AbstractThe business judgment rule is an ancient doctrine that was developed in the US. It seeks to prevent courts from reviewing directors’ decisions, on the basis that directors have the capacity and expertise to make business decisions. This article examines the desirability of applying the US business judgment rule in Nigeria. Through a comparative analysis, it argues that the peculiarities of Nigeria's corporate law and environment do not justify the application of the rule. More specifically, it contends that differences in the legal regime for derivative suits, standards of duty of care and skill, corporate law culture, and the distinct epoch in which the business judgment rule and the duty of care and skill were recognized in the US, make its application unnecessary in Nigeria. It concludes that the current statutory duty of care and skill should be retained to hold directors accountable for reckless business decisions.
The question of how best to protect the interests of a promoter, a third party, and a company in pre-incorporation contracts is one that seems to have defied corporate law. Although this problem has its origin in common law, various countries have made efforts to address it through statutory reforms. The paper, therefore, examines the extent to which the Canadian and Nigerian legal regimes for the pre-incorporation contract have provided panaceas to the problem. This paper, through a comparative analysis, argues that although the legal regimes have made efforts to reform the common law rule on pre-incorporation contracts, they suffer patent defects. It also posits that notwithstanding the defects in the laws, the Canadian legal regimes offer more protection to parties to pre-incorporation contracts than Nigerian law. The paper suggests reforms in both regimes that would meet the reasonable expectations of the parties to a pre incorporation contract
In February 2016, the Federal High Court made a seminal decision in Nigeria's telecommunications industry. It struck out a suit filed by E.M.T.S. Limited (popularly known as Etisalat) against MTN over the latter's acquisition of Visafone Communications Limited on the grounds that it lacked jurisdiction to entertain the suit. This comment argues that the decision of the court should not be construed as "a missed opportunity" to address the topical issue of anti-competitive conduct in the sector. Instead, it represents a progressive step towards recognising the significance of exploration and compliance with the internal statutory procedures before bringing anti-competitive claims in courts. This would not only enhance compliance with the law but also avail an opportunity for courts to intervene and determine anticompetitive conduct in the sector if the sector-specific regulator fails to do so.
On 7 August 2020, the President of the Federal Republic of Nigeria assented to the Companies and Allied Matters Bill which culminated in the Companies and Allied Matters Act of 2020. The new Act repeals the Companies and Allied Matters Act of 1990 which had been in operation for thirty years. The Act contains provisions that regulate the right of a party to institute an action for harm caused to a company by majority shareholders or directors, a principle of corporate law widely known as derivative suit. This article, therefore, examines the provisions of the Act. It argues that, unlike the 1990 Act, the provisions of the 2020 Act have achieved significant milestones in enhancement of the rights of minority shareholders, companies, directors and the roles of courts in shareholders’ derivative litigation. However, there are gaps in the Act which may threaten the utility of derivative suits in corporate governance in Nigeria. The article suggests a hybrid of reforms to the Act and useful guides to courts that will be beneficial to shareholder applicants, directors and corporations in derivative litigation.
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