KONKON CONGLOMERATE LTD & ORS v. NIPCO (2021)

KONKON CONGLOMERATE LTD & ORS v. NIPCO

(2021)LCN/14998(CA)

In The Court Of Appeal

(ABUJA JUDICIAL DIVISION)

On Wednesday, February 03, 2021

CA/A/431/2016

RATIO

EVIDENCE: POWER OF THE COURTS TO EXAMINE DOCUMENTS

It is trite and it has been held in a plethora of cases that the Courts have absolute power to look at the documents in their files and utilize them to support established facts. See the cases of AGBASI VS. EBIKOREFE (1997) 4 NWLR (PT. 502) 630; UZODINMA VS. IZUNASO (NO. 2) (2011) 17 NWLR (PT. 1225) 30 AT 90 PARAGRAPHS B – C, G and T INVEST LTD VS. WITT & BUSH LTDand HON. CHIGOZIE EZE & ORS VS. GOVERNOR OF ABIA STATE & ORS (2014) LPELR – 23276 (SC). PER MOHAMMED BABA IDRIS, J.C.A.
COMPANY LAW: WHETHER TRANSACTIONS OF A PROMOTER OF A COMPANY ARE BINDING ON THE COMPANY

It must be stated that all transactions a promoter enters with third parties on behalf of the company with the aim of floating the formation, registration and eventual incorporation of the company (i.e. to pre-incorporation contract) binds the company upon it being incorporated as the company. PER MOHAMMED BABA IDRIS, J.C.A.
COMPANY: IMPLICATION OF THE ISSUANCE OF A CERTIFICATE OF INCORPORATION

Upon the issuance of a certificate of incorporation, the incorporated company becomes a personality distinct from those that aided in its formation whom are the promoters and, in most cases, eventually become the subscribers to the memorandum. See the cases of SALOMON VS. SALOMON & CO. LTD (1897) A. C. 22 and MELWANI VS. FEED NATION INDUSTRIES (NIG) LTD (2002) FWLR (PT. 113) 135.
From the above authorities it is clear that upon incorporation the company attains a distinct legal personality from its promoters and the said promoters cannot claim ownership of the company. PER MOHAMMED BABA IDRIS, J.C.A.
COMPANY LAW: MEANING OF A SHAREHOLDER

A shareholder as defined in the Black’s Law Dictionary is one who owns or holds a share or shares in a company, especially a corporation. Shareholders are not owners of companies, although shareholders have some controlling right. With regards to whether shareholders are owners of the company, the Supreme Court has this to say in the case of OKOMU OIL PALM COMPANY LIMITED VS. O. S. ISERHIENRHIEN (2001) LPELR – 2471 (SC):

Before Our Lordships:

Monica Bolna’an Dongban-Mensem Justice of the Court of Appeal

Yargata Byenchit Nimpar Justice of the Court of Appeal

Mohammed Baba Idris Justice of the Court of Appeal

Between

KONKON CONGLOMERATE LIMITED 2. FESTAKON INVESTMENT LIMITED 3. DR. PETER OGBEIDE 4. ENGR. FESTUS EGBE 5. REGISTERED TRUSTEES OF THE INDEPENDENT PETROLEUM MARKETERS ASSOCIATION OF NIGERIA APPELANT(S)

And

NIPCO PLC RESPONDENT(S)

MOHAMMED BABA IDRIS, J.C.A. (Delivering the Leading Judgment): By an Originating Summons dated 24th October, 2016 and filed on the same date, the Respondent as Plaintiff at the trial Court instituted an action against the Appellants, who were the defendants at the trial Court for the determination of the following questions:
1. Whether having regards to the extant Judgment of the High Court of Lagos State in Suit No. ID/231/2005 dated 18th January, 2010 between FOWOBI ENTERPRISES LTD. & 4 ORS VS. NIPCO PLC & 3 ORS to the effect that the Property lying and situate at 1/15 Dockyard Road Apapa Lagos and the tank farm thereon belong to the Plaintiff, the Defendants have any right of ownership over the assets of the Plaintiff?
2. Whether having regard to the order/Ruling of the Federal High Court Port Harcourt dated 9th May, 2011 in suit No. FHC/PH/CS/241/2011 between AUSCO OIL LIMITED & 3 ORS V NIPCO PLC & 3 ORS to the effect that the Plaintiff is not the commercial arm of the 5th Defendant, the Plaintiff is accountable to the Defendants for its activities, operations and management?
3. Whether having regard to the provisions of

Sections 37 and 38(1) of the Companies and Allied Matters Act, CAP C20 LFN 2004 and the letters from statutory bodies established by law to regulate the formation and operations of public liability Companies in Nigeria which are the Corporate Affairs Commission (CAC) and Securities and Exchange Commission (SEC) dated 1/7/14 and 7/7/14 respectively, to the effect that the Plaintiff and the 5th Defendant are two separate legal entities, the Plaintiff is one and the same legal personality with the 5th Defendant such that the operations, management and affairs of two organizations are the same?
4. If the answers to questions 1, 2 and 3 above are in the negative, whether the act of embarking on a strike action by Petroleum, Tanker Drivers (PTD) an affiliate of National Union Petroleum and Natural Gas Workers (NUPENG) on the insistence that the Plaintiff must recognize a particular candidate as the president of the 5th Defendant, which refusal resulted in the shutting down of the operations of the Plaintiff for 12 days, is lawful and in accordance with the extant laws regulating the existence and operations of the Plaintiff and the 5th Defendant?

