CIVIL PROCEDURE — Fair Hearing — Derivative Actions — Ex Parte Application for Leave to Commence Derivative Action Denies Right to Fair Hearing
Ratio Decidendi
Per Adekeye, JSC, in Agip (Nigeria) Ltd v. Agip Petroleum International & Ors (2010) NLC-351-2002(SC) at pp. 58–59; Paras D–B:
"The leave to be granted in the application referred to in Rule 2(1) of the Companies Proceedings Rules relates to the rights of the company whose name shall be employed in the capacity of the plaintiff. An order which has the effect of stripping the Directors of their statutory right must be one in respect of which they should be given the right to be heard before it is made as their civil rights and obligations would be affected. Consequently, it is right to give them fair hearing as enshrined in section 36(1) of the 1999 Constitution."
Explanation / Scope
This principle establishes that ex parte applications for leave to commence derivative actions deny directors their right to fair hearing under Section 36(1) of the Constitution. Such orders strip directors of statutory rights and affect their civil rights and obligations, so they must be heard before any order is made. The principle applies in derivative action proceedings. It ensures that directors are not deprived of their rights without being heard. The principle reflects the constitutional guarantee of fair hearing. It prevents courts from making orders affecting directors’ rights without giving them an opportunity to be heard. The court must give notice to directors. The principle provides guidance on the procedure for derivative actions.