Criminal Trial Of Corporation In Nigeria By Chidera Nwokeke – TheNigerialawyer

The concept of criminal liability and trial of companies is not
novel in Nigeria. It is a settled position of our law that a
corporation is a juristic person and a separate entity distinct
from its agents or directors and can be held criminally liable for
offences other than regulatory offences and can be subjected to
trial in our court as an adult. The Court in the case of 
DIKKO AND SONS LTD v. CAC (2014)
LPELR-CA/A/351/2010 defined corporation to mean thus:

A Corporation is defined in Blacks Law Dictionary, 9th edition
page 391 as: “An entity (usually a business) having authority under
law to act as a single person distinct from the shareholders who
own it and having rights to issue stock and exist indefinitely; a
group or succession of persons established in accordance with legal
rules into a legal or juristic person that has a legal personality
distinct from the natural persons who make it up, exists
indefinitely apart from them, and has the legal powers that its
constitution gives it.

By virtue of Section 37 of Companies and Allied Matters
Act 2004 (hereinafter referred to as
CAMA) provides

As from the date of incorporation mentioned in the certificate
of incorporation, the subscriber of the memorandum together with
such other persons as may, from time to time, become members of the
company, shall be a body corporate by the name contained in the
memorandum, capable forthwith of exercising all the powers and
functions of an incorporated company including the power to hold
land, and having perpetual succession and a common seal, but with
such liability on the part of the members to contribute to the
assets of the company in the event of its being wound up as is
mentioned in this Act.

Section 38 of CAMA provides for the powers of a
company and states thus:

• Except to the extent that the company’s memorandum or any
  enactment otherwise provides, every company shall, for the
  furtherance of its authorised business or objects, have all the
  powers of a natural person of full capacity.

Section 65 of CAMA provides for the acts of
directors, managing directors and states thus

Any act of the members in general meeting, the board of
directors, or of a managing director while carrying on in the usual
way the business of the company, shall be treated as the act of the
company itself and the company shall be criminally and civilly
liable therefore to the same extent as if it were a natural
person:

Provided that‐

(a) The company shall not incur civil liability to any person if
that person had actual knowledge at the time of the transaction in
question that the general meeting, board of directors, or managing
director, as the case may be, had no power to act in the matter or
had acted in an irregular manner or if, having regard to his
position with or relationship to the company, he ought to have
known of the absence of such power or of the irregularity;

(b) If in fact a business is being carried on by the company,
the company shall not escape liability for acts undertaken in
connection with that business merely because the business in
question was not among the business authorised by the company’s
memorandum.

It is barefaced that by virtue of Section 38 of
CAMA, corporations have same full power like a natural
person but the question that crosses the mind is, considering its
artificialness, can it act on its own? I answer in the negative and
align myself with the position of the law that corporations can
only act through its human agents.  The Supreme Court in case
of WILLIAMS v LSDPC (1978)
LPELR-SC.102/1976 per ANIAGOLU J.S.C. laid to rest
that:

A company, although a legal person, is an artificial one which
can only act through its human agents and officers. He stated
further that a corporation is an abstraction, it has no mind of its
own any more than it has a body of its own; its active and
directing will must consequently be sought in the person of
somebody who for some purpose may be called an agent, but who is
really the directing mind and will of the corporation, the very ego
and centre of the personality of the corporation.

The court in another case of STB LTD v INTERDRILL NIG
LTD (2007) ALL FWLR (pt 366) 757 @ 771 held
that

A company is an abstract body that only exists in the eyes of
the law. In many ways, it has always been likened to a human body.
The law ascribes to a company the possession of a brain and a nerve
centre, which controls what it does. Since it cannot form an
intention within its abstract body, to operate, it must act through
its agents, its employees or servants, who are often regarded as
the hands to do the work of the company. These are not in law,
regarded as representing the mind or the will of the company.
Another category of employees of the legal fiction is the managers
and directors; the law ascribes the right to control the will and
mind of the company to this category of higher employees; the state
of their mind is treated by the law as that of the company, a mere
legal fiction.-IGWEM & CO LTD & ANOR V IGWEBE
(2009) LPELR-CA/A/7/08

