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  • Unibiz Nig. Limited vs. C.B.C.L. Ltd.
  • 152
  • 2003-04-28
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Unibiz Nig. Limited vs. C.B.C.L. Ltd.

UNIBIZ NIGERIA LIMITED

V

COMMERCIAL BANK CREDIT LYONNAIS LTD.

( For itself and on behalf of Babington Ashaye )

SUPREME COURT OF NIGERIA

IDRIS LEGBO KUTIGI, JSC ( Presided )

UTHMAN MOHAMMED, JSC

UMARU ATU KALGO, JSC

AKINTOLA OLUFEMI EJIWUNMI, JSC ( Read the Lead Judgment )

EMMANUEL OLAYINKA AYOOLA, JSC

SC.15/2001

FRIDAY, 21ST FEBRUARY, 2003

ACTION - Receiver/Manager - Action on behalf of the company - Need for to seek and obtain leave of court before prosecuting

COMPANY LAW - Company commencing action on behalf of receiver - Whether has locus standi to do so

COMPANY LAW - Receiver - Status of

COMPANY LAW - Receiver - Whether a company has locus standi to commence an action on behalf of

COMPANY LAW - Receiver bringing an action in the name of company Whether can do so - Action brought thereby - Whether can bring Need for to obtain leave of court before bringing such an action

COMPANY LAW - Receiver/Manager - Action on behalf of the company Need for to seek and obtain leave of court before prosecuting Purpose of obtaining leave

CONSTITUTIONAL LAW - Constitutional provisions - Status and effect of viz-a-viz contrary provisions in other laws

COURT - Interlocutory applications - When considering - Alternative orders which the court is empowered to make - Order XXXIII, rule 10, Federal High Court Rules

FAIR HEARING - Audi alteram partem - Principle of - Point at which grant of interlocutory injunction will offend

FAIR HEARING - Criteria and attributes of

FAIR HEARING - Fair hearing as guaranteed by the Constitution Consideration of

INJUNCTION - Ex-parte application for - Requirement for ‘real’ urgency as opposed to ‘self-induced’ urgency - Relevance of to an application for interim injunction

INJUNCTION - Ex-parte application and application made on notice for Distinction between

INJUNCTION - Ex-parte application for - When may or may not be granted -  Basis for

INJUNCTION - Interlocutory injunction - Grant of - Point at which will offend the principle of audi alteram partem

INJUNCTION - Interlocutory injunction - Grant of - When will offend principles of fair hearing

INJUNCTION - Interlocutory injunction - When order of restraint not tied to the happening of any event sought - Need to put the other party on notice in an application for

LOCUS STANDI - Company commencing action on behalf of receiver Whether has locus standi to do so

PRACTICE AND PROCEDURE - Interlocutory applications - When considering - Alternative orders which the court is empowered to make -  Order XXXIII, rule 10, Federal High Court (Civil Procedure) Rules

Issues:

1.            Who is the proper party that has locus standi as between a debenture holder who has appointed a receiver/manager and

the receiver/manager, to institute an action under section 391 of the CAMA to protect the assets forming the subject-matter of the receivership?

2.            Whether the Court of Appeal was right in law in holding that the orders made by the trial court upon an ex-parte application were properly made.

Facts:

The appellant was indebted to the respondent to the sum of N77,194,576.30 which led the respondent to appoint Mr. Babington Ashaye, chartered accountant, as receiver/manager of the appellant’s company. As a result of entreaties by the appellant, Mr. Babington Ashaye was instructed by the respondent not to assume his position as receiver in order to give the appellant time to make good its promise to liquidate its outstanding indebtedness to the respondent. The appellant however failed to make good its promise, hence, the respondent commenced this action at the Federal High Court Lagos with an ex-parte originating summons for the following orders:-

(1)         An order of this Honourable Court directing the Receiver to take such steps as may be necessary to realise the assets of the Respondent with a view to paying its outstandings to the applicant.

(2)         An order of this Honourable Court restraining the respondent, its agents, privies and assigns including but not limited to its directors, and officers from doing anything that would prevent the receiver from performing his lawful duties as a receiver.

The trial court granted the orders as prayed. Dissatisfied, appellant appealed to the Court of Appeal, the Court of Appeal confirmed the judgment of the trial court. Appellant further appealed to the Supreme Court.

The Supreme Court considered sections 390 and 391 of the Companies and Allied Matters Act, 1991 which provides “Section 390:

A receiver or manager of any property or undertaking of a company appointed out of a court under a power contained in any instrument shall, subject to section 393 of this Act, be deemed to be an agent of the person or persons on whose behalf he is appointed and, if appointed Manager of the whole or any part of the undertaking of a company he shall be deemed to stand in a fiduciary relationship to the company and observe the utmost good faith towards it in any transaction with it or on its behalf.” “Section 391

                            A receiver or manager of the property of a company appointed in accordance with the provisions of subsection (1)  of section 390 of this Decree, may apply to the court for directions in relation to any particular matter arising in connection with the performance of his functions, and on any such application, the court may give such directions or make such order declaring the rights of persons before the court or otherwise, as it thinks just.”