EDICOMSA INTERNATIONAL INC. AND ASSOCIATES v. CITEC INTERNATIONAL ESTATES LTD.(2005)

EDICOMSA INTERNATIONAL INC. AND ASSOCIATES v. CITEC INTERNATIONAL ESTATES LTD.

(2005)LCN/1853(CA)

In The Court of Appeal of Nigeria

On Thursday, the 8th day of December, 2005

CA/A/175/2003

RATIO

ACTION: WHETHER A FOREIGN COMPANY THAT IS NOT REGISTERED IN NIGERIA BUT WHICH CARRYS ON BUSINESS CAN SUE AND BE SUED HERE IN NIGERIA

My Lords, this appeal brings into focus a very important but often misunderstood contractual and commercial issue and it is: “Whether a foreign company that fails to comply with the provisions of section 54 of CAMA and proceeds to carry on business in Nigeria can sue and be sued.” Under Common Law and for centuries now, a company properly registered in a foreign country has been recognized as a company. It can sue and be sued in its corporate name. See Dicey, Conflict of Laws 12th Edition Vol. 2 at page 1107; Halsbury’s Laws of England Vol. 8 para 703; Lazard Brothers & Co. v. Midland Bank (1933) AC p. 289. This is so because there is basis for reciprocity in international relations as no one jurisdiction is superior to the other. By virtue of section 60(b) of the Companies and Allied Matters Act, a foreign company can sue and be sued in Nigerian courts. See: Nigerian Bank of Commerce and Industry Ltd. v. Europa Traders (U.K.) Ltd. (1990) 6 NWLR (Pt.154) p. 36. Olaogun Ent. Ltd. v. S.J. & M (1992) 4 NWLR (Pt. 235) p. 361. The law is very well settled that just as a Nigerian who attends the University of London and eventually graduates but fails to pay his fees can be sued by the University of London for the outstanding fees in a Nigerian court, so also can a Nigerian company from whom a British company has bought goods and has not paid be sued in a British court. This as I alluded to earlier is reciprocity in international relations. A foreign company not registered in Nigeria can sue in its name. There is no need for such a company to sue in the name of its agent in Nigeria. PER RHODES-VIVOUR, J.C.A.

WORDS AND PHRASES: MEANING OF THE PHRASE TO CARRY ON BUSINESS

To carry on business means to conduct, prosecute or continue a particular vocation or business as a continuous operation or 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 Blacks 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 Oil business in Nigeria. PER RHODES-VIVOUR, J.C.A.

JUSTICES

IBRAHIM TANKO MUHAMMAD Justice of The Court of Appeal of Nigeria

VICTOR AIMEPOMO OMAGE Justice of The Court of Appeal of Nigeria

OLABODE RHODES-VIVOUR Justice of The Court of Appeal of Nigeria

Between

EDICOMSA INTERNATIONAL INC. AND ASSOCIATES Appellant(s)

AND

CITEC INTERNATIONAL ESTATES LTD. Respondent(s)

