1.0 Introduction
For decades, Nigeria’s corporate insolvency framework was characterised by a singular focus on liquidation. The Companies and Allied Matters Act 1990 (CAMA 1990), which governed corporate insolvency for thirty years, provided limited options for distressed companies beyond winding-up and the rather narrow mechanisms of arrangements and compromises1. This liquidation-oriented approach meant that financially distressed companies were typically wound up, resulting in business closures, loss of jobs, and economic uncertainty2.
The enactment of the Companies and Allied Matters Act 2020 (CAMA 2020) marked a significant departure from this tradition. For the first time, Nigeria introduced modern corporate rescue tools into its insolvency framework, including company voluntary arrangements (CVA) and, most significantly, administration3. These innovations were modelled after the United Kingdom’s Insolvency Act 1986, reflecting a deliberate policy choice to shift the focus of insolvency law from liquidation to the preservation of going concern value4.
This article examines whether administration under CAMA 2020 has replaced winding-up as the preferred insolvency mechanism in Nigeria. It analyses the objectives of administration, the relationship between administration and winding-up petitions, the possibility of concurrent proceedings, practical challenges facing administrators, and lessons that may be drawn from the UK insolvency regime.
2.0 The Objectives of Administration Under CAMA 2020
Administration is a process that involves the appointment of an administrator to manage a company’s assets with a view to rescuing the whole or part of the company’s undertaking as a going concern5. The administrator must be a qualified insolvency practitioner, and upon appointment becomes an officer of the court and an agent of the company.
The statutory objectives of administration are set out in section 483 of CAMA 2020. The primary objective is to rescue the company as a going concern6. Where rescue is not reasonably practicable, the administrator must pursue a secondary objective which is achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up. Failing that, the administrator may pursue a third objective of realising property in order to make a distribution to secured or preferential creditors.
This hierarchical structure of objectives reflects a carefully calibrated policy choice. The legislature has expressed a clear preference for corporate rescue over liquidation. However, it has also recognised that not all companies are capable of being rescued, and that in such cases, the administrator should still strive to maximise value for creditors rather than simply overseeing a fire sale of assets.
The administration procedure is supported by a statutory moratorium. Upon the appointment o7f an administrator, no legal proceedings, execution, or distress may be instituted or continued against the company or its property, except with the permission of the court or the consent of the administrator7. This moratorium provides the company with the necessary breathing space to restructure its affairs without the constant threat of creditor enforcement actions8. The moratorium is intended to provide companies with the necessary breathing space to restructure their affairs and avoid the costs and uncertainties associated with liquidation. It is important to note, however, that the moratorium under CAMA 2020 is not automatic. Unlike the position in some jurisdictions where a moratorium arises automatically upon the commencement of rescue proceedings, under CAMA 2020 the moratorium only takes effect once an administrator is validly appointed.
3.0 The Relationship Between Administration and Winding-Up Petitions
One of the most significant aspects of the administration regime under CAMA 2020 is its relationship with winding-up proceedings9. Section 477 of CAMA 2020 provides that a petition for the winding-up of a company shall be dismissed on the making of an administration order in respect of the company. Furthermore, a winding-up petition is suspended while the company is in administration following an out-of-court appointment under section 475.
This provision is of profound importance. It means that once a company enters administration, any pending winding-up petition is effectively stayed or dismissed. The practical effect is that administration takes precedence over winding-up proceedings. A creditor who has commenced winding-up proceedings against a company cannot continue those proceedings once the company enters administration10.
This legislative choice reflects the policy preference for corporate rescue over liquidation. By mandating the dismissal or suspension of winding-up petitions upon the commencement of administration, the legislature has ensured that rescue efforts are not undermined by parallel liquidation proceedings11.
There are, however, important exceptions to this rule. Section 477(2) provides that the suspension of a winding-up petition does not apply to a petition presented on grounds of public interest. Similarly, section 477(3) provides that the dismissal and suspension provisions do not apply to petitions presented under special banking provisions of the Banks and Other Financial Institutions Act, the Nigeria Deposit Insurance Corporation Act, or any law or rule by a financial services and markets regulator. These exceptions recognise that in certain cases, particularly those involving public interest or the stability of the financial system, the normal preference for rescue may be overridden.
4.0 Can Concurrent Insolvency Proceedings Exist?
The question of whether concurrent insolvency proceedings can exist under CAMA 2020 is closely connected to the operation of section 477. The clear legislative intention is to prevent the coexistence of administration and winding-up proceedings. Once a company is in administration, any pending winding-up petition is dismissed or suspended12.
