The Limits Of Regulatory Oversight: How Far Can The CAC Go Under Sections 839 And 851 Of CAMA 2020?

Introduction

The Companies and Allied Matters Act (CAMA) 2020 significantly expanded the supervisory powers of the Corporate Affairs Commission (“CAC” or the “Commission’’) over incorporated trustees in Nigeria. Among the most consequential of these expanded powers are those contained in Sections 839 and 851 of the Act, which empower the CAC to suspend trustees, appoint interim managers, and adjudicate disputes through an internal Administrative Proceedings Committee (APC). These provisions have proven to be a double-edged sword, whilst they arm the CAC with tools for genuine regulatory intervention, they also carry a latent risk of administrative overreach.

The Federal High Court in Abuja was recently called upon to examine precisely this tension. In a judgment delivered on 5th June, 2026 in Suit No. FHC/ABJ/CS/2142/2025, Justice Binta Nyako nullified the CAC’s deregistration of the National Youth Council of Nigeria (NYCN), ordered the restoration of its certificate of registration, and dissolved the Interim Management Committee (IMC) that the CAC had installed in the wake of the deregistration¹. The decision is a significant doctrinal contribution to the jurisprudence governing the outer limits of administrative regulatory power under CAMA 2020 and must be read against the backdrop of a line of earlier decisions in which sister courts of coordinate jurisdiction had already begun to whittle down the reach of the same provisions.

Background to the Dispute

The NYCN is a body whose trustees were registered as incorporated trustees by the CAC, with its certificate of registration originally issued on 28th October, 2020. On 6th October, 2025, the CAC withdrew the NYCN’s certificate of registration. A day later, the CAC and the Federal Ministry of Youth Development jointly announced the constitution of a nine-member IMC led by Buhari Shehu, to manage the council’s affairs pending the resolution of a leadership dispute.

Prior to the withdrawal of the Certificate of Incorporation, the trusteeship, leadership structure, and administration of the NYCN under the leadership of Mr. Sukubo Sara-Igbe Sukubo had been the subject of multiple proceedings before courts of competent jurisdiction. In particular, the Federal High Court, Abuja, presided over by Honourable Justice D.U. Okorowo, in Suit No. FHC/ABJ/CS/1553/2022, affirmed the validity of the NYCN’s Certificate of Incorporation and upheld Mr. Sukubo Sara-Igbe Sukubo’s leadership².

The dispute is also the subject of Appeal No. CA/ABJ/CV/13081/2023 before the Court of Appeal, in which both the CAC and the Federal Ministry of Youth Development are parties. It has been contended in the appeal that any action by the CAC or the Ministry to revoke the Council’s registration or constitute an Interim Management Committee while the appeal remains pending would amount to an affront to the judicial process.

Dissatisfied with these actions, Sukubo Sara-Igbe Sukubo, who serves as the President of the NYCN and Secretary of its Board of Trustees, together with another claimant, instituted the suit challenging the legality of the CAC’s conduct. The claimants argued that the CAC acted beyond its statutory powers, that the provisions of CAMA relied upon to justify the intervention (specifically Sections 839 and 851) had previously been held to be unconstitutional by superior courts³ and that in any event, the CAC ought not to have intervened whilst related leadership and trusteeship disputes were already pending before courts of competent jurisdiction.

The Statutory Framework: Sections 839 and 851 of CAMA 2020

Section 839 of CAMA 2020 grants the CAC the power to suspend the trustees of an association and appoint an interim manager or managers to manage the affairs of an association where the CAC reasonably believes that: (a) there is or has been misconduct or mismanagement in the administration of the association; (b) it is necessary or desirable for the purposes of protecting the association’s property, securing a proper application of that property, or serving the public interest; or (c) the affairs of the association are being conducted fraudulently⁴.

