NWLR (Pt. 895) 1 CA and Yesufu v. Gov. Edo
State [2001] 13 NWLR (Pt. 731) 517 SC, in holding that a notice of
resignation of an appointment becomes effective and valid the moment it is
received by the person or authority to whom it is addressed.
From the above, the lesson
for employers is very crucial and, so, can be summarized as follows:
– the
right of an employee to resign without hindrance is still a good labour law and
best practice;
– No
employer has discretion to reject resignation on account of any ongoing
investigation against the employee or his outstanding indebtedness or
inadequacy of the notice period given in the resignation letter;
– Also,
any defect in a resignation letter cannot invalidate or impugn the right of an
employee the employment though it may deprive him or her some benefits which
would have been available if he or she resigns properly.
– It
goes without saying, therefore, that the power to reject an employee’s
resignation letter in any staff #handbook, employee manual or #HR policy will
be unlawful and unenforceable to the extent of its inconsistency with
international best practice and labour standards in employment and labour
relations. The argument that an employee who signs an employment contract
giving the employer such oppressive power cannot later complain is beside the
point. Under Nigerian law, as stated in many cases, including the Supreme
Court’s decision in Menakaya v. Menakaya, public policy
forbids two parties from contracting out of a mandatory law.
Kayode Omosehin is a
Principal Associate and Notary Public at KORIAT & CO. in Lagos.
by Legalnaija | Sep 2, 2020 | Uncategorized
THE
LEGAL PRATICALITIES OF THE USE OF BLOCKCHAIN FOR ONLINE ARBITRATION.
Asides the technical
inhibitions in the complete adoption of blockchain (such as technical know-how,
space for retention of data, protection of confidential information, etc.),[1]
blockchain is not currently used in all earnest for offline commercial
international transactions due to the legal ambiguities; some of which have
been previously hinted on and addressed earlier on in this work. The legal
uncertainties span from the questionability of the legality of a smart
arbitration contract (and if it falls under the ambit of forced consent of
parties who decide to use blockchain as an online platform) to the
enforceability of the arbitral awards. Thus, the legal uncertainties arise from
the initiation of the arbitration agreement through blockchain, to the
recognition of the award by the State. This work will however, limit itself to
the ambiguities to the applicable law of arbitral proceedings (lex situs) and the practicability of
the enforcement of the award.
I.
Lex
Situs in Blockchain Arbitration.
An essential and admirable
feature of Blockchain is its decentralised nature, as it operates on a
peer-peer operational system, above any regulatory authority.[2]
This, however, poses a legal uncertainty as to the governing law applicable to
the international commercial dispute, also referred to as lex situs. Most
international arbitration statutes recognise this, as provided in Article 14 of the International Chamber of
Commerce (ICC) Arbitration Rules[3]
and Article 16 of the London Court of International Arbitration (LCIA)
Arbitration Rules.[4] This position is recognised in the case of Hiscox
v. Outhwaite[5] where the House of Lords held that the
seat of the award is where the contract was signed. The seat of arbitration
will determine the level of State intervention into the arbitration process
(concerning the arbitration theory employed by the State) and the arbitrability
of the subject matter (as was held in the case of Soleimany v. Soleimany[6]).
The seat of arbitration also determines the degree to which the arbitral award
can be challenged.
Legal jurists hence have
criticised the practicality of the use of blockchain as a platform of online-
arbitration as Smart Contracts are enabled through distributed nodes, which cut
across multiple legal jurisdictions, especially on instances of international
contracts, consequently obfuscating the actual lex situs.[7]
In rectifying this uncertainty, scholars have proposed that the arbitrators can
apply the principle of ex aequo et bono by resolving the
dispute on what is deemed fair and just, on instance of no clear applicable
law.[8]
Hence, arbitrators in blockchain assume the powers of amiable compositeur[9]
to carrying out their duties. This position has been criticised due to the very
nature of the technology itself, as it excludes parties through “forced
consent”[10]
from expressly vesting arbitrators the powers to apply the principles of ex
aequo et bono.[11]
Another theory proposed by
legal jurist is the adoption of the jurisdiction of the Fifth party in the
arbitration agreement (referencing the provider of the online-arbitration
service) as the lex situs of the
dispute.[12] This theory proposes that the service
provider maintain a degree of responsibility as owners and maintainers of the
service, and therefore can be accorded the appropriate seat of arbitration.[13]
This position has been given judicial credence in the cases of re
Tezos Securities Litigation[14] and Alibaba Group Holdings Ltd v.