The Respondent sought for the following reliefs against the Appellants thus:
1. A declaration that the Plaintiff is the sole and exclusive owner of all the property/assets of the Plaintiff including (but not limited to) the property and the tank farm thereon lying and situate at 1 & 15 Dockyard Road, Apapa, Lagos or anywhere whatsoever.
2. A Declaration that the Plaintiff is a separate and distinct legal entity from the 5th Defendant.
3. A Declaration that the Plaintiff is not the commercial arm or business arm/subsidiary of the 5th Defendant.
4. A Declaration that the Plaintiff is subject to the control of its Board of Directors while the 5th Defendant is subject to its Board of Trustees in control and management and none is accountable to the other.
5. A Declaration that the activities, operations and affairs of the 5th Defendant should have no bearing, influence, or effect whatsoever on the operations, management, affairs and existence of the Plaintiff or any of its subsidiaries.
6. AN ORDER of Perpetual Injunction restraining the defendants whether by themselves, agents, privies, associates, employees or members from laying

claims to, asserting, representing or in any way whatsoever contesting for the ownership of the Plaintiff or any of its assets.
7. AN ORDER of Perpetual Injunction restraining the defendants whether by themselves, agents, privies, associates, employees or members from interfering with, intermeddling with, obstructing or disturbing the activities, affairs or operations of the Plaintiff or any of its subsidiaries.

Before going into the appeal I wish to provide hereunder a summary of the facts involved in this appeal.

It is the Respondent’s claim at the trial Court that it is a public limited liability company incorporated on the 8th January, 2001 and that its board of directors led by Chief Dr. Bestman Anekwe worked diligently and tirelessly to market the Respondent to members of the 5th Appellant. The Respondent further claim that several members of the 5th Appellant bought the Respondent’s shares while the majority of the 5th Appellant’s members failed to subscribe to the shares.

The Respondent also claims that the 5th Appellant has over 7,000 members but only about 1,200 subscribed to the shares of the Respondent and that

the shares certificate has since been issued to the shareholders. The Respondent further claims that with the increase in the number of the 5th Appellant’s shareholders and the need for it to diversify, its name was changed by a special resolution on the 5th July 2002, from IPMAN Petroleum Marketing Company Ltd to the Respondent.

The Respondent claims that its authorized share capital is N300,000,000 while its issued share capital is N200,000,000 out of which the 5th Appellant as an association owns 1,000,000 shares. That in 2001, it successfully bided for its present oil terminal complex lying and situate at 1/15 Dockyard Road, Apapa Lagos, (which used to be the former headquarters of the Lever Brothers of Nig Plc) at the value of N1,420,000,000 (One Billion Four Hundred and Twenty Million Naira).

The Respondent claims that it applied for a syndicated loan facility from former Standard Trust Bank (now UBA Plc) which bank raised the money for the Respondent with which the property was purchased and that the shares were subscribed to in their respective individual capacities. That it did a private placement exercise and embarked upon massive

nation-wide campaign of the members of the 5th Appellant to subscribe to its shares to enable it raise the requisite fund to pay the loan from Standard Trust Bank and that the response of the majority of the members of the 5th Appellant was negative as all they could raise by way of subscription to the Respondent’s share was about N450,000,000 and the shares were subscribed to in their respective individual capacity.

The Respondent further claims that following the decision of the bank to auction the property to recover its money, and in view of the poor subscription level from the member of the 5th Appellant, the Respondent invited core investors to buy into the company to be able to raise the requisite funds. The Respondent also claims that Purebond Ltd of United Kingdom emerged the preferred core investor and injected funds to subscribe to 60% of the Respondent issued share capital amounting to 120,000,000 shares and that the remaining shares are held by individual Nigerian subscribers.

The Respondent claims that following the successful repayment of the loan by the core investors and the successful completion of the Respondent’s

automated oil and gas terminal in 2004, a group of members of the 5th Appellant instituted an action in Suit No. ID/231/2005 between FOWOBI ENTERPRISES LTD & 4 ORS VS. NIPCO PLC & 3 ORS at Lagos High Court contending that the Respondent’s automated oil terminal lying and situate at 1/15 Dockyard Road, Apapa, Lagos belongs to them as members of IPMAN and/or to IPMAN as an association. The Respondent further claims that the 5th Appellant was also a defendant in that suit.

The Respondent further claims that in a consent judgment delivered by Honourable Justice Candide Johnson of the Lagos High Court, the Court held that the property lying and situate at 1/15 Dockyard Road, Apapa Lagos and all development/assets thereon belong to the Respondent as a corporate body and not to the association. That in 2011, a group of members of the 5th Appellant filed Suit No. FHC/PH/CS/241/2011 between AUSCO OIL LIMITED & 3 ORS VS. NIPCO PLC & 3 ORS, against the Respondent and others seeking a relief inter alia, that the Respondent is not the commercial arm of the 5th Appellant and as such the Nigerian National Petroleum Corporation (NNPC) and the

Petroleum Product Marketing Company (PPMC) (a subsidiary of NNPC), should stop recognizing or dealing with the Respondent as a commercial arm of the 5th Appellant. The Respondent further claims that the Honourable Justice Lambo Akanbi of the Federal High Court, Port Harcourt on 19th May, 2011, in a considered ruling, granted the relief aforesaid, holding that the Respondent is not the commercial arm of the 5th Appellant.

