CITEC INTERNATION ESTATES LTD VS. EDICOMISA INTERNATIONAL INC. & ASS. (SC. 163 2006)[2017] NGSC 13 (9 June 2017) (SC. 163 2006) [1960] NGSC 1 (08 June 2017);

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  • CITEC INTERNATION ESTATES LTD VS. EDICOMISA INTERNATIONAL INC. & ASS. (SC. 163 2006)[2017] NGSC 13 (9 June 2017) (SC. 163 2006) [1960] NGSC 1 (08 June 2017);
Flynote: CL Incorporation Foreign-Owned Company

In the Supreme Court

Holden at Abuja

Fri, 09 June 2017

Suit Number: SC. 163 2006

Between

CITEC INTERNATION ESTATES LIMITED                          ……..  Appellant

And

EDICOMISA INTERNATIONAL INC. & ASSOCIATES                    ……..   Respondent

 

 

JUDGMENT

Delivered by EJEMBI EKO, JSC

On 23rd July, 2003, the High Court of the Federal Capital Territory (FCT) presided by Hussein Mukhtar, J, delivered its ruling in the suit No. FCT/HC/CV/405/2003 in the preliminary objection of the defendant in that suit. The learned trial Judge held in the said Ruling inter alia that "the plaintiff company though has the legal capacity to sue and be sued has no parallel capacity to carry on any business in Nigeria until it is so incorporated in Nigeria". Against this decision the plaintiff at the trial High Court of the FCT lodged its appeal on 1st August, 2003 to the Court of Appeal (hereinafter referred to as the "lower court").

 

 

The appeal at the lower court was heard and determined on the questions:

 

 

"whether the company - Edicomsa International, Inc. & Associates, incorporated as a legal entity under the laws of the United States of America, has legal capacity to carry on business in Nigeria and consequently maintain an action in Nigerian Court to enforce its right in the business it carried on in Nigeria".

 

 

The lower court held that a foreign company, not registered to carry on business in Nigeria, can maintain an action to enforce the rights to the business it carried on in Nigeria. This further appeal by the dependant at the trial court raises, in my view, the question only of the proper or correct interpretation of the provisions of Sections 54, 55 and 60 of the Companies and Allied Matters Act (CAMA) which I herein below reproduce:

 

 

"54 (1) Subject to Sections 56 to 59 of this Act, every foreign company which, before or after the commencement of this Act. was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Act.

 

 

(2) Any act of the company in contravention of subsection (1) of this Section shall be void.

 

 

(3) Nothing in this Section shall affect the status of-

(a) any foreign company which before the

 

2. Whether the provisions of Section 60(b) of CAMA is applicable in the circumstances of this appeal and inures to the Respondent. 

 

 

3. Was the Court of Appeal right in the circumstance of this case, to hold that the Respondent was not given the opportunity to establish its legal capacity or status by the trial court?

 

 

Certain facts are not in dispute between the parties at the trial court. Some of those facts are that -

 

 

1. The Respondent, as the plaintiff, "is a company registered under the Laws of the United States of America as a corporate entity which carries on the business of Architecture, Engineering, Planning, Construction and Interiors and having its principal place of business at C/Serrano, 8d, IZq, 28001 Madrid, Spain" -Paragraph 1 of the Statement of Claim.

 

2. The Defendant/Appellant employed the plaintiff/Respondent as its "architects and Engineers -Consultants and Sole-Contractor to do for the Defendant and the Federal Government of Nigeria, the conceptualisation, design, infrastructure and construction of five thousand Housing Units at Nbera District in Abuja". Part of the business the defendant/Appellant engaged the Plaintiff/Respondent to carry on in Nigeria, as part of the Agreements between the parties, was the commitment of the plaintiff "to build 2 factories for the production of Simplex Cepol Wall and Slab Panels as well as other elements to be used in the Construction of the Housing Units for the Defendant". See paragraphs 3, 4, and 6.

 

 

3. The plaintiff/Respondent, in furtherance of the Agreements it had entered with the defendant, had bought all the machinery, equipment and vehicles for the building and operation of the said factories", which it had built and "immediately commenced the production of the Simplex Cepol Panels - used to build the model houses". See paragraph 10 of the Statement of Claim.

 

 

4. The immediate cause of action is the alleged breach of the terms of the Agreements the plaintiffs and the Defendant executed. The Respondent allegedly had not been paying for jobs done by the plaintiff, which jobs had been duly certified upon valuations. See paragraphs 13, 14, 15 of the Statement of Claim.