Alibabacoin Foundation et al[15]
where the U.S Courts, in determining issues relating to cryptocurrency and
blockchain, held inter alia that ‘the physical location of the verifying nodes’
is an important factor in determining the jurisdiction of the court.[16]
This writer finds this theory persuasive, as it provides a practical resolution
to this legal debacle.
II.
Enforcement
of the award.
As stated earlier, the New
York Convention stipulates in Article V
the prerequisites of a valid arbitral award, stating that it must written for
it to be recognised and enforced in another State.[17]
This is necessary because the enforcement of an award requires judicial
assistance of the State where the award is to be recognised.[18]
States are empowered to decline enforcement of an award in its jurisdiction on
the ground of public policy. Blockchain, however, provides an automatic
execution of the arbitral award through Smart Contracts for online disputes
relating to cryptocurrencies.[19]
Advocates for the inclusion
of blockchain argue that this is a redeeming factor of the technology, as it is
an effective and practical implementation of the award without encumbrances.[20]
This has been criticised by legal scholars who are of the view that this is a
deviation from traditional commercial practice as it automatically enforces the
award (this mostly involves the transfer of cryptocurrencies from one wallet to
the other) by bypassing the public policy position of the State.[21]
This school of thought also argue that such an enforcement will disregard the
principle of favor debitoris[22]
which protects the interests of the debtor of the award to ensure his
rights are not violated in enforcement.[23]
CONCLUSION/RECOMMENDATION.
As contractual relations
become autonomous through novel technological platforms, the role of dispute
resolution is also expected to adopt to the changes. The procedure of ‘old
wine, new bottle’ approach proposed by traditionalists is ill fitted here, as
with new frontiers comes new challenges. An example is the blur of boundaries
between procedure and execution in Smart Contracts. As legal jurists propose,
the use of blockchain creates more problems than it actually aims to resolve
due to its uncertainties from its ambiguous definition to concept of
decentralisation.[24]
Regardless of legal
skepticisms, Blockchain has been adopted as an ODR platform to resolve online
disputes concerning cryptocurrencies. This, however, has not been implemented
into offline transactions despite its numerous advantages. Reasons for this are
not farfetched, as blockchain is riddled with legal uncertainties. The
technology has been related to the Wild West where there exists little or no
regulations, and all innovators are in a virtual race to the most reliable.[25]
This writer, however, opines that this is a necessary process to streamline the
technology into a more favorable legal platform. Traditional commercial
practice emerged through centuries of practice by traders, referred to as lex
mercatoria.[26]
This organic evolution is also the essential trigger of the internationally
accepted concept of arbitration. This legal Darwinism is essential for
regulation standards that are intricately interwoven with Blockchain and its
services, as not all old wines fit into new bottles. This is essential because
the proposals from jurists that Blockchain should be ‘centre-regulated’ negates
the entirety of the technology itself, as it operates on a decentralised,
peer-to-peer assessed medium.
This writer agrees with the
suggestion of the use of the ‘Oracle’[27] in
the blockchain platform to serve as an interface between the technology and the
real world, to reflect the data and agreements of parties that are not encoded
into the Smart Contract.[28]
This can include parties’ agreement on the use of arbitrators on instance of
conflict, choice of law applicable, seat of arbitration and the enforcement
procedure.[29]
These updates can act as the necessary restrictions of the automatic nature of
Blockchain during arbitral proceedings, making it more suitable to resolve
offline commercial issues, resolving most of the highlighted legal issues.
