Battle over AEDC: BPE challenges court’s jurisdiction

Abuja Electricity Distribution Company (AEDC)

Abuja Electricity Distribution Company (AEDC)

By Taiye Agbaje

The Bureau of Public Enterprises (BPE), on Monday, challenged the jurisdiction of a Federal High Court, Abuja to hear a suit filed against it and others over the controversial takeover of Abuja Electricity Distribution Company (AEDC).

Counsel to the BPE, A.U. Mustapha, SAN, made this known to Justice Inyang Ekwo during the day’s proceeding.

He hinted that a motion on notice marked: FHC/ABJ/CS/1557/2021 dated Dec. 17 but filed Dec. 20, seeking an order of the court staying proceedings in the suit and referring same to arbitration for settlement was already before the court.

Mustapha said the application was in view of the contents of the Share Sale Agreement dated Feb. 21, 2013, and the Shareholders’ Agreement dated August 21, 2013, between the parties respectively annexed as Exhibits BPE-1 and BPE-2.

The News Agency of Nigeria (NAN) reports that the plaintiffs; CEC Africa Investments Limited and KANN Utility Company Limited, in a suit marked: FHC/ABJ/CS/1557/2021, had sued the Attorney General of the Federation (AGF) and Central Bank of Nigeria (CBN) as 1st and 2nd defendants.

Also joined in the suit dated and filed on Dec. 8 include the BPE, Ministry of Finance, AEDC, United Bank for Africa (UBA) and United Capital Trustees Limited as 3rd to 7th defendants respectively.

The plaintiffs had sought an order restraining the AGF, CBN, BPE and Ministry of Finance from interfering with the operations and management of AEDC .

They also sought an order, restraining the AGG, CBN, BPE and the finance ministry from taking any steps which may transfer or forfeit or reduce, or takeover the 60 per cent shareholding of the 2nd plaintiff in AEDC in any manner or limit the 2nd plaintiff ability to exercise its full rights over the shares pending the hearing and determination of the matter.

NAN reports that Justice Ekwo had, on Dec. 10, ordered the parties to maintain status quo after counsel to the plaintiffs, Etigwe Uwa, SAN, moved an ex-parte motion to the effect.

He also ordered that the defendants be put on notice of the processes filed in the suit within five days of making the order.

At the resumed hearing, plaintiffs’ lawyer, Uwa, said that though the matter was adjourned for the hearing of motion on notice, he informed that despite the status quo order of the court, the premises of the AEDC (5th defendant) was invaded.

“We have filed an application of non-compliance with the status quo order,” he said.
Lawyers to all the defendants, including the 5th defendant, said they were not aware of the invasion.

The judge, however, expressed surprise that a court would make an order and parties would choose to do otherwise.
According to him, this is not safe for our system; it is not safe for members of the bar and the judiciary.

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Ekwo, therefore, restated that the status quo order still subsists.

Responding to the arguments of the defence, Uwa said though the arbitration clause was correct, the matter the plaintiffs were “litigating today goes beyond that.”

He argued that the UBA and United Capital Trustees Limited were not part of the agreement in the arbitration clause.

According to him, we are suing on a compromise, not on the whole action.

Justice Ekwo, who said he intended to take the motion for stay of proceeding before going to the substantive matter, said: “This will give direction whether this court will continue with the case or not.”

He adjourned the matter until Feb. 16, 2022, for hearing of the motion for stay.

BPE motion on notice was brought in accordance with Section 5 (1) & (2) of the Arbitration and Conciliation Act CAP A18 LFN, 2004, among others.

Some of the grounds for filing the motion are that “the plaintiffs, by the suit, are seeking to enforce certain provisions in the Share Sale Agreement and the Shareholders’ Agreement.

“That both agreements provide that all disputes between the parties shall first be referred to Arbitration for settlement.”

According to the motion, Clauses 15 .2 – 15.7 of the Share Sale Agreement provide that parties SHALL submit their disputes to Arbitration for settlement with the place of Arbitration being in London, England.

Again it states that “Clauses 16.3-16.7 of The Shareholders’ Agreement provide that parties SHALL submit their disputes to Arbitration for settlement with the place of Arbitration being in London, England.”

It stated further that “the alleged disputes herein sought to be litigated upon by the plaintiffs have not been referred to arbitration for an amicable resolution in line with the provisions of the Agreement.

“Section 5 (1) and (2) of the Arbitration Act Cap A18 LFN, 2004 provide that where parties had agreed or contracted to settle their disputes by arbitration and one of them heads straight to court in breach of the agreement, the court is bound to stay proceedings thereof pending resolution or settlement of the matters/disputes by arbitration.”(NAN)

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