However, the possibility of multiple administration orders in respect of the same company has recently emerged as a practical issue. In early 2026, the Federal High Court in Lagos made two separate administration orders in respect of AMNI International Petroleum Development Company Limited within a period of less than two weeks13. Both applications were brought by different creditors within the same period but arose from distinct creditor claims.
Legal analysts have noted that insolvency proceedings are creditor-specific, meaning that multiple administration orders may arise where separate claims satisfy statutory requirements. This raises important questions about the coordination of multiple administrations and the potential for conflicts between administrators appointed by different creditors14.
The AMNI cases illustrate that while CAMA 2020 clearly contemplates administration as an alternative to winding-up, the practical operation of the administration regime may give rise to complex issues of concurrent proceedings. The courts will need to develop principles for managing such situations, including questions of priority between competing administration applications and the coordination of multiple administrators.
5.0 Practical Challenges Facing Administrators
Despite the laudable objectives of the administration regime, its effectiveness in practice is constrained by a number of practical challenges. These include:
5.1 Weak Institutional Capacity
One of the most significant challenges is the weak institutional capacity of the relevant authorities. The Corporate Affairs Commission (CAC), which plays a key role in the administration process, has been criticised for inefficiency15. Delays in processing filings and issuing approvals can impede the timely implementation of administration proceedings. The Federal High Court, which has exclusive jurisdiction over insolvency matters, also faces challenges. The slow pace of litigation in Nigeria is well-documented, and this can undermine the efficiency of court-supervised administration proceedings. The lack of a specialised court dealing exclusively with insolvency matters further compounds this problem.
5.2 Lack of Cross-Border Insolvency Framework
Another significant challenge is the absence of a cross-border insolvency framework in Nigeria. Nigeria has not adopted the UNCITRAL Model Law on Cross-Border Insolvency. This limits the effectiveness of rescue tools in handling cross-border insolvencies16. Where a distressed company has assets or creditors in multiple jurisdictions, the administrator may face difficulties in coordinating proceedings across different legal systems.
5.3 Limited Awareness and Expertise
The administration regime under CAMA 2020 is still relatively new, and there is limited awareness of the procedures among both practitioners and potential users. There is also a shortage of qualified insolvency practitioners with the expertise to act as administrators. This shortage may limit the availability and effectiveness of administration as a rescue tool17.
5.4 Retention of Receivership
A further challenge is the retention of receivership alongside administration in CAMA 2020. Receivership is an enforcement mechanism that primarily protects the interests of secured creditors18. Some commentators have argued that the retention of receivership alongside administration creates a loophole that can be exploited by secured creditors who may choose receivership, which solely protects their interests, over administration. This could undermine the rescue objectives of the administration regime.
5.5 The CVA Moratorium Gap
While administration benefits from a statutory moratorium, the CVA procedure does not provide any automatic statutory moratorium. This gap means that companies seeking to use a CVA as a rescue tool may still be vulnerable to enforcement actions by creditors during the negotiation and approval process. As one study has noted, the lack of moratoriums to support the CVA process limits the effectiveness of the rescue tools under CAMA 202019.
6.0 Lessons From the UK Insolvency Regime
Given that Nigeria’s administration regime was modelled after the UK Insolvency Act 1986, it is instructive to examine the UK experience for lessons that may inform the development of the Nigerian regime.
6.1 The Hierarchy of Objectives
The UK Insolvency Act 1986, Schedule B1, paragraph 3, establishes a similar hierarchy of objectives for administration. The primary objective is to rescue the company as a going concern. If this is not reasonably practicable, the administrator must pursue the secondary objective of achieving a better result for creditors than would be likely in winding-up20. The third objective, making a distribution to secured or preferential creditors may only be pursued if the administrator thinks that neither the first nor the second objective is reasonably practicable21.
The UK experience demonstrates the importance of clear judicial guidance on the interpretation and application of these objectives. Nigerian courts will need to develop similar jurisprudence to ensure consistency in the administration of companies22.
6.2 The Role of the Court
Under the UK regime, the court plays a supervisory role in administration, but the administrator is given considerable autonomy to manage the company’s affairs. The UK experience suggests that an overly restrictive judicial approach can undermine the efficiency of administration, while insufficient judicial oversight can lead to abuses23.
The Nigerian courts will need to strike an appropriate balance between supervision and flexibility. The recent AMNI cases suggest that the courts are actively engaging with the administration regime. As more cases come before the courts, a body of jurisprudence will develop that provides guidance on the operation of the administration provisions24.
