In this piece, Ayodele Ashiata Kadiri argues against the establishment of specialised courts for only insolvency and restructuring matters or disputes.
I was privileged to participate in a debate at the annual International Conference organised by the Business Recovery & Insolvency Practitioners Association of Nigeria (BRIPAN) in 2022. It took place at the Federal Palace Hotel from September 22, 2022 to September 23, 2022 and was themed “Insolvency, Restructuring and Economic Development”. My co-debater argued that there should be special courts established for the administration of justice in insolvency and restructuring matters or disputes. I argued, on the other hand, that there was no reason for establishing special courts for insolvency and restructuring matters or disputes. I have set out in succeeding paragraphs the bases for my arguments.
First, it is reinventing the wheel. The Federal High Court (“FHC”) already has and exercises “jurisdiction to the exclusion of any other court in civil causes and matters” on “bankruptcy and insolvency” by virtue of section 251(1)(j) of the 1999 Constitution of the Federal Republic of Nigeria, (as amended) (the “Constitution”). Does the FHC’s exclusive jurisdiction over bankruptcy and insolvency not make it ‘special’ enough for the dispensation of justice in insolvency and restructuring matters or disputes?
Second, and this flows from the first, it is a waste of resources that could be better utilised elsewhere. Think about the costs of setting up special courts. There will be construction or other real estate related costs, costs of operations (fuel, administrative staff, etc). There will also be that one cost that everyone seems to overlook but is the steepest – the cost of corruption. It will be another opportunity to embezzle funds, and also oil the wheels of nepotism in Nigeria. These costs could be applied to improving court infrastructure generally (e.g., finding a solution to the matchbox sized court rooms at the Federal High Court (Lagos Division)) and catering to the welfare of the Justices of the existing courts, as well as the members of their staff. It would be shameless of anyone to fail to acknowledge the near-crippling effect of the 64-day strike of the Judicial Staff Union of Nigeria on the dispensation of justice in 2021. The fact that it happened immediately after the COVID 19 lockdown made the consequences even more dire.
Third, it is a superficial solution. I like to think of it as asking somebody with body odour to merely buy new clothes or change their wardrobe. We all know that, that is not the cause of the problem. There are a lot of problems in the judicial system in Nigeria, and we cannot keep creating special courts to solve that problem. We must rework the machinery for the administration of justice. It is as simple as that. We create new courts in the same problematic system so that they can also be drowned in the sea of the inefficiency that already exists. It is ultimately counterproductive. The way to drive it home is to look at it from the appellate courts. If you have a matter at the Court of Appeal today the chances are that your next adjourned date will be sometime in 2024. Imagine creating a special court for insolvency matters. Let us assume that the special courts deliver a judgement in nine months, but one of the parties is dissatisfied and goes on appeal. That matter suffers the same fate as any other matter that was not initially decided by a special court. What, then, was the point of the special court? Or is it the case that there will be a parallel appellate court system for only insolvency and restructuring matters? The focus on restoring efficiency to the judiciary should not solely be on the courts of first instance. Efficiency must be restored at all levels.
My opponent had, on that day, argued that creating special courts will among others improve efficiency and expertise. I believe that my third argument has addressed the efficiency point. In respect of expertise, we can have a division in the FHC where there can selected justices to preside over bankruptcy and insolvency matters. Again, this further reinforces my argument to rework the judicial system as a whole. There should be some system in building expertise across the courts, without necessarily separating the courts. If that was to be the case, then every subject matter should have its appellate courts where only expert justices will preside. My opponent also made two additional arguments I find very interesting but slightly upsetting. The first is that some other subject matters have their dedicated courts, like the National Industrial Court. It felt like the ’emi lo kan’ mentality was again rearing its head again. Is that what our judicial system has become?
So, because labour and tax matters have special courts, insolvency and bankruptcy matters should have theirs? Have we interrogated the success of the National Industrial Courts? Where is the data in support of contention that special courts are required for insolvency and restructuring matters? We cannot make life-altering decisions because we think it is the turn of somebody or something to be there. It is still one of the battles we are fighting as a country. The second is that we should consider it because other jurisdictions have a similar system (i.e., special courts for bankruptcy and insolvency matters). I think that one of the many problems we have in Nigeria is that we keep looking at other jurisdictions instead of looking inwards. As much as I am a proponent of not reinventing the wheel, I think we should also make sure that whatever we are attempting to copy, is well suited for our peculiar circumstances. And I think, it is stating the obvious to say that creating special courts for insolvency/bankruptcy/restructuring matters without more is not what we need in Nigeria at this time.
So, with these few points of mine, I hope that you are now convinced that rather than clamour for the establishment of special courts for insolvency and restructuring matters or disputes, we should all advocate for the restoration of efficiency in the judiciary as a whole.
Kadiri, a2016 First Class Honours graduate of the Nigerian Law School, is based in Lagos. She can be reached via kadiriayodele@gmail.com