Most professional associations in Nigeria have formal rules that provide for the investigation and discipline of members who breach the ethics of their profession. A form of administrative enquiry is usually conducted to verify such breach and appropriate sanctions are meted out.

Where such professional misconduct also constitutes a crime and a criminal action is instituted in court,  the question then arises as to whether the administrative tribunal set up to enquire into such an allegation, has to await the outcome of the criminal trial before it can take steps to investigate and discipline the affected member. This was one of the central issues decided by the Court of Appeal, Lagos Division in APPEAL NO. CA/L/769/09: MUFUTAU AJAYI V. INSTITUTE OF CHARTERED ACCOUNTANTS OF NIGERIA & ORS.

Ajayi was a senior officer in African Petroleum Plc and was alleged to have misrepresented important information contained in the prospectus issued by the company. The matter was referred to the Administrative Proceedings Committee (APC) of the Securities and Exchange Commission (SEC) which indicted Ajayi, recommended criminal prosecution and issued additional directives. Further to its decision, the SEC wrote to the Institute of Chartered Accountants of Nigeria (ICAN), to which Ajayi belonged, to inform it of the SEC’s decision. ICAN referred the issue to its Accountants Investigating Panel (AIP) and its Accountants Disciplinary Tribunal (ADT).

Ajayi therefore instituted an action at the Federal High Court to quash the decision of the SEC on grounds of lack of fair hearing. That case went up to the Supreme Court.

During the pendency of that appeal, Ajayi instituted the current case in the Federal High Court to determine whether ICAN and its administrative panels needed to wait for the outcome of the Supreme Court case. The Federal High Court disagreed with Ajayi, deciding that ICAN and its panels did not need to await the decision of the Supreme Court in the pending sister appeal. Ajayi therefore appealed to the Court of Appeal.

In allowing Ajayi’s appeal, the Court of Appeal noted, generally, that only a court and not an investigative panel can determine the criminal liability of any person. It decided that notwithstanding the independent nature of administrative proceedings, once there is a criminal case in court against a person, the administrative proceedings must be suspended pending the outcome of the case in court. Where there is no criminal court action, even though the professional misconduct contains elements of crimes, the administrative tribunal can go on with its duties and sanction the member. In this case, however, since Ajayi had filed an action in court to quash his indictment by the SEC and the indictment was the basis of the disciplinary proceeding initiated by ICAN, it was necessary for ICAN to await the outcome of Ajayi’s appeal which is pending in the Supreme Court before they could take administrative action against Ajayi.

The Court of Appeal also decided that even though ICAN and its panels were not parties to the case in the Supreme Court, since they were interested parties as the case would have a direct bearing on their actions, they were obliged to wait for the outcome of the appeal. The Court of Appeal therefore allowed Ajayi’s appeal.

This case is important as it highlights the need to prevent a situation where a person who is challenging an indictment in court, is punished on the basis of the same indictment by another organization when the court has not yet finally decided his or her complicity.

Tayo Oyetibo LP represented the Appellant