RHODES-VIVOUR, J.C.A. (Delivering the Leading Judgment): This is an appeal by the plaintiff/appellant against the ruling of the Hon. Justice Hussein Muktar of the Abuja High Court, delivered on the 23rd day of July, 2003.
The plaintiff/appellant sued the defendant/respondent on a writ of summons issued out of the Abuja High Court on 31/3/03. The plaintiff’s claim was for breach of contract, orders of injunction and an account.
Upon being served the writ of summons and statement of claim, the defendant filed its statement of defence on 16/5/03. Learned Counsel for the defendant/respondent filed a notice of preliminary objection on ten grounds contending in the main that the court lacks jurisdiction to entertain the suit. The objection was subsequently argued on three grounds to wit:
“1. The plaintiff is not a juristic person.
2. The plaintiff’s case as disclosed in the statement of claim is not one that can be entertained by this court, and
3. The cause of action is premised on an illegal contract.”
The learned trial Judge heard counsel and in a considered ruling delivered on 23/7/2003, the plaintiff’s/appellant’s action was struck out on the grounds of incompetence. This is what the learned trial Judge said:
“By section 54(2) of the Companies and Allied Matters Act any act of the plaintiff in 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 sections 54(1) and (2) and 55 of the Companies and Allied Matters Act, 1990. The plaintiff’s action in this suit is therefore a non-starter being void ab initio. The objection succeeds on this ground. It follows that the plaintiff’s void action must be and is hereby struck out.”
As the plaintiff was dissatisfied with the ruling of the learned trial Judge, it appealed to this court. Briefs were duly filed and exchanged in accordance with the rules of this court. For the appellant, its counsel, P.R. Onoja, Esq. identified a sole issue for determination of the appeal. It reads:
“Whether the learned trial Judge was not in error when he held at a preliminary stage of the trial that the alleged contract, subject matter of the suit having been entered into or being executed in Nigeria without the plaintiff having been incorporated in Nigeria as a legal entity is illegal, null and void”.
On the other side of the fence, the respondent’s learned counsel, Mrs. J.O. Adesina also had a sole issue for determination. It reads thus:
“Does the appellant have any legal capacity to carry on the business in Nigeria and consequently to maintain this action.”
The respondent also filed a respondent’s notice which was deemed duly filed on 22/3/05. It was incorporated in the respondent’s brief of argument. In response, the appellant filed an appellant’s reply brief of argument on 4/4/05.
At the hearing of the appeal on 26/10/05 the appellant was unrepresented.
Learned Counsel for the respondent adopted his brief and proffered oral submissions in support of the argument in his brief. In support of the respondent’s notice, he relied on Bob Manuel v. Briggs (2003) 5 NWLR (Pt. 813) p. 323.
I shall comment on the respondent’s notice and the appellant’s reply brief later on in this ruling.
Before I proceed to consider arguments canvassed by both sides, a brief summary of the facts would be apposite at this stage for better understanding of the issues raised in the appeal.
The appellant claims to be a foreign company incorporated in the United States of America. It never claimed to be registered in Nigeria. The appellant and the respondent executed a series of agreements wherein the former was employed by the latter to provide architectural designs, drawings, civil infrastructural and construction of 5,000 housing units for the defendant and the Federal Government in Nbora district, Abuja.
After the commencement of work, there was serious disagreement between the parties on payments due to the appellant, and so the appellant sued for breach of contract, injunctions, etc.
The defendant filed a defence and a notice of preliminary objection challenging the competence of the suit on the following grounds:
(a) the plaintiff is not a juristic person;
(b) the case as disclosed in the statement of claim is not one that can be entertained by this court; and
(c) that the foundation or cause of action is the alleged contract is illegal and void by force of law. The preliminary objection was sustained, and the suit struck out.
I now turn to the arguments canvassed by both sides in their respective briefs.
Learned Counsel for the appellant argued that the trial Judge was in error to strike out the suit at a preliminary stage on the ground that the appellant had no capacity to enter into the alleged contract having not been incorporated or registered in Nigeria. Reliance was placed on:
Ritz & Co. KG v. Techno Ltd. (1999) 4 NWLR (Pt.598) p.298; Nigeria Bank for Commerce & Industry Ltd. v. Europa Traders (UK.) Ltd. (1990) 6 NWLR (Pt.154) p. 36.
He urged this Court to allow the appeal.
The learned Counsel for the respondent anchored his submissions on two points.
(a) that the appellant is not a registered company in Nigeria or elsewhere and therefore has no legal capacity to sue.
Reliance was placed on: Bank of Baroda v. Iyalabani Co. Ltd. (2002) 13 NWLR (Pt. 785) p. 551; Iyke Medical Mechandise v. Pfizer Inc. (2001) 10 NWLR (Pt. 722) p.540.
(b) that any contract entered into by a company not registered in Nigeria with the intention of carrying on business in Nigeria (like the appellant who was engaged in construction works) is illegal, null and void.
Reference was made to section 54(1) and (2) of the Companies and Allied Matters Act, Cap. 59 Laws of the Federation of Nigeria 1990.
He urged this court to dismiss the appeal.
My Lords, this appeal brings into focus a very important but often misunderstood contractual and commercial issue and it is:
“Whether a foreign company that fails to comply with the provisions of section 54 of CAMA and proceeds to carry on business in Nigeria can sue and be sued.”
Under Common Law and for centuries now, a company properly registered in a foreign country has been recognized as a company. It can sue and be sued in its corporate name. See Dicey, Conflict of Laws 12th Edition Vol. 2 at page 1107;
Halsbury’s Laws of England Vol. 8 para 703; Lazard Brothers & Co. v. Midland Bank (1933) AC p. 289.
This is so because there is basis for reciprocity in international relations as no one jurisdiction is superior to the other.
By virtue of section 60(b) of the Companies and Allied Matters Act, a foreign company can sue and be sued in Nigerian courts. See:
Nigerian Bank of Commerce and Industry Ltd. v. Europa Traders (U.K.) Ltd. (1990) 6 NWLR (Pt.154) p. 36. Olaogun Ent. Ltd. v. S.J. & M (1992) 4 NWLR (Pt. 235) p. 361.
The law is very well settled that just as a Nigerian who attends the University of London and eventually graduates but fails to pay his fees can be sued by the University of London for the outstanding fees in a Nigerian court, so also can a Nigerian company from whom a British company has bought goods and has not paid be sued in a British court. This as I alluded to earlier is reciprocity in international relations.
A foreign company not registered in Nigeria can sue in its name.
There is no need for such a company to sue in the name of its agent in Nigeria.

