Part I
Introduction
The corporate insolvency regime in Nigeria is generally governed by the Companies and Allied Matters Act (“CAMA”) 2020 and the Business Facilitation (Miscellaneous Provisions) Act 2023. Other applicable industry-specific statutes include the Banks and Other Financial Institutions Act 2020, the Nigerian Deposit Insurance Corporation Act 2023, the Asset Management Corporation of Nigeria Act, the National Insurance Commission Act 1997, the Insurance Act 2003, and the Pension Reform Act 2014.
CAMA 2020 introduced restructuring and reorganisation procedures aimed at refocusing insolvency practice from pro-liquidation strategies towards business rescue mechanisms. These procedures include administration, company voluntary arrangement (“CVA”), and schemes of arrangement. The introduction of these procedures was designed to offer companies and their creditors the opportunity to seek a revival of a company in distress.
The focus of this article, which is subdivided into several parts, is the administration procedure under Nigerian law. In this part, we provide a general overview of the administration procedure and address some emerging issues around the appointment of an administrator. In the other parts of the article, we examine recent developments in insolvency practice in Nigeria.
Overview of the Administration Procedure
The provisions of CAMA 2020 on the administration procedure1 are significantly modelled after Part II, Schedule B1 of the English Insolvency Act 1986 (“English Insolvency Act”). This legislative heritage is significant because it provides Nigerian courts with a substantial body of English jurisprudence to draw upon when interpreting the administration provisions, subject to any necessary modifications to account for differences in the Nigerian legal and commercial context.
Appointment of an Administrator
Under CAMA, an administrator may be appointed by an Administration Order issued by a Judge of the Federal High Court;2 by the holder of a floating charge,3 where the instrument creating the floating charge empowers the holder to appoint an administrator or a receiver;4 or by the company or its directors.5