In conclusion, blockchain is
relatively a new technology, and the extent of its potential, either alone or
mixed with another sector such as arbitration, are currently unknown. The
unknown, however, will so remain, if depths are not pushed. Blockchain will
revolutionise the commercial world, and as consequence, the legal world as
well.
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by Legalnaija | Sep 2, 2020 | Uncategorized
INTRODUCTION
Conflict is an integral part
of society and in all facets of human interactions and relations, prompting the
development of means and avenues for the resolution of those conflicts, either
through exaggerated violence, or other peaceful means.[1]
These avenues of dispute resolution have evolved over the centuries, from
settlement by the elderly, to royal or religious institutions, to the
institutions set up and recognised by the State.[2] Most
developed and developing societies have adopted the State’s means of dispute
resolution, which is the recognition of the Court system to resolve issues
ranging from personal grievances to complex contractual matters.[3]
The increasing complex
nature of disputed issues and industry, the number of contracting parties
involved, and the increasing strain on the court system due to the number of
issues to be resolved with limited resources, necessitated the rise of Alternative Dispute Resolution systems
(hereinafter ADR).[4]
ADR comprises of, but is not limited to, mediation, negotiation and
arbitration. With growing interest from contracting parties, both national and
international, on the inclusion of an arbitration clause in their commercial
agreements as the first form of resolution on instance of a dispute, States and
the international community have developed robust regulatory regimes for the
recognition and enforcement of arbitral awards.[5] The United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention)[6]
is the foremost international treaty for the standardisation of arbitration by
States, regardless of their internal theory of recognition, such as the
jurisdictional, hybrid and autonomous theories.[7]
In recent decades, the
nature of commercial transactions have evolved, due to the rise of
globalisation and digitalised platforms, prompting the emergence of a new
medium of dispute resolution referred to as Online Dispute Resolution (ODR), revolutionising dispute settlement
through its prompt and cost effective process.[8] The
existence of ODR relies on the
virtual prowess of Information and
Communication Technology (ICT), which constantly evolves with innovations.
The emergence of Blockchain as a disruptive technology on not just the
commercial industry, but including real estate, health-care, content
distribution, etc., has drawn an enquiry on the applicability of the technology
as a means of dispute resolution.[9]
This work will explore the nature of online dispute resolution and blockchain
as a disruptive technology, and the legal practicalities of adopting same as a
form of ADR for international commercial transactions.
With the aim of analysing
theoretical and practical aspects of the central theme, this work is so
structured to highlight the necessity for the emergence of ODR, as well as the
different outlooks at its definition. This work also addresses Online
Arbitration as a concept, the practicalities and challenges in today’s
commercial society (if any) and the modes the practice is effected. This
analysis also addresses the Blockchain technology, its operations and
applicability in conducting online arbitration. In conclusion, this writer will
give his researched recommendations on the legal practicality of using
Blockchain as a form of dispute resolution.
EMERGENCE
OF ONLINE DISPUTE RESOLUTION (AN OVERVIEW)
Through the medium of the
internet and ICTs, contracting parties from different nations are able to
conduct and conclude commercial transactions (e-commerce)[10],
with little or no human contact. This interconnected nature of e-commerce has
made dispute resolution complex, as the transactions can involve multiple
jurisdictions.[11] With the astronomical growth of commercial
activities in the Cyberspace (e-commerce transactions accounted for $1,856
billion of manufacturing shipments in the United States in 2008[12]),
the necessity of a viable dispute resolution system was recognised.[13]
As aforementioned, there are already established mechanisms to recognise and
enforce the rights of parties, from the traditional adjudication procedures, to
the erstwhile Alternative Dispute Resolution systems, which are inundated with
documented challenges.[14]
With the advancements made
in information technology law, and the growing need of an expedient and cheaper
method of dispute resolution, the Centre de recherche en droit public
(CRDP) at the University of Montréal started the project known as ‘CyberTribunal’ in 1996, which offered
customers online mediation and arbitration services in resolving disputes
arising with traders online.[15]
The CRDP project presented the necessary research on the practicability of
conducting computer based disputes resolution with advantageous convenience.[16]
In January 2000, an
international legal dispute on domain name was completely resolved online by
parties and an arbitrator, all located in different States, birthing the first
use of the internet as a means of dispute resolution. This led to the
formulation of the Internet Corporation
for Assigned Names and Numbers (ICANN [17])
administered by eResolution, an organisation set up to resolve domain name
disputes.[18]
This promoted the emergence of SquareTrade,
which offers online mediation services for disputes arising out of eBay
transactions.[19]
The successes of these systems in administering ADR for online disputes
stimulated the recognition of ODR by legal practitioners and technology
enthusiasts.
