Prof.

Bolaji Owasanoye
Director of Research,
Nigerian Institute of Advanced Legal Studies

Appreciation to NERC and NJI

The main perspective in the lead paper is
lucidly presented in the paper of Eve Moran
and Ethan Kimbrel both Administrative Law
Judges from the Illinois Commerce
Commission.

For this seminar I take judge to mean a
judicial officer as defined in section 318 of the
1999 constitution. The section defines judicial
officer as a holder of a judicial office.

There is a distinction in the status and role of
the ALJ from Illinois and a judicial officer in
Nigeria.

A judge as a judicial officer is constitutionally
defined and must take the oath in the 7th
schedule to the 1999 constitution.

1. The Illinois regime has two types of judges i.e.
the ALJ and the state Court judge.

2. The ALJ is a member of the Executive arm
while the state judge is counterpart of our own
judicial officers.

3. The ALJ is in fact a regulator of public utilities.
The counterpart of the ALJ in Nigeria will be
designated staff of the NERC.

4. It is not likely that NERC officials perceive
themselves as “judges” or as performing judicial
functions even though they may in fact do the
same things as the ALJ officials

Regulation is one of the inevitable
consequences of the privatization of utility
industries in Nigeria.

Regulation is necessary to prevent monopoly
abuse and to ensure standards.

Regulation helps us avoid moving from public
monopoly to private monopoly and its
political and economic consequences for the
polity.

Before privatization/commericialisation
programme which started as part of
Structural Adjustment Program (SAP) in 1986
utilities and infrastructure were delivered by
inefficient state owned enterprises.

The most notable being electricity under
NEPA now PHCN and telecoms under NITEL
now comatose.

Some states in USA such as Illinois have chosen
to establish a single regulatory agency such as
the Illinois Commission to oversee the operation
of public utilities

Nigeria has chosen to fragment the regulatory
agencies or rather specialize them at the federal
level by having different regulators for different
utilities e.g. NCC, NERC,

Whenever Nigeria’s federalism matures some
states of the federation may have their own
utilities agencies to regulate public utilities in
their domain

Before NERC there was Utilities Charges Commission
(UCC) established by Decree 104 of 1992 to evaluate
trends in utilities tariff and to advise government with
regard to increase in tariffs amongst other things.

UCC law covered electricity, telecoms, petroleum,
domestic aviation, railway services, ferry and port
services, road transport, postal and any other utility that
may be added.

Its functions are now virtually overtaken other
government agencies though the law and agency remains
vide Cap U17 in LFN 2004

There is no mention of it in the Electric Sector Reform Act
of 2005 but its powers on electricity sector is overtaken by
NERC

From the lead paper we note that the ALJ must have

1. Deep knowledge of the law and policy– this may
mean that ALJ must be lawyers. The paper is not
specific

2. Ability to review facts as evidence

3. Ability to create fair, complete and accurate record

4. Ability to follow precedence of decided cases

5. Ability to prepare decisions as recommendations to
the Commission on cases reviewed

6. Independence of action and ability to resist
pressure from regulated companies and other
quarters

Nature of proceedings before the regulatory agency in Illinois akin
to a full trial in court

Processes are called pleadings;

assigned docket or case numbers;

hearing notices are issued;

rules of fair hearing are observed;

discovery/status/pre trial conferences are held;

case flow management processes are followed;

sworn testimonies and cross examination is taken;

evidence is tendered

lawyers represent clients;

ALJ presides over the proceedings as would a judge in any court room;

ALJ drafts a judgment which may or may not be accepted by its
employers the Illinois Commission

Follow up steps such as ability of parties to
challenge the draft order; opportunity for the
ALJ to defend the order in public; opportunity
of the parties to file for Rehearing before the
Commission.

All these factors underscore reference to
some staff of the Illinois Commission as ALJ

This aspect also underscores the quasi judicial
functions of the Commission

Proceedings before NERC are akin to proceedings before
ALJ

Difference is that NERC assumes direct oversight from the
moment a petition is filed.

Section 47 of the Electric Power Sector Reform Act gives
NERC power to hold hearings.

Just as in Illinois a party to a hearing before the
Commission can request a review of its decision under
section 50(1) of its enabling Act.

S.49 allows NERC of its motion or at the instance of a
party to refer matters of law only to the FHC for
determination.

This oversight is the main key role of Nigerian judges in
regulation.

Combined reading of ss. 49 and 50 of ESRA
2005 implies certain conclusions

1. The reference to FHC is restricted to matter of
law and no more.

2. A dissatisfied party may further appeal to Court
of Appeal or Supreme Court on same matters of
law

3. Any objection outside clarification of law is
settled with finality by NERC decision e.g. an
award on pricing and related technical matters.

The question is do these conclusions
foreclose the well known principles of judicial
review of administrative actions?

Note that NERC is a hybrid regulator involved
with executive, legislative and judicial
functions.

The intervention of the courts in its action will
depend on which of its functions is in issue

Executive functions: are subject to judicial review
under the time tested powers of the courts to review
administrative actions

Legislative functions: may be subject to review
depending on the crux of the matter. Once regulations
take force of law as subsidiary instrument, Can NERC
be final arbiter of the interpretation of its regulations.

A dispute on the meaning of its regulation can be be
referred to FHC under s. 49 as matter of law

Note that if the regulation is a technical matter FHC
may not be able to make much impact in the matter

Judicial function: of NERC would be final by
implication of section 50 except where there
is a matter of law involved and it is referred

The question is – Is it international best
practice to foreclose the possibility of review
of the decisions of the Commission by regular
Courts?

Broad latitude to challenge decisions of NERC may if
applied in Nigeria, defeat the entire objective of reform.

First, delay in Nigerian judicial process is legendary.

Secondly, if parties have latitude to challenge NERC
decisions we can assume that virtually every decision will
be challenged by parties who have the means to litigate
thereby frustrating the entire purpose of bringing
development to the sector by a prompt and efficient
method of dispute resolution.

Third the technical nature of the subject matter is one of
the merits of using a specialised process to deal with
matters efficiently.

Fourth the opportunity to develop precedent of a
technical nature will be frustrated or delayed.

To underscore this point the lead paper notes
that-

“Illinois courts give great deference to the
Commission’s decisions as they are the
judgments of an administrative body with
tremendous expertise in the field of public
utilities and have the qualifications to
interpret specialized and highly technical
evidence. United Cities Gas Co. v. Illinois
Commerce Commission,643 N.E. 2d 719 (1994”

Nigerian courts generally entertain matters
of frivolous or technical nature already
decided by another adjudicatory body or a
professional administrative panel on a subject
of which judges have limited capacity.

The excuse that someone’s right is infringed
is used to admit the matter and frustrate the
decision of the earlier body.

Apart from delay the practice contribute to
dilemma of already congested appellate
courts groaning under the weight of electoral
and other disputes.

The clear exception must be where there is
apparent violation of constitutional provision.

NERC being a public agency is duty bound to act in
accordance with the law therefore where it fails go do
so its actions may be challenged for judicial review

For a claimant to succeed it must show that

NERC is under a legal duty to act; or

make a decision in a certain way and is unlawfully refusing
or failing to do so; or

a decision or action that has been taken is ‘beyond the
powers’ i.e. ultra vires the Commission.

The three categories of wrongs used to open judicial
review are illegality, fairness and irrationality or
proportionality of action.