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 stated provisions, all its acts shall be void. That is to say 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 or 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 Blacks 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 Oil business in Nigeria.”

My Lords, the learned trial Judge relied heavily on the provisions of section 54(1) and (2) of CAMA to strike out the plaintiff/appellant’s case. Had the learned trial Judge averted his mind to the provisions of section 60 of CAMA, his Lordship would not have sustained the preliminary objection.
Section 60(b) of CAMA reads as follows:
“nothing in this chapter shall be construed as affecting the rights or liability of a foreign company to sue or be sued in its name or in the name of its agent.”
Indeed, the plaintiff/appellant was clearly wrong to Carry on business in Nigeria without complying with the provisions of section 54(1) of CAMA. Failure to comply with the provisions of section 54(1) of CAMA attracts a very inconsequential penalty. See section 55 of CAMA, it reads in part:
“If any foreign company fails to comply with the requirements of section 54 of this Act… 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 … permits the default … 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.”
The very low fines for such a grave offence as the non registration of a business enterprise seems to suggest one of the ways the Government has chosen to attract foreign investment and businesses in Nigeria thereby creating an enabling environment that would be favorable to foreigners.
The learned trial Judge was in grave 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 position of the law is that a foreign company having the intention of 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) of CAMA 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 a foreign company or against it. See-
Ritz & Co. KG v. Techno Ltd. (1999) 4 NWLR (Pt.598) p.298;
Kitchen Equip (WA) Ltd. v. Stamins Cathering Equip. Int. Ltd. Suit No. FAC/L/17/182 delivered on 28/2/83.
All I 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 Nigerian courts.
The Respondent’s Notice
Order 3 rule 14 of the Court of Appeal Rules provides for respondent’s notice.
A respondent’s notice is a process filed by a respondent who agrees with the judgment but wants the judgment varied or affirmed on other grounds. The respondent is not allowed to introduce a fresh case or re-argue his case in a respondent’s notice. See Ogunbadejo v. Owoyemi (1993) 1 NWLR (Pt.271) p. 517; Ibe v. Onuorah (1999) 14 NWLR (Pt.638) p. 340.
The thrust of the respondent’s notice is that the respondent challenged the legal capacity of the appellant before the trial court and full arguments were presented on both sides, but the learned trial Judge failed to avert his mind to the issue and did not come to any decision on the point. It is the contention of learned counsel for the respondent that the appellant never proved the fact of its incorporation in Nigeria or its legal capacity. Relying on Bank of Baroda v. Iyalabami Co. Ltd. (2002) 13 NWLR (Pt.785) p. 551, he urged this court to dismiss the appeal because the appellant on record is not known to law.
The appellant filed a reply brief.
By virtue of the provisions of order 6 rule 5 of the Court of Appeal Rules, a reply brief would be filed only when an issue of law or an argument raised in the respondent’s brief calls for a reply.
A reply brief should be limited to answering new points arising from the respondent’s brief, and so when the respondent’s brief does not contain new or fresh points, a reply brief would be unnecessary.
See: ACB Ltd. v. Apugo (1995) 6 NWLR (Pt.399) p. 65; Ijade v. Ogunyemi (1996) 9 NWLR (Pt. 470) p. 17; Umeji v. A.-G., Imo State (1995) 4 NWLR (Pt. 391) p.552.
Learned Counsel for the respondent observed that the issue of the juristic personality of the appellant cannot be raised by respondent’s notice but by cross appeal. He further observed that the trial Judge found that the appellant is a foreign company, contending that the decision can only be challenged on appeal.
A plaintiff and indeed parties in a suit must be proper persons either natural or legal.
A non existent or dead person cannot sue.
See Anyebe v. The State (1986) 1 SC p. 87; (1986) 1 NWLR (Pt. 14) 39.
Nigerian Nurses Association v. Attorney General of the Federation (1981) 11-12 SC. p. 1.