 

 

5. The Companies i.e. the Plaintiff and Edicomsa International Nigeria Limited are doing business in Nigeria at the defendant's site. See paragraphs 9.16 of the Statement of Claim".

 

 

It is clear from the plaintiffs own averments in the Statement of Claim that the Plaintiff, a legal entity incorporated under the Laws of the USA, is carrying on business in Nigeria in furtherance of the Agreements it entered into with the defendant/Appellant I do not think that it is in dispute that the plaintiff/Respondent - is a foreign company doing business in Nigeria. Its juristic personality, as an entity registered or incorporated in the USA is not in dispute. The narrow issue is whether it has been registered in Nigeria, under the Nigerian Laws, particularly CAMA, to carry on business in Nigeria. Edicomsa International Nigeria Limited, incorporated in Nigeria by the plaintiff to carry on business in Nigeria jointly with the plaintiff in pursuance of the Agreements the plaintiff had with the Defendant is a Nigerian Company that is distinct and different from the plaintiff.

 

 

I earlier reproduced the provisions of Section 54(1) and 55 of CAMA. The lower court, in my view, got it right when it held at pages 170 -171 of the Record, to wit -

 

 

"My Lords, by virtue of the provisions of Section 54 '' (1) of the Companies and Allied Matters Act any foreign company seeking to carry on business in Nigeria shall take steps to obtain incorporation for that purpose, but until so incorporated the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company.

 

 

If a foreign company fails to comply with the above provisions all its acts shall be void. That is to say (that) a foreign company cannot carry on business in Nigeria unless it is incorporated in Nigeria.

 

 

To carry on business means to conduct, prosecute or continue a particular vocation or business as a continuous operation as permanent occupation. The repetition of acts may be sufficient. It also means to hold oneself out to others as engaged in the selling of goods or services. See Black's Law Dictionary 5th edition p. 194.

 

 

In the instant case the appellant admits in its pleadings that it is a foreign company registered in the United States of America. It did not comply with the Provisions of Section 54(1) of CAMA since it is not incorporated in Nigeria.

 

The appellant executed contract with the respondent wherein it was to build housing units and similar work for the defendant. This falls within the warm embrace of "to carry on business in Nigeria'.

 

 

I agree entirely, on this findings that the plaintiff, the Respondent, herein, is a foreign company carrying on business in Nigeria without being duly registered to do so. The legal consequence is that provided in Section 55 of CAMA. The conduct criminalised by Section 55 of CAMA is what the trial court and the lower court had found the Respondent to have done. The concurrent findings of fact, based on the admission of the Respondent in its pleadings, are unchallenged. The conduct of the Respondent doing or carrying on business in Nigeria without being duly registered is not only criminal by virtue of Section 55 of CAMA, the transaction it entered into with the Appellant, as the defendant, was void by dint of Section 54(2) of CAMA.

 

 

There is no evidence that the plaintiff/Respondent enjoyed any exemption under Section 54(3) of CAMA. There had been, on the part of the plaintiff/Respondent, an admission that it is a foreign company carrying on business in Nigeria without being registered to do so. The lower court has found, on the admission of the plaintiff/Respondent, that being a foreign company carrying on business in Nigeria without being duly registered under the CAMA to do so "all its acts" or transactions in Nigeria are void. Throughout the judgment of the court below and notwithstanding the trial court's reliance on it in its decision at page 126 of the record, there was no mention of Section 55 of CAMA and/or its implication on the admission of the plaintiff/Respondent and the lower court's unchallenged findings of fact that the plaintiff/Respondent, as a foreign company was carrying on business without its being registered to do so. I have no doubt whatsoever, reading Sections 54 and 55 of CAMA together vis-a-vis the conduct of the plaintiff/Respondent that the latters transactions with the defendant/Appellant was criminal and void.

 

 

In ALAO v. A.C.B. LTD. (1998) 1 - 2 SC 179; (1998) 3 NWLR (pt.542) 339; per Kutigi, JSC (as he then was) stated at page 355 thus:

 

 

"The law is very clear on the effect of illegality on a transaction or contract. It is the law that a contract is illegal if the consideration or the promise involves doing something illegal or contrary to public policy or if the intention of the parties in making the contract is hereby to promote something which is illegal or contrary to public policy. An illegal contract is a void contract and it cannot be the foundation of any legal right. In other words, when the object of either the promise or the consideration is to promote the committal of an illegal act, the contract itself is illegal and cannot be enforced (See HERMAN v. JEUCHNER (1888) is QBD 561; WILLIAM HILL (PARK LANE) LTD. v. HOFMAN (1950) 1 ALL ER 1013; CHIEF ONYIUKE III v. OKEKE (1976) 1 ALL NLR (pt.) 181; SODIPO v. LEMMINKAINEN OY (NO.2) 1986 1 NWLR (pt.l5) 220)". Emphasis supplied)

