Court sets aside NERC’s order removing IBEDC board members

The Federal High Court sitting in Abuja on Friday set aside the order of the Nigerian Electricity Regulatory Commission (NERC) removing the Tunde Ayeni led board of directors of the Ibadan Electricity Distribution Company (IBEDC).

The trial Judge, Justice Taiwo O. Taiwo, in a judgment he delivered in the suit, agreed with the submissions by the counsel to the IBEDC and its directors, Muyiwa Balogun, Partner at Olaniwun Ajayi LP, that the appointment and removal of directors must be in accordance with the provisions of Companies and Allied Matters Act (CAMA) and the Electric Power Sector Reform Act, 2005 (ESPRA).

The court specifically held that there is nothing in ESPRA and NERC’s enabling law, which permits it, NERC, to make the removal order.

It will be recalled that NERC, in an order of 19th June 2018 directed IBEDC to commence the process of dissolution of its Board within 21 days period, citing alleged delay in the repayment of some loans by IBEDC investors.

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The IBEDC directors, led by Tunde Ayeni, however, responded swiftly to the allegation, stating that it has lived up to its financial commitments to IBEDC, disclosing that as at Thursday, June 14, 2018, it had paid its monthly commitment up to date.

In a bid to resolve the matter once and for all, the aggrieved directors sued NERC for its decision to suspend them from the Board of IBEDC.

The court further held, in its judgment that Section 18 of the Electricity Industry (Enforcement) Regulation 2014, which purports to give NERC the powers to remove directors is ultra vires, as it goes beyond the remit of ESPRA and therefore nullified Section 18 of the Regulation for being inconsistent with ESPRA.

In addition, the court held that NERC cannot be an umpire in its own case, and any allegations of fraud must be adjudged, not by NERC, but by a competent court.

Analysts have contended that such decision by a regulator was capable of discouraging both local and foreign investors from injecting the much needed private capital that is required to develop the Nigerian power sector and propel the economy.

Tribune