Crucially, however, the section establishes important procedural safeguards. Subsection (2) provides that the suspension of trustees is to be effected by an order of court, upon the petition of the CAC or members comprising at least one-fifth of the association.⁵ Subsection (11) further requires that the CAC shall only exercise its powers under the section with the approval of the Minister.⁶ These safeguards reveal that the legislature did not intend for the CAC to act unilaterally in displacing the governance structure of an association, judicial oversight and ministerial approval are built into the statutory scheme.

Section 851, on the other hand, establishes the APC of the CAC. The APC is empowered to: (a) provide a hearing for persons alleged to have contravened CAMA or its regulations; (b) resolve disputes or grievances arising from the operations of the Act; and (c) impose administrative penalties for contraventions.⁷ The sanctions available to the APC include the imposition of administrative penalties, suspension or revocation of registration, and a recommendation for criminal prosecution. Decisions of the APC are subject to confirmation by the Governing Board of CAC and may be appealed to the Federal High Court.⁸

Read together, these provisions create a supervisory regime that, whilst broad in its scope, is by no means without limits. The central question that arose in the NYCN case was whether the CAC had acted within those limits.

Legal Gaps and Structural Weaknesses

Lacunae in Section 839

Absence of a pre-suspension notice and hearing requirement: Section 839(1) empowers the Commission to form a “reasonable belief” and then make an “order” of suspension. There is no requirement in the provision for the CAMA to notify the trustees of the basis of its belief, invite a response, or afford an opportunity to be heard before forming that belief and making the order. Section 36(1) of the Constitution guarantees the right to fair hearing which must be engaged at the point of any adverse administrative decision, not merely at the court stage.⁹ As such, the absence of a pre-intervention notice, and response mechanism is the most fundamental structural lacuna in Section 839.¹⁰

Internal drafting inconsistency between subsections (1) and (2): Subsection (1) states that the Commission “may by order suspend the trustees,” suggesting a unilateral executive power of the Commission to issue a suspension order. Subsection (2) then states that “the trustees shall be suspended by an order of Court” upon the petition of the Commission. These two subsections create an irreconcilable internal contradiction. It is unclear whether the Commission has autonomous power to suspend (subsection (1)) or whether suspension requires a court order (subsection (2)). This ambiguity is not academic; it is the precise ambiguity that the CAC exploited in the NYCN case by withdrawing the certificate of registration without first obtaining a court order.¹¹

The ‘public interest’ ground is undefined and unbounded: Section 839(1)(b)(iii) permits intervention where it is “in the public interest”. Neither Section 839 nor the interpretation section (Section 868) of CAMA defines the term “public interest”. There are no criteria, benchmarks, or guiding principles for when the Commission may determine that intervention in the affairs of an association is in the public interest. This is a dangerously open-ended grant of discretionary power. In the hands of a partisan or politically motivated Commission, it could be used to justify intervention in the affairs of any association that the Government of the day finds inconvenient, including activist civil society groups, human rights organisations and policy-advocacy groups. The “public interest” ground is the most constitutionally vulnerable element of Section 839.¹²

No time limits on interim administration: Section 839 contains no statutory time limit within which: (a) a petition under subsection (2) must be filed after the Commission forms its belief; (b) the court must hear and determine the petition; or (c) the period of interim management must last before the situation must be reviewed or resolved. The absence of these limits means that an association can be under CAC-supervised interim administration indefinitely, which strips the association of the right to self-governance, an essential attribute without which the freedom of association guaranteed by the Constitution is rendered nugatory.¹³

Absence of accountability mechanisms for interim managers: Section 839(4) places interim managers under the “supervision of the Commission,” and Section 839(10) empowers the Commission to make regulations as to the “functions, powers and remuneration” of the interim manager. This means the financial governance of the association, including the remuneration of the very person appointed to oversee it, is determined by the Commission itself. There is no provision for independent auditing of the interim manager’s conduct or for court oversight of the interim manager’s performance during the administration period.¹⁴

