Gamji Fertilizer Company Limited & Anor V. France Appro S. A. S & Ors (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A. (Delivering the Leading Judgment)

This an appeal from the judgment of the Federal High Court, Kano Division, delivered on 15th October 2007 by Hon. Justice Adeniyi Ademola in which he entered judgment against the Appellants. The Appellants herein were the 3rd and 4th Defendants before the trial Court, while the 1st and 2nd Respondents, both based in France, were the plaintiff.

The 3rd and 4th Respondents were the 1st and 2nd Defendants. To avoid confusion, the 1st and 2nd Respondents, the Plaintiffs, shall be referred to interchangeably as “the claimants”, while the 1st Appellant, who was the 3rd Defendant before the lower Court shall also be referred to interchangeably as ?Gamji?.

At trial, five witnesses testified for the Claimants while the 1st and 2nd Defendants (3rd and 4th Respondents herein) called four witnesses in defence of their claim. The Appellants (3rd and 4th Defendants) called one witness. A total of 376 exhibits were tendered at the trial.

The case of the Claimants, foreign nationals based in France, is that they agreed with the 4th Respondent, Alhaji Mohammed Sanni Abdullahi (2nd

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Defendant at lower Court), in the year 2000, to incorporate a Company in Nigeria as subsidiary of the 1st Claimant, a fertilizer company, to market and sell the 1st Claimant’s fertilizer in Nigeria. The 1st Claimant through the 2nd Claimant, its Managing Director, entered into an agreement with the 4th Respondent (Mohammed Abdullahi) by which the 4th Respondent was to be made the Managing Director of the Nigerian Company on its incorporation. The Nigerian Company was duly incorporated, as F. Appro International Company Ltd, the 3rd Respondent. The agreed shareholding was that the 2nd Claimant (2nd Respondent herein) and his son, Alexandre, would hold 60% of the shares while the 4th Respondent and his son would hold 40% of the shares.

In accordance with the said agreement, the 1st Respondent, France Appro SAS, shipped to the 3rd Respondent, F. Appro International Co. Ltd, in the year 2000, for sale and distribution, 15,730 metric tons of NPK fertilizer (valued at $3,381,950 USD), 33,250 laminated bags (valued at $76,475 USD) and some items of furniture (valued at $21,319.45 USD), with a total value of $3,479,744.

?In order to further buttress their

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business interest in Nigeria, the 2nd Respondent (Lionel Martins) and the 4th Respondent (Mohammed Abdullahi) subsequently incorporated another company, Gamji Fertilizer Company Ltd (1st Appellant) with the same share allotment as the former arrangement. The 1st and 2nd Respondents (Claimants) allege that by the agreement between the parties, following the sale of these goods, the cost of the goods would be remitted to them while the profit from the sale would be shared in the same ratio of shareholding 60%-40% in favour of the 1st Respondent, his son and the 4th Respondent and his son.

Contrarily, however, the 3rd Respondent, 4th Respondent and the 1st Appellant (Gamji) sold the said items and only remitted to the Claimants the sum of $2,657,900.45 USD, leaving. a balance unpaid of $821,844.00 of the capital investment. The 1st and 2nd Respondents accuse the said Defendants of failing to account for the profit of N146,767,192 made from the transaction.

?They also accuse these Defendants of utilizing the unremitted monies to fraudulently increase the share capital of the 1st Appellant, Gamji Fertilizer Company Ltd, and of allotting shares in it of

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