It is trite principle of our law that to make companies culpable
for crimes committed by its directors or principal agents, there is
need to lift up the veil that clothes the companies and the court
ought to apply the doctrine of alter ego. In the case of
ADEJUMO v STATE the court held that where an
incorporated body allows itself to be used as an engine or tool for
fraud, the veil of incorporation will be lifted and raised so that
the actual perpetrators will be held accountable and liable. There
is no doubt that the law as established is that an incorporated
company has a direct and separate legal personality from its
members and officials. The consequence of recognizing the separate
personality of a company is to draw a veil of incorporation over
the company. One of the instances where the veil of incorporation
may be lifted is where the company is liable for fraud. –
JUBRIL v FRN (2018)
LPELR-CA/L/658c/2017

It is a settled principle of our law that a company can be
criminally liable by holding the company vicariously liable. The
company can only be liable if it can be shown that an alter ego or
a principal officer who can bind the company committed the offence
in the ordinary course of its business. The principle of corporate
liability was fully established in common law in 1944 in the case
of DPP v KENT & SUSSEX CONTRACTORS LTD (1944)
KB 146, where the court held that a corporation can only
have knowledge and form an intention through its human agents due
to its nature and this reliance means the review of corporate
behaviour must be situated within the acts of natural persons
acting on its behalf.

It is obvious that criminal liability or responsibility operates
on the twin pillars of mens rea and actus reus. Criminal liability
is attached only to those acts in which there is violation of
criminal law. To make one liable, it must be shown by the
prosecution that the act or omission has been done which was
forbidden by law and has been done with a guilty mind. The Supreme
Court in the case of ABACHA v AG FEDERATION (2014)
18 NWLR (pt.1438) 21 held that a company can be prosecuted
for a crime and it can be prosecuted as if it is a natural person.
The court stated that by virtue of Section 65
CAMA, a company may be liable in crime to the same extent
as a natural person and it can be prosecuted for the common law
offence of conspiracy to defraud, even though mens rea is an
important ingredient of that offence.

In Nigeria, the focus in determining corporate criminal
liability is hinged on the doctrine of alter ego which is usually
the adopted approach to determine actual intentions and corporate
mens rea. In the case of ORJI UZOR KALU v FRN
(2012) LPELR-CA/A/224c/2009, the court made the
above conclusion when called upon to determine corporate liability
by stating that the appellant who is the first accused in the case
at the Federal High Court is the alter ego of the second accused
person Slok Nigeria limited and remained its directing mind even
while he was the governor of a state. Through this doctrine of
alter ego, mens rea of principal officers of the company is
attributed and imputed to the company. However, it is pertinent to
determine the status of the officer or agent involved.

Perusing through the provisions of CAMA and other regulatory
laws that regulates the affairs of companies, there is need to draw
a thin line between regulatory offences and criminal offences.
Criminal offences are prosecuted by public prosecutors while
regulatory offences are usually prosecuted by administrative
authorities like Corporate Affairs Commission. A conviction for a
criminal offence requires proof that you intended to commit the
offence and proof of guilt beyond a reasonable doubt, a conviction
for a regulatory offence does not require proof of intent. Whereas
sanctions for criminal offences are imposed by court but regulatory
sanctions are imposed by administrative authorities except if
appealed, then the court will step in.

In circumstances wherein the prosecution wishes to prosecute a
company for a criminal offence under our instant Nigerian laws, are
there provisions of the law that ought to be followed? I answer in
the affirmative and align myself with the provisions of the
Administration of Criminal Justice Act 2015 (hereinafter referred
to ACJA) which provides for trial of corporations.

