Landmark Court of Appeal Judgement Strips Regulatory Agencies of Power to Impose Fines On Oil Companies

Source: Daily Times, 19/04/2018

The Court of Appeal, Calabar has delivered a landmark Judgment on the powers of regulatory agencies to impose fines without recourse to the courts. In its Judgment in favour of ExxonMobil (Mobil) in an appeal filed by the National Oil Spill Detection & Response Agency (NOSDRA), the Court of Appeal struck down Section 6(3) of the NOSDRA Act empowering it to impose fines, in clear violation of the Constitution of the Federal Republic of Nigeria 1999. This appeal was against the landmark decision of the Honourable Justice Ojukwu of the Federal High Court, Uyo Division, delivered on Tuesday, May 16, 2017, on the motion filed by ExxonMobil’s Nigerian subsidiary in Suit FHC/UY/CS/1623/2016 – National Oil Spill Detection & Response Agency (NOSDRA) vs. Mobil Producing Nigeria Unlimited.

Justice Ojukwu’s decision was to the effect that the imposition of fines by regulatory agencies, as was done in this case by NOSDRA, without due recourse to the Courts, is illegal and does not accord with the rules of natural justice and fairness. Upholding the submissions of Counsel to Mobil, Prof. Fabian Ajogwu SAN, as canvassed by Mr Ituah Imhanze of Kenna Partners, and the affirming the ruling of the lower Court, the Court of Appeal, Calabar in a unanimous decision held that by the imposition of penalty on Mobil without due recourse to the courts, NOSDRA had “acted in a judicial capacity which they are not imbued with” under the Constitution.

Justice Nwosu-Iheme, in the lead judgment, further restated the power of the courts under the Constitution to declare any Act of the National Assembly that is inconsistent with the Constitution as null and void and pronounced that the offending provisions of the NOSDRA Act which provided the basis for the arbitrary imposition of fine by NOSDRA constitutes a lacuna in the NOSDRA Act. By implication, the Court of Appeal has affirmed the courts’ position on the arbitrary imposition of fines by regulatory agencies and has essentially struck down the provisions of Section 6(3) of the NOSDRA Act on the imposition of fines. NOSDRA was represented by Mr Charles Ateboh.

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