ODR is defined as the
‘practice of resolving disputes via the Internet or digital applications.’[20]
Legal scholars postulate that ODR is mainly another aspect of, or is
synonymous, to ADR, but enabled through the internet and ICT services.[21] This theory argues that ODR employs the
traditional means of mediation, arbitration and negotiation in settling
disputes virtually, with a ‘Fourth
Party’ being the technological platform used, and the ‘Fifth party’ being the provider of
the service.[22]
There is the argument that
ODR is not the simple adoption of virtual services in resolving a dispute, as
it also acts as a medium of prevention of commercial disputes that occur within
and outside the internet.[23]
This school of thought proposes that, as all novel systems, ODR involves new
tools/skills, techniques and assumptions for its effective applicability,
hence, making it distinct from the traditional ADR.[24]
Some examples of the distinctive features of ODR from ADR is the lack of
face-to-face interaction between parties and the automatic record of all
dispute data.[25]
ODR platforms also have fully automated dispute resolution processes which
makes use of developed algorithms in resolving disputes.[26]
ADR, although developed as a
private-sector based regulatory regime, currently has governance introduced for
certification and ethical behavior models.[27]
Proponents of this theory propose that ODR should have organic emergence of its
own regulations and governance.[28]
It is proposed by jurists of this school of thought that ODR can generate its
own internal system of governance, with premise on both I.T. law and ADR. This
is has been coined as Legal Darwinism.[29] This writer finds this school of thought on
the nature of ODR more persuasive, as the system, although adopts the
traditional forms of ADR, exists on a distinct medium which requires its
individualistic set of rules, skills and governance.[30]
ODR has grown over the past
decade to be a recognised form of dispute settlement by States and
international bodies. The European
Commission initiated the Electronic
Consumer Dispute Resolution (ECODIR)[31]
project for the virtual resolution of disputes between Europeans and
cybersellers.[32]
The United Nations Commission on
International Trade Law (UNCITRAL) has also adopted its Technical Notes on Online Dispute
Resolution[33]
in recognition of ODR. The World
Intellectual Property Organisation (WIPO) is another international entity
that has also adopted ODR through the Uniform
Dispute Resolution Policy.[34]
Although States such as the
United Kingdom (UK),[35] and the United States of America (U.S.) are
keen on the adoption of ODR as part of their multi-door courtroom system, ODR
is mainly employed by the private sector, with institutions such as eBay
setting up comprehensive ODR mechanism to resolve disputes arising out their
transactions.[36]
There are other ODR platform service providers, who use specific dispute
resolution applications, such as Benoam[37] and
the Mediation Room.[38]
This work will limit itself to the use of ODR by the private sector for
commercial transactions dispute resolution.
As aforementioned, ODR makes
use of ADR such as mediation, arbitration and negotiation. This work however,
will limit itself to Online Arbitration, in consideration of the implication
and legal feasibility of the novel Blockchain technology in settling arbitarble
disputes online. To understand this, an analysis of the nature of Online
Arbitration is expedient.
ONLINE
ARBITRATION.
