A Federal High Court sitting in Ikoyi, Lagos on Wednesday dismissed a suit filed by Spectrum Wireless Communications Limited against Emerging Markets Telecommunications Services, owners of 9mobile, challenging the sale of the company.
The Court, presided over by Justice C. J. Aneke, in a ruling on the preliminary objections filed by counsel to EMTS upheld the Defendant’s prayers in Suit No. FHC/L/CS/153/2018 that there is no direct shareholding relationship between Spectrum Wireless and EMTS, thereby vesting on Spectrum the right to sue EMTS to protect its alleged shareholding in EMTS.
The court also upheld the Defendant’s position that there is no privity of contract between EMTS and Spectrum as Spectrum is not a shareholder in EMTS and cannot be said to have been directly affected by the actions of its shareholders – Mubadala Holdings Cyprus Ltd, Myacynth and Etisalat International Nigeria Ltd.
The Court further upheld the Defendant’s position that if at all Spectrum has a right of action, its action should be against PTHNV, the company it originally invested in, and not EMTS.
The Court therefore upheld the submission of counsel to EMTS that not being a shareholder of EMTS, Spectrum lacks the locus standi to bring the suit against EMTS on the basis of any decision taken by the shareholders of EMTS.
The Court therefore upheld the Defendant’s prayers, saying that Spectrum lacks the locus standi to sue, adding that the concept of “indirect shareholding/economic interest” claimed by Spectrum is unknown to Nigerian law, which only recognizes members of a company as those named in its Register of Members.
Justice Aneke also held that Spectrum is not a party to the credit facilities, which it claims were unlawfully obtained, and it is elementary law that only parties to a contract can make judicial claims in respect thereof.
The Court therefore dismissed the suit in its entirety.
In his reaction to the ruling, the Company Secretary/Legal adviser, 9mobile, Ore Olajide, said: “This is victory for democracy, victory for the rule of law in Nigeria, victory for company law legal practitioners, victory for Corporate lawyers, academia and students. 9mobile will continue to focus on satisfying our numerous customers and stakeholders who have faith in us and have stayed the course with us.”
It would be recalled that Spectrum Wireless Communications had sued EMTS and 16 other defendants, including United Capital Trustees Limited (‘the Lenders’), the Central Bank of Nigeria and the Nigerian Communications Commission over the sale of the telco.
The company had claimed that it acquired indirect holding of 30 per cent of the shares of EMTS after a private placement and was allotted 4,041,096 Class A shares of Premium Telecommunications Holdings NV (“PTHNV”), which owns 99 per cent of the shares in MyaCynth Coperative UA (“MyaCynth”).
The Plaintiff also claimed that MyaCynth holds 30 per cent of the shares of EMTS BV and EMTS BV holds 99.9 per cent of the shares of EMTS and that EMTS’ syndicated loan from the 2nd to 4th Defendants was granted without the requisite statutory approval of the CBN and can, therefore, not be enforced through the sale of EMTS’ shares and assets by the 2nd to the 14th Defendants.
Spectrum also claimed that its investments in EMTS will be lost if the 15th to 17th Defendants are allowed to effect the sale of EMTS.