Revisiting class action litigations against corporations in Nigeria: Lessons from the US experience

by | May 20, 2023 | JCCL, JCCL V8 I2

Revisiting class action litigations against corporations in Nigeria: Lessons from the US experience

Author: Kalu Kingsley Anele

ISSN: 2521-2575
Affiliations: Lecturer: Pusan National University, Busan, South Korea
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2022, p. 55 – 83
https://doi.org/10.47348/JCCL/V8/i2a3

Abstract

Class actions remain one of the most plausible mechanisms to aggregate and ventilate corporate grievances in court effectively. Despite its advantages, including recurrent corporate malfeasance, the class action procedure in Nigeria is limited in scope. This article uses a comparative analysis methodology and the class action regime in the United States (US), which is general in nature under Rule 23, to interrogate the application of the procedure in Nigeria. It argues that Nigeria’s extant class action legal framework is limited in scope since it focuses only on intellectual property infringements. By comparatively analysing the application of Rule 23 in the US in bankruptcy, competition, securities, and human rights cases, the article submits that introducing a general class action framework is imperative in Nigeria. Consequently, this article suggests using legislation, courts, public enlightenment strategy, and guidelines for attorney fees to introduce, strengthen, and implement a general class action regime in Nigeria. This would engender corporate behavioural change, encourage policy regulation, bolster the use of class action by legal practitioners, and facilitate access to court.

Practice Note: Responding to stockholder proposals, director elections and say-on-pay votes

by | May 20, 2023 | JCCL, JCCL V8 I2

Practice Note: Responding to stockholder proposals, director elections and say-on-pay votes

Authors: James J. Hanks Jr., Michael D. Schiffer, Michael F. Sheehan

ISSN: 2521-2575
Affiliations: Partner, Venable LLP, Baltimore, MD; Partner, Venable LLP, Baltimore, MD; Partner, Venable LLP, Baltimore, MD
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2022, p. 84 – 89
https://doi.org/10.47348/JCCL/V8/i2a4

Abstract

As boards of directors of public companies prepare for their 2023 annual meetings and, relatedly, consider the voting results from 2022 annual meetings, we are being asked for advice concerning (I) the duties of directors of Maryland corporations and (II) the policies and current practices of the proxy advisory services relating to stockholder proposals, director elections, and Say-On-Pay votes.

Book Review: Corporate Law and Corporate Governance – A Global Picture of Business Undertakings in South Africa, 2 ed

by | May 20, 2023 | JCCL, JCCL V8 I2

Book Review: Corporate Law and Corporate Governance – A Global Picture of Business Undertakings in South Africa, 2ed

Authors: Tshepo Mongalo and Tshepiso Scott

ISSN: 2521-2575
Affiliations: N/A
Source: Journal of Corporate and Commercial Law & Practice, Volume 8 Issue 2, 2022, p. 90 – 94
https://doi.org/10.47348/JCCL/V8/i2a5

Abstract

None

The Misuse and Abuse of Section 80J of the Income Tax Act: Time to get back to the basics

by | May 14, 2023 | BTCLQ, BTCLQ V14 I1

The Misuse and Abuse of Section 80J of the Income Tax Act: Time to get back to the basics

Author: Ed Liptak

ISSN: 2219-1585
Affiliations: Independent Tax Person Extraordinaire
Source: Business Tax & Company Law Quarterly, Volume 14 Issue 1, 2023, p. 1 – 12

Abstract

Section 80J of the Income Tax Act was introduced in 2006 as part of the then new General Anti-Avoidance Rule (GAAR). This section requires the Commissioner to notify a taxpayer at the point in an audit when he/she first comes to believe that the GAAR may be applicable to an arrangement entered into or carried out by the taxpayer. It was enacted in response to concerns that the new GAAR might be automatically relied upon by SARS as a ‘catch-all’ section of last resort without due and proper consideration. Commentators also expressed concerns about conduct of audits under former s 103, particularly with respect to delays they encountered and the time and expensed they incurred. Section 80J attempted to address these concerns by providing a logical framework for the timeous conduct of audits under the new GAAR. Subsection (1) requires the Commissioner to notify the taxpayer if he/she believes the GAAR may be applicable to an arrangement and state his/her reasons therefor; sub-s (2) gives the taxpayer an opportunity to respond to that notice; sub-s (3) requires the Commissioner to take further action within a specific statutory time frame; and sub-s (4) permits the Commissioner to revise or modify his reasons for applying the GAAR in light of any additional information that may come to his knowledge. Two recent judgments have raised concerns about the current approach being taken to s 80J by taxpayers and, to a certain extent, SARS itself. In particular, taxpayers appear to be taking the position that section 80J(1), read together with the statutory definition of ‘arrangement’, have imposed a burden upon the Commissioner to identify and describe a transaction, operation or scheme with an exacting degree of precision never before required under the former s 103 or its predecessors. This approach cannot be support by a textual, contextual and purposive interpretation of the provisions involved, and, in fact, would severely frustrate both the overriding purpose of the current GAAR and the specific purposes of s 80J itself.

Outsourcing and the Foreign Business Establishment Rule for CFC Purposes: Why The SCA Got it Wrong in CSARS v Coronation Investment Management SA (Pty) Ltd

by | May 14, 2023 | BTCLQ, BTCLQ V14 I1

Outsourcing and the Foreign Business Establishment Rule for CFC Purposes: Why The SCA Got it Wrong in CSARS v Coronation Investment Management SA (Pty) Ltd

Authors: Wally Horak and James Mckinnell

ISSN: 2219-1585
Affiliations: Head of Tax, Cape Town, Bowmans; Head of Litigation, Cape Town, Bowmans
Source: Business Tax & Company Law Quarterly, Volume 14 Issue 1, 2023, p. 13 – 23

Abstract

The judgment recently delivered by the Supreme Court of Appeal in the case of CSARS v Coronation Investment Management SA (Pty) Ltd, has caused significant uncertainty and concern amongst South African multinational enterprises which operate via subsidiaries in foreign countries. The judgment had to consider the requirements under section 9D of the Income Tax Act 58 of 1962 to qualify for the foreign business establishment (FBE) exemption from the controlled foreign company (CFC) rules, which may result in the imposition of South African normal tax on the South African parent company (‘Coronation SA’) of an amount equal to the net income of the CFC. In particular, the question was whether the CFC (‘Coronation Ireland’) may determine the scope of its primary business conducted in the foreign country or whether objective factors determine the potential scope of such business. The SCA considered the question with reference to the CFC’s Memorandum of Association and its business licence and concluded that the CFC was entitled to conduct the wider business of fund management and investment management and the fact that it decided to outsource its investment management functions implied that it did not conduct its primary business via the FBE in Ireland. Therefore, the SCA rejected the notion that the primary business is determined with reference to how the CFC chooses to operate, i e the choice of a business model cannot alter the primary operations of the CFC. The SCA thus held that the CFC did not qualify for the FBE exemption. With respect to the imposition of an understatement penalty and under-estimation of provisional tax penalty, the SCA found that the taxpayer relied on a legal opinion that it was entitled to the FBE exemption and there is nothing to suggest that the taxpayer’s tax returns were not submitted in the bona fide belief that it may be eligible for the FBE exemption. Therefore, the Court ruled that the claim for understatement penalties and under-estimation penalties must fail.