Data Gathering

90

of the Asset Management Corporation of Nigeria (AMCON), for non-satisfaction of Judgment debt, the petition can be commenced if the debtor company failed to pay the judgment sum within 90 days from the date of judgment.³³⁹

91

High Court³⁴⁴. Thus, the Companies Winding up Rules (CWR)³⁴⁵ is the applicable rule to winding up of companies in Nigeria.³⁴⁶

By virtue of the provisions of the Companies Winding up Rules,³⁴⁷ all proceedings in every winding up under the CAMA shall be governed by the provisions of the Rules. Furthermore, the forms in the appendix, subject to the power of the Chief Judge of the Federal High Court to either alter any forms specified in the appendix or substitute new forms in lieu thereof, shall be used where applicable in all winding up proceedings in Nigeria. But where there is no provision in the Rules in respect of any proceedings in or before the court, the Federal High Court (Civil Procedure) Rules shall apply.³⁴⁸

The winding up of a company in Nigeria is commenced by a Petition.³⁴⁹ Every petition shall be in form 2, 3, or 4 in the Appendix with such variations as the circumstances may require.³⁵⁰ The application to the court for a winding up of a company by Petition can be presented³⁵¹ either by:-

i. The Company;

ii. A Creditor, including a contingent or prospective creditor of the company;

iii. The official receiver;

iv. A Contributory;

344CAMA, op cit, s. 552 (1)

345 2001. It is important to note that prior to the Companies Winding up Rules (CWR) 2001, Companies Winding up Rules 1983 made pursuant to section 375 of the Companies Act 1968 (now repealed) were applicable in all winding up proceedings in Nigeria; In the United Kingdom, the applicable rule is the Insolvency Rules 1986 (as amended).

346Honeywell Flour Mills Plc v Ecobank (Nig) Ltd [2016] 16 N.W.L.R (pt 1539) 387 at 435, paras C – D.

347CWR, op cit, r. 2; Honeywell Flour Mills Plc v Ecobank (Nig) Ltd, ibid.

348CWR, op cit, r. 183; Honeywell Flour Mills Plc v Ecobank (Nig) Ltd, ibid at 427, para E.

349 CAMA, op cit, s.410 (1); Insolvency Act, op cit, s. 124 (1) (UK); Bodies Corporate (Official Liquidations) Act, op cit, s. 1 (1) (b) and (c) (Ghana); Gbedu v Itie & ors, supra.

350 CWR, op cit, r. 15. Form 2 is the general form of a Petition; Form 3 is for a Petition by unpaid creditor on simple contract; Form 4 is for a Petition by minority shareholders; Insolvency Rules, op cit, r 4.7 (UK) – there is one form for winding up petition unlike the case in Nigeria.

351 CAMA, op cit, s. 410 (a) to (h); Insolvency Act, op cit, s. 124 (1) (4) (UK). In the Republic of India, the liquidation of a company is not by a petition an originating process but is only invoked after a corporate insolvency resolution process under chapter II of the Insolvency and Bankruptcy Code 2016.

92

v. A Trustee in bankruptcy to, or a contributory;

vi. The Corporate Affairs Commission;

vii. A Receiver if authorised by the instrument under which he was appointed;

or;

viii. By all or any of those parties, together or separately.

Notwithstanding the above provision of the CAMA, it is important to state that the Asset Management Corporation of Nigeria.³⁵² Nigeria Deposit Insurance Corporation (NDIC), a capital market operator³⁵³ in practice are statutorily empowered to bring an application by petition to the Federal High Court for winding up of a company. However, it is of common knowledge that a winding up petition pursuant to the provisions of section 410 (1) of the CAMA is usually presented by creditors or contributories.³⁵⁴ A contributory has been defined as “every person liable to contribute to the assets of a company in the event of its being wound up…”³⁵⁵ It also includes a „fully paid up shareholder, provided he or she has a tangible interest in the winding up of the company, which is usually demonstrated by showing that the company has a surplus of assets over liabilities‟.³⁵⁶

In First Equity Securities Ltd v Anozie³⁵⁷ the Court of Appeal while adopting the definition of a contributory as stated in Ado Ibrahim & Co. Ltd v B.C.C. Ltd, departed from the pronouncement of the Supreme Court of Nigeria that a contributory shall be entitled to present a winding up petition only when there are assets for distribution to the benefit or interest of the petitioner if the order of winding up was made. Rather, the Court of Appeal held that by virtue of s.410 (4) of the CAMA, a contributory shall

352 Asset Management Corporation of Nigeria (AMCON) Act 2010 (as amended 2015), s. 52.

353ISA, op cit, s.53(1) and the SEC s. Ibid s.53(2)

354 Banks and other Financial Institutions Act (BOFIA) Cap B3 LFN 2004 (as amended), s. 38 (1).

355 CAMA, op cit, s. 567 (1); Insolvency Act, op cit, s. 79 (1) (UK).

356 Ado Ibrahim & Co v B.C.C Ltd, supra, at 574, paras E-F.

357 [2015] 12 N.W.L.R (pt 1473) 337.

93

be entitled to present a winding up petition not withstanding that there may not be available assets on the winding up for distribution to contributories.³⁵⁸

In this study, the focus will be mainly on Petition presented by a creditor for winding up of a company for the inability to pay its debt. Hence, it is important to underscore the fact that winding up petition proceeding can have far reaching consequences on the company, its shareholder, employees, creditors and the society.³⁵⁹ The courts strictly follow the provisions and procedures specified in the CAMA and the Companies Winding up Rules for the winding up of a company. In this respect, the court in Pharma-Deko Plc v Financial Derivates Co Ltd, held that

“Companies Winding up proceedings are specialised and unique…. This specialised guidelines and procedures have their own implications for the court and the parties.

For example, once a law has prescribed a particular method of exercising a statutory power, any other method of exercise of it is excluded”.³⁶⁰

Thus, where an application for winding up of a company is not presented by petition and in the prescribed form but through other modes of commencement of action such as writ of summons, originating summons or originating motion, the court would be robbed of jurisdiction and the application and entire proceedings void abinitio.³⁶¹