EDOKPOLO V SEM-EDO WIRE INDUSTRIES LTD: REVISITED

The above-captioned case, the subject of this review, is a notable decision of the Supreme Court on some fundamental principles of company law. It explores the common law principles on a company’s liability for pre-incorporation contracts and the famous rule in Foss v Harbottle. It is no gain saying that the Supreme Court's pronouncement on the applicability of settled English principles of common law form a benchmark for the growth of indigenous versions of such principles. This paper analyses the legal basis of the decisions reached by the court of first instance and the appellate courts (Court of Appeal and Supreme Court) in the context of extant principles and the relevance of the decision in light of present day case law and statutory developments. It is contended that whilst the relevant courts concentrated in re-stating settled principles, the facts of the case do not provide the necessary foundation for such exercise. In other words, it is submitted that the decisions and pronouncements were made essentially per incuriam. The facts of the Edokpolo case are clearly amplified in i the lead judgement of Nnamani JSC. The appellant, the plaintiff in the substantive suit filed in the Federal High Court Warri, is a limited liability company incorporated under the Companies Decree 1968 and carrying on business principally in Benin City, Sometime in 1975, the appellant and a German based company SEM Nigerian Holding G.H.B.H. & Co., Hamburg agreed to set up a wire industry in Nigeria.