Court Okays Ojora's Action Against Unipetrol, AP Merger
By Chika Amanze-Nwachuku
The Court of Appeal, Lagos has given Otunba Adekunle Ojora the go-ahead to challenge the merger of Unipetrol Nigeria Plc and Agip Nigeria Plc.
In a unanimous ruling delivered by Justice Clara Bata Ogunbiyi, which was endorsed by Justices Kumai Bayang Akaahs and Mohammed Lawal Garba, the Appellate Court held that Ojora is an interested person deprived of his position as the Chairman of Agip Nigeria and therefore is entitled to appeal against the order of a Federal High Court, which sanctioned the merger.
Before the merger took place, there were two groups of shareholders; the Nigerian shareholders and Messrs Agip Petroli International B.V.
Agip International, an Italian company controlled 60 per cent of the share capital while Nigerian shareholders held 40 per cent, with the appellant (Ojora), the largest single Nigerian shareholder having 5,802,050 units of shares.
In December, 2001, Unipetrol Nigeria Plc acquired the 60 per cent shareholding of Agip Petroli International, a transaction which the Nigerian shareholders sensed was a take-over bid by Unipetrol Nigeria.
On January 22, 2003, a Federal High Court in a consolidated decision on three separate applications before it, sanctioned the scheme of merger between the two companies. The court, however, refused to grant the request of Ojora and other shareholders who had filed separate applications seeking to be joined as respondents in the joint petition filed by Agip Nigeria Plc and Unipetrol, asking the court to sanction the scheme of merger.
The Federal High Court had also dismissed an application filed by two sets of applicants asking the court to suspend the proposed merger, pending the determination of the appeal at the Supreme Court, against the January, 2003 order, sanctioning the merger.
Dissatisfied with the rulings of the lower court, Ojora, through his counsel, Mr Nojim Tairu filed an appeal at the Court of Appeal.
He also on January 28, 2003 filed an application at the lower court, seeking leave to appeal against the January 22, 2003 decision, as a person having an interest in the matter.
Some ancillary reliefs sought from the court, were also refused, prompting the appellant to file the motion, seeking the leave of the Court of Appeal as an interested person, to appeal against the decisions of the Federal High Court.
Sequel to an order of May 12, 2004, both parties filed their written submissions, which were adopted on September 28, 2004. In his argument, Tairu, Ojora's counsel urged the court to grant the prayers in exercise of its discretion. But Mr. Ademola Akinrele, SAN, counsel for the respondent vehemently opposed the application and urged the court to refuse it as incompetent.
Akinrele's contention was predicated on the failure of the applicant to first seek for extension of time within which to seek leave to apply as an interested party.
The defence counsel had submitted that Ojora is a busy-body and is therefore not an interested person deserving to be granted leave to appeal against the January 22, 2003 ruling of the Federal High Court, which sanctioned the merger.
He cited the Provision of Order 3 Rule 3 (3) of the Court of Appeal Rules, Ojukwu V. Governor of Lagos State, among others and maintained that the applicant (Ojora) could not have been made a party, on reason that the proceedings before the Federal High Court was a special one for the merger, which was brought under Section 100 of the Investments and Securities Act, 1999.
He said, it is not the intendment of the Legislature by the statutory provisions that a minority shareholder in a public company, who is not in support of a merger of his company and another company, should apply to join the proceedings merely to oppose the merger.
Besides, he argued that an applicant seeking leave to be joined as a party to a proceeding must show legal interest and not a sentimental interest in the subject matter of the proceedings, adding that Ojora has not averred that the decision he is seeking to appeal has denied him of his shareholding, or has removed him as a director of the company.
But opposing, Ojora's counsel argued that for one to qualify for leave to appeal as an interested person, he must be or likely to be affected or must have been deprived of something, which he is either enjoying presently or would otherwise have been entitled to.
Citing Societe Generale Bank Limited V. Afekoro, the counsel said, his client (Ojora) has been affected to the extent that a company of which he is a member has been merged with another, and by reason of that fact, his right to dividends which is the return on his investment is no longer dependent on the performance of the Board of the vompany of which he was a member before the merger.
He contended that there is no time limit for seeking leave to appeal as interested person.
The Appeal Court in granting the prayers of Ojora, held that, contrary to Akinrele's submission, he (Ojora) is properly before the court.
The court also noted that it is not controverted that Ojora is not only a shareholder of Agip Nigeria, but the Chairman of the Board of Directors up to August 22, 2002, and single Nigerian shareholder with 5802050 units of ordinary shares, adding that in his capacity as Director/ Chairman of the said company, he was deprived of the opportunity of expressing his opinion on the take over bid.
The appellate court while granting the applicant leave to appeal as an interested person, held that the decision of the lower court in approving the merger was not a consent judgment as argued by the respondent counsel.
The court also made an order enlarging the time within which the applicant may appeal the said decision, noting that Ojora's appeal raised substantial points of procedural and substantive laws relating to the procedure as to the mode of bringing an application for an order sanctioning a scheme of merger, the issue of the illegality of the take over of Agip Nigeria Plc by Unipetrol by reason of which the Federal High Court ought not to have sanctioned the merger without resolving the issue of illegality, the applicable principle in applying for stay of proceeding in cross-actions.
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