On 5 February 2026, Nigeria’s music industry witnessed a legal development that sent immediate ripples across the business, legal, and financial communities as well as among artists and stakeholders in intellectual property rights. Eleven of the country’s leading record labels and music companies, acting through the Record Label Proprietors’ Initiative, filed an ex parte application at the Federal High Court, Lagos, challenging how copyright levy funds collected under Nigerian law were being distributed.
The application, filed under Suit No. FHC/L/CS/207/2026, highlights tensions within the Nigerian copyright ecosystem, particularly the administration of funds collected for sound recordings. These companies are seeking urgent relief to prevent what they describe as improper disbursement of monies that rightfully belong to them, reflecting a broader issue of transparency and accountability in Nigeria’s collective management of copyright royalties. The legal action immediately prompted the court to grant a Mareva injunction that froze about N1.2 billion in copyright levy funds, drawing the attention of the Central Bank of Nigeria and twenty commercial banks tasked with holding or managing the funds.
This case is significant not only for the large sums of money involved but also because it underscores the evolving legal and commercial landscape of Nigeria’s music industry, where rights holders increasingly demand direct control over royalties, particularly when they have opted out of collective management.
The events that unfolded reflect the intersection of law, finance, and creative enterprise, revealing how disputes over intellectual property can escalate into high-stakes litigation.
The Applicants and Their Motivation
The ex parte application was filed by the Record Label Proprietors’ Initiative and eleven major music companies in Nigeria. The list of applicants includes Mavin Records Ltd, Davido Music Worldwide Ltd, Premier Music Publishing Ltd, Chocolate City Music Ltd, Hypertek Digital Ltd, Digital Music Commerce & Exchange Ltd also known as DMCE, Beggars Group Media Ltd, Universal Music Group, Sony Music Entertainment Africa, Warner Music South Africa (Pty) Ltd, and Gamma Media Middle East DMCC. These companies collectively represent a significant portion of Nigeria’s recorded music market, encompassing both domestic and international labels with substantial catalogs of sound recordings.
The applicants contend that the current method of distributing copyright levy funds under the Copyright Act, where payments are channeled through the Musical Copyright Society of Nigeria, does not fairly compensate rights holders, particularly labels that have opted out of collective management. Their argument focuses on transparency, accountability, and the principle that rights holders should receive payment directly for their works rather than being subject to generalized allocation rules that may not reflect individual entitlements. The urgency of their application reflects concerns that funds could be disbursed to MCSN before the court has a chance to review the legal claims and determine whether the existing scheme is consistent with statutory and contractual rights.
By filing the ex parte application, the record labels sought to obtain a temporary court order before the other party, in this case MCSN and potentially the Central Bank of Nigeria, had the opportunity to respond. This approach is commonly used in urgent matters where applicants fear that immediate action may render any later court decision ineffective. The application therefore signals the seriousness with which these music companies are treating the protection of their copyright royalties and their determination to assert control over the management of their intellectual property revenues.
The Key Reliefs Sought
In the motion, the applicants requested several specific reliefs from the Federal High Court. The first and most prominent relief was a restraining order preventing the Central Bank of Nigeria from releasing or disbursing any copyright levy funds that relate to sound recordings payable to MCSN. This relief was intended to halt immediate distribution while the court examines whether the current system appropriately reflects the rights and entitlements of individual labels.
The second relief sought a similar restraint against MCSN itself, preventing it and its agents from receiving, accessing, withdrawing, transferring, converting, or otherwise dealing with the funds. This is critical because it ensures that even if funds are held in commercial banks, MCSN cannot unilaterally use or distribute them in ways that might conflict with the plaintiffs’ claims.
The applicants also requested that the CBN and over twenty commercial banks preserve the funds and provide affidavits within three days, disclosing how much is held on behalf of MCSN. The banks listed in the application include Access Bank Plc, Citi Bank Nigeria Limited, Fidelity Bank Nigeria Plc, First Bank of Nigeria Plc, First City Monument Bank Plc, Guaranty Trust Bank Plc, Heritage Bank Plc, Keystone Bank Limited, Skye Bank Plc, Stanbic IBTC Bank Nigeria Limited, Standard Chartered Bank, Sterling Bank Plc, Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc, Ecobank Nigeria Limited, SunTrust Bank Nigeria Limited, and Enterprise Bank Limited. By involving the banks directly, the plaintiffs aimed to prevent any premature disbursement of funds and ensure that the assets were preserved until the court could rule on the substantive legal questions.
A further relief specifically required that any copyright levy funds already received by MCSN, especially those related to sound recordings owned by the plaintiffs who have opted out of collective management, be preserved and not used or transferred. This recognizes the reality that MCSN had already collected some funds and reinforces the need to freeze those amounts to prevent potential misuse or irreversible payments before judicial determination.
Court Response and Mareva Injunction
Justice Ambrose Lewis‑Allagoa of the Federal High Court, Lagos, reviewed the ex parte application and granted an interim Mareva injunction in favor of the applicants. The Mareva injunction is a legal remedy that freezes assets to prevent them from being dissipated or moved beyond the reach of the court. In this case, approximately N1.2 billion, equivalent to roughly 1.5 million US dollars, was frozen pending further proceedings.
The injunction restrains the Central Bank of Nigeria, its agents, and the listed banks from disbursing the funds. It also bars MCSN from accessing, handling, or otherwise dealing with the funds. The order serves as a protective mechanism to preserve the status quo and prevent potentially irreversible disbursement that could undermine the applicants’ claims. The full hearing of the substantive Motion on Notice is scheduled for 12 March 2026, at which point the court will examine the merits of the case, evaluate evidence, and determine whether the freeze should continue or if the current distribution system aligns with Nigerian law.
