- A Lagos federal high court has dismissed the Manufacturers Association of Nigeria’s (MAN) lawsuit against eleven electricity distribution companies over a tariff increase.
- The court’s ruling cited premature filing and insufficient internal dispute resolution mechanisms.
A federal high court in Lagos has ruled against the Manufacturers Association of Nigeria (MAN) in its lawsuit challenging the recent tariff increase imposed by eleven electricity distribution companies (DisCos) on Band A customers.
The court’s decision, delivered on October 7, 2024, deemed the lawsuit an abuse of the court process, labelling it as premature and inconsistent with the provisions of the Electricity Act 2023.
The Nigerian Electricity Regulatory Commission (NERC) reported on Wednesday, October 9, 2024, that the court found MAN’s case lacked a reasonable cause of action. It emphasised that the association had failed to exhaust available internal mechanisms for dispute resolution before seeking judicial intervention. This ruling highlights the importance of adhering to proper legal processes when addressing regulatory disputes.
Segun Ajayi-Kadir, the director-general of MAN, has not yet commented on the court’s decision. The legal conflict emerged after NERC approved a significant tariff increase on April 3, 2024, setting the new rate for Band A customers who receive an average of 20 hours of electricity supply daily at N225 per kilowatt (kW).
In defence of the tariff hike, Power Minister Adebayo Adelabu explained that the federal government could no longer afford to subsidise electricity, necessitating the increase to ensure the sustainability of power distribution. The DisCos involved in the case include major companies like the Abuja Electricity Distribution Company (AEDC) and the Eko Electricity Distribution Company (EKEDC).
MAN argued that the tariff review process was not correctly adhered to before the new rates were issued and claimed that applying the increase solely to Band A customers while excluding other customer classifications constituted discrimination. However, NERC countered that MAN’s suit was filed hastily, lacking the necessary legal foundation, ultimately leading to the court’s decision to dismiss the case.
The outcome of this ruling is significant as it reinforces the regulatory framework established under the Electricity Act 2023 and emphasises the necessity for industry stakeholders to engage in proper dispute resolution procedures before resorting to litigation.
As the electricity sector in Nigeria continues to evolve, the implications of this decision may resonate across the industry, influencing future regulatory practices and customer relations.