An incorporated company has a separate entity distinct from the individuals who are shareholders and directors in control of the company’s operations. The procedure for how to sue a company is not far-fetched from the procedure for suing an ordinary person, because a company is also deemed as a legal personality with its own rights and privileges.
There are several reasons for bringing an action in Court against a Company. It could be as a result of a breach of contract, debt recovery, defective products, bad services or injury to an individual or properties.
In detailing the procedure to sue a company in Nigeria, it is trite to first of all state that an incorporated company has the capacity to sue and be sued because it has the power of a natural person. It can institute an action to enforce its legal rights in its corporate name and also defend in its corporate name when sued.
A company may be liable in tort or breach of contract in respect of acts of its members or officers carried out on behalf of the company.
Where a company is being sued for monetary claims, the first step is to send a written demand notice drafted by a Lawyer to the company before an action can be brought against such a company. The demand notice usually explains the injuries suffered or the wrongs done by the complaint or particulars of any breach of contractual terms and the amount of compensation that the complainant or plaintiff is willing to collect. Such a letter may also be used to issue a warning to the company of the complainant’s intention of resorting to a court where the company refuses to comply with the demands in it.
For an action to be instituted, there must be a valid legal cause of action. This cause of action can be negligence suffered as a result of the company’s action or failure to act, breach of contract arising from an existing valid contract, employment discrimination arising from unlawful dismissal among others. A lawyer to weigh the scale of winning the suit must evaluate the cause of action before bringing an action in court; it should not be a frivolous matter based on emotions.
Where demand notice has been served on the company and it refuses to comply, the complainant can institute an action in court for the grievances suffered. An action can be brought in the jurisdiction where the company operates its business. If the company has an office in a state, it can be sued in that state.
The complaining party filing processes in court through a lawyer institutes an action. The processes may include a statement of claim, list of witnesses to be relied on, witness statement on oath and documents to be relied on during the trial of the case. These processes are further served on the Company effective by delivering the process in the company’s registered or corporate addresses or serving its directors or other principal officers of the company. Under the Nigerian law, no action may commence against person or entity unless the party being sued has been duly served with the copy of the court’s processes detailing the case against him.
When an action has been duly filed in court, