LEGAL PRINCIPLE: COMPANY LAW — Receivership — Principal May Institute Action on Behalf of Receiver/Manager
PRINCIPLE STATEMENT
By the agency relationship created by law between the debenture holder and the receiver/manager, the principal (debenture holder) may take action for and on behalf of the agent.
RATIO DECIDENDI (SOURCE)
Per Ejiwunmi, JSC, in Unibiz Nigeria Limited v. Commercial Bank Credit Lyonnais Ltd. (2003) NLC-152001(SC) at p. 9; Paras A–B.
"In view of that agency relationship created by law, it seems to me clear that by the agency relationship so created with its principal, the Commercial Bank (Credit Lyonnais Nigeria) Limited, the principal can if it wishes take action for and on behalf of the agent."
EXPLANATION / SCOPE
The principal may sue on behalf of the receiver/agent. The principle applies to company law. The agency relationship allows this. The rule ensures effective enforcement of rights. The principal has standing to act. The principle is well-established.
