A Federal High Court in Lagos has further reserved ruling till May 27, 2015, on the preliminary objection filed by the founder, Living Faith Church, a.k.a. Winners’ Chapel, Bishop David Oyedepo, against the N1.86bn claim by a stock brokerage firm.
The firm, Valueline Securities and Investment Limited, and its Managing Director, Samuel Enyinnaya, had sued Oyedepo for alleged breach of contract in a N9bn stock market deal. Also joined in the claim are Oyedepo’s family, his book publishing company, the Winners’ Chapel and the Nigerian Stock Exchange. The plaintiffs particularly accused the NSE of bias in its investigations into the N9bn business dispute.
They prayed the court to declare as illegal, the freezing of their bank accounts by NSE and to make an order to immediately unfreeze their accounts. But Oyedepo, through his lawyer, Mr. Chioma Okwuanyi, had urged the court to discountenance the plaintiffs’ claims and to decline jurisdiction over the case which was the fallout of a capital market transaction. The ruling on the objection was, however, adjourned for the third time till May 27, the parties having filed and moved their final written addresses since February 26.
In the three-ground preliminary objection, Okwuanyi contended that by the provisions of Section 34 of the Investment and Securities Act, only the Investment and Securities Tribunal had the vested authority to entertain a dispute between a capital market operator and his client and not a Federal High Court, to which the plaintiff had brought the matter.
The lawyer argued that the plaintiffs’ suit as presently constituted before Justice Mohammed Yunusa was premature, as the plaintiff had yet to explore all the avenues laid down to resolve such a dispute before heading for the court.
“My Lord, what we are saying is that, going by the reliefs sought by the plaintiffs, they have said that this issue is a simple contract relating to investment portfolio management and our contention is that issues of simple contracts are never within the jurisdiction of the Federal High Court.
“Also, going by the Clause 14 of the Investment Management Agreement, this matter as presently constituted is premature. What clause 14 prescribed is that parties would resort to arbitration to resolve all disputes.
“My Lord, Section 251 of the constitution does not donate jurisdiction to this court in respect of capital market. We therefore urge your Lordship to uphold our objection and to strike out this suit or refer the case to the Investment and Securities Tribunal or to arbitration,” Okwuanyi had submitted.
In its own objection, the NSE, through its counsel, Mr. M.O. Liadi, had also contended that the plaintiffs ought to have approached the NSE council to ventilate their grievances rather than approach the Federal High Court.
“Given the complaints of the plaintiffs against the decision of the applicant, the plaintiffs ought to have approached the applicant’s council and if still unsatisfied, the plaintiff is obliged to proceed to the Securities and Exchange Commission.
“If still unsatisfied, by the provisions of sections 284 and 289 of the Investment and Securities Act, the plaintiffs are permitted to proceed to the tribunal. We submit that the plaintiffs have failed to do this,” Liadi had said on February 26.
But the plaintiffs’ lawyer, Mr. Rickey Tarfa (SAN), urged the court to assume jurisdiction and to dismiss the defendants’ preliminary objection for being irregular and for failing to comply with the court’s rules. In their statement of claim, the plaintiffs explained that the Oyedepos entered an Investment Portfolio Management Agreement with them and appointed them as the portfolio managers to oversee and to ensure the profitability of an investment worth about N9bn in the NSE.
The plaintiffs claimed that in order to enhance profitability of the investment; they obtained some margin loans from banks, which they claimed turned out to be a great boost to the investment. But Okwuanyi claimed that the losses recorded on the investment were due to the plaintiffs’ recklessness with the margin loans purportedly obtained.
He argued that the margin loan was neither obtained with his client’s consent nor was for the purpose of the investment.
Okwanyi said,
“The losses occasioned to the investment of the first to the 10th defendants were as a result of the negligence and recklessness of the plaintiffs. It was an outright fraud.“None of the reports submitted by the plaintiffs captured the margin borrowing because they were all in their names and not in the name or on behalf of the first to the 10th defendants.”
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