Ministerial approval and accountability gap: Section 839(11) requires ministerial approval before the Commission may exercise its powers under the section. This condition, whilst a welcome check on CAC’s autonomy, introduces its own lacuna, i.e. there is no provision governing how the Minister is to exercise the approval power, within what timeframe, on what criteria, or subject to what oversight. The requirement therefore creates a gateway that can be opened by executive will without any procedural check or balance.¹⁵ 

Lacunae in Section 851

The APC is structurally not independent: The APC is chaired by the Registrar-General of the Commission and staffed entirely by serving officers of the Commission and a representative of a government Ministry. There is no independent member, no representative of civil society, no legal practitioner from outside the Commission, and no judicial officer. The Commission is, in effect, both the prosecutor (it initiates proceedings or receives complaints that trigger the APC) and the adjudicator. This structure disregards the principle of nemo judex in causa sua (no person should be a judge in their own cause) and was the basis on which Justice Omotosho in Federal High Court Decision in Sukubo Sara-Igbe Sukubo & Anor. v. Corporate Affairs Commission & Ors. (Suit No. FHC/ABJ/CS/2142/2025) held that Section 851 violated the right to fair hearing.¹⁶

Decisions are confirmed by the Board of the Commission, double conflict of interest: Section 851(11) subjects all APC decisions to “confirmation by the Board”. The Board of the Commission is the governing body of the CAC. This means the same institutional actor that constitutes the APC, initiates or accepts the proceedings, supervises the inquiry, also confirms the outcome. There is no separation between the investigative, adjudicatory and confirmatory functions, which is antithetical to the constitutional guarantee of fair hearing.¹⁷

The APC is empowered to revoke registration, a power of judicial character: Section 851(10)(b) empowers the APC to impose “suspension or revocation of registration” as a sanction. The revocation of an association’s certificate of registration is not a merely administrative matter; it is a civil consequence of the gravest order. It extinguishes the legal personality of the association, terminates its ability to hold property, and disbands its corporate existence. Such a consequence is plainly of a judicial character and, under Section 6(6)(b) and Section 251(1)(e) of the Constitution, ought to be exercisable only by a court of competent jurisdiction.¹⁸

There is no statutory right to pre-hearing disclosure of evidence: Section 851(4)(a) purportedly provides an “opportunity of being heard” for persons alleged to have contravened CAMA. However, the section does not require the APC to: (a) disclose in advance the evidence or allegations against the respondent; (b) allow the respondent to call witnesses or cross-examine witnesses against them; or (c) issue a reasoned written decision. The right to be heard, without these procedural requirements, reduces the constitutional guarantee of the right to fair hearing to an empty shell.

Absence of a requirement for reasoned decisions: Section 851(9) provides that decisions of the APC are to be forwarded to the parties not later than 14 days after confirmation by the Board. There is however no requirement for the decision to be accompanied by written reasons. The absence of this statutory requirement for a reasoned decision renders nugatory the right of appeal to the Federal High Court allowed under subsection (12), as an aggrieved party is left entirely in the dark regarding the factual or legal basis of the decision they seek to challenge.

Antecedent Jurisprudence: A Pattern of Constitutional Challenge

The claimants’ assertion that Sections 839 and 851 had previously been struck down was not without foundation. By the time the NYCN suit was filed, there existed a significant body of first-instance authority calling the constitutionality of those provisions into question.

In Ekpenyong v. National Assembly & Ors.¹⁹, Justice James Omotosho of the Federal High Court, Abuja delivered a landmark judgment on 18th April, 2023 striking down Sections 839, 842, 843, 844, 845, 846, 847, 848 and 851 of CAMA 2020. The plaintiff, an Abuja-based lawyer, had challenged those provisions on the ground that they infringed on his constitutionally guaranteed rights to freedom of thought, conscience and religion²⁰ and freedom of peaceful assembly and association.²¹ Justice Omotosho agreed, holding that the powers granted to the CAC to regulate and administer incorporated trustees under those sections were inconsistent with the constitution and were therefore null and void. He further held that the provisions of Section 851 establishing the APC denied the plaintiff his constitutional right of access to court under Sections 6(6)(b) and 36(1) of the Constitution and usurped the jurisdiction of the Federal High Court under Section 251(1)(e). While the CAC has exercised its right of appeal, the Federal High Court judgments remain valid, subsisting and binding until they are set aside by an appellate court.