The Respondent claims that following the ruling aforesaid, NNPC and PPMC stopped dealing with the Respondent or relating with the commercial arm of the 5th Appellant. And that the 5th Appellant is an association which is factually and legally different from the Respondent.

The Respondent claims that whereas the 5th Appellant is run and managed by its board of trustees, the Respondent is run and managed by its board of directors. That from 2009 till 2014, Alhaji Abdulkadir Aminu who is a Director in the Respondent company, was the National President of the 5th Appellant.

The Respondent claims that following the leadership tussle in the 5th Appellant, the National President of National Union of Petroleum and Natural Gas Workers

(NUPENG), directed the national chairman of Petroleum Tankers Drivers, PTD (an affiliate union to the NUPENG) to embark on a strike action against the Respondent and to sustain the strike action until the Respondent recognizes Chief Obasi Lawson as the national president of the 5th Appellant and that the union embarked on the strike action which lasted for 12 days.

The Respondent further claims that the strike action almost ruined the Respondent’s operations and that at the time of the strike action which lasted from the 24th March, 2014 to 4th April, 2014, there was no trade dispute declared by the union against the Respondent, neither was there any industrial crisis or industrial disharmony between the Respondent and the union.

The Respondent claimed that it had just held its 10th annual general meeting on the 26th March, 2014 showing a turnover of N137,704,302 for its year ending 31st December, 2013 and that the Respondent’s daily turnover was about N377,271,368. That the unlawful and unprovoked strike action by the union against the Respondent which led to the shutdown of the Respondent’s terminal for 12 days, led

to a direct consequential loss of N4.5 billion in income to the Respondent.

The Respondent claimed that as a result of the unwarranted industrial strike action by the union against the Respondent, the Respondent sought several injunctive orders from the National Industrial Court against the union and the said orders were granted and that parties never the less, entered into a consent judgment.

The Respondent further claims that as a result of the pernicious consequences of the strike action on the Respondent’s operation, Purebond Ltd, United Kingdom (core investors in the Respondent) on the 14th April, wrote a letter to the Respondent, demanding explanations as to why the terminal should be shut down for 12 days for acts that are completely unconnected and unrelated to the business of the company. That in reaction to the letter aforesaid, the Respondent through its Solicitors P. C. OBI & CO. wrote to the Securities and Exchange Commission (SEC) and the Corporate Affairs Commission (CAC) seeking statutory legal opinion from the statutory bodies established by law to regulate operations of the Respondent.

The Respondent claims that the SEC and CAC in their responses dated 7th July, 2014 and 1st July, 2014 respectively, unanimously maintained the position that the Respondent is a separate legal entity from the 5th Appellant and that the activities and operations of the two corporate bodies are separate and distinct. That the 1st and 2nd Appellants on 1st April, 2014, 15th September, 2014, 5th May, 2014, and 25th September, 2014 respectively wrote letters each to the Respondent seeking for account of profit and rendering of account of its activities to the 5th Appellant on the grounds that the Respondent was incorporated and owned by the 5th Appellant. The Respondent also claims that the 5th Appellant is legally different from the Respondent and that their activities are neither co-related nor interwoven.

The Respondent claims that the strike action called up by NUPENG and PTD against the Respondent as a result of intra-association leadership dispute in the 5th Appellant engendered very colossal financial and operational losses to the Respondent. That the core investors in the Respondent may withdraw their investment in the Respondent if any future unwarranted and unrelated strike

action is foisted on the Respondent.

The Respondent claims that by virtue of Sections 37 and 38(1) of the Companies and Allied Matters Acts Cap C20, Laws of the Federation of Nigeria 2004, the Respondent is a separate legal entity from the 5th Appellant and their operations are separate and distinct and that it will be in the interest of justice for the Court to make positive pronouncement to this effect to save the Respondent from imminent destruction that will arise should its core investors pullout from it.

The trial Court heard the matter on the 18th November, 2015. The parties therein adopted their respective processes and the matter was adjourned to 27th January, 2016 for judgment.

After considering the evidence led by the parties, the learned trial judge, Honourable Justice A. R. Mohammed delivered judgment in the Suit No. FHC/ABJ/CS/779/2014 on the 22nd February, 2016 wherein the learned trial judge gave judgment in favour of the Respondent.

Dissatisfied with the said judgment of the trial Court, the Appellants filed a Notice of Appeal dated 25th April, 2016 and filed on the same day comprising of four (4) grounds of appeal.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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The Appellants then filed its Brief of Argument in this appeal and in the said Appellants’ brief of argument as settled by his counsel Ileka Ifeayinwa Edith Esq. dated 21st November, 2017 and filed on the 4th December, 2017, the following issues for determination were distilled from the grounds of appeal as follows:
1. Whether or not from the affidavit evidence placed before the Court, the Respondent is not a commercial arm of the 5th Appellant.
2. Whether or not from the Affidavit evidence on record the Respondent has a duty to render account to the 5th Appellant.