6.3 Pre-Administration Agreements
Some UK commentators have suggested that companies may benefit from having pre-administration agreements that can quickly be presented for ratification by creditors and sanctioned by the court25. Such agreements can facilitate a smoother and more efficient administration process by reducing uncertainty and the need for protracted negotiations during the administration period26. This is a lesson that Nigerian practitioners may wish to consider27.
6.4 The Need for Specialised Insolvency Courts
The UK has a well-developed system of specialised insolvency courts and judges with expertise in insolvency matters. The lack of such specialisation in Nigeria has been identified as a limitation on the effectiveness of the administration regime28. The establishment of specialised insolvency divisions within the Federal High Court could enhance the efficiency and quality of administration proceedings.
7.0 Has Administration Replaced Winding-Up?
At the level of legislative policy, the answer is clearly yes29. CAMA 2020 was enacted, in part, to shift the focus of Nigeria’s insolvency law from liquidation and winding-up to the rescue of companies. The introduction of administration and CVA reflects a deliberate policy choice to prioritise corporate rescue over liquidation. The statutory provisions, particularly section 477 which mandates the dismissal or suspension of winding-up petitions upon the commencement of administration, give effect to this policy preference.
However, at the level of practical reality, the picture is more complex. The administration regime faces significant practical challenges, including weak institutional capacity, the lack of a cross-border insolvency framework, limited awareness and expertise, and the retention of receivership30. These challenges limit the extent to which administration has actually replaced winding-up in practice.
Furthermore, administration is not appropriate for all companies. Certain companies cannot take advantage of the administration mechanism, including commercial banks, insurance companies (without the approval of the National Insurance Commission), and non-authorised deposit takers31. For these companies, winding-up may remain the only available insolvency mechanism. It is also important to recognise that administration does not always lead to rescue. Where rescue is not reasonably practicable, the administrator may pursue objectives that are closer to liquidation, such as achieving a better result for creditors or making distributions to secured and preferential creditors32. In such cases, administration may function as a more orderly and value-preserving alternative to winding-up, but it does not entirely displace liquidation.
8.0 Conclusion
The introduction of administration under CAMA 2020 represents a significant shift in Nigeria’s corporate insolvency framework. For the first time, Nigerian law provides a comprehensive rescue mechanism that offers distressed companies an alternative to liquidation. The statutory objectives of administration, the hierarchical structure of those objectives, and the protective moratorium all reflect a clear legislative preference for corporate rescue. Section 477 of CAMA 2020, which mandates the dismissal or suspension of winding-up petitions upon the commencement of administration, gives practical effect to this preference by ensuring that rescue efforts are not undermined by parallel liquidation proceedings. At the level of legislative policy, administration has indeed replaced winding-up as the preferred insolvency mechanism. However, the practical reality is more nuanced. Significant challenges including weak institutional capacity, the absence of a cross-border insolvency framework, limited awareness and expertise, and the retention of receivership all stand to constrain the effectiveness of the administration regime. The recent AMNI cases illustrate some of the practical complexities that arise in the operation of the administration provisions.
The Nigerian courts will play a crucial role in shaping the development of the administration regime through their interpretation of the statutory provisions. Drawing lessons from the UK experience, particularly in relation to the hierarchy of objectives, the role of the court, and the benefits of specialisation, Nigeria can strengthen its corporate rescue framework and ensure that administration fulfils its promise as a genuine alternative to winding-up. Ultimately, while administration has not entirely replaced winding-up, it has only fundamentally transformed Nigeria’s insolvency landscape by providing a viable rescue mechanism that preserves going concern value, protects jobs, and offers better outcomes for creditors than immediate liquidation. The rise of corporate rescue in Nigeria is a welcome development, but its full potential will only be realised if the practical challenges facing the administration regime are addressed through institutional reform, capacity building, and the development of a robust body of judicial precedent.