Where the legal capacity of the plaintiff is challenged by the defendant, the onus is on the former to prove his legal capacity and this is done by leading evidence, oral or documentary in proof of same. There is nothing on the record to show that the plaintiff/appellant was given the opportunity to do so.The trial Judge failed to recognize that on the state of the pleadings, the issue of the plaintiff’s legal capacity was in dispute. Surely, the parties should have been allowed to call evidence to determine the issue of the plaintiff’s legal capacity.
The respondent’s notice fails and it is hereby dismissed.
This appeal has merit. It is accordingly allowed.
Trial shall commence with dispatch before another Judge of the Abuja High Court, Federal Capital Territory.
There shall be no order as to costs.

I. T. MUHAMMAD, J.C.A.: I have had the opportunity of reading in advance, the judgment of my learned brother, Rhodes-Vivour, JCA. I am in complete agreement with him. As a rider however, I wish to observe that Nigerian courts recognize as juristic persons corporations established by a foreign law by virtue of the facts of their creation and continuance under and by virtue of that law. Such recognition is said to be by the comity of nations. Such foreign company is permitted to sue on evidence being given of the proper instruments whereby the law of the foreign country it was effectually created as a corporation there. Ogundare, JSC (as he then was) in Bank of Baroda v. Iyalabani Co. Ltd. (2002) 13 NWLR (Pt.785) p. 551 at 588, paras. B-C held thus:
“It is not every corporate body that comes before the court that is registered under Nigerian law. It is a principle of common law, and this is accepted in this country, that a corporation incorporated in a foreign country may sue or be sued in our courts. It is not uncommon that this often happens in our courts.”
See Lazard Brothers & Co. v. Midland Bank (1933) AC 289 where Lord Wright at page 297 held inter alia –
“English courts have long since recognized as juristic persons corporations established by foreign law in virtue of the fact of their creation and continuance under and by that law. Such recognition is said to be by the comity of nations. Thus, in Henriques v. Dutch West India Co. (1728) 2 Ld Raym J 532, J 535, the Dutch company were permitted to sue in the King’s Bench on evidence being given of the proper instruments whereby by the law of Holland they were effectually created a corporation there”.
See also Halsbury’s Laws of England 4th Edn. Volume 8, para. 983, where the principle was put thus:
“English law recognizes the existence of a corporation duly created in a foreign country and will allow it to sue and be sued in England in its corporate capacity.”
I believe that this country ranks as a part of the comity of nations, the principle enunciated above with regard to corporations that owe their creations to a foreign law should also by all means be granted the right to sue and be sued in Nigerian courts. See also Dicey, Conflict of laws, 12th Ed. Volume 2 p. 1107.
However, section 54(1) and (2) 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 carryon 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”.
In CAMA section 55, low fines have been stipulated for offenders of the above provision. This means that breach of the provisions are redressable by way of payment of fine imposed on the offenders. This in my view means that although a foreign company may fail to comply with the provision as stipulated by section 54 of CAMA such noncompliance cannot be a bar to commencing litigation by or against such a foreign company. Several decided cases cited in the lead judgment support this proposition of the law.
For this and the more detailed reasons given by my learned brother in his lead judgment, I too allow the appeal and abide by all the consequential orders made in the lead judgment.

OMAGE, J.C.A.: I have read before now, the lead ruling of my learned brother, Olabode Rhodes-Vivour, JCA and I agree with the reasoning and conclusions therein.
I agree that the provision of section 60(1) of the Companies and Allied Matters Act do not prescribe a complete bar to the institution by a foreign company of action in Nigerian courts, if the foreign based company is not registered in Nigeria. The provisions of section 54(1) of the same Act, subscribe that non registration of such foreign companies in Nigeria before the company can sue or be sued in Nigerian courts, will be penalized if charged and is liable to make payment of penalty, such penalty is not so severe which suggests an enabling intention on the part of the legislator and draftsman to allow such foreign companies to sue in the courts.
For the fuller reasons contained in the lead judgment of my learned brother Rhodes-Vivour, I too will allow the appeal and direct that the matter be remitted to the High Court Abuja for a re-hearing and determination.
I abide by all the consequential orders for costs.

Appearances

Not representedFor Appellant

AND