A Senior Advocate of Nigeria, Otunba Olayiwola Afolabi, has been recognised for his role in a 2014 Court of Appeal judgment that highlighted the importance of corporate authorisation in instituting legal proceedings on behalf of a company.
The case, Stephen Ogbebor & Sons Sawmill Ltd v. Adun (2014) LPELR-22764(CA), Suit No. CA/B/20/2009, arose from a land dispute involving parcels of land at Evbuoriaria Village, along the Benin–Sapele Road in Benin City, Edo State.
The company had approached the High Court of Edo State seeking a declaration of ownership, a perpetual injunction and ₦5 million in damages against Chief John Osamede Adun.
However, Afolabi, who represented Adun, challenged the competence of the action, arguing that the company had not established that the proceedings were properly authorised by its relevant corporate organ.
The argument centred on the provisions of Sections 63, 65 and 66 of the Companies and Allied Matters Act, which address corporate management and authority.
According to the account of the case, Roland Ogbebor, who purportedly initiated the proceedings on behalf of the company, failed to produce the necessary corporate authorisation, despite claiming that such documents existed. The defence had also specifically raised the issue of lack of authority.
The trial court found the action incompetent. The matter subsequently proceeded to the Court of Appeal, where Afolabi further challenged aspects of the appellant’s case, including the formulation of three issues from two grounds of appeal.
In its judgment delivered on April 15, 2014, the Court of Appeal, per Justice Ibrahim Mohammed Musa Saulawa, JCA, substantially upheld the respondent’s arguments.
Relying on Tasa Ltd v. Dantrans (Nig.) Ltd (1996) 10 NWLR (Pt. 478) 360, the appellate court reaffirmed the principle that a managing director cannot independently authorise legal proceedings in a company’s name without the requisite approval of the board or shareholders.
The court also held that the action amounted to an abuse of court process, having regard to earlier pending litigation concerning the disputed property.
Although the appeal was dismissed, the Court of Appeal modified the consequential order of the trial court, holding that the incompetent suit ought to have been struck out rather than dismissed.
Beyond the legal significance of the judgment, Afolabi reportedly recalled that his successful representation earned him a personal gesture of appreciation from his client, Chief John Osamede Adun, who presented him with a Jeep in recognition of the legal services rendered.
The decision remains an illustration of the role corporate authority and procedural compliance play in determining whether a company can validly institute legal proceedings.
It also highlights how a fundamental question of company law can become decisive in litigation involving an entirely different subject matter, such as land ownership.
Written by Enitan Mudashiru
