Can a foreign company sue or be sued in Nigeria?

Companhia Brasifeira De Infraestrutura (INFAZ) v. Companhia Brasileira De Entrepostos E Commercio (COBEC Nigeria Limited) [2018] 12 NWLR (Pt. 1632) 127 at 132, paras. E-F, per Aka’ahs, JSC:

“This Court decided in Saeby jernstoberi Maskinfabric A/S v. Olaogun Enterprises Ltd. (1999) 14 NWLR (Pt. 637) 128 which was cited to the court below that the principle of law that a foreign corporation, duly created according to the laws of a foreign state recognized by Nigeria, may sue or be sued in its corporate name in our courts is part of the common law. The Court per Ayoola, JSC at p. 146 para. G went further to state: “It suffices to say that the Appellant Company which was admitted by the respondent to be a limited liability company with its registered office in Copenhagen properly sued in its corporate name.”

Notes:

The Appellant was a Brazilian company formerly known as Companhia Brasileira De Entrepostos E Commercio (“COBEC of Brazil”) at the time. It thereafter changed its name to Companhia Brasifeira De Infraestrutura (“INFAZ of Brazil”). The Respondent was its Nigerian partners.

It happened that the relationship between the Appellant, Respondent and the Respondent’s Chairman broken down as a result of which the Appellant filed a petition for winding up of the Respondent at the Federal High Court. In compliance with the Winding Up Rules, the Appellant filed an application seeking for an order to advertise the Petition. The Respondent opposed the application and also filed a motion seeking to have the Petition dismissed on the ground that the Appellant was an unknown legal entity and was neither a creditor nor a contributory. The Respondent however conceded that COBEC of Brazil was the only foreign shareholder known to the Respondent.

The trial Court upheld the contentions of the Respondent and struck out the Petition and the application to advertise the Petition for being illegal. The Court of Appeal dismissed the Appellant’s appeal and further held that there was no evidence of compliance with the Brazilian law governing change of name of the company.

The Appellant’s appeal to the Supreme Court was allowed. Aka’ahs, JSC clarified the position of the law as quoted above, holding that the Appellant had the locus standi to institute the action. According to him: “If COBEC in Brazil was changed to INFAZ it follows that INFAZ is a contributory shareholder of the Respondent company and therefore has the locus standi to apply for the winding up of COBEC (Nigeria) Limited.”

His Lordship further held that since there was evidence, that is, documents showing the change of name from COBEC of Brazil to INFAZ of Brazil, there was a presumption under Section 149 of the Evidence Act that the evidence represent the position of the law in Brazil on the change of name of the Appellant until the contrary is proved by the Respondent who did not challenge the authenticity of the documents. According to the Court, “In view of the finding of the trial Court that exhibits AA-AA2 accorded with Brazilian law on the change of name, it was wrong for the Court of Appeal to embark on a futile exercise seeking evidence of compliance with the Brazilian law governing change of name of the company…”

The position of the Supreme Court is supported as same is good for the advancement of international trade. As Ayoola, JSC reasoned in Saeby jernstoberi Maskinfabric A/S v. Olaogun enterprises Ltd. (supra), such restrictions on foreign companies, if allowed, “is too preposterous and patently inimical to international trade to merit any prolonged or serious consideration.”



Stephen Azubuike
Author: Stephen Azubuike
Stephen is a Legal Practitioner, Consultant, Mediator and Social Entrepreneur. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts. Desirous of implementing new legal solutions, he founded Stephen Legal, a firm in the business of providing innovative legal insights and easy solution in this information age. Stephen also serves as a volunteer at Prof. Pat. Utomi’s Centre for Values in Leadership in Lagos, given his passion for capacity building and leadership development.

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