Court Orders NERC To Reverse Increase In Electricity Tariff

Channels Television  
Updated July 13, 2016

Jimoh Ibrahim, NICON, Global FleetThe Federal High Court sitting in Lagos has annulled the increment in electricity tariff recently announced by the Nigerian Electricity Regulatory Commission (NERC).

Justice Mohammed Idris, who delivered judgment in a suit filed by a Lagos based lawyer, Mr. Toluwani Adebiyi, challenging the increment, described NERC’s action as irrational, irregular and illegal.

The court, while relying on Sections 31, 32 and 76 of the Electricity Power Sector Reform Act (EPSRA) 2005, in deciding the substantive suit, held that, “NERC acted outside the powers conferred on it by the Act and failed to follow the prescribed procedure.

The court was also of the view that “NERC has not shown that it acted in due obedience to the prescribed procedures and that there is no evidence that NERC complied with Section 76(6)(7) and (9) of the EPSRA Act.

The court further held that “of all the legal requirements, it appeared the only one complied with by NERC was that it announced the new tariff in the newspapers.

The court said that, “it is clear from the affidavit evidence that the increase in tarriff was done by NERC in defiance of the order of the court made on May 28, 2015 which directed parties in the case to maintain the status quo”.

On this issue, the court said, “the law is that every person upon whom an order is made by a court of competent jurisdiction must obey it, unless and until the order is discharged and set aside at the Appeal.

Consequently, the court held that,” the tariff increase from July 1, 2015 was done in breach of the ‘status quo’ order”, adding that “NERC’s action, was therefore, clearly hasty, reckless and irresponsible”.

Speaking further, Justice Idris said, “this country is in a democracy where the rule of law shall prevail over impunity or whimsical desires. Anything to the contrary will be an invitation to anarchy.

“It is the law that what is done officially must be done in accordance with the law. Investors are free to do business in Nigeria but they shall abide by the law of this country. Nigeria is not a kangaroo State. Nigeria is not a banana Republic.

“It is intolerance and extremely dangerous for any branch of the Executive to create a posture it may not obey certain orders of the court. That is tantamount to Executive recklessness which will lead to lawlessness”, he said.

In view of these, the court while invoking its disciplinary jurisdiction, ordered that “the increment in electricity tariff which took effect after the institution of this action and while a restraining order is subsisting is hereby declared illegal and same is hereby set aside.

“NERC is hereby directed to reverse to the status quo and the commission is hereby restrained from further increasing electricity tariff except it complies strictly with the relevant provisions of the EPSRA”, the court said.

The sum of N50,000 was awarded in favour of the plaintiff.

The court had earlier held that it indeed has the jurisdiction to entertain the matter.

In deciding on the issue of jurisdiction, the court made explanations on four issues: These are: whether or not the suit was properly commenced; whether or not the plaintiff has ‘locus standi’ to file the action; whether or not the suit was statute barred and whether or not the suit disclosed a reasonable cause of action.

On the first issue, the court held that the suit was properly commenced by originating summons.

“Having looked at the affidavit evidence, it is my view that there are no substantial disputes of facts on the materials needed for the determination of this suit. I therefore hold that this suit is properly commenced by an originating summons. The originating summons filed by the plaintiff contains the questions for determination and the reliefs sought from the court in compliance with the rules of the court”.