 

 

The Appellant's counsel submits, on the authority of SOLANKE v. ABED & ANOR. (1962) 1 ALL NLR 230 at 233, and I agree, that where a statute, as CAMA does, not only declares a contract void, but also imposes penalty for making it, the contract is illegal. The contract, in the instant case, by operation of Sections 54 and 55 of CAMA, was illegal and void ah initio. Thus, as stated by Kutigi, JSC (as he then was) in ALAO v. A.C.B. (supra) and this Court in OYENEYIN v. AKINKUGBE (2010 4 NWLR (pt.1184) 265 at 285, an illegal act, that is a void act, does not confer any legal right or title whatsoever.

 

 

The Respondent has not challenged the very loud and clear finding of fact by the lower court, at page 170 of the Record, to the effect that in the instant case the Respondent, as the plaintiff, had admitted in its pleadings that it is a foreign company carrying on business in Nigeria without complying with Section 54(1) of CAMA, since it is not registered or incorporated in Nigeria to so do. Having not appealed or challenged these specific findings or decisions of the lower court very adverse to its interest, the Respondent cannot now be heard here submitting that the contract or transaction it has with the defendant/Appellant does not amount to "carrying on business in Nigeria". The law is trite that a specific finding of fact by a court which is neither challenged nor appealed is deemed to be an acceptable and admitted fact by the party against whom it was made. In this case, this specific finding of fact was made concurrently by the trial court and the lower court. Such findings of fact, as this Court held in BAKARE v. THE STATE (1987) 3 SC 1, are presumed to be correct. The burden of displacing this presumption is on the party challenging the specific finding, as this Respondent purports to do belatedly and without any cross-appeal. The burden, as Agim, JCA, stated in DONATUS OKAFOR v. IFEANYIISIADINSO (2014) LPELR - 14 23013 (CA), is not discharged by a mere assertion that the findings is wrong.

 

 

Respondents counsel has submitted tersely that the authorities cited by the Appellant's counsel to the effect the contract the Respondent, as the plaintiff, was enforcing against the Appellant, being an illegal and void transaction or contract, was unenforceable, are irrelevant. The learned counsel made no further effort however, to show that the authorities are irrelevant and inapplicable. Clearly, the transaction or contract the Respondent, as the plaintiff, is enforcing against the Appellant is, by statute, an illegal and void contract or transaction. The Respondent has no right in law to enforce such an illegality: See ALAO v. A.C.B. LTD. (supra); SODIPO v. LEMMINKAINEN (supra); OYENEYIN v. AKINKUGBE (supra); SOLANKE v. ABED (SUPRA). The combined effect of Sections 54 (1) & (2) and 55 of CAMA making it illegal for a foreign company to carry on business in Nigeria without first being duly registered to do so is that the transaction or contract the Respondent, a foreign company, has with the Appellant is an unenfoceable transaction or contract.

 

 

Sections 54 and 55 of CAMA, on one hand, and Section 60 of CAMA, on the other hand, do not provide for similar or identical causes of action. The lower court had apparently mixed up the two distinct sets of fact provided for in Section 54 and 55, and Section 60 of CAMA,

 

 

Where a foreign company, not registered in Nigeria, purports to carry on business in Nigeria in defiance of Section 54(1) of CAMA, such transaction is not only void, it is illegal and a crime to do so. That is the legislative intent or purpose of Sections 54(2} and 55 of CAMA. In our interpretational responsibility or function, ours is to construe statutory provisions to bring out and promote its purpose. See RABIU v. THE STATE (1980) 8 -11 SC 130. The legislature has enacted Sections 54 and 55 purposely not to allow a foreign company carry on business in Nigeria without being first duly registered in Nigeria in accordance with the provisions of CAMA. That is why the conduct is expressly criminalised by Section 55 of CAMA. Thus any conduct of a foreign company in defiance of Section 54(1) of CAMA renders whatever business it carries on not only void (by S.54(2) of CAMA) it is criminal to do so by virtue of Section 55 of CAMA. The law as put in latinism, ex dolo ma Jo non oritur, is simply that the court of justice will not lend its aid to a man who grounds his cause on illegality. If from the plaintiffs own pleading, his cause of action is founded on illegality or some transgression of the positive law of this country, then, as the trial court stated in its Judgment in this case, he has no right to be assisted by our law courts.

