The acquisition of Mainstreet Bank, formerly known as Afribank Nigeria Plc, by Skye Bank Plc appears to be shaky. This follows the April 28, 2015, judgment of the Court of Appeal, Lagos Division, which set aside the winding-up order of AfribankPlc earlier granted by Justice C. E. Archibong, of the Federal High Court, Lagos Judicial Division, on July 2, 2012.
The setting aside of the order by the Appeal Court is capable of jeopardizing its “successful” acquisition of the Mainstreet Bank Nigeria Limited on December 18, 2014.Mainstreet is a bridge bank put in place by the Nigeria Deposit Insurance Corporation, NDIC, and transferred to Asset Management Company of Nigeria (AMCON) to acquire the assets and liabilities of Afribank after the latter’s license was withdrawn by the Central Bank of Nigeria (CBN).
In the lead judgment delivered by Justice AbimbolaOsarugueObaseki-Adejomo of the Appeal Court, Lagos Division, in a matter between Afribank Nigeria Plc, Igbrude MosesOke, RasaqOlalekanMumini, Akinsanya Solomon Sunday, SuliemanDaudaBabatunde, IgbaSanniOlatomide (the appellants) and Nigeria Deposit Insurance Corporation (the respondent), the court held that “the ruling and the winding-up order of the 1st Appellant (Afribank) made by the Federal High Court, Lagos Judicial Division, C. E. Archibong J. dated the 2nd of July, 2012 is hereby set aside.” The Appeal Court ordered that “the matter be remitted back to the lower court, to the Chief Judge of the Federal High Court, for re-assignment to another judge for hearing and determination of the petition. I award the sum of N50, 000.00 as cost.”
The Appeal Court held that the lower court erred in law and caused Afribank to suffer miscarriage of justice by hearing and ruling on the matter on a day it had set aside for the case to be called for mention. “It is a settled law that a court cannot threat a date when a case is fixed for mention, as a hearing date and any judgment obtained in this regard amounts to a nullity.”
The court noted that from the recording of proceedings reproduced earlier in the course of its judgment, it was apparent from the proceedings of April 2, 2012 that the matter would come up for “mention” and nothing more on the adjourned date of July 2, 2012. So, the trial court ought not to have proceeded to hear the matter,unless and until the matter has been slated for “hearing” and/or hearing notice was issued in this regard. “The approach adopted by the lower court led to a miscarriage of justice and ipso facto a denial of the appellant’s right tofair hearing…. Fair hearing in this regard has been interpreted to imply fair trial that every reasonable and fair minded observer who watches proceedings should be able to come to the conclusion that the court has been fair to the parties concerned,” the Appeal Court further stated.
The Appeal Court enjoined courts to adhere strictly to rulesguiding the winding-up of a company incorporated under the Companies and Allied Matters Act, since winding-up proceedings are proceedings of a special and peculiar nature that results to in the termination of a life of a corporate body.“It is of upmost necessity that courts should abide by the rules and also exercise restraint in proceedings for the winding-up of a company, hence the termination of its life.”
The appellants through their lawyer,OnyebuchiAniakor, principal counsel of OnyebuchiAniakor& Co, wanted the Appeal Court to determine the issues. One of the issues was “whether it is open to the lower court to proceed, on a date in which this suit was expressly and specifically fixed for mention by the Court, to strike out the appellant’s Notice of Preliminary Objection to the competency of the suit and/ or to entertain the petition comprised in this suit without any prior notice to the contrary and in the absence of an Order setting aside its earlier ruling, to wit: ‘That there are suits that may be prejudiced?”
Secondly, the appellants wanted the court to determine “whether the petition filed in this suit and the entire suit itself are not wholly incompetent and/or constitute grievous abuse of process, and ought thereby to be struck out and/or dismissed in their entirety?”
The first issue was resolved in favour of the appellant while the second issue was referred back to the high court for retrial.
Justice Obaseki-Adejomoof the Appeal Court had in his ruling declared that “having resolved issue one in favour of the Appellants, it will be superfluous and overreaching to go ahead and determine the second issue in this appeal, as I have discovered that this issue bothers on the grounds that have been raised by the Appellants in their Notice of Preliminary Objection in opposition of the petition for the winding-up of the 1st Appellant at the lower court.”
By Dike Onwuamaeze
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