By virtue of Section 479 ACJA, Information may
be preferred against a corporation after the preparation of the
proofs of evidence relating to the charge. An information under
Section 479 may include, either in substitution
for or in addition to counts charging the offence for which proofs
of evidence have been prepared, counts which may be lawfully joined
in the same information and are founded on facts or evidence
disclosed in the proofs of evidence.-Section 480
ACJA

Pursuant to Section 481, a representative may,
on behalf of a corporation:

(a) State, whether the corporation is ready to be tried on a
charge or information or altered charge or, information to which
the corporation has been called on to plead;

(b) Consent to the hearing and determination of a complaint
before the return date of a summons;

(c) Express assent to the trial of the corporation on
information, notwithstanding that a copy of the information and
notice of trial has not been served on (the corporation 3 days or
more before the date on which the corporation is to be tried.

Where a representative appears, any requirement of this Act that
anything shall be done in the presence of the defendant, or shall
be read or said or explained to the defendant, shall be construed
as a requirement that, that thing shall be done in the presence of
the representative or read or said or explained to the
representative –Section 482 ACJA. Section
483 ACJA further provides that, where a representative
does not appear, any such requirement as is referred to in
Section 478 of this Act, shall not apply.

Section 478 ACJA states that where a
corporation is called upon to plead to any charge or information
including a new charge or information framed under the provisions
of this Act or charge or information added to or altered under the
provisions of this Act, it may enter in writing by its
representative a plea of guilty or not guilty or any plea which may
be entered under this Act and if either the corporation does not
appear by a representative or, though it does so appear, fails to
enter as aforesaid any plea, the court shall order a plea of not
guilty to be entered and the trial shall proceed as though the
corporation had duly entered a plea of not guilty.

The community effect of the above section is that;

• A plea by a corporation may be entered in writing
• The plea may be made by its representative
• Where a corporation does not appear by a representative, or
  where the representative fails to enter any plea, the court shall
  order a plea of not guilty to be entered and the trial will proceed
  as though the corporation had duly entered a plea of not
  guilty.

In this article, “representative” in relation to a corporation
means a person duly appointed by the corporation to represent it
for the purpose of doing any act or thing which the representative
of a corporation is by this Part authorised to do, but a person so
appointed shall not, by virtue only of being so appointed, be
qualified to act on behalf of the corporation before any court for
any other purpose. –Section 477(2) ACJA

However, it is pertinent to state that a representative for the
purposes of this Part need not be appointed under the seal of the
corporation, and a statement in writing purporting to be signed by
a managing director of the corporation, or by any person (by
whatever name called) having, or being one of the persons having,
the management of the affairs of the corporation, to the effect
that the person named in the statement has been appointed as the
representative of the corporation for the purposes of this Part,
shall be admissible without further proof as prima facie evidence
that the person has been so appointed.-Section 477(3)
ACJA

Section 481 (1) ACJA provides thus; subject to
the preceding provisions of this part, the provisions of this Act
relating to the inquiry into and trial of offences shall apply to a
corporation as they apply to an adult. By virtue of this section,
in present Nigeria, a company is treated as an adult for any
offence they are tried without any exception.

(2) A corporation may be charged jointly and tried with an
individual for any offence

It is pertinent to state that a company charged for a crime has
the right to a counsel of its choice and have the right to examine
and cross examine a witness because it is their fundamental right
to fair hearing as provided in Section 36 of 1999
Constitution of Nigeria. As a reminder, corporations as a
juristic person cannot be arrested as a means of compelling their
appearance in any court. Rather, they can be served with court
summon by virtue of Section 113 and 114 of ACJA.
Furthermore, a combine reading of Section 78 of CAMA
2004 and Section 123(b) ACJA, a company
can be served with a court process and the person effecting the
service of summon shall effect it by delivering it to a director,
secretary, chief agent within the jurisdiction, or by leaving it at
the principal place of business in Nigeria of the corporation and
failure to serve the court process on the corporation, robs the
court of its jurisdiction.

To boot, a court can upon conviction sentence a company
appropriately, if and only if the prosecution discharged the burden
of proof vested upon them. The criminal trial of corporation
demands and requires that the burden of proof and standard proof
remains the same as though a natural person is being tried. The
court at the end of its trial, after conviction, can sentence the
corporation appropriately, if they are found guilty.