 

 

While Sections 54 and 55 of CAMA are about the conduct of a foreign company that it is illegal in Nigeria, Section 60 of CAMA on the other hand, permits the enforcement by a foreign company a legal right accruing to it from a lawful business or transaction. Section 60 of CAMA does not vest in a foreign company a legal right to enforce an illegal contract. The situation the legislature has in mind, in enacting Section 60 of CAMA, is where, for instance, a foreign company has had a transaction with a Nigerian or a Nigerian entity which transaction could be enforced in Nigeria but which of course may not have been as a result of any business the foreign company is carrying on in Nigeria. Section 60 of CAMA, no doubt, was enacted to further enhance international trade or commerce. I have, in support of this view, the decision of Ademola, JCA, in NIGERIA BANK FOR COMMERCE & INDUSTRY LTD v. EUROPA TRADERS (UK) LTD (1990) 6 NWLR (pt.154) 36 at page 41; that is -

 

"In as much as a Nigerian goes to Harrods to buy goods on credit can be sued by Harrods in Nigerian Courts, so also can a British Company from whom a Nigerian has bought goods and has not paid be sued in Nigerian Courts. There is basis for reciprocity in international relations and no nationalistic feelings or thoughts should destroy this fundamental rules of International relations".

 

 

See also RITZ & CO. KG v. TECHNO LTD. (1999) 4 NWLR (pt.598) 298 at 305.

 

 

The capacity of a foreign company to sue and/or be sued in Nigerian Courts, as a fundamental principle in reciprocity in International relations and mercantile practice is the basis and purpose for enactment of Section 60 of CAMA. That capacity, in my firm view, does not warrant or permit, in view of Section 54 and 60 of CAMA, a foreign company to sue in Nigerian Courts to enforce contracts that are either illegal or expressly criminalised, as the instant, by the positive or express laws of Nigeria. Nigerian courts, I must say, are not established to legalise acts or conducts that are illegalised or criminalized by Parliament or statute. They are also not established to declare as illegal acts or conduct that are by law legal and/or lawful. That will definitely will be a negation of the principle of purposive interpretation or construction of statutes.

 

 

The lower court held, at page 173 of the Record, that where the legal capacity of the plaintiff is challenged by the defendant the onus is on the former to prove his legal status or capacity and that this is done by the plaintiff leading evidence, oral or documentary, to prove its legal capacity that is challenged. The lower court is quite right on this. The lower court further held that there is nothing on the Record that the plaintiff, now the Respondent, was given an opportunity to prove that it has legal

 

 

There are two things here. One is whether the Respondent, as a foreign company, has legal capacity to sue and be sued in Nigerian courts. The other is whether it can enforce an illegal contract? I had earlier in this Judgment made the point that the Respondent, an admitted foreign company, on the basis of reciprocity in International relations has legal capacity to maintain an action in any Nigerian Court to enforce any legitimate contractual right pursuant to Section 60 of CAMA. 1 have also held that a foreign company, as the plaintiff/Respondent, that is not registered in Nigeria cannot carry on business in Nigeria, and that where it carries on Nigeria in defiance of the positive or statutory provisions prohibiting it to do so such contract is illegal. For avoidance of doubt Section 54(2) of CAMA provides that any contract or business transaction carried on in Nigeria by a foreign company, which has not been registered or incorporated in Nigeria to carry on business in Nigeria, is void. Section 55 of CAMA, without ambiguity, provides that a foreign company that carries on business without being so registered does so criminally. Accordingly, such business or contract performed by the foreign company in contravention of the provisions of Section 54(1) & (2) of CAMA is illegal and void.

 

 

There was no dispute at the trial court that the plaintiff was a foreign company. This fact was expressly admitted in paragraph 1 of the Statement of Claim. In the same Statement of Claim the plaintiff further admitted that it was carrying on business in Nigeria with the defendant/Appellant. Against these pleadings it was averred by the defendant/Appellant in paragraph 1(b) of the Statement of Defence that -

 

 

The Defendant shall also contend that (the) Plaintiff being an entity not known to law in Nigeria cannot carry on business in Nigeria and consequently any purported agreement entered into with the Defendant is illegal null and void and no legal effect in view of Section 54 (1) and (2) of the Corporate (sic: Companies) and Allied Matters Act Cap. 59 LFN, 1990.

 

 

Thereafter, the Defendant, now the Appellant, filed Notice of Preliminary Objection challenging the jurisdiction of the trial court to entertain the action. Among the grounds upon which the objection was brought was the plea that "the contract purportedly giving rise to the cause of action is VOID and ILLEGAL.

