CIVIL PROCEDURE — Originating Processes — Derivative Actions — Mode of Commencement Required by Statute
Ratio Decidendi
Per Adekeye, JSC, in Agip (Nigeria) Ltd v. Agip Petroleum International & Ors (2010) NLC-351-2002(SC) at p. 24; Paras A–C:
"By the community reading of sections 303 of the Companies and Allied Matters Act and Rules 2(1) and (2) of the Companies Proceedings Rules, proceedings in an application for leave to prosecute a derivative action is to be commenced by an originating summons but not otherwise. Where any proceedings are begun other than as provided by the Rules, such proceedings are incompetent. Once there is a defect in competence, it is fatal and the proceedings are a nullity."
Explanation / Scope
This principle establishes that derivative actions must be commenced by originating summons as required by statute. Proceedings commenced otherwise are incompetent and a nullity. The principle applies in derivative action proceedings. It ensures compliance with statutory requirements. The principle reflects the need for proper commencement of proceedings. It prevents parties from using the wrong mode of commencement. The court must require compliance with the rules. The principle provides guidance on the proper mode of commencement for derivative actions. It ensures that proceedings are properly constituted.