1 Maxwell Obesi, ‘Corporate Rescue Reform in Nigeria: A Comparative Analysis of the Law and Policy in the Context of African Rehabilitation Models’ (PhD thesis, 2025) https://search.proquest.com/openview/74afb956520eb8f082152ee13ad9065c/1?pq-origsite=gscholar&cbl=2026366&diss=y accessed 30 June 2026
2 Olusegun O Onakoya, ‘Corporate Rescue as Sustainable Mechanism for Strengthening Companies in Nigeria?’ (2022) 118 Journal of Law, Policy and Globalization http://ir.library.ui.edu.ng/bitstream/123456789/7775/1/%2823%29ui_art_onakoya_corporate_2022.pdf accessed 30 June 2026
3 Onyeka Christiana Aduma and Helen Obiageli Obi, ‘Examining the Introduction of Company Voluntary Arrangement as a Rescue Mechanism under Company and Allied Matters Act (CAMA) 2020’ (2022) 3 International Journal of Law and Clinical Legal Education https://nigerianjournalsonline.org/index.php/IJOLACLE/article/download/4464/4171 accessed 30 June 2026
4 Ibid
5 Amala Umeike, ‘New Frontiers in Nigeria’s Corporate Insolvency Regime: Focus on Administration’ (2024) 18(1) Insolvency & Restructuring International 5 https://openurl.ebsco.com/contentitem/gcd:179244849?sid=ebsco:plink:crawler-gcd&id=ebsco:gcd:179244849&crl=c&jrnl=19950241 accessed 30 June 2026
6 Omowonuola Alabi, ‘The Concept of Administration in Resolving Company Insolvency in Nigeria’ (2024) SSRN https://www.academia.edu/download/119831135/The_Concept_of_Administration_in_Resolving_Company_Insolvency_in_Nigeria.pdf accessed 30 June 2026
7 Onyeka Christiana Aduma, ‘An Appraisal of the Role of Moratorium Mechanism in Business Rescue in Nigeria’ (2024) 9 Novena University Law Journal https://nigerianjournalsonline.org/index.php/NULJ/article/download/1291/1214 accessed 30 June 2026
8 Ibid
9 Ekenobi ThankGod Chinonso, ‘From Collapse to Recovery: CAMA 2020’s Tools for Saving Distressed Companies’ (2025) SSRN https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=5850962 accessed 30 June 2026
10 Ibrahim Bello, ‘Corporate Restructuring in Nigeria: An Analysis of Rescue Mechanisms under the Companies and Allied Matter Act 2020’ (2024) SSRN https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=4980581 accessed 30 June 2026
11 Emmanuel Oluwafemi Olowononi, Asma’u Sulaiman Muhammad, PAN Ahiarammunnah and Michelle Marchie, ‘Out-Of-Court Administration under the Companies and Allied Matters Act 2020: Rescue or Repackaged Receivership?’ (2026) 19(1) Law and Policy Reviewhttps://researchafrica.africa/lawpolicyreview/index.php/lpr/article/viewFile/425/323 accessed 30 June 2026
12 Omidiji Temiloluwa and Omoniyi Bukola Akinola, ‘An Overview of the Innovations of the Companies and Allied Matters Act 2020: Expansions or Restrictions?’ (2024) 2(1) African Journal of Law, Ethics and Education https://ajleejournal.com/index.php/ajlee/article/download/133/132 accessed 30 June 2026
13 ‘Insolvency: Court Appoints Administrator Over AMNI in Second Creditor Lawsuit’ Victoria Chambers (23 February 2026) https://www.victoriachambers.com.ng/insolvency-court-appoints-administrator-over-amni-in-second-creditor-lawsuit/ accessed 30 June 2026
14 ‘Court Proceedings against AMNI in Related Companies Arise from Same Commercial Dispute Not Separate Creditor Actions’ Premium Times (24 February 2026) https://www.premiumtimesng.com/promoted/859313-court-proceedings-against-amni-in-related-companies-arise-from-same-commercial-dispute-not-separate-creditor-actions.html accessed 30 June 2026
15 Nnama Umenweke, ‘Corporate Insolvency in Nigeria: Shifting from Dissolution to Restructuring under the Companies and Allied Matters Act 2020’ (2026) 3(1) Nnamdi Azikiwe University Journal of Private and Property Law 35 https://journals.unizik.edu.ng/index.php/naujppl/article/view/7520 accessed 30 June 2026
16 Cyril Uchenna Amaefule, ‘Cross-Border Insolvency of Shipping Companies: Time for Nigeria to Adopt the UNCITRAL Model Law on Cross-Border Insolvency’ (2020) https://vervoerrecht.nl/wp-content/uploads/2024/06/NVV_Scriptieprijs2021_Amaefule_Cross-borderInsolvency.pdf accessed 30 June 2026