 

 

The supporting affidavit averred in paragraph 4{a) that the plaintiff was not incorporated in Nigeria. This fact was not disputed. The plaintiff filed no counter affidavit. The law is settled that facts not disputed are taken as admitted, and therefore, need no further proof.

 

The Preliminary Objection was on the cause list of the trial court for hearing on four diverse dates from 16th April, 2003 before it was heard on 19th June, 2003. The Ruling on it was delivered on 23rd July. 2003.

 

 

Clearly on the state of pleadings and other facts it does not lie in the mouth of the plaintiff/Respondent to say that it was not given an opportunity to prove that it was registered or incorporated in Nigeria to carry on business in Nigeria in compliance with Section 54(1) of the CAMA. It is only by such positive averment or evidence that it can raise and establish its defence to the Preliminary Objection. The learned counsel to the Appellant submits, and 1 agree, that the only way incorporation of a company can be established in any proceedings is by tendering the certificate of its incorporation. See LUTIN v. NNPC (2006) 2 NWLR (pt.965) 506 at 533.

 

 

On the state of pleadings an issue was raised that the plaintiff, a foreign company, having not been registered or incorporated in Nigeria to carry on business in Nigeria, could not legally carry on business in Nigeria with the defendant/Appellant, and that "the contract purportedly giving rise to the cause of action illegal and void. That should be enough notice, for purposes of audi alteram partem, to the Plaintiff to prove that it, in doing business with the defendant/Appellant in Nigeria it had, as a foreign company, complied with the provisions of Section 54(1) of CAMA, in order to avoid the harsh consequences of Sections 54(2) and 55 of CAMA. The plaintiff did not file any reply pleading to join issues with the defendant/Appellant on this very major challenge to the enforceability of the contract it purportedly entered into with the defendant/Appellant. The Respondent, as the plaintiff, still missed the opportunity it had to establish that it was registered or incorporated in Nigeria, in compliance with Section 54(1) of CAMA to carry on business in Nigeria as a foreign company, when it failed to file counter-affidavit to controvert or challenge the averment in the affidavit in support of the Preliminary Objection alleging that it was "not incorporated in Nigeria". I agree with the Appellant, on authority of MAINAGEE v. GWAMMA (2004) 14 NWLR (pt. 893) 323 at 334, that the law is now settled that if any evidence given by any party is not controverted by the other party who has the opportunity to do so, and such evidence is not inherently incredible or spurious, the court ought to give credence to such evidence and act on it.

 

 

The issue is whether the Respondent, as the plaintiff, was given an opportunity to establish that it was incorporated or registered in Nigeria, as a foreign company, to carry on business in Nigeria as Section 54(1) of CAMA requires it to do. The learned counsel for the Respondent completely missed the point when he submitted that when issues are joined on the pleadings, a party cannot just file a notice of Preliminary Objection supported by affidavit and thereby seek to have that issue resolved at the interlocutory stage. And that he should rather await the normal processes of the trial. This submission does not poignantly answer or address the issue whether his client was given an opportunity to establish that it carried on business in Nigeria, as a foreign company, in compliance with Section 54(1) of CAMA.

 

 

In any case, the extant Rules of the trial court, the High Court (Civil Procedure) Rules, 2006 by its Order 25, permitted the defendant to raise any point of law as a special defence which the trial Judge may set down for hearing and to be disposed at any time before trial, and where the point of law substantially disposes of the whole action the trial court may then dismiss the action or make such order as may be just. The appellant, as the defendant, pleaded illegality of the contract the plaintiff was purportedly enforcing against it, which illegality deprived the trial court of jurisdiction. The defendant had raised threshold question of jurisdiction which the trial court had to resolve first and foremost.

 

 

Illegality of a contract or transaction, whenever it is raised as a defence to a claim founded on the said transaction, impacts on the jurisdiction of the court.

When the contract on which the plaintiff sues is ex facie illegal, the courts will decline to enforce it for the courts exercise their jurisdiction only to administer the law of the land. They do not exercise their jurisdiction to help the Plaintiff break the law. See GEORGE & ORS v. DOMINION FLOUR MILLS LTD (1963) 1 ALL NLR 71; IBRAHIM v. OSIM (1988) NWLR 257; BARCLAYS BANK D.O.C. v, MEMUNATU HASSAN (1961) ALL NLR 836.

 

 

From all that I have been labouring to say or demonstrate, I find substance in the appeal on all the issues canvassed. 1 hereby resolve all the issues in favour of the Appellant. The appeal is allowed. The Judgment of the lower court delivered on 8th December, 2005, in the appeal No. CA/A/175/2003 is hereby set aside. In its stead the decision of the High Court of the Federal Capital Territory delivered on 23rd July, 2003 in the suit No. FCT/CV/405/2003 is hereby restored and affirmed.

