Ratio Decidendi

Per Onnoghen, JSC, in Agro Allied Development Ent. Ltd v. MV Northern Reefer & Ors (2009) NLC-123-268-2002(SC) at pp. 6–7; Paras B–A:

"It is very clear from the above provision that the party to seek and obtain the leave of the court before proceeding with or commencing an action against a company for which a provisional liquidator has been appointed or a winding up order made, is the party who intends to proceed with or commence the action, not the other way round… There is nothing in section 417 which prohibits such company as is described in the section from proceeding with action or proceedings against another person. What that section prohibited subject to leave of the court is proceeding with action or proceeding against the company."
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Explanation / Scope

This principle establishes that leave under Section 417 of CAMA is required for actions against a company in liquidation, not for actions by the company against others. A company in liquidation can proceed with an action against another person without leave. The principle applies where the company in liquidation is the claimant. It ensures that the company can pursue its claims. The principle reflects the purpose of Section 417 to protect the company from claims, not to restrict its ability to sue. The court must distinguish between actions against and by the company. The principle prevents misinterpretation of the statutory provision.

Cases Applying This Principle

Agro Allied Development Ent. Ltd v. MV Northern Reefer & Ors