The granting of the Mareva injunction reflects the court’s recognition that, without immediate intervention, funds could be dissipated in ways that would render a favorable judgment for the applicants meaningless. By freezing the assets, the court ensures that the dispute can be resolved on its merits without practical complications arising from preemptive disbursement.
The Legal Framework
The ex parte application and subsequent injunction are grounded in Nigerian statutory law. Under the Copyright Act, the collection of levy funds for sound recordings is mandated to compensate rights holders when their works are used publicly or commercially. Collective management organizations like MCSN administer these funds, aggregating royalties and distributing them according to internal rules.
However, the law also recognizes that rights holders may choose to opt out of collective management. Labels and artists who exercise this option retain the right to receive payment directly for the use of their works. The plaintiffs in this case argue that MCSN’s handling of levy funds does not respect these individual rights, potentially diverting money to other claimants or failing to provide transparency in accounting. The legal challenge therefore seeks to enforce statutory rights and clarify the obligations of MCSN and financial institutions in handling collected royalties.
The Mareva injunction itself relies on principles established in Nigerian civil procedure. Courts are empowered to freeze assets when there is a credible risk that funds may be dissipated or otherwise rendered unavailable, potentially frustrating justice. The ex parte nature of the order allowed the applicants to secure immediate protection without waiting for the defendants to file responses, reflecting the urgency of the situation.
Implications for the Music Industry
This legal development has significant implications for Nigeria’s music industry. It underscores ongoing tensions between collective management organizations and rights holders who seek more control over their royalties. The freezing of N1.2 billion draws attention to the scale of the royalty ecosystem and the need for transparent mechanisms that balance collective management with individual rights.
Artists and labels may increasingly consider opting out of collective management if they feel their earnings are not properly accounted for or distributed. The litigation also highlights the role of the judiciary in arbitrating disputes that have substantial financial and reputational consequences. Record labels may now have greater confidence in asserting their rights through legal channels, while MCSN and similar organizations may need to adopt stricter governance, clearer accounting practices, and enhanced communication with stakeholders to avoid future disputes.
Additionally, the case demonstrates the critical intersection of law and finance. Twenty commercial banks and the Central Bank of Nigeria are now directly implicated in preserving funds for litigation. Their cooperation ensures that funds are not prematurely disbursed, reinforcing the judiciary’s authority in financial disputes and protecting the integrity of the copyright levy system.
Broader Context and Precedents
Historically, disputes over copyright levies in Nigeria have occasionally escalated to litigation, but freezing such a large sum across multiple banks is notable. The case draws attention to the evolving commercial dynamics of Nigeria’s music sector, which has grown into a multi-billion naira industry with international partnerships, licensing agreements, and complex revenue streams.
The ex parte application reflects an increasing willingness by rights holders to use legal mechanisms to enforce accountability. Courts have previously granted Mareva injunctions in commercial disputes, but the scale of this freeze, combined with the prominence of the parties involved, is unusual. It sets a benchmark for how similar disputes may be addressed in the future and underscores the judiciary’s willingness to intervene decisively in protecting financial interests pending resolution.
Social and Industry Reactions
Following the injunction, public and industry reactions have varied. Some observers view the action as a necessary step to protect the legitimate interests of rights holders who feel underserved by collective management. Others express concern that prolonged litigation may disrupt royalty payments to smaller artists who rely on timely distributions from MCSN.
Media coverage has highlighted the transparency concerns raised by the plaintiffs, sparking debates about how the music industry in Nigeria balances collective administration with individual rights. The dispute has also drawn attention to the role of digital platforms in tracking royalties and the need for modernization of reporting and distribution systems.
Industry analysts suggest that the litigation could catalyze reform within MCSN and other collective management organizations, encouraging stricter auditing, better communication with rights holders, and increased transparency in fund allocation. For the broader creative economy, the case signals that rights holders are willing to assert their legal and financial entitlements vigorously, potentially reshaping the business environment for music licensing and royalty collection.
Next Steps and Legal Timeline
The full hearing of the substantive Motion on Notice is scheduled for 12 March 2026. At that hearing, the Federal High Court will evaluate the applicants’ claims in detail, including whether the existing copyright levy distribution mechanism complies with Nigerian law, whether MCSN has acted in accordance with its fiduciary obligations, and whether the injunction should continue or be lifted. Evidence, affidavits, and expert testimonies will likely be presented, and the court may issue a binding decision that clarifies the rights and obligations of all parties involved.
Following the hearing, the court could modify, maintain, or dissolve the Mareva injunction, and issue further directives concerning the handling and distribution of copyright levy funds. Any resolution may also set legal precedents regarding the treatment of funds held by collective management organizations and the rights of individual labels that have opted out.
Takeaway
The ex parte application filed on 5 February 2026 by the Record Label Proprietors’ Initiative and eleven leading music companies in Nigeria represents a landmark moment in the country’s music industry and legal landscape. The granting of a Mareva injunction freezing N1.2 billion across twenty banks and barring MCSN from accessing the funds underscores the seriousness of the dispute and the urgency with which rights holders are asserting their claims. At its core, the case raises fundamental questions about transparency, accountability, and the proper distribution of copyright levy funds in Nigeria, particularly for labels that have chosen to manage their rights independently.
Beyond the immediate financial and legal implications, the case reflects the broader evolution of Nigeria’s creative economy, where legal mechanisms, commercial interests, and digital platforms intersect. Artists, labels, and collective management organizations are closely observing the proceedings, and the outcome is likely to influence royalty distribution practices, governance reforms, and industry norms. As the full hearing scheduled for 12 March 2026 approaches, stakeholders across the music, legal, and financial sectors remain attentive, aware that the court’s decision may have lasting ramifications for intellectual property administration and the protection of creative rights in Nigeria.
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