ATTORNEY GENERAL OF LAGOS STATE APPELLANT. V EKO HOTELS LIMITED

Issue:

The appellant was the defendant in the Federal High Court. The respondents were the plaintiffs. The crux of this matter is shares in the respondents. The case of the respondents is that the Lagos State Government owned 51% of the shares in the 1st respondent. By January, 1997, the State Government had reduced its shareholding to 25% by selling 1,040,000 of its previously held shares to the 2nd respondent. Consequently, the shareholding of the 2nd respondent grew from 49% to 75%, whilst that of Lagos State Government reduced to 25% of 1st respondent's authorised share capital. NSCQR VOLUME 27 2005 Page 625 The Governor of Lagos State, by virtue of a Lagos State of Nigeria Official Gazette No. 26 of 23rd August 1999, set up a Tribunal of inquiry in the 1st respondent. Before the date of sitting of the Tribunal of Inquiry chaired by Philips, J. of the Lagos State High Court, the solicitors of the 2nd respondent in a letter dated 1st September, 1999 to the Chairman questioned "... the legal basis and validity of constituting a panel of inquiry into the sale and acquisition of shares of Eko Hotels Limited, purely civil matter". Following the failure of the Company Secretary of the 1st respondent. Mr. Samuel Alabi, one Mr. Olumide Adewunmi, Mr. Richard Herb and Mr. Mark Devroye and others to appear before the Tribunal of Inquiry, the Tribunal issued warrant for their arrest. It is in evidence that Mr. Samuel Alabi was arrested and put in custody on 8th September, 1999. He was released the following day, 9th September, 1999. On 17th September, 1999, the respondents commenced an action by way of originating summons at the Federal High Court, Lagos seeking the determination of questions, a number of declarations and orders as set out at pages 138-158 of the Record of Appeal. The gravamen of the action is that the Legal Notice No. 10 of 1999 by which the Lagos State Governor constituted a Standing Tribunal of Inquiry is null and void and of no effect. The respondents based their contention on the premise that the Governor of Lagos State has no authority or vires to make subsidiary legislation empowering the conduct of an inquiry into the sale of shares of the appellant in the 1st respondent, being a matter or cause arising out of the operation of the Companies and Allied Matters Act (CAMA) and also that only the Federal High Court is competent to adjudicate on the subject matter of sale of shares. The respondents further contended that the empannelling of the Tribunal by the Governor was contrary to the rules of natural justice and that the powers of the tribunals sought to exercise, particularly NSCQR VOLUME 27 2005 Page 626 that of compelling witnesses did not extend to functionaries of the respondent not being public officers. The Federal High Court granted the reliefs of the respondent but refused the respondent's application for leave to amend their originating processes. The Court held that the Legal Notice is a subsidiary legislation on the affairs of a limited liability company and that such being an item on the Exclusive Legislative List is ulta vires the powers of the Governor. The Court consequently declared the Legal Notice null, void and of no effect. The Court also held that the Tribunal is a quasi-judicial body. On impartiality, the learned trial Judge held that as the Tribunal was constituted by the Governor himself (the complainant) its impartiality cannot be guaranteed. The Court therefore issued an order of prohibition against the Tribunal. The Court also held that the Directors of the 1st respondent were not public officers at the time the cause of action arose, and therefore cannot be subjected to an inquiry. An appeal to the Court of Appeal was dismissed. Dissatisfied, this is a further appeal to the Supreme Court. There is a cross-appeal.