Court of Appeal nullifies ‘KPMG Professional Services’ registration, rules in favour of KPMG Nigeria

The Court of Appeal in Lagos has nullified the registration of the business name “KPMG Professional Services” by the Corporate Affairs Commission (CAC), siding with KPMG Nigeria in a long-running legal battle over rights to the “KPMG” name.

PREMIUM TIMES reviewed on Tuesday the certified true copy of the judgement, which was earlier delivered on 10 July.

In the unanimous judgement of the three-member panel that sat on the appeal, the court granted all four prayers sought by KPMG Nigeria against the CAC, the first respondent, and KPMG Professional Services, the second respondent.

KPMG Nigeria, which has been operating in Nigeria since 1978, practises as KPMG Audit, KPMG Tax Consultants and KPMG Consulting. It claimed in a legal dispute dating back to 2002 that it had been using KPMP long before the name was “deceptively” included and registered for KPMG Professional Services.

A member of the three-judge panel, Abdullahi Mahmud Bayero, who delivered the lead judgement, ruled that the CAC’s registration of a similarly named entity was improper and misleading under Section 662(1) (d) of the Companies and Allied Matters Act (CAMA) 1990, now Section 852 of CAMA 2020.

“The Registrar cannot assign a business name already held by another entity. One cannot give what one does not have — nemo dat quod non habet,” the court held.

The appellant KPMG Nigeria was represented by A.T. Oloyede, while Emmanuel Umoren represented the first respondent (CAC), and E.O. Sofunde, who is a Senior Advocate of Nigeria (SAN), with M.O. Ajana and F.O. Salawu, appeared for the second respondent.

Background

The judgement noted KPMG Nigeria filed its suit in 2022 to challenge the CAC’s registration of “KPMG Professional Services,” a name it argued was deceptively similar to its longstanding brand.

The Federal High Court dismissed KPMG Nigeria’s suit in 2005, holding that the firm had merged with Akintola Williams Deloitte & Touche and therefore no longer had rights to the name “KPMG.”

The lower court also upheld a counterclaim from the second respondent, ordering the deregistration of KPMG Nigeria’s business names.

But displeased with the decision, KPMG Nigeria went on appeal.

Upholding the appellant’s case, the appellate court found the claim of a merger “inadequate and unsubstantiated.”

It faulted the lower court for relying on newspaper articles — Exhibits S03 to S07 and S010 — which it said were insufficient to establish a legal merger.

“Newspaper articles are not and cannot be sufficient evidence of the state of affairs for the court to base its decision. What is required to show that there is a merger is concrete evidence of the merger,” the court held.

“This by necessity should be a copy of the agreement, which will state the form of the merger entered into by the parties… Since the 2nd Respondents have based their case on this supposed merger, the burden of proof is on them to prove it; absence of the proof… is fatal.”

Mr Bayero cited one article (Exhibit S010), which stated that the Chairman of KPMG Nigeria would function as Vice Chairman of Akintola Williams Deloitte “consequent upon the recent merger.”

“The only understanding that can be reached… is that Mr Ajayi has a dual function both as Chairman/Chief Executive of KPMG and Vice Chairman of Akintola Williams,” the court said. “It thus becomes obvious that the merger, if any, has not put an end to KPMG.”

The judgement added that the continued operation of KPMG Nigeria — including submission of post-2002 audit reports for Guinness Plc and AIICO Insurance Plc — further proved it remained in business.

“It is also clear that it cannot be a merger of names but at best, a merger of business. The name KPMG still exists and the merger, if any, has not affected it.”

The court concluded that even if there was a merger, it only involved KPMG Audit, not the entire firm:

“The only branch of KPMG, if any, that entered into a merger… is KPMG Audit. The other spheres were totally unaffected.”

CAC criticised

The appellate court was also critical of the CAC’s role, stating that it acted contrary to CAMA by registering a similar name without first removing the earlier ones.

“Even if the Appellants had ceased to do business as the court seemed to have held, the 2nd Respondent should not have been carrying on business until the appellants’ certificate of registration is withdrawn or set aside.”

It cited Section 662(1)(d) of CAMA 1990: “Where a business name… is identical with or similar to a name by which any firm, company or individual is registered… and the Registrar is of opinion that registration would likely mislead the public, then the Registrar shall… cancel the registration thereof.”

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The court said the CAC registrar “essentially slept on its duty” and clarified that a party seeking relief in such cases does not need to first petition the Registrar before going to court.

“The declarations as sought by the appellants/plaintiffs in the court below are hereby granted and the counter-claim of the respondents is dismissed. The decision of the Court below in Suit No. FHC/L/CS/776/2002 delivered on 25/05/2005 is hereby set aside,’’ Mr Bayero ruled.

Concurring opinion

The two other judges on the panel – Abimbola Obaseki-Adejumo, who was the presiding justice, and A.M. Talba, member – concurred with the lead judgement.

In her concurring opinion, Mrs Obaseki-Adejumo emphasised that the burden of proof lay with the party asserting the merger.

“The 2nd Respondent who claimed there was a merger failed to present the merger agreement before this court but relied on Exhibit S010, and from the content of the document it does not impute a merger. The trial court erred when he overlooked this fact.”

“The appellant established his case and discharged the burden of proof to make him entitled to the declaration he claims.”

She cited Section 131 (1) of the Evidence Act 2011: “Whoever desires any court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts shall prove that those facts exist.”

Mrs Obaseki-Adejumo also ordered the judgement of the trial court be set aside.