Online arbitration, also
referred to as electronic-arbitration (e-arbitration), is one of the foremost
aspects of ODR in resolution of cross-border e-commerce disputes through an
asynchronous process,[39]
although it is not rampantly in use as online-mediation.[40]
E-arbitration is currently used mostly in the resolution of conflict arising
from domain names.[41]
A claimant, who intends to settle the dispute through e-arbitration, initiates
the process by submitting statement of claim, indicating relevant facts and
remedies, to the ODR platform.[42]
Examples of ODR platforms that render such services are WIPO Arbitration and Mediation Centre,[43] internet-ARBitration (net-ARB)[44]
and eQuibbly.[45] The arbitration agreement is concluded with
the arbitral process conducted virtually, as parties (claimant and respondent)
virtually select an arbitrator from the list of accredited arbitrators
registered with the ODR platform.[46]
Either parties are entitled to raise objections as to the arbitrator.
E-arbitration can be
conducted through e-mail, as all the documents for filing, as well as evidence
and written submissions are filled through e-mail. This also includes the
interaction between the arbitrator and the participating parties.[47] Online arbitration also uses the mode of
video-conferencing, by virtue of the ODR service provider.[48] The
first award settled under the online-arbitration platform of WIPO on a dispute
on domain name was the case of World Wrestling Federation Entertainment,
Inc, v. Michael Bosman[49].
The
New York Convention stipulates, through Article II Clause 1, that for an arbitration award to be validly
recognised internationally, there must be a written form of agreement on the
instance of a dispute in an international trade.[50] The
term ‘written’ is described by the Convention to include the “exchange of
letters or telegrams”,[51]
which provides a liberalized interpretation of the term by State signatories
indicating minimum requirements.[52]
Article IV(I) makes provisions that
an arbitral award should be in writing, signed by the arbitrator(s) on the
original or certified copy of the award.[53] The
UNCITRAL Model law on International Arbitration has broadened
this position, by providing that an arbitration agreement can be documented via
telex, telegram or other means of telecommunication, which records the
agreement.[54]
This position is indicative of the recognition of the online arbitration by
States that have adopted the UNCITRAL model law interpretation as well.
Hence, on the premise of the
interpretation by the UNCITRAL Model law, online-arbitration fulfills the
necessary requirements of a valid arbitration agreement by the New York
Convention, as it involves written agreements of parties to submit the dispute
to an arbitral panel either, as provided by the ODR platform.[55]
Legal jurists, who claim the use of ODR excludes parties from voluntarily
submitting to the arbitration panel, have challenged this position using the
WIPO model as a case study as that of mandatory arbitration.[56]
Scholars have also argued
that on the instance of both parties failing to agree on the lex
situs, the ODR platform will have to select the jurisdiction where the
arbitration will be conducted.[57]
The lex
situs is an essential part of an arbitration proceeding as it dictates
the procedural law that is applicable to the arbitral panel, and possibly
influence and determine the outcome of the case.[58]
Enforcement of the award however, is not as straight forward, as legal scholars
have raised arguments against the governing laws of the arbitration, as
e-commerce transactions involve multiple jurisdictions.[59]
These arguments will be succinctly addressed subsequently in relation to
e-arbitration and blockchain.
Although e-arbitration is
not fashionably applicable to offline commercial disputes (as most of the
disputes that occur with this medium relate to conflict on domain name) due to
the legal uncertainties,[60]
parties however make use this ODR service due to its convenience. Parties can
conclude dispute resolution processes through a virtual medium unlike in
traditional ADR.[61]
This makes online arbitration more cost effective and cheaper that other ADR
means.
THE
TECHNOLOGY KNOWN AS BLOCKCHAIN
The phrase, ‘one size fits
all’ very much applies to the description of Blockchain, as it is one of
the 21st century trending
subjects due to its diversity and transformative potential in application in
most aspects of human interaction.[62]
Regulators, academics, legal practitioners and technology enthusiasts all are
promoting the inclusion of the blockchain into various industries, with
arguments of numerous advantages.[63]
Blockchain is the foremost Decentralised
Ledger Technology (DLT) that allows network members to share, store and
transmit information in a continuous manner in the form of ‘blocks’.[64]
These blocks contain series of data from past transactions accessible to
participants of the network with either a private or public key.