The court in the case of ONAH v FRN (2017)
LPELR-CA/L/548C/2016 held that sentencing is the
imposition of the punishment prescribed by law on the accused
person by the court. In determining the particular sentence to be
imposed, the court shall consider the nature and circumstance of
the offence and the need for the sentence imposed.  The Court
of Appeal in the recent case of ABIODUN v FRN
(2019) LPELR-CA/L/1125C/2018 held that the law
with regards to sentencing is that sentencing is a matter within
the discretion of the trial court provided the discretion is
exercised judicially and judiciously within the law.

The court in the case of AYOMITAN v STATE
(2018) LPELR-CA/IL/106c/16– held that when a
statute provides a statutory minimum for an offence, a trial judge
is not permitted to impose a sentence below the statutory minimum.
The discretion of a trial judge in sentencing operates only when
the statute provides for a statutory maximum in sentencing. In such
a case, there is a degree of flexibility in the range of the
sentencing pendulum between a discretionary minimum and a maximum
that could not be exceeded.- KAYODE v FRN (2017)
LPELR-CA/C/72c/2010.

It is apposite to ask at this point, can a court sentence a
company to imprisonment? I answer in the negative and strongly
contend that a company cannot be sentenced to imprisonment even
where the law provides for imprisonment as the punishment of the
offence committed because of its artificial nature. That is why, a
trial court in sentencing especially imprisonment, must consider
the essence of imprisonment. The court in the case of ALI v
FRN (2016) LPELR-40472 (CA) held that the
essence of imprisonment is to meet the legitimate expectation of
society of retribution, where the society strikes back at the
offender as to deter potential offenders and make the commission of
crime unattractive, protect the public and society by ensuring the
dare devil criminals and recalcitrant offenders are taken out of
circulation.

In consideration of the above case, it is barefaced and brassy
that the essence of imprisonment cannot be achieved if corporations
are sentenced to imprisonment. So, following the decision of the
court in the case of USHIE v STATE (2012)
LPELR-CA/C/72c/2010, the court held that it is desirable
that in exercising its discretion over sentencing, a trial court
should state in its judgment the factors that influenced its
decision. So therefore, the trial court, in trials involving
corporations ought to state that the defendant is a corporation and
by virtue of its artificial nature, it influenced its decision in
sentencing.

In Nigeria, the bromidic and banal type of sentencing imposed on
corporations is the payment of fines. The court can make an order
of forfeiture as its sentence especially if the offence relates to
bribes received by them. The court may also make an order for
winding up of the corporation as its sentence.-Section
401(1)(a) CAMA. By virtue of Section 319 and 321
(1) (a) ACJA, the court can order for
restitution/compensation to  be paid to any person injured by
the offence, irrespective of any other fine or other punishment
that may be imposed.

In conclusion, it is now settled position of our law that a
company is a legal person, however due to its artificial nature; it
acts through its human agents. A company can be held liable for
criminal offences committed by them and to hold them liable, the
court has adopted the doctrine of alter ego to hold them criminally
liable. A company can be arraigned before a court and be duly
represented by its representatives and its trial shall take the
same method as that of an adult. The criminal trial of corporations
in Nigeria is a welcome development to our legal jurisprudence
especially the criminal law and company law. It has widened the
scope of liability from being personal to a vicarious nature
following the doctrine of alter ego. Furthermore, the trial of
corporations will help reduce corrupt practices that companies
enter into. However, the question of whether a company can be
imprisoned has always being a line of argument but I submit that
due to its artificial nature, such mode of punishment cannot be
actualized.

Written by Chidera Nwokeke

Chidera Nwokeke is a graduate of Law from Ebonyi State
University, a law School candidate. He is academically motivated
and has passion for research in several areas of law. He has a keen
interest in dispute resolution, Litigation, Human Right and
Corporate Law Practice. He can be reached at [email protected]^[1]
or 08120945787.