FBN Holdings’ Appeal Stalls Proceedings In Shareholders Suit

The Federal High Court sitting in Lagos has ordered parties in the suit filed by three aggrieved shareholders of First Bank against FBN Holdings to file written addresses on whether the court can proceed with the hearing of the matter despite the period of time after an appeal has been made.

Justice Akintayo Aluko gave the order on Tuesday after he notified the lawyers that the appeal instituted by FBN Holdings’ Plc before the Court of Appeal, is seeking a review of the restraining order granted by Justice Nicholas Oweibo stopping the Annual General Meeting (AGM) of FBN Holdings’ which was held on August 15, 2023.

Apart from the appeal seeking to stop the Annual General Meeting of the company, FBN Holdings’ had also filed another application seeking a stay of the proceedings.

In response to the court’s order, counsel to the aggrieved shareholders, 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 the court to close its eyes to the notice of appeal as that would amount to insubordination.

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

Three 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 Aug. 15 pending the hearing of their suit.

Vacation judge, Nicholas Oweibo granted the order on Aug. 9th. The judge also directed FBN Holdings Plc not to hold its scheduled and statutory AGM until the issues before the court were resolved but FBN Holdings Plc in its Notice of Appeal, asked the appeal court to nullify the ex-parte order.

In the Notice of Appeal filed on its behalf by its team of lawyers led by Mutalubi Adebayo (SAN), FBN Holdings’ is also asking the appeal court for an order directing that a different judge of the Federal High Court Lagos be assigned to hear the substantive matter.

The lawyers 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.

They also argued that the trial judge erred in law when he granted the prayers sought by the respondents in their motion ex parte dated August 8 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.

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.