BARTAL WEST AFRICA LIMITED V. OFIR BAR SHALOM

Legalpedia Citation: (2025-07) Legalpedia 76889 (CA)

In the Court of Appeal

Holden at Lagos

Fri Jul 4, 2025

Suit Number: CA/L/776/2017

CORAM

Joseph Eyo Ekanem Justice of the Court of Appeal

Muhammad Ibrahim Sirajo Justice of the Court of Appeal

Uwabunkeonye Onwosi Justice of the Court of Appeal

PARTIES

BARTAL WEST AFRICA LIMITED

APPELLANTS

OFIR BAR SHALOM

RESPONDENTS

AREA(S) OF LAW

AREAS OF LAW: APPEAL, COMPANIES AND ALLIED MATTERS ACT, COMPANIES WINDING-UP RULES, COMPANY LAW, DIRECTORY PROVISIONS, IRREGULARITY, MANDATORY PROVISIONS, MISCARRIAGE OF JUSTICE, PRACTICE AND PROCEDURE, STATUTORY INTERPRETATION, SUBSTANTIAL JUSTICE, VERIFYING AFFIDAVIT

SUMMARY OF FACTS

The Appellant, Bartal West Africa Limited, was a private limited liability company formed through a partnership agreement between David Atias and the Respondent, Ofir Bar Shalom (both Israelis), each holding 50% stake. The company had a share capital of N10,000,000.00. Following a disagreement between the partners, the Respondent filed a winding-up petition against the Appellant at the Federal High Court, Lagos Division on 03/08/2016 pursuant to Sections 408(b)&(e) and 410(1)(d) of the Companies and Allied Matters Act.

The petition was supported by a Verifying Affidavit sworn by the Respondent on 02/08/2016, one day before the filing of the petition on 03/08/2016. The Appellant filed a preliminary objection on 01/11/2016, contending that the Verifying Affidavit was in violent contravention of Order 18(1) of the Companies Winding-Up Rules, 2001, which requires the verifying affidavit to be sworn on the same day as the petition is presented, and therefore rendered both the affidavit and petition incompetent.

The Respondent filed a Motion on Notice on 23/11/2016 seeking orders to substitute the original verifying affidavit with a new one dated 17/11/2016, extend time for filing, and deem the new documents as properly filed and served. The Appellant opposed this motion, arguing that the lower court lacked jurisdiction to substitute a verifying affidavit that was ab initio defective.

On 27/04/2017, the Federal High Court (Coram: Hadiza R. Shagari, J.) granted all the reliefs sought by the Respondent, allowing the substitution of the defective verifying affidavit. The Appellant appealed this ruling, and the matter was heard alongside a sister appeal (CA/L/775/2017) involving similar facts and legal issues.

HELD

1. The appeal was dismissed for want of merit.

2. The Court adopted the reasoning and conclusion from the sister appeal CA/L/775/2017 between Bashan Nigeria Limited vs. Ofir Bar Shalom, which dealt with identical facts and legal issues.

3. The Court held that the word “shall” in Rule 18(1) of the Companies Winding-Up Rules, 2001 is directory, not mandatory.

4. The Court held that a breach of Order 18(1) is not necessarily fatal unless it can be shown that it has occasioned a miscarriage of justice to the complaining party.

5. The Court applied Rule 182(1) of the Companies Winding-Up Rules, which provides that no proceeding shall be invalidated by formal defect or irregularity unless the court is of the opinion that injustice has been caused and cannot be remedied.

6. The Court found that the Appellant did not show any injustice occasioned by the irregularity complained of.

7. The judgment of the Federal High Court was affirmed, and costs of N200,000.00 were awarded to the Respondent against the Appellant.

ISSUES

The Appellant formulated two issues:

1. Whether in the face of the Respondent’s fatal non-compliance with the mandatory provisions of Order 18 Rule(1) of the Winding up Rules, 2001, the lower Court was right to have treated same as a mere irregularity and subsequently proceeded to grant the Respondent leave to substitute the defective verifying affidavit?

2. Whether the learned trial judge was right in granting the prayers 1, 2, and the 1st leg of prayer 5 contained in the Respondent’s motion on notice dated the 23rd of November, 2016?

The Respondent formulated a lone issue: “Considering the facts and circumstances of this appeal, was the learned trial Judge not right in law and therefore justified in substituting the initial verifying affidavit dated 2nd August, 2016 with the subsequent one dated 17th November, 2017 in the interest of doing of substantial justice in this suit?”

RATIONES DECIDENDI

INTERPRETATION OF “SHALL” IN COMPANIES WINDING-UP RULES – DIRECTORY NATURE OF RULE 18(1)

The word ‘shall’ in Rule 18(1) of the Companies Winding-Up Rules, 2001 is not mandatory but directory. A breach of the provision is not necessarily fatal except it can be shown that it has occasioned a miscarriage of justice to the party that complains about its breach. – Per JOSEPH EYO EKANEM, J.C.A.

COMPANIES WINDING-UP RULES – PROVISION FOR CURING FORMAL DEFECTS AND IRREGULARITIES

Rule 182(1) of the said Winding-Up Rules vindicates this position by providing that no proceeding under the Act or the Rules shall be invalidated by any formal defect or by an irregularity unless the Court is of the opinion that, Injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that Court. – Per JOSEPH EYO EKANEM, J.C.A.

BURDEN OF PROVING INJUSTICE – REQUIREMENT TO DEMONSTRATE MISCARRIAGE OF JUSTICE

The Appellant did not show any Injustice occasioned to him by the irregularity complained of and the lower Court did not see any such Injustice. It is for the above reasons that I find that the appeal has no merit.– Per JOSEPH EYO EKANEM, J.C.A.