With regards to Issue One, the Appellants’ Counsel argued that Courts are bound by the evidence placed before the Court. Counsel further argued that the affidavit evidence of the Respondent clearly portrays the legal position of the Respondent and that from the affidavit evidence, it is without doubt that the Respondent was incorporated by the 5th Appellant as shareholders of the Respondent having acquired the shares of the Respondent, thus the Respondent cannot run away from its shareholders.

The Appellants’ Counsel therefore submitted that since the

Respondent’s shares are owned by the Appellants, the 5th Appellant inclusive, the Appellants have the statutory rights of a shareholder which makes the Respondent a commercial arm of the 5th Appellant, and such rights include the rights to attend and vote at the Annual General Meeting as well as direct the Respondent in its daily activities.

On Issue Two, the Appellants’ Counsel argued that from the provision of Section 79(3) of the Companies and Allied Matters Act (CAMA), it is clear that the Respondent owes a duty to render accounts of its activities to the shareholders and since the 5th Appellant is a shareholder, then it becomes mandatory for the Respondent to render account to the Appellants particularly the 5th Appellant being a shareholder of the Respondent.

On the other hand, the Respondent filed its brief of argument contained in the Respondent/Cross-Appellant Brief of Argument dated 26th January, 2016 and filed on the 30th January, 2016 and settled by its Counsel Paul C. Obi Esq. wherein two issues for determination were raised thus:
1. Whether in view of the affidavit evidence placed before the Court and the positive

findings of the learned Trial Judge, that the Respondent is an incorporated company, the Respondent can be regarded as commercial arm of the 5th Appellant.
2. Whether in view of the affidavit evidence placed before the Court and the positive findings of the learned Trial Judge, that the Respondent is an incorporated company separate and distinct from the 5th Appellant, the Respondent has a duty to render account to the 5th Appellant.

The Respondent’s Counsel argued the two issues together and in doing so counsel argued that the Respondent as an incorporated company cannot be regarded as a commercial arm of the 5th Appellant even if the 5th Appellant is a shareholder and promoter of the Respondent. Counsel further argued that a promoter is simply a human agent whose activities gave birth to the company as a legal entity and cannot be regarded as a part owner of a company and upon incorporation, a company becomes a separate legal entity from any one of its shareholders and cannot be owned by a single entity in law. On this point, Counsel cited the case of FEDERAL BOARD OF INLAND REVENUE VS. INTEGRATED DATA SERVICES (2009) 8 NWLR (PT. 1144) 15.

The Respondent’s Counsel also argued that the trial judge having granted reliefs 2 and 4 of the Respondent’s originating summons made positive findings that the Respondent is a separate and distinct legal entity from the 5th Appellant and that none is accountable to the other, the logical conclusion that ought to have been made is that the Respondent has no duty to render account to the 5th Appellant.

The Respondent’s Counsel also argued that contrary to paragraph 102 of the Appellant’s Brief of Argument, there was no counter-claim filed by the Appellant at the trial Court. In conclusion, counsel urged this Court to dismiss the appeal.

Having summarized the briefs of Counsel, I wish to adopt the issues for determination raised by the Appellants in their Brief of Argument. The issues are reproduced hereunder:
1. Whether or not from the affidavit evidence placed before the Court, the Respondent is not a commercial arm of the 5th Appellant.
2. Whether or not from the Affidavit evidence on record the Respondent has a duty to render account to the 5th Appellant.

ISSUE ONE
It is important to refer to the

affidavit evidence before the trial Court now made available through the Record of Appeal before this Court in order to determine Issue One.

The Respondent in paragraphs 2, 6, 8 and 9 of the affidavit in support of the originating summons stated thus:
“2. The Plaintiff is a Public Limited liability Company and incorporated under the Companies and Allied Matters Act Cap C20, LFN 2004 and has its Principal place of business at 1/15 Dockyard Road, Apapa Lagos and its Abuja office at Plot 506 Durban Close, off Durban Street, Wuse II Abuja, FCT.
6. The 5th Defendant, an incorporated body, is an association to which Independent Petroleum marketers in Nigeria belong and has its office at Tonimas Housing Estate, Katawpe, Abuja FCT.
8. I know as a fact that whereas IPMAN has over 7,000 members only about 1,200 subscribed to the shares of the Plaintiff. The share Certificates have since been issued to the shareholder. With the increase in the number of the Plaintiff’s shareholders and the need for it to diversify, its name was changed by a special resolution on 5th July, 2002, from IPMAN Petroleum Marketing Company Limited to NIPCO Plc.

Now shown to me and marked as Exhibits AA1 and AA2 respectively, are the Certificate of Incorporation of the Plaintiff and the Plaintiff’s list of shareholders as at January 2014. Also shown to me and marked as Exhibit AA3 is the particulars of the Plaintiff’s list directors at the time of Incorporation.
9. The authorized share capital of the Plaintiff is N300,000,000 while its issued share Capital is N200,000,000 out of which the 5th Defendant as an association owns 1,000,000 shares.”