Earlier, on 21st March 2023, in the related matter of Registered Trustees of the Christian Association of Nigeria (CAN) v. Corporate Affairs Commission & Anor. (Suit No. FHC/ABJ/CS/84/2022), Justice Inyang Ekwo, also of the Federal High Court Abuja, equally moved to curtail the reach of those provisions.²² In that suit filed by Joe Gadzama, SAN, on behalf of CAN, the court held that the provisions of Sections 17(1), 839(1) and (7)(a), 842(1) and (2), 851 and 854 of CAMA 2020 and Regulations 28, 29 and 30 of the Companies Regulations (CR) 2021 were not applicable to CAN and the churches (including mosques) as religious bodies. The court went further to make an order of perpetual injunction restraining the CAC from taking any step to implement those provisions against religious bodies. Notably, however, Justice Ekwo declined to make the generic order of nullity sought by the plaintiff, observing that such an order would affect other bodies and organisations registered under Part F of the Act.

Taken together, these decisions established, well before the NYCN case arose, that the constitutional validity of Sections 839 and 851 was already subject to judicial scrutiny, a consideration that ought to have informed CAC’s conduct in the NYCN matter.

The Court’s Decision and its Reasoning

Justice Nyako’s judgment proceeded on two related but analytically distinct grounds:

The Boundary Between Regulatory Oversight and Judicial Determination

The court held that whilst the CAC possesses regulatory oversight powers over incorporated trustees, those powers do not extend to the determination of leadership disputes or the displacement of existing governing structures, particularly where such matters are already subject to pending litigation.²³ In the court’s view, the real question is not whether the CAC has regulatory powers, it clearly does, but whether those powers extend to the wholesale displacement of existing leadership structures is the concern.

Justice Nyako stated emphatically that the CAC may investigate, supervise compliance with statutory requirements and make inquiries into the affairs of an association. What it cannot do is assume the role of the court by effectively deciding who should govern an association whilst that very issue remains the subject of pending litigation. Administrative agencies, the court reasoned, must exercise restraint when judicial proceedings are ongoing, so as not to take actions capable of prejudicing those proceedings.

This reasoning reflects a broader constitutional principle of separation of powers. Courts are constitutionally vested with the power to adjudicate disputes and an administrative agency that pre-empts judicial determination of a contested question, particularly by altering the status quo in favour of one set of disputants over another, trespasses upon judicial territory. The court encapsulated this principle in its finding that the law does not permit a party, directly or indirectly, to achieve administratively what remains unresolved judicially.²⁴

The Constitutionality of Sections 839 and 851

The claimants had contended that Sections 839 and 851 of CAMA had previously been declared unconstitutional by the courts, and that any reliance on those sections was therefore unlawful. The court’s approach on this point was careful and notably restrained. Justice Nyako declined to make a blanket declaration that Sections 839 and 851 are unconstitutional. Instead, she ruled that the CAC’s reliance on those provisions in the specific circumstances of the NYCN case was improper.

This is a significant aspect of the judgment. By declining to pronounce on the constitutionality of the provisions in the abstract, the court preserved the question for a more appropriate case and avoided the creation of unnecessary gap which are obviously present in the regulatory framework. The holding is contextual, the actions taken were unlawful not because Sections 839 and 851 are inherently unconstitutional, but because the circumstances under which they were invoked – in the face of pending litigation and without following the procedural requirements embedded in Section 839 itself, rendered their invocation impermissible in the instance.²⁵

It bears noting that this approach stands in contrast to the more categorical positions taken by Justices Omotosho and Ekwo. The existence of three separate first-instance judgments, each arriving at a different degree of restriction on these provisions -outright nullity, contextual inapplicability and situational impropriety respectively, underscores the unsettled state of the law and the need for a definitive pronouncement by an appellate court.