Satoshi Nakamoto introduced
the concept of Blockchain in 2008 in his paper on bitcoin and the great
financial revolution introduced by cryptocurrencies.[65]
However, this sparked interest into the technology itself and stretched beyond
financial activities to include governance, real estate, entertainment and
voting, etc.[66]
The types of blockchain
depends mainly on the members of the network with access to the block, as there
are permissioned and permissionless blockchains, which can be sub-divided into
four categories: the public and private permissionless, as well as the
private and public permissioned.[67]
Blockchain performs on two principal mechanisms, which are a decentralised and distributed network (which ensures that the
technology can survive data breaches and other malevolent attacks as there is
no regulatory central authority),[68]
and consensus approval (where new
blocks are added on validated approval by members of the network).[69]
These two mechanisms make blockchain a well-secure technology for sensitive
data storage and protection.[70]
It is imperative to state
that Smart Contracts are an essential aspect of blockchain, as they possess the
computerized transaction protocol that executes the terms agreed on by
participating parties in the network.[71] Legal scholars, who hold more traditional
views, have postulated that Smart Contracts can never be legal contracts as
they lack the foundations of a contract, such as consensus ad idem, offer,
acceptance and intention to enter into legal agreement, and thus fails to
qualify under the provisions of the New York Convention.[72]
This writer humbly disagrees with this position, as the UNICTRAL model law has made profound interpretation of Article II, to include any form of
communication. The communication carried out through blockchain is through
algorithms, and the subsequent signing in by parties with their private keys
can transcribe the intentions of parties to be subjected to same, and can be
interpreted to cover the legal concepts of offer and acceptance.[73]
Consequently, Developed
States are on the verve of incorporating blockchain into the State recognised
ODR platforms. An example of this is the application of blockchain technology
by the Chinese government to the Hangzhou
Westlake Court with a planned cooperation by the Hangzhou Blockchain Technology Research Institute to use blockchain
technology to prevent tampering with digital evidence. In addition, the
Guangzhou Arbitration Commission has issued the first arbitral award based on
the ‘Arbitration Chain’.[74]
How
is Blockchain applicable to online arbitration?
As aforementioned,
blockchain is a buzzing topic in today’s legal sphere, as legal practitioners
and technology enthusiasts deliberate on the nexus between the two spheres,
especially concerning international commercial arbitration. Arbitration
practitioners have argued that blockchain is not a suitable platform to conduct
arbitral proceedings, stating that the technology is “quite slow and expensive
to store massive volumes of data.”[75] This writer humbly disagrees with this
position, as, although, the use of a public permissionless blockchain might be
slow to store such data, private permissioned blockchain is the best suited for
online-arbitration, as it has the potential to process thousands of
transactions per second with low costs.[76]
Within the bitcoin system,
users have formulated a private adjudication system that works essentially with
two digital keys (public or private), as parties can have access to the coins
without dispute. However, on an instance
of a conflict, parties can contact a private adjudicator, who will have a third
access key into the network to assess the facts through the blocks and trace
the origination of the dispute, to determine the case.[77] Blockchain as a form of transnational
arbitration uses ‘multi-signature address’ system, which is highly
self-sufficient and operates outside the influence of the State.[78]
A multi-signature address allows private parties to set up a dispute resolution
procedure that is effectively able to enforce its own outcomes.[79]
Due to its technical and decentralised attributes, blockchain is argued to be
the most practical and advanced form of online-arbitration.[80]
As Smart Contracts are self-executing,
it raises the question of the possibility of the necessity of third party
enforcement, as dispute resolution is considered to be rendered obsolete.[81]
This writer humbly disagrees with this position, as there is the necessity for
a third party adjudicator (as Smart Contracts are liable to disputes due to a
number of issues such as human error in coding).[82]