The Appellants on the other hand in their counter affidavit to the affidavit in support of the Originating Summons especially at paragraphs 3, 11, 15, 17, 19, and 20 stated thus:
“3. That Paragraph 1 – 6 of the Plaintiff’s affidavit are true.
11. That paragraph 14 – 18 of the Plaintiff’s affidavit is false. That the Plaintiff still remains the commercial arm of the 5th Defendant more so, when it is floated by the 5th Defendant.
15. That Paragraph 25 – 28 of the Plaintiff’s affidavit is false. That NIPCO Plc formally IPMAN Petroleum Marketing Company Ltd was incorporated by the National

Executives of IPMAN and that the Corporate Affairs Commission and Securities and Exchange Commission do not at all know the history or existence of NIPCO Plc and thus gave improper advice to the Plaintiff via Exhibits AA17 and AA18.
17. That Paragraph 30 of the Plaintiff affidavit is false. That the Plaintiff is floated by IPMAN and therefore, it is the commercial arm of IPMAN.
19. That paragraph 33 of the Plaintiff’s affidavit is false. That since IPMAN floated the Plaintiff, the Plaintiff is not a separate legal entity and is accountable to the 5th Defendant.
20. That it will also be in the interest of Justice to make a declaration that, the Plaintiff as the commercial arm of the 5th Defendant and promoted by the 5th Defendant, the Plaintiff must render account of its activities to the 5th Defendant.”

The above depositions by the Respondent and Appellants respectively reveals one thing – that the Respondent and 5th Appellant are incorporated entities. While the Respondent is a Public Limited Liability Company, the 5th Appellant is incorporated as an association to which the Independent Petroleum Marketers in Nigeria

belong to.

The fact of the separate incorporation of the Respondent and the 5th Appellant is as evidenced at page 13 of the Record of Appeal which shows that the Respondent formerly known as IPMAN Petroleum Marketing Company was incorporated as a Limited Liability Company on the 8th of January 2000. The Appellants did not dispute this fact of the Respondent being an Incorporated Company via the depositions in paragraph 3 of the counter affidavit to the affidavit in support of the Originating Summons.

Also, the Respondent in its deposition at paragraph 9 of the affidavit in support of the Originating Summons stated that its authorized share capital is N300,000,000 while its issued share capital is N200,000,000 out of which the 5th Appellant as an association owns 1,000,000 shares. This I can see from the documentary evidence at page 23 of the Record of Appeal showing the Independent Petroleum Marketers Association as a shareholder of the Respondent with 1,000,000 shareholdings.

The Respondent also deposed in paragraph 18 of the affidavit in support of the originating summons to the fact that while the 5th Appellant is run and managed by its Board

of Trustees, the Plaintiff is run and managed by its Board of Directors. Additionally, the documents at page 33 of the Record of Appeal which shows the particulars of directors of the Respondent does not even have the name of the 5th Appellant in it. It is trite and it has been held in a plethora of cases that the Courts have absolute power to look at the documents in their files and utilize them to support established facts. See the cases of AGBASI VS. EBIKOREFE (1997) 4 NWLR (PT. 502) 630; UZODINMA VS. IZUNASO (NO. 2) (2011) 17 NWLR (PT. 1225) 30 AT 90 PARAGRAPHS B – C, G and T INVEST LTD VS. WITT & BUSH LTDand HON. CHIGOZIE EZE & ORS VS. GOVERNOR OF ABIA STATE & ORS (2014) LPELR – 23276 (SC).
These documents have not only shown that the Respondent and 5th Appellant are separate legal entities, it has shown that the 5th Appellant is only a shareholder in the Respondent.

Moving forward, the deposition of the Appellants at paragraphs 11 and 19 of the Counter Affidavit reveals that the 5th Appellant posits itself as the promoter of the Respondent. The legal position of a promoter is that he is neither a trustee nor an agent of

the company because there is no company yet in existence. The correct way to describe his legal position is that he stands in a fiduciary position towards the company about to be formed. See Section 62(1) of the Companies and Allied Matters Act.
It must be stated that all transactions a promoter enters with third parties on behalf of the company with the aim of floating the formation, registration and eventual incorporation of the company (i.e. to pre-incorporation contract) binds the company upon it being incorporated as the company.
Upon the issuance of a certificate of incorporation, the incorporated company becomes a personality distinct from those that aided in its formation whom are the promoters and, in most cases, eventually become the subscribers to the memorandum. See the cases of SALOMON VS. SALOMON & CO. LTD (1897) A. C. 22 and MELWANI VS. FEED NATION INDUSTRIES (NIG) LTD (2002) FWLR (PT. 113) 135.
From the above authorities it is clear that upon incorporation the company attains a distinct legal personality from its promoters and the said promoters cannot claim ownership of the company.
I also totally disagree with the

deposition of the Appellants in paragraphs 15 of their counter affidavit that the Corporate Affairs Commission and Securities and Exchange Commission do not at all know the history or existence of the Respondent and thus gave improper advice to the Respondent via Exhibit AA17 and AA18. The Investment and Securities Act has vested the Securities and Exchange Commission with the responsibility to protect investors and shareholders in public companies and that was why it rightly directed for the advice of the Corporate Affairs Commission vide Exhibit AA17.
The Companies and Allied Matters Act on the other hand has vested the Corporate Affairs Commission (CAC) the duty of regulating the formation, registration, incorporation of companies. The CAC specifically and in acting in its capacity advised through Exhibit AA18, that the Respondent is a separate legal entity from all its members and members of the 5th Appellant. The ownership of the company (Respondent) does not vest in the 5th Appellant rather they belong to and are vested in the company amongst other advice as contained in page 114 of the Record of Appeal.
Therefore, the advice by virtue of the

respective letters contained at pages 111, 112, 113 and 114 is in line. It is therefore my humble view that from the respective affidavit evidence before me and the documents in support thereof, the Respondent and the 5th Appellant are separate legal entities and the Respondent cannot in anyway be the commercial arm of the 5th Appellant. I hereby align myself with the findings and decision of the trial Court in this regard as contained in page 191 of the Record of Appeal. This issue is hereby resolved against the Appellants.