 

 

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, JSC:

 

 

My learned brother, EJEMBI EKO, JSC has obliged me with a copy of the judgment just delivered. His Lordship has exhaustively considered and ably resolved the issues in contention in this appeal. I am in entire agreement with the reasoning and conclusion reached therein. I adopt the summary of the facts as set out in the judgment in making some comments in support.

 

 

The High Court of the Federal Capital Territory (FCT) in its ruling delivered on 23/7/2003 held as follows:

 

 

"By Section 54(2) of the CAMA any act of the plaintiff in defiance of the provisions of Subsection (1) thereof shall be void. The alleged contract project upon which this suit is brought having been entered into and being executed in Nigeria without the plaintiff having been incorporated or registered in Nigeria as a corporate entity is illegal, null and void by the combined effect of Sections 54(1) and (2) and 55 of CAMA 1990. The plaintiff's action in this suit is therefore a non-starter being void ab initio. The objection succeeds on this ground."

 

 

Based on this finding the respondent's suit was struck out. It appealed to the Court of Appeal Abuja (the lower court) which, on 8/12/2005 allowed the appeal and ordered that the suit should commence de novo before another Judge of the FCT with dispatch. The lower court was of the view that notwithstanding the provision of Section 54(1) of the Companies and Allied Matters Act (CAMA) requiring foreign companies intending to carry on business in Nigeria to take all necessary steps to obtain incorporation for that .purpose, the light fine: imposed for non-compliance, provided in Section 55 suggests that there is an inherent intention that the law would not be strictly endorced. The court also held that the respondent was not given an opportunity to prove the fact of its incorporation in Nigeria. It was also of the view that an unincorporated foreign company can sue and be sued in Nigeria.

 

 

Sections 54 and 55 of CAMA provide as follows:

"54(1). Subject to Sections 56 to 59 of this Act, every foreign company which before or after the commencement of this Act was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notice and other documents, as matters preliminary to incorporation under this Act.

 

(2) Any act of the company in contravention of subsection (1) of this section SHALL BE VOID.

 

 

(3) Nothing in this section shall affect the status of-

 

 

(a) any foreign company which before the commencement of this Act was granted exemption from compliance with Part X of the Companies Act 1968;

 

 

(b) any foreign companies exemption under any treaty to which Nigeria is a party.

 

 

55. If any foreign company fails to comply with the requirements of Section 54 of this Act in so far as they may apply to the company, the company shall be guilty of an offence and liable on conviction to a tine of not less than N2,500; and every officer or agent of the company who knowingly and willfully authorises or permits the default or failure to comply with those requirements shall, whether or not the company is also convicted of any offence, be liable on conviction to a fine of not less than N250 and where the offence is a continuing one to a further fine of N25 for every day during which the default continues."

(Emphasis mine)

 

 

The cardinal rule of interpretation of statutes is that words used in a statute must be given their natural and ordinary meaning unless such interpretation would lead to injustice or absurdity. It is said that where the language of the statute is clear and explicit, effect must be given to it, as in such circumstances the words of the statute speak the intention of the legislature. See: Ibrahim Vs Barde (1996) 9 NWLR (Pt. 474) 513 & 577 B-C; Ojokolobo Vs Alamu (1987) 3 NWLR (61) 377 & 402 F-H; Ahmed Vs Kassim (1958) SCNLR 28 @ 30C. It was held in Adewumi Vs A-G Ekiti State & Ors (2002) SCNJ 27 @ 50, per Wali, JSC, that a court is not permitted to distort a statute's meaning in order to make it conform with the Judge's own version of sound social policy.

 

 

I have had a careful look at the provisions of Sections 54 and 55 of CAMA reproduced above. The language employed therein is clear and unambiguous. Section 54(1) clearly states that every foreign company incorporated outside Nigeria before or after the commencement of the Act must take steps to obtain incorporation in Nigeria. Until the process is complete and certificate of incorporation issued, the company is not entitled to carry on business in Nigeria nor can it exercise any of the powers of a registered company. It is forbidden from having a place of business or an address for service of processes in Nigeria for any purpose other than the receipt of notice and other documents, as matters preliminary to incorporation. The exception is where the company has been granted exemption by virtue of sub-section (3) (a) or (b).

 

Subsection (2) of Section 54 in no uncertain terms states that any act in contravention of Subsection (1) SHALL BE VOID.

