Is the Fine Imposed on MTN by the NCC Legal?
The media is awash with reports connected with the N1.048 Trillion fine imposed on MTN by the Nigerian Communications Commission (“NCC”). The fine was allegedly imposed pursuant to Section 20(1) of the Registration of Telephone Subscribers Regulations 2011 which makes a licensee liable to a fine of N200, 000.00 (Two Hundred Thousand Naira) per un-registered sim card for failing to deactivate an un-registered sim card after notification by the NCC. The NCC claims that MTN failed to deactivate 5.1 million sim cards.
This fine has shaken MTN to its foundations. Within a week of the fine being made public, the market capitalisation of MTN’s parent company in South Africa dropped by a whopping $5.24 Billion (-22%) necessitating the suspension of trading in the shares on the Johannesburg Stock Exchange. Amidst this furore, not much attention has been focussed on whether or not NCC has the legal power to impose a fine of such magnitude. As we all know, regulators like NCC, being creations of statute, can only exercise powers expressly or impliedly given to them by statute. Where they exceed such powers, a competent court will declare their excessive acts null and void.
There is no doubt that the Registration of Telephone Subscribers Regulations 2011 is a subsidiary instrument made by the NCC. However, Section 12(1) of the Interpretation Act states as follows:
“Where an Act confers a power to make a subsidiary instrument, proclamation or notification, the power shall include (a) power to make different provision for different circumstances;
(b) power, exercisable in the like manner and subject to the like consent and conditions (if any), to vary and revoke the instrument, proclamation or notification;
(c) in the case of a subsidiary instrument, power to prescribe punishments for contravention of provisions of the instrument, not exceeding as respects a particular contravention (i) in the case of rules of court imprisonment for a term of three months or a fine of fifty naira or both,
(ii) in any other case, imprisonment for a term of six months or a fine of one hundred naira or both.” (underlining mine)
This writer is of the view that the Registration of Telephone Subscribers Regulations 2011, being a subsidiary instrument, is subject to the provisions of Section 12(1) of the Interpretation Act (an Act of the National Assembly). Accordingly, to the extent that it seeks to impose a fine in excess of N100 (One Hundred Naira) per contravention, it should be declared null and void by a competent court.
What does this mean for MTN? Without prejudice to any other grounds upon which MTN may choose to challenge the fine, it simply means that the maximum fine that can be imposed on it by virtue of the Registration of Telephone Subscribers Regulations 2011 is N100 (One Hundred Naira) per sim card which translates to N510, 000, 000.00 (Five Hundred and Ten Million Naira) for 5.1 million sim cards (i.e. 0.05% of the total amount imposed by NCC).