Identifying the Exceptions: When May the CAC Lawfully Intervene?

The NYCN decision, whilst it curtails administrative overreach, does not deprive the CAC of its supervisory mandate. Drawing from both the judgment and the statutory text of Section 839, the following propositions may be identified as instances in which the CAC may lawfully exercise its powers:

Where there is evidence of misconduct or mismanagement: Section 839(1)(a) permits intervention where there is or has been misconduct or mismanagement in the administration of the association.²⁶ Subsection (5) clarifies that this extends to the excessive remuneration of persons acting in the affairs of the association. Where such evidence exists and no related matter is pending before a court, the CAC may act, provided it obtains the requisite ministerial approval and proceeds through the court in line with subsection (2).

Where intervention is necessary to protect the association’s property: Section 839(1)(b) permits intervention where it is necessary or desirable for the purpose of protecting the property of the association, securing a proper application of that property for the association’s objects, or serving the public interest.²⁷ In such circumstances, and where no concurrent litigation has been commenced, the CAC may act to preserve the association’s assets.

Where the affairs of the association are being conducted fraudulently: Section 839(1)(c) provides a basis for intervention where the affairs of the association are being run fraudulently.²⁸ This is perhaps the most compelling ground for intervention and one where the balance between regulatory action and judicial restraint may tilt more readily in favour of immediate administrative action.

Dormant accounts and untraceable associations: Section 842 of CAMA 2020 provides a distinct but related basis for dissolution where the association holds dormant bank accounts and fails to respond satisfactorily to the CAC’s inquiries within 15 days.²⁹ In such cases, where the very existence and activity of the association are in doubt, the CAC’s dissolution powers are more readily defensible.

In all of these cases, however, the common thread running through the statutory framework is the requirement for procedural regularity such as ministerial approval, court orders, and the avoidance of pre-empting pending litigation. The NYCN case illustrates that the failure to observe these conditions may render an otherwise ostensibly valid exercise of power unlawful.

Is it necessary for the CAC to have these Powers?

There are genuine and legitimate reasons why the CAC should possess some supervisory authority over incorporated trustees. The following considerations support the existence of regulatory oversight powers in principle:

Prevention of fraud and misappropriation: Nigeria has documented cases of trustees misappropriating association funds, diverting donations and running organisations for private gain. The absence of any supervisory mechanism would leave beneficiaries and members without recourse against a complicit board of trustees.

Protection of vulnerable beneficiaries: Many incorporated trustees exist to serve charitable, religious or social purposes. Where the trustees cease to serve those purposes, some external authority must have legal standing, to intervene to protect the beneficiaries and the association’s property.

Prevention of capture by bad actors: Without oversight, incorporated trustees can become vehicles for money laundering, tax evasion and the financing of illegal activities. A regulatory framework that can investigate and, where necessary, remove trustees is therefore of genuine public value.

From our analysis above, it is evident that the powers under Sections 839 and 851, as currently drafted, are disproportionate to the regulatory objective. In the absence of clear institutional safeguards to guarantee complete administrative independence, granting the Commission the power to unilaterally suspend trustees and appoint interim managers introduces a significant risk of overreach, making it the most invasive regulatory intervention possible. Adopting this mechanism as the primary regulatory tool falls short of the threshold of proportionality required under Section 45(1) of the Constitution. Incorporated trustees differ fundamentally from commercial companies and business names as they are trust-based entities. While CAC should undoubtedly have supervisory authority, the current scope and structure of these sections are constitutionally infirm and structurally flawed. Ultimately, the necessity of these specific powers, in their present unchecked form, has not been established and creates opportunities to contest the regulatory actions of the CAC, even in situations where valid reasons exist for such intervention by the CAC.