ISSUE TWO
Having in mind my findings under Issue One which I adopt in continuation of my findings under this issue, I think it is pertinent to consider the status of a shareholder.

“Besides, having a controlling number of shares in a company is not synonymous with its ownership once it is incorporated as an entity of its own and having its own separate legal existence.”
In my view, the shareholders only have the right as members of the company and as such maintain a direct or remote control over the activities of the company as the company is a corporate entity with its own legal existence. The company therefore has a duty to all its shareholders and not to a particular shareholder as in this case.
Having in mind the totality of my findings under Issue One and now under this issue, the Respondent has no duty to render account to the 5th Appellant. This issue is therefore hereby resolved in favour of the Respondent.
In the final analysis, the appeal fails. I make no further order as to cost.

CROSS-APPEAL
The Respondent now the Cross-Appellant in this Cross Appeal filed a Notice of Cross-Appeal dated the 17th May, 2016 and filed on the same day comprising of two (2) grounds of appeal. The parties to this appeal exchanged their respective briefs of argument in the appeal.

The Cross-Appellant’s Brief as

settled by its Counsel, Paul C. Obi Esq. is dated 26th January, 2018 and filed on 30th January, 2018 and it raised two issues for determination thus:
1. Whether the learned Trial Judge erred in law when he refused relief 5 sought by the Cross-Appellant in its originating Summons cannot be granted because as shareholder in the Plaintiff, the 5th defendant cannot be restrained in having bearing or effect in the operations of the Plaintiff after finding that the Cross-Appellant and the 5th Defendant/Cross Respondent are two separate legal entities and the operations of one should not affect the other. (GROUND 1).
2. Whether the Learned Trial Judge erred in law when he failed to make a pronouncement on relief 6 sought by the Cross-Appellant in its originating summons which sought for an injunction restraining the Defendants from laying claims to, asserting, representing or in any way whatsoever contesting for the ownership of the Plaintiff or any of its assets; after granting relief 1 of the originating summons to the effect that the Cross-Appellant is the sole and exclusive owner of all its assets and properties or the assets and properties of its

subsidiaries. (GROUND 2)

In the Cross-Appellant’s Brief of Argument, the Cross-Appellant’s Counsel in arguing issue one, argued that the trial judge granted reliefs 2, 4 and 7 to the effect that the Cross Appellant and the Cross-Respondent are separate and distinct entities, and that the Cross-Appellant is subject to the control of its board of directors, while the Cross-Respondent is subject to control of its board of trustees and none is accountable to the other and that having granted these reliefs, relief 5 ought to have been granted and as such failure to grant reliefs 5 amounts to a contradiction of the reliefs 2, 4 and 7 already granted.

In arguing Issue Two, counsel argued that the Court, having granted relief 1 in the originating summons that the Cross-Appellant is the sole and exclusive owner of its assets and properties is entitled to the grant of Issue 6.

The Cross-Respondent also filed their Brief of Argument dated 4th June, 2018 and filed on the same day and settled by their Counsel, Ikeatuegwu Ifeanyinwa Edith Esq. wherein the following issues of determination where raised:
Whether or not the two issues raised in

the two grounds of Appeal are not interwoven with the reliefs granted by the Lower Court.

The Cross-Respondent’s Counsel argued that the trial judge granted reliefs 1, 2, 3, 4 and 7 in favour of the Cross-Appellant and refused to grant reliefs 5 and 6 bearing in mind that the reliefs are interwoven and same with the other reliefs granted and thus aiming at the same result. Counsel further argued that the reliefs sought by the Cross-Appellant are entirely the same touching on same issue but multiplies on several issues which amounts to proliferation of issues as reliefs 5 and 6 are resemblance of the other issues earlier granted by the trial Court.

The Cross-Appellant’s Counsel also filed a Reply Brief of Argument dated 19th June, 2018 and filed on the same date as settled by its Counsel Paul C. Obi Esq. I will adopt the issues for determination raised by the Cross-Appellant and I shall address same hereunder. For a better flow, this Court will consider Issues One and Two together.

ISSUES ONE AND TWO
Before I go ahead with the consideration of these issues it is pertinent to reproduce the reliefs sought for by the

Cross-Appellant at the trial Court thus:
1. A declaration that the Plaintiff is the sole and exclusive owner of all the property/assets of the Plaintiff including (but not limited to) the property and the tank farm thereon lying and situate at 1 and 15 Dockyard Road, Apapa, Lagos or anywhere whatsoever.
2. A Declaration that the Plaintiff is a separate and distinct legal entity from the 5th Defendant.
3. A Declaration that the Plaintiff is not the commercial arm or business arm/subsidiary of the 5th Defendant.
4. A Declaration that the Plaintiff is subject to the control of its Board of Directors while the 5th Defendant is subject to its Board of Trustees in control and management and none is accountable to the other.
5. A Declaration that the activities, operations and affairs of the 5th Defendant should have no bearing, influence, or effect whatsoever on the operations, management, affairs and existence of the Plaintiff or any of its subsidiaries.
6. AN ORDER of Perpetual Injunction restraining the defendants whether by themselves, agents, privies, associates, employees or members from laying claims to, asserting, representing

or in any way whatsoever contesting for the ownership of the Plaintiff or any of its assets.
7. AN ORDER of Perpetual Injunction restraining the defendants whether by themselves, agents, privies, associates, employees or members from interfering with, intermeddling with, obstructing or disturbing the activities, affairs or operations of the Plaintiff or any of its subsidiaries.