17 Bolanle Adebola, Kayode Olude and Sanford Mba, ‘Comprehending and Resolving the Challenges of the Nigerian Insolvency Law in Practice: The Performance Improvement Approach’ (2025) 25(1) Journal of Corporate Law Studies 145 https://www.tandfonline.com/doi/full/10.1080/14735970.2025.2495408 accessed 30 June 2026
18 Eseni Azu Udu and Onwa Ali Onwa, ‘Situating the Challenge to Administrator’s Conduct in Salvaging Ailing Company’ (2025) 1 AEFUNAI Law Journal of Public and Private Law https://nigerianjournalsonline.org/index.php/ALJPPL/article/download/1106/1032 accessed 30 June 2026
19 Onyeka Christiana Aduma, ‘An Appraisal of the Role of Moratorium Mechanism in Business Rescue in Nigeria’ (2024) 9 Novena University Law Journal https://nigerianjournalsonline.org/index.php/NULJ/article/download/1291/1214 accessed 30 June 2026
20 Ian F Fletcher, ‘UK Corporate Rescue: Recent Developments – Changes to Administrative Receivership, Administration, and Company Voluntary Arrangements – The Insolvency Act 2000, the White Paper 2001 and the Enterprise Act 2002’ (2004) 5(1) European Business Organization Law Review 119 https://www.cambridge.org/core/journals/european-business-organization-law-review-ebor/article/uk-corporate-rescue-recent-developments-changes-to-administrative-receivership-administration-and-company-voluntary-arrangements-the-insolvency-act-2000-the-white-paper-2001-and-the-enterprise-act-2002/0DC91E4FA4AF5C7F1134D876DE30F924 accessed 30 June 2026
21 Hamish Anderson, ‘Administration and Insolvency: The United Kingdom Approach’ in Banks and Remedies (Taylor & Francis 2021) 313 https://www.taylorfrancis.com/chapters/edit/10.4324/9781003123194-12/administration-insolvency-united-kingdom-approach-hamish-anderson accessed 30 June 2026
22 Abdullah Nasser A Aldahmash, ‘The Petition for a Liquidation Procedure and the Administrative Liquidation Procedure: A Comparative Analysis Study in Saudi and UK Insolvency Law’ (2026) 68(4) International Journal of Law and Management 628 https://www.emerald.com/ijlma/article-pdf/68/4/628/11620179/ijlma-10-2024-0384en.pdf accessed 30 June 2026
23 John Armour, Audrey Wen-Hsin Hsu and Adrian Walters, ‘Corporate Insolvency in the United Kingdom: The Impact of the Enterprise Act 2002’ (2008) 5(2) European Company and Financial Law Review https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=1151785 accessed 30 June 2026
24 Régis Blazy and Nirjhar Nigam, ‘Corporate Insolvency Procedures in England: The Uneasy Case for Liquidations’ (2019) 47(1) European Journal of Law and Economics 89 https://ifs.unistra.fr/large/publications/2018/2018-02.pdf accessed 30 June 2026
25 Marjan Marandi Parkinson, Corporate Governance in Transition: Dealing with Financial Distress and Insolvency in UK Companies (Springer 2018)
26 Abdul Karim Kargbo, ‘The Post-1986 UK Insolvency System: A Study of Mode of Resolution and of Company Outcome’ (PhD thesis, City University London 2009) https://openaccess.city.ac.uk/id/eprint/12033/2/THE%20POST-1986%20UK%20INSOLVENCY%20SYSTEM.2.pdf accessed 30 June 2026
27 Paulina Fishman, ‘UK Administrations: Lessons for Down Under’ (2023) 23(2) Oxford University Commonwealth Law Journal 209 https://www.tandfonline.com/doi/abs/10.1080/14729342.2025.2577045 accessed 30 June 2026
28 Paul J Omar and Jennifer Gant, ‘Corporate Rescue in the United Kingdom: Past, Present and Future Reforms’ (2016) 24 Insolvency Law Journal 40 https://irep.ntu.ac.uk/id/eprint/27854/1/Pubsub5402_Omar.pdf accessed 30 June 2026
29 Umar Said, PA N Ahiarammunnah, Asma’u Sulaiman Muhammad and Emmanuel Oluwafemi Olowononi, ‘Administration of Companies by Court-Appointed Administrator under the Companies and Allied Matters Act, 2020’ (2026) 4(1) African Journal of Legal Research https://www.africanjournaloflegalresearch.com/index.php/ajlr/article/viewFile/292/204 accessed 30 June 2026
30 Ibid
31 KUK Ekwueme, Dimgba Nnamdi, Olufemi Olaoye, Adeniyi Aderogba and Joseph Onele, ‘Winding Up of Banks Pursuant to the Provisions of the NDIC Act 2006: The Legal Challenges and the Way Forward’ (2015) SSRN https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=2672061 accessed 30 June 2026
32 Ibid
