Justice Daniel Osiagor of the Federal High Court, Lagos, has declared the sale and alienation of assets, as well stocks of a limited liability company, Kay Nath Nigeria Limited, by an old generation bank illegal, null and void.
The judge, while delivering judgment in a suit marked FHC/L/CS/459/2004 and filed by Kay Nath Nigeria Limited against the bank, ordered it to refund the sum of N143,297,700 to the company.
Justice Osiagor held: “I have gone through the processes filed and exhibits tendered and deduced that the JVA exhibit 17 was still subsisting as of March 11, 2004.
“It is pertinent to state here that parties are bound by the terms of a contract. It was expressly stated as one of the terms in the JVA that the company shall liquidate the debt owed to the bank (the defendant herein).
“This agreement embodies the entire understanding of the parties in respect of the matters contained or referred to in it inclusive of all the annexures to this agreement and there are no promises, terms, conditions or obligations, oral or written, express or implied other than those contained in this agreement.
“Thus, the valuation price of N246,829,500 (Exhibit 19) minus the 600 KVA Generator of N8,000,000 = N238,829,500. N238,829,500 minus a further 40 per cent depreciation for wear and tear of N95,531,800 = N143,297,700. The plaintiff is therefore entitled to N143,297,700. Interest is refused.”
The plaintiff had in its amended statement of claim dated April 27, 2023, and filed by its counsel, Adenrele Adegborioye of BA Law LLP, prayed for a declaration that the removal, disposition, sale and alienation of the assets and stock of its head office and factory premises at Ajao Estate, Lagos and any other place by the defendant and its agents is illegal, null and void.
Adegborioye had argued that although the Chief promoter of a business was included in the Joint Venture Agreement (JVA) about getting involved in its management, he was shut out even after a series of letters were written to the company.
Consequently, he prayed the court for a declaration that the plaintiff and its officers and owners are entitled to free and unhindered access to, and use of the plaintiff’s head office and factory at 13/15 Osolo Way, off Murtala Mohammed International Airport Road, Ajao Estate, Lagos.
The plaintiff also prayed the court for “a declaration that the complete takeover of the administration and control of the management of the plaintiff’s company to the exclusion of any other person and the subsequent disruption of the plaintiff’s business by the defendant and its agents, is ultra vires the Memorandum and Articles of Association of the firm, not in conformity with the Companies and Allied Matters Act or any other enactment, and so illegal, null and void and of no effect whatsoever.
“A declaration that the plaintiff and its officers and owners are entitled to free and unhindered access to and use of the plaintiff’s head office and factory at 13/15 Osolo Way, off Muritala Mohammed International Airport Road, Ajao Estate, Lagos.
However, the bank, by its amended statement of defence and counterclaim dated June 27, 2023, urged the court to hold that as a mortgagee, it is entitled to execute its power of sale in respect of the plaintiff’s properties (fixed plants, machinery, fixtures, fittings, movable and immovable both present and in the future), particularly the plaintiff’s property lying and being at Ago Okota-Isolo by virtue of the Investment Mortgage Agreement between them dated November 16, 1992 and duly registered at the Corporate Affairs Commission.
In the alternative, the bank prayed the court to direct the defendant to a counterclaim of N131,811,183.70, being the outstanding balance in the defendant’s account as of March 11, 2004.
