In a recent interview, former member of the Investments and Securities Tribunal, Mr. Osemwengie Smart, shed light on the crucial role the tribunal plays in instilling confidence among domestic and international investors in the Nigerian economy. He discussed the tribunal’s inception, accomplishments, challenges, and its future trajectory.
When asked about the rationale behind establishing the Investments and Securities Tribunal (IST) amidst existing court systems, Mr. Smart explained, “The capital market operates on a tight schedule. Regular courts often lead to prolonged delays, rendering the relevance of disputes moot by the time they are resolved. The government recognized the need for a specialized court to fast-track capital market cases, which led to the formation of the Defeat Committee. This committee recommended creating the IST, a tribunal specially designed to resolve disputes within a strict three-month timeframe, in stark contrast to conventional courts where cases can drag on for years.”
Reflecting on his time on the tribunal, Mr. Smart was asked if there were any complex cases that necessitated extending the three-month limit. He replied, “Not at all. Throughout my tenure, we consistently adhered to that three-month timeline. To my knowledge, none of my colleagues have exceeded this deadline either.”
The conversation then turned to the procedures followed if a case could not be resolved amicably within the designated period. Mr. Smart elaborated, “We strongly encourage settlements and often seek to resolve issues without lengthy litigation. If both parties express interest in finding common ground, we can grant an additional month or two for them to negotiate. If they succeed in reaching an agreement, we accept their terms as the court’s judgment. However, if they can’t settle, we proceed with the case.”
Regarding the proportion of disputes resolved out of court compared to those that enter full litigation, he noted, “Fewer cases end up settling out of court compared to those that go to litigation. This can sometimes be attributed to the practices of some lawyers, who may prefer the courtroom in order to justify their fees, believing that a settlement might diminish their efforts. Nevertheless, we do have an Alternative Dispute Resolution (ADR) center available for simpler disputes or those involving smaller amounts.”
On evaluating the effectiveness of the IST in resolving investment disputes, Mr. Smart asserted, “The IST has demonstrated remarkable effectiveness. It handles both appellate and original cases, with a prerequisite that investors must first attempt to resolve disputes with the Securities and Exchange Commission (SEC). Should they be dissatisfied with the SEC’s outcome, they can appeal to the tribunal. Moreover, if there are delays from the SEC, investors can escalate the situation to the IST without being held up indefinitely.”
He emphasized the tribunal’s positive influence on investor confidence: “The settlements we facilitate enhance investor trust. Foreign investors observe that the SEC is actively engaging with cryptocurrency exchanges, which signals a reliable mechanism for resolving disputes. This confidence has bolstered Nigeria’s standing as a signatory to the International Organization of Securities Commissions (IOSCO), further elevating investor trust.”
The discussion then shifted to the IST’s accessibility and engagement with investors. Mr. Smart remarked, “The IST is well-utilized, with offices not only in Abuja and Lagos but also in Kano, Enugu, and Port Harcourt. We cater specifically to capital market investors who know where to seek resolution for their disputes, as confirmed by a recent Supreme Court ruling. The court established that the IST holds exclusive jurisdiction over capital market disputes.”
Addressing concerns about the tribunal potentially being overwhelmed, he reassured, “The court is not overloaded. The laws have been significantly refined since their introduction in 1999. Now, any claims involving capital market operators must first be directed to the SEC, which helps prevent minor cases from congesting the system.”
While acknowledging some challenges in enforcement, Mr. Smart stated, “Enforcement can present challenges, as our judgments must be registered with the Federal High Court for execution. However, most cases comply without necessitating further action. There is an opportunity for the government to strengthen this process by allocating resources to develop an enforcement unit, which would be advantageous.”
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