 

 

I am of the considered view that in the face of such clear provisions no further enquiry need be made as to the status of a foreign company entering into and carrying on business in Nigeria without being incorporated under CAMA. In addition to any act of the company being void, section 55 provides for criminal liability and fines. While it may be said that the fines are paltry, the fact that defaulters will be criminally culpable and liable to conviction underscores the seriousness with which the legislature views non-compliance with the provisions.

 

 

The respondent, as plaintiff at the trial court sought to enforce agreements it had entered into with the appellant which were for consultancy services and the construction of two factories at its Nbora Abuja project site. Although the respondent was paid for the supply of 2 new factories at the Nbora site, the appellant terminated the contract on the ground that the respondent had installed second hand and fairly used equipment in the factories while the factories supplied and constructed by the respondent were unserviceable and unfit for purpose.

 

Upon the termination of the contracts the respondent instituted an action against the appellant seeking mandatory order of injunction and special and general damages.

 

 

The appellant by way of preliminary objection challenged the jurisdiction of the court to hear j the suit on several grounds including the fact that the contract was a nullity having been entered into by the respondent without it being incorporated in Nigeria under the Companies and Allied Matters Act.

 

 

I am of the considered view that the finding of the trial court, reproduced earlier, is a correct statement of the law on this issue. There is no doubt that the respondent was carrying on business in Nigeria without being incorporated under CAMA and was therefore in breach of Section 54(1) of the Act. The consequence of the non-compliance is clearly spelt out in Subsection (2). The agreements are null and void.

 

 

The argument of learned counsel for the respondent that it was not afforded an opportunity to satisfy the court as to the fact of its registration is very feeble. This is because one of the main contentions in the preliminary objection was the respondent's non-incorporation. It was clear that the respondent's, now appellant's intention was to truncate the hearing of the suit on this ground. An affidavit of facts was deposed to asserting that the respondent was a foreign company not registered in Nigeria but carrying on business in the country. What better opportunity couid there have been to satisfy the court to the contrary? I am of the view and do hold that there was no breach of the respondent's right to fair hearing nor any miscarriage of justice in the decision of the trial court.

 

 

For these and the more detailed reasons stated in the lead judgment, I am of the view that the court below erred in setting aside the decision of the trial court. There is merit in this appeal and I hereby allow it. The judgment of the Court of Appeal, Abuja in CA/A//175/2003 delivered on 8/12/2005 is set aside. The ruling of the High Court of the FCT delivered on 23/7/2003 is affirmed.

 

 

SIDI DAUDA BAGE, JSC:

 

 

I have had the benefit of reading in draft the lead Judgment of my learned brother Ejembi Eko, JSC, just delivered. I agree entirely with the reasoning and conclusion reached. I do not have anything useful to add. The appeal is allowed, judgment of the lower Court is hereby set aside. The decision of the trial Court delivered on 23rd July, 2013 is hereby restored.

 

 

I abide by all the orders contained in the lead Judgment.

 

 

MUSA DATI'IJO MUHAMMAD, JSC:

 

 

Having read in draft the lead judgment of my learned brother EJEMBI EKO JSC just delivered, I agree with his lordships reasoning and conclusion that the appeal has merit and same should succeed.

 

 

In saying it in my own words purely for the sake of emphasis, I shall rely on the summary of the facts that brought about the appeal restating them only in facilitating a better understanding of the point being made.

 

 

Following the preliminary objection raised by the defendant against the competence of plaintiffs suit at the trial court, the court at pages 126 - 127 of the record of appeal, held inter-alia as follows:

 

"By section 54(2) of the companies and Allied Matters Act any act of the plaintiff is defiance of the provision of subsection (1) therefore shall be void. The alleged contract or project upon which this suit is brought having been entered into and being executed in Nigeria without the plaintiff having been incorporated or registered in Nigeria as a corporate entity is illegal null and void by the combined effect of Section 54(1) (2) and 55 of the Companies and Allied Act g 1999. The plaintiffs action in this suit is therefore a non-starter being void ab initio. The objection succeeds on this ground.

 

 

The plaintiff appealed against the foregoing to the Court of Appeal, the lower court which, in determining the appeal, held in conclusion at pages 171 - 172 as follows:-

 

 

The learned trial Judge was in error to hold that since the plaintiff/appellant failed to comply with the provisions of Section 54(1) of CAMA it cannot sue.

 

 

The correct provision of the law is that a Foreign Company having the intention to doing business in Nigeria must take necessary steps to obtain incorporation in Nigeria. That is to say it must comply with the provisions of Section 54(1) before it commences business. If the foreign company carries on business without being incorporated in Nigeria all its acts are void and it shall be liable to pay fines as provided by Section 55 of CAMA.

