FBN Holdings’ Appeal Stalls Proceedings In Shareholders Suit

Justice Akintayo Aluko of the Federal High Court in Lagos on Tuesday ordered lawyers in the suit filed by three aggrieved FBN Holdings Plc shareholders, seeking to stop the Annual General Meeting of the company to file written addresses on whether he can proceed with the hearing of the matter.

Justice Aluko gave the directives after he notified the lawyers of the pendency of an Appeal instituted by FBN Holdings Plc before the Court of Appeal,  seeking a review of the restraining order granted by Justice Nicholas Oweibo stopping FBN Holdings’ AGM held on August 15, 2023,

Justice Aluko, therefore, asked counsel to address whether the court can proceed with the case given the Appeal and another application seeking a stay of proceedings.

Responding to counsel to the petitioners, Dr Muiz Banire (SAN) argued that a notice of Appeal cannot act as a stay of proceedings and that an appeal can only be said to be pending when records of proceedings have been entered and a date set for hearing.

He submitted that the court can proceed with the hearing of the matter as his application has nothing to do with the issues raised in the appeal.

But Justice Aluko, while interjecting him, said it would not be wise for him to close his eyes to the notice of appeal as that would amount to insubordination.

The respondent’s lawyer, Mutalubi Adebayo (SAN), as well as counsel of parties seeking to be joined, Kazeem Gbadamosi (SAN), Adesoji  Adedoyin (SAN) and Babajide Koku, all pleaded with the court to give them time to address the court on whether it can proceed with the hearing of the matter given the pending of their appeal and the application for stay of proceedings

Some aggrieved shareholders, Olojede Adewole Solomon, Adebayo Oluwafemi Abayomi, and Ogundiran Emmanuel Adejare, had urged the Federal High Court for an order stopping the bank’s Annual General Meeting scheduled for August 15 pending the hearing of their suit number FHC/L/CP/1575/23.

FBN Holdings Plc had, in its Notice of Appeal, urged the upper court to nullify an ex-parte order granted by Justice Oweibo of the Federal High Court, which stopped the bank’s Annual General Meeting (AGM).

The Holding company, in a Notice of Appeal filed on its behalf by its team of lawyers led by Mutalubi Adebayo (SAN), is also asking the upper court for an order allowing its appeal and an order directing that a different Judge of the Federal High Court Lagos be assigned to hear the substantive matter.

The lawyer further argued that the lower court lacked the jurisdiction to grant the ex-parte order because the condition precedent under the Federal High Court Rules for the hearing of the suit was not met by the petitioners.

In his ruling delivered on August 9, 2023, Justice Oweibo directed FBN Holdings Plc not to hold its scheduled and statutory AGM until the issues before the court were resolved.

However, FBN Holdings Plc, in its appeal filed on six grounds of law, urged the appellate court to set aside the ex-parte order and that it should assign the matter to a new judge for hearing.

The appellant argued that the trial judge erred in law when he granted the prayer sought by the respondents in their Motion ex parte dated August 8, 2023, while they sought the same relief in their substantive suit before the same court.

Adebayo contended that by granting the respondents prayer, the judge prejudged the substantive issues even before they were heard.

The lawyer also submitted that the lower court lacked the jurisdiction to entertain the respondents’ suit and also to grant the prayers sought in the motion ex parte when the condition precedent for the hearing of urgent action during the long vacation of the court was not fulfilled.

He maintained that the judge erred in law when he granted the order to restrain FBN Holdings from complying with the statutory duty under Section 237 of CAMA 2020 to wit, holding its Annual General Meeting.

Adebayo stated that the holding of an Annual General Meeting of a Public Liability Company is a statutory duty whose performance cannot be restrained by the grant of an injunction.

The senior lawyer argued that by Section 237(1) of the Companies and Allied Matters Act, No. 3 of 2020, the holding of an Annual General Meeting by a Public Liability Company is mandatory.

He also claimed that section 237(5) of the Companies and Allied Matters Act prescribes sanctions against any company and every officer of the company if default is made in holding the Annual General Meeting of the company.

Adebayo further insisted that the lower court judge erred in law when it assumed jurisdiction to entertain the suit and proceeded to grant prayers sought by the respondents without the leave of the court first sought and obtained.

He submitted that Justice Oweibo erred in law when it entertained and granted the order to restrain FBN Holdings from holding its Annual General Meeting when no real urgency was disclosed by the affidavit supporting the application.

The SAN stated that one of the vital conditions for granting an interim order of injunction is the existence of real urgency and not a self-induced hurry.

Adebayo further claimed that the trial judge erred in law when he assumed jurisdiction to entertain the petition and proceeded to grant the prayers sought despite the Petition being in contravention of Order 5 Rule 2(2)(a) – (d) of the Federal High Court (Civil Procedure) Rules of 2019

The respondents have not filed their reply to the appeal and no date has been fixed for its hearing.