The trial Court pursuant to its findings granted reliefs 1, 2, 3, 4 and 7. It refused to grant relief 5 on the ground that the 5th Cross-Respondent as shareholder in the Cross-Appellant, cannot be restrained from having any bearing or effect in the operations of the Cross Appellant but failed to make pronouncement on reliefs 6. This Court will now concern itself with the failure of the trial Court to grant Reliefs 5 and 6.

Where a party seeks a particular relief from the Court, the Court is duty bound, where he established the right to it, to award same to him. See the case of GABRIEL ATIVIE VS. KABELMETAL NIGERIA LIMITED (2008) LPELR – 591 (SC).

Upon the consideration of the evidence before it, the trial Court having rightly made findings at pages 186 –

190 of the Record of Appeal and held at page 190 of the Record of Appeal that the Respondent is a separate legal entity from the 5th Cross-Respondent cannot be found to refuse the grant of relief 5 on the grounds that the 5th Cross-Respondent as shareholder in the Cross-Appellant cannot be restrained from having any bearing or effect in the operations of the Cross-Respondent.

In my view, the refusal to grant issue 5 was wrong in law because, if the Cross-Appellant has succeeded in giving evidence of the separate legal personality of the Cross-Appellant from the 5th Cross-Respondent, then the activities, operations and affairs of the 5th Cross-Respondent should have no bearing, influence, or effect whatsoever on the operations, management, affairs and existence of the Plaintiff or any of its subsidiaries. I hereby grant relief 5. This issue is resolved in favour of the Cross-Appellant.

As per the failure of the trial Court to grant relief 6, it is settled that the status of the Cross-Respondents and the 5th Cross-Respondent is that of shareholders in the Cross-Appellant and it is settled in the case of OKOMU OIL PALM COMPANY LIMITED VS. O. S. ISERHIENRHIEN

(2001) LPELR – 2471 (SC) that having a controlling number of shares is not synonymous with the ownership of the company as once a company is incorporated, it is as an entity of its own and having its own separate legal existence.

Before I conclude on this issue, I wish to make pronouncement on the argument of the Cross-Appellant contained in paragraph 3.02 of the Cross- Respondent Brief of Argument. This Court frowns on proliferation of issues from a single ground of appeal. See the cases of BURAIMOH VS. BAMGBOSE (1989) 3 NWLR (PT. 109) 325; ATTORNEY GENERAL OF BENDEL STATE VS. AIDEYAN (1989) 4 NWLR (PT. 118) 646; UTIH VS. ONOYIVWE (1991) 1 NWLR (PT. 166) 166 AT 214 and OGUNBIYI VS. ISHOLA (1996) 6 NWLR (PT. 452) 12 AT 19.
As a matter of procedure, issues should not outnumber grounds of appeal. This is because issues are framed from one or more grounds of appeal, preferably more than one ground of appeal. The reverse position is the practice and it is that grounds of appeal outnumber issues. See generally the cases of ATTORNEY GENERAL, BENDEL STATE VS. AIDEYAN (1989) 4 NWLR (PT. 118) 646; UGO VS. OBIEKWE (1989) 1 NWLR (PT. 99)

566; ADELAJA VS. FANOIKI (1990) 2 NWLR (PT. 131) 137; ANON LODGE HOTELS LTD VS. MERCANTILE BANK OF NIGERIA LTD (1993) 3 NWLR (PT. 284) 721.
It is clear that the two issues for determination as formulated by the Cross-Appellant was done from grounds 1 and 2 of the Notice of Appeal. Also, looking at reliefs 5 and 6, it is clear that the reliefs are different from each other and this can be noticed from my findings made above on the grant of reliefs 5 and 6. It is therefore clear that the issues formulated by the Cross-Appellant does not amount to a proliferation of issues, and I so hold. This issue is hereby resolved in favour of the Cross-Appellant.

In view of my findings on the issue hereinabove, I hereby make an order of perpetual injunction restraining the Cross-Respondents whether by themselves, agents, privies, associates, employees or members from laying claims to, asserting, representing or in any way whatsoever contesting for the ownership of the Cross-Appellant or any of its assets.

In the circumstance, this Court grants reliefs 5 and 6 of the Cross-Appellant’s reliefs sought for by the said Cross-Appellant in its originating

summons at the trial Court in addition to reliefs 1, 2, 3, 4 and 7 granted by the trial Court and further set aside the part of the judgment of the trial Court wherein it refused the grant of relief 5.
This cross-appeal therefore succeeds. No order is made as to cost.

