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Afribank Gets ‘Life’ Back, But…

Afribank Will Have To Wait For The Outcome Of A Re-Trial To Know If It Would Still Exist As The Court Of Appeal In Lagos Thrashes A Winding- Up Order On It By A High Court

Our Reporter

Reprieve came the way of Afribank Nigeria Plc weekend as the Court of Appeal in Lagos set aside a winding-up order made against it by a Federal High Court, also in Lagos. The court of Appeal also ordered a return of the suit to the Federal High Court and re-assignment to another judge for re-trial. Besides, it awarded a N50,000 cost in favour of the appellants. The lower court had, following a petition by the Nigeria Deposit Insurance Corporation, (NDIC), ordered a winding-up of the Afribank. But shareholders of the bank, who disagreed with the lower court, went a notch higher in search of relief. The shareholders include Igbrude Oke, Rasak Mumini, Akinsanya Sunday, Suleiman Babatunde, Igba Olatomide. On their own behalf and those of other shareholders of the bank, they approached the Appeal Court through Mr Onyebuchi Aniako, arguing in challenge of the order, that other pending and unheard cases against the takeover of the bank, would be prejudiced if the lower court’s order subsists.

At the lower court, the shareholders had, in a petition, argued that it was an abuse of court process to entertain the winding-up application, when there were preliminary applications challenging the powers of the Central Bank of Nigeria (CBN), to take the decision it took against Afribank. The shareholders became worried that without resolving the preliminary applications, NDIC went ahead to file the petition to wind-up on the argument that since Afribank’s license had been revoked by the CBN, the bank was dead. Despite the shareholders challenge, the Federal High Court scheduled hearing on the NDIC application.. It would also be recalled that the lower court had, on the day the matter was fixed for mention, and in the absence of the shareholders counsel, went ahead to hear the NDIC argument on the petition and preliminary objection, contrary to decided Supreme Court judgments, to the effect that on the day a matter is adjourned for mention, major applications would not be taken unless with the agreement of counsel.

The Appeal Court was also informed that the lower court had, on the same day, gone ahead to order a wind-up of Afribank. In the appeal, the shareholders had asked the appellate court to determine: “Whether it is open to the lower court to proceed, on a date in which the suit was expressly and specifically fixed for mention by the court, to strike out the appellant 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.” Justice Abimbola Obaseki-Adejumo, in the lead judgment said “evidently, winding-up proceedings are proceedings of a special and peculiar nature results in the termination of life of a corporate body and the Afribank in the instant case.

To this extent, the Companies Winding-Up Rules has provided for the procedures to be followed for the winding-up of a company incorporated under the Companies and Allied Matters Act: it is of utmost necessity that courts should abide by the Rules and also exercise restraint in proceedings for winding-up of a company, hence the termination of its life. “Therefore, on the basis of the decision of the Apex Court, and this court cited earlier, and having held that the matter was adjourned for mention on 02/07/2012, the learned trial judge was clearly in error to have struck out the appellants preliminary objection and granted the order for winding-up on that day, hence a nullity. “Having resolved issue one in favour of the applicants and in the light of the above, I therefore, allow this appeal. The ruling and winding-up order of Afribank made by the Federal High Court, Lagos Division, per C. E. Archibong J., dated July 2, 2012 is hereby set aside. I hereby order 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. Justices Joseph Ikyegh and Chinwe Iyizoba, who were members of the panel, agreed with the lead judgment.

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