 

 

A foreign company that fails to comply with the provisions of Section 54(1) of CAMA and proceeds to carry on business in Nigeria can sue to protect its rights and be sued where liable Non-compliance with Section 54(1) is not a bar to suits by foreign company or against it. All l have been saying is to the effect that a foreign company not registered in Nigeria and carrying on business here can sue and be sued in Nigeria courts.

 

 

The instant appeal is against the lower courts foregoing decision asking in the main the resolution of the very issue raised in the two courts below to wit:-

 

 

(1) Whether in view of Section 54(1) (2) and (3) of the Companies and Allied Matters Act (CAMA), a foreign entity, not registered in Nigeria pursuant to Section 5491) or given the leave under Section 54(3), can enforce a contract to carry on business in Nigeria in view of Section 54(2) CAMA?

 

 

(2) Whether the provision of Section 60(b) of CAMA is applicable in the circumstances of this appeal and inures to the respondent.

 

 

Resolution of the foregoing issues requires placing some interpretation on Sections 54, 55 and 60 of the Companies and Allied Matters Act (CAMA) hereinafter reproduced for ease of reference:-

 

 

"54 (1) Subject to Sections 56 to 59 of this Act, every foreign company which, before or after the commencement of this Act was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Act.

 

 

(2) Any Act of the company in contravention of subsection (1) of this Section shall be void.

 

 

(3) Nothing in this Section shall affect the 3 status of 

(a) any foreign company which before the commencement of this Act was granted exemption from compliance with Part X of the Companies Act, 1968.

 

 

(b) any foreign company exempted under any treaty to which Nigeria is a party.

 

 

55. If any foreign company fails to comply with the requirements of Section 54 of this Act in so far as they may apply to the company, the company shall be guilty of an offence and liable on conviction to a fine of not less than N2,500; and every officer or agent of the company who knowingly and willingly authorizes or permits the default or failure to comply with those requirements shall, whether or not the company is also convicted of an offence, be liable on conviction to a fine of not less than N250 and where the offence is a continuing one to a further fine of N25 for every day during which the default continues.

 

 

60. For avoidance of doubt, it is hereby declared that-

 

 

(a) save as provided in Section 55, 55, 57 and 59 of this Act, nothing in this Act shall be construed as authorizing the disregard by any exempted foreign company of any enactment or rule of law; and

 

 

(b) nothing in this Chapter shall be construed as affecting the rights and liability of a foreign company to sue or be sued in its name or in the name of its agent

 

 

A community reading of the foregoing clear and unambiguous provisions manifestly reveals that except where the foreign company is granted exemption from compliance or by virtue of a treaty, it cannot, without obtaining incorporation as a separate entity, carry on business in Nigeria and any business it so transacts, without its being incorporated as a separate entity, is void and incapable of being enforced in any court or tribunal. None-compliance with the requirement of Section 54, by virtue of Section 55 of the Act, constitutes an offence, liable to a fine on conviction. It follows, therefore, that a business transaction by a foreign company that has not obtained incorporation, notwithstanding Section 60 of CAMA, is not only void but illegal. The bottom line here is that though as a legal personality such a foreign company may sue and be sued as provided for under Section 60 (b) of CAMA, having not obtained incorporation as a separate entity in Nigeria such contract being void and tainted by illegality by the companys breach of Section 54(1) and (2) of the same Act, is rendered unenforceable. Herein lies the merit of this appeal against the lower courts finding to the contrary. For this and the fuller reasons articulated in the lead judgment, I allow the appeal and abide by the consequential orders therein.

 

 

Amiru Sanusi, JSC:

 

 

I had the opportunity of reading draft copy of the judgment supplied to me before now by my learned brother Ejembi Eko JSC just delivered.

 

 

His lordship had adequately addressed all the salient issues canvassed by learned counsel in the appeal before arriving at the conclusion that the appeal is meritorious. I am at one with his reasoning and conclusion that in View of the merit of the appeal, it has to be allowed and I accordingly do same. It is hereby also allowed by me. Appeal allowed.

 

COUNSEL APPEARANCES:

 

 

A.M. Kayode, Esq, with Adiza Shata (Miss) for the Appellant.

 

 

F.R. Onoja, Esq, with I.C. Akwiwu (Miss) and O.O. Ajisegiri (Miss), for the Respondent.

 

 

CHRIS ENEJE, ESQ. with him, Daniella Ikokwu (Miss) for 1st Respondent

MOHAMMED SALLAU, ESQ. for 2nd Respondent. For Respondent