MONICA BOLNA’AN DONGBAN-MENSEM, J.C.A.: I agree with the lead Judgment prepared by my learned brother, MOHAMMED BABA IDRIS, JCA, dismissing the appeal and allowing the cross appeal.

The Appellant submits that the Corporate Affairs Commission (CAC) and the Securities and Exchange Commission (SEC) do not know the history or existence of the Respondent and thereby gave improper advice to the Respondent via Exhibits AA17 and AA18 respectively.

The last paragraph of Exhibit AA18 (Letter from SEC) is reproduced as follows;
“In the circumstance, the Commission would ordinarily be desirous of assisting NIPCO Plc (via your firm) with the clarification it has requested, considering the fact that the position of Purebond Limited that NIPCO is a separate legal entity from any other corporate body, which is in tandem with the law and practice in Nigeria (Sections 37 and 38 of the CAMA).

the Commission nevertheless advices that you forward your request to the CAC for an opinion on the issues set out by Purebond Limited.”

The Corporate Affairs Commission in Exhibit AA17 responded to the Respondent thus;
“1. NIPCO PLC with RC399339 is entirely independent and a separate entity from ALL its members – including the trustees and members of IPMAN with RC2686…
3. The ownership of the company – NIPCO PLC and its assets do not belong to the shareholders of the company or IPMAN, rather they belong and are vested in the Company itself…
7. In summary, the company NIPCO PLC is to be regarded as a distinct and legally separate and independent entity that is registered with CAC as a PLC under Part A of CAMA and its ownership and management is distinct in structure and organs from those of IPMAN registered under Part C of CAMA.”

The two bodies tasked with the responsibility of regulating companies and shares of companies have advised Parties appropriately as to their legal rights and powers in tandem with their enabling Acts. I agree with the trial Court that the Respondent and the 5th Appellant have a

separate and distinct personality. I crave indulgence to reproduce extensively the finding of the trial Court on this issue anon;
‘From the depositions in paragraphs 15 and 17 of the defendants’ counter Affidavit, the defendants have clearly admitted that the Plaintiff is an incorporated company. Although, in the said paragraphs 15 and 17 of the Counter Affidavit, the defendants have stated that Plaintiff that is, NIPCO Plc, was formerly known as IPMAN but the name was later changed to NIPCO, the fact still remains that the Plaintiff is an incorporated company. It does not really matter by whom the incorporation was done. It may well be that IPMAN floated the Plaintiff or that the name of IPMAN was changed to NIPCO. The fact that after NIPCO (the Plaintiff herein) was floated by IPMAN (5th Defendant herein), the two bodies separately retained their corporate identities. The Plaintiff NIPCO exist as an incorporated company while IPMAN (5th defendant) also exists as an incorporated company.
The Law is also very settled that upon incorporation, a company becomes distinct and separate from its promoters. See the case of NEW RES INT’L LTD VS ORANUSI

Supra…
On the argument of the defendants that they promoted the Plaintiff for the purpose of securing loan facility from the then Standard Trust Bank (Now UBA PLC), and as such the Plaintiff shall render accounts of its operations, activities and management to the 5th defendant, it should be stated that even where a member of a company (who seemed to have formed a company and have the controlling shares in the shareholding of that company, cannot in law, be regarded as owning that company after incorporation. This is the view expressed by the Supreme Court in the case of OKOMU OIL PALM CO. LTD VS. ISERHIENRHEIN supra at page 686 paragraphs G-H, where it was held thus;
“Besides, having a controlling numbers of shares in a company is not synonymous with its ownership once it is incorporated as an entity of its own and having its own separate legal existence. Whatever impression was therefore given in this case that the Federal Civil Service Commission sat in the background and maintained a direct or remote control over the activities of the appellant by applying thereto its rules – a corporate entity with its own legal existence – must be rejected

as a wrong and ill-conceived legal proposition.” Underlining mine.
It is thus crystal clear that even if it was the 5th defendant that was instrumental to the forming of the Plaintiff or that the 5th defendant wholly floated the plaintiff or even that the 5th defendant controls the majority shareholding in the Plaintiff, those incidences, cannot, in law, constitute the grounds upon which the Plaintiff could be made to lose or surrender its separate legal entity and be made an appendage to the 5th defendant so as to render accounts to the 5th defendant. The obligation of the Plaintiff to render accounts is to all its shareholders and not just one of them. See in this regard, the provision of Section 79 (3) of the Companies and Allied Matters Act (CAMA).
From the above analysis of the position of the law, I am of the firm view that the Plaintiff is a separate legal entity from the 5th defendant. That being the case, the plaintiff has no obligation to render account of its activities, operations and management to the 5th defendant, but to all the shareholders of the Plaintiff (NIPCO). “(See Page 188-190 of the Records).

Consequently, I too hereby dismiss this appeal as lacking in merit and allow the cross appeal. I wholly adopt as mine, the orders made in the lead judgment.

YARGATA BYENCHIT NIMPAR, J.C.A.: I had the privilege of reading in advance the Judgment just delivered by my learned brother, MOHAMMED BABA IDRIS, JCA and I am in agreement with his reasoning and conclusion arrived at therein.

Appearances:

V. IWU, ESQ. For Appellant(s)

PAUL C. OBI, ESQ. For Respondent(s)

Appearances:

V. IWU, ESQ. For Appellant(s)

PAUL C. OBI, ESQ. For Respondent(s)