CORAM

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ABUBAKAR BASHIR WALI JUSTICE, SUPREME COURT (Presided)

A.O. EJIWUNMI JUSTICE, SUPREME COURT

ANTHONY IKECHUKWU IGUH JUSTICE, SUPREME COURT

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PARTIES

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SOCIETE GENERALE FAVOURISER LE DEVELOPMENT DU COMMERCE ET DE L’ INDUSTRIE EN FRANCE APPELLANTS

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RESPONDENTS

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AREA(S) OF LAW

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SUMMARY OF FACTS

The respondent instituted an action against the appellant seeking a number of reliefs, the appellant sought an order with the High Court that the action be stayed. The Trial Court granted the said order, the respondent being dissatisfied appealed. The Court of Appeal allowed the appeal. The appellant appealed against the ruling to this Court being dissatisfied.

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HELD

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Appeal allowed and judgment of the Court below set aside.

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ISSUES

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Whether the Supreme Court ought to decline jurisdiction to examine the effect, if any, of section 72, 624, and 626 of the Companies and Allied Matter Act; (Cap. 59, Laws of The Federation of Nigeria, 1990) on the 7th July 1976, “Technical Management Agreement’ that forms the ‘crux’ – issue in contention in the appellant’s appeal on the grounds that contrary to the erroneous assumption which the court below made, the subject – ‘Agreement’ is not a ‘pre-incorporation contract’ (within the true and proper judicial meaning of the term) of the kind to which those sections of the Act could possibly apply: (whether retrospectively or prospectively, or at all

Whether S. 6 of the Interpretation Act (Cap. 192) is not over-ridden by the express provisions of S. 624 and S. 626 of CAMA so as to make S. 72 of CAMA have retrospective application.

Whether by the ordinary, plain and natural meaning of S. 624 and S. 626 of CAMA, S. 72 in Part A of CAMA does not make the ratification of the agreement binding on the respondent despite the respondent’s formation and registration prior to the commencement of CAMA.

Whether S. 72 of CAMA does not apply to the respondent Company so as to make the Agreement binding on the respondent, notwithstanding that the respondent’s action which was filed in December,1989 was pending when CAMA first came into effect on January 2, 1990

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RATIONES DECIDENDI

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RATIFICATION OF PRE-INCORPORATION CONTRACT

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All that has now changed in this country for section 72(1) of CAMA makes it possible for a pre-incorporation contract to be ratified by a company after its incorporation and thereby becoming bound by it and entitled to the benefit thereof. Per OGUNDARE JSC

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RATIFICATION OF PRE-INCORPORATION CONTRACT

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At common law a company before its incorporation has no capacity to contract. Consequently, nobody can contract for it as Agent nor can a pre-incorporation contract be ratified by the company after its incorporation. Per OGUNDARE JSC

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CASES CITED

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Ogunade & Ors. v. Ogunade (1965) NMLR 136
Transbridge Co. Ltd. v. Survey International Co. Ltd. (1986) 17 NSCC 1084; (1986) 4 NWLR (Pt. 37) 576
Edokpolo & Co. Ltd. v. Sem-EdoWire Industries Ltd. & Ors. (1984) 7 SC 119
Sparks Electrics (Nig.) Ltd. v. Ponmile (1986) 2 NWLR 579
Enahoro v.I.B.WA. Ltd. (1971) 1 NCLR 180
Kelner v. Baxter (1867) LR 2CP 174
Natal Land and Colonisation Co. v. Pauline Syndicate (1904) AC 120
Touche v. Metropolitan Railway Warehousing Co. (1871) 6 Ch. App 671
Howard v. Patent Ivory Manufacturing Co. (1888) 38 Ch D 156

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STATUTES REFERRED TO

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Companies and Allied Matters Act 1979

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