Conclusion

The concurrent Federal High Court decisions in Ekpenyong, CAN and NYCN matters send a consistent judicial signal that the powers conferred on the CAC by Sections 839 and 851 of CAMA 2020 are constitutionally sensitive and susceptible to abuse if not exercised with rigour and restraint. Whilst the CAC may investigate, supervise compliance and intervene where statutory conditions are strictly met, it may not resolve contested governance questions properly before the courts or alter the status quo in ways that pre-empt judicial determination. As Justice Nyako observed, the law does not permit a party to achieve administratively what remains unresolved judicially. Ultimately, procedural compliance cannot cure the underlying structural and constitutional infirmities built into the provisions of the CAMA. Whilst some supervisory authority over incorporated trustees is legitimate and necessary, the present scope of Section 839 and 851 is disproportionate. Targeted amendments and, ultimately, dedicated legislation for incorporated trustees and non-governmental organisations are necessary to bring the framework into constitutional conformity.

Footnotes

1. Suit No. FHC/ABJ/CS/2142/2025, judgment of Justice Binta Nyako (Federal High Court, Abuja, 5 June 2026). “Court orders CAC to reinstate NYCN, dissolves interim committee”, Punch Newspapers, 5 June 2026, https://punchng.com/court-orders-cac-to-reinstate-nycn-dissolves-interim-committee/.

2. Incorporated Trustees of the National Youth Council of Nigeria & 4 Ors vs Corporate Affairs Commission & 3 Ors, https://www.vanguardngr.com/2025/10/nycn-youth-ministry-clash-over-council-leadership/

3. Suit No. FHC/ABJ/CS/1076/2020, judgment of Justice James Omotosho (Federal High Court, Abuja, 18 April 2023). “Court nullifies sections of CAMA 2020 for infringing on citizens’ fundamental rights”, The Guardian Nigeria, 21 April 2023, https://guardian.ng/news/court-nullifies-sections-of-cama-2020-for-infringing-on-citizens-fundamental-rights/.

4. Companies and Allied Matters Act 2020, No. 3 of 2020 (Nigeria), s. 839(1).

5. Ibid, s. 839(2).

6. Ibid, s. 839(11).

7. Ibid, s. 851(1)-(4).

8. ibid, s. 851(10)-(12).

9. Constitution of the Federal Republic of Nigeria 1999 (as amended) (CFRN), s 36(1).

10. CAMA 2020, s 839(1)

11. ibid, s 839(1)(2)

12. CAMA 2020, s 839(1)(b)(iii)

13. Section 40 Constitution 1999

14. ibid, s 839(10)

15. ibid, s 839(11)

16. Chukwudi (n 17). See also the natural justice principles: nemo judex in causa sua and audi alteram partem, recognised by the Supreme Court of Nigeria in Adigun v Attorney-General of Oyo State [1987] 1 NWLR (Pt 53) 678.

17. CAMA 2020, s 851(11)

18. CFRN, s 6(6)(b) vests judicial powers in the courts; s 251(1)(e) specifically vests jurisdiction over companies and allied matters in the Federal High Court.

19. Suit No. FHC/ABJ/CS/1076/2020

20. Section 38 Constitution of the Federal Republic of Nigeria 1999 (as amended)

21. ibid

22. Registered Trustees of the Christian Association of Nigeria v. Corporate Affairs Commission & Anor., Suit No. FHC/ABJ/CS/84/2022, judgment of Justice Inyang Ekwo (Federal High Court, Abuja, 21 March 2023). https://www.vanguardngr.com/2023/03/court-stops-cac-from-suspending-appointing-can-churchs-trustees/.

23. FHC/ABJ/CS/2142/2025 (n 6), per Justice Nyako.

24. ibid

25. ibid

26. CAMA 2020, s. 839(5).

27. ibid, s. 839(1)(b).

28. ibid, s. 839(1)(c).

29. ibid, s. 842(2).

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