Examining consumers’ right to litigate vis-à-vis statutory dispute resolution mechanisms

Consumer disputes happen daily―whether involving defective goods purchased from business vendors or shoddy services. In such cases, the law provides avenues for redress. Although every person is guaranteed the right of access to the courts, statutes may establish a dispute resolution mechanism in the statute itself, or subsidiary legislation made pursuant thereto. Can a consumer forego such statutory channels and directly approach the courts to enforce their rights? This commentary examines the Nigerian legal position on this issue and the implications for consumers.

Sections 6(6)(b) and 36(1) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) (the “Constitution”) guarantees access to the courts (and tribunals) to determine disputes. However, section 36(2) provides that a law conferring a government or authority the right to determine questions arising from the administration of laws will not be invalidated unless it precludes representation from affected persons or makes its decisions final and unappealable. This preserves other dispute resolution mechanisms that may have been put in place in various statutes.

The Federal Competition and Consumer Protection Act 2018 (“FCCPA”) governs competition and consumer protection in Nigeria and provides the general framework for the consumer disputes resolution. It recognises other sector-specific regulators and their dispute resolution mechanisms and establishes a concurrent jurisdiction with these statutes with respect to the settlement of consumer disputes. However, the FCCPA will prevail where other statutes are inconsistent with its provisions in matters of consumer protection and competition.

Section 146(1) of the FCCPA outlines dispute resolution channels for aggrieved consumers viz: (a) escalation to the vendors or service providers; (b) complaint to the sector regulators; and (c) complaint to the Federal Competition and Consumer Protection Commission (FCCPC). Although no hierarchy is explicitly stated, section 147 of the FCCPA suggests that consumers may first approach sector regulators before the FCCPC. However, section 146(2) provides that “notwithstanding the provisions of subsection (1), an aggrieved consumer can directly approach a court with appropriate jurisdiction to seek redress”. This suggests that consumers can directly approach courts for redress despite the three dispute resolution mechanisms already provided for. Can consumers then directly approach the courts, irrespective of statutory administrative dispute resolution mechanisms?

The Constitution does not explicitly mandate exhausting statutory remedies before litigation. Its sections 6 and 36 simply entrench the right of access to courts and validate other statutory dispute resolution mechanisms, provided decisions emanating from them are not final and conclusive and they allow affected parties to make representations.

Supreme Court decisions (although unrelated to consumer disputes) show the apex court’s insistence on the exhaustion of statutory remedies before a court’s jurisdiction can be triggered (see Aribisala v. Ogunyemi (2005) 6 NWLR (Pt. 921) 212; Owoseni v. Faloye (2005) 14 NWLR (Pt. 946) 719). In fact, the Court has reiterated that exhaustion of statutory remedies is a condition precedent to the invocation of the court’s jurisdiction (Ojora v. AGIP (2014) 1 NWLR (Pt. 1387)).

In 2021, the Supreme Court, although by way of an obiter dictum, pronounced on whether a consumer must exhaust statutory remedies before approaching courts. In Obe v. MTN (2021) 18 NWLR (Pt. 1809) 415, the claimant complained that MTN had blocked his phone line, which caused him grave loss. The High Court dismissed his claims as unsubstantiated, a position upheld by the Court of Appeal and Supreme Court. However, in one of the concurring decisions, the Supreme Court noted (albeit obiter) that the dispute resolution mechanism established pursuant to guidelines issued under the Nigerian Communications Act (NCA) should have first been explored before the matter was litigated and that an aggrieved consumer must first explore all statutory dispute resolution mechanisms before litigating a dispute, failing which, a suit would be deemed premature. However, this pronouncement did not reference sections 6 and 36 of the Constitution or sections 146 and 147 of the FCCPA.

A major concern regarding this decision is its obiter status, which would ordinarily mean it does not bind lower courts. Therefore, until the Supreme Court interprets the FCCPA’s provisions with respect to a consumer’s right to litigate a dispute without exploring statutory dispute resolution channels, the FCCPA’s position on a consumer’s right to litigate despite statutory dispute resolution channels will stand.

That said, although Obe v. MTN does not suffice as settled authority on the point, the Supreme Court may, in the future, when faced with the issue, rule that consumers must explore statutory dispute resolution mechanisms before approaching the court.

Therefore, to err on the side of caution, aggrieved consumers should endeavour to explore statutory (and administrative) dispute resolution mechanisms before approaching the courts to prevent the risk of a court striking out of their suits not complying with a condition precedent.

Daniel Buter is an Associate at Olaniwun Ajayi LP, where he routinely advises on a broad range of transactions cutting across energy, finance, and M&A. Daniel was part of the team that advised the federal government on the first-ever dollar-denominated bond issuance, which is currently oversubscribed. He contributed to draughting the Nigeria Data Protection Act, 2023, and is currently collaborating with the World Bank to drive access to finance in the country by increasing consumer access and aiding SMEs in accessing credit.

Obed Soludo is an Associate at Olaniwun Ajayi LP, where he oscillates between the Disputes Resolution Practice and Government Business Practice teams. As a dispute attorney, Obed represents corporations, organisations, and individuals in (primarily commercial) contentious matters before Nigeria’s superior courts. As a member of the Government Business team, he drafts and reviews key legislation, as well as advises international organisations and various levels of government on legislative/policy reforms and regulatory compliance. Obed holds consecutive first-class degrees from Nile University of Nigeria (LL.B.) and the Nigerian Law School (B.L.), respectively.