African Continental Sea Ways V Nigeria Dredging Roads and General Work Ltd (1977)

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A. G. IRIKEFE, J.S.C. 

The appellants by their plaint filed at the Federal Revenue Court on 24th April, 1974 claimed against the respondents:

“(a) A declaration that there is a valid and subsisting agreement between the plaintiff and the defendant whereby the plaintiff is entitled to 53,500 shares in the defendant’s company.

(b) Specific performance of the said agreement by executing a formal deed of transfer of the said shares to the plaintiff.

(c) An injunction to restrain the defendant from transferring the said shares or any part thereof in any manner prejudicial to the plaintiff’s interest.”

The case derives its life from a mass of documentary evidence in the form of correspondence exchanged between the parties and these will be set out in this judgment as, and when relevant.

The plaintiffs, hereinafter referred to as appellants, are a limited liability company registered in Nigeria. The defendants, hereinafter referred to as respondents, are also a limited liability company registered in Nigeria.

It would appear that as the result of a meeting between the accredited representatives of the two companies sometime in May, 1973 wherein the possibility of the appellants purchasing some of the respondent’s shares was discussed, the appellants wrote as follows to the respondent: – Exh. A.

Date 7th May, 1973 Sale of Shares

At a meeting held on 6th May, 1973 between representatives of African Continental Seaways Limited (hereinafter referred to as A.C.S.) and Nigerian Dredging Roads and General Works Limited (hereinafter referred to as N.D. R.) it was agreed as follows:

(a) that N.D.R. shall offer and A.C.S. shall acquire between 30% and 35% of N.D.R. shares;

(b) that effective date of transfer of shares shall be 1st June, 1973;

(c) that the proposal regarding payment of shares be left a little more flexible in the meantime (NDR representatives proposed that the method of payment shall be by deferred call-up of shares and the pattern of call-up shall be 25% in the first instance).

(d) that these proposals are subject to final ratification by the Board of Directors of both companies. It was accordingly arranged that the Board of A.C.S. & the total shareholders should meet on 17th May, 1973, and that similarly the Board of N.D.R. should deliberate on the issue about the same time. Thereafter, a meeting of the representatives from both companies will meet to take final decision on the 20th May, 1973, in Lagos.