9 May 2002

Nigeria: Internet Firm Asks Court to Dismiss Wind-Up Suit

Lagos — A Lagos-based indigenous internet services firm, Prodigy International Limited, has applied to a Federal High Court in Lagos to urge it to strike out a suit filed against it which is praying the court to wind it (Prodigy) up.

In a preliminary objection filed against the suit pending before the Chief Judge of the Federal High Court, Justice Rose Ukeje, the company faulted the petition brought by Amol Ventures Nigeria Limited on the ground that " the petitioner is not an interested party within the ambit of section 410 (1) of the Companies and Allied Matters Act, 1990" (CAMA).

Prodigy is contending that Amol Ventures does not have the "requisite capacity to present a petition for winding-up of a company under the Act, and therefore has no locus standi to institute the action, and the same action should be struck out".

Further, the company urged the court to hold that " Amol Ventures has not disclosed the existence of any debt owed it as defined by section 409 of the Companies and Allied Matters Act".

Apart from the contention on the locus standi of the company to ask the court to wind-up Prodigy, the defendant company (Prodigy) insisted that the manner in which the action was brought before the court is an abuse of court process and fit to be discountenanced.

Disputing the claim by Amol that Prodigy should be wound-up because it is insolvent, Prodigy stated that " the petitioner (Amol) has not adduced a prima facie evidence of insolvency against the respondent (Prodigy) which is a guiding principle in the consideration of a petition for wind up of a company under section 408 of CAMA, 1990".

Prodigy also stated that it is the duty of a petitioner for a wind-up action to furnish the court with enough evidence to justify the prayer, alleging that Amol "failed woefully to discharge this duty".

It further argued that the action filed by Amol against it is in the strict sense not a wind-up action according to section 408 of CAMA, 1990, "but an action which should lie in contract for damages for recovery of simple debt".

A 21-paragraph affidavit attached to the objection and deposed to by the Managing Director of Prodigy averred that " as a fact Prodigy did not transact any business with the petitioner but with Amol International".

He also said that at the times his firm paid Amol International who it transacted the business of supply of Internet equipment through its Nigerian subsidiary, Amol Nigeria Limited, it was strictly on agreement through the management of the firm.

Prodigy therefore prayed the court to dismiss the suit entirely, as it is not properly constituted.

Amol sued Prodigy asking the court to wind-up the company for insolvency and failure to pay its debts after some supplies of internet equipment to it (Prodigy)

After a mention of the matter Monday sequel to the filing of the objection by Prodigy, Justice Ukeje adjourned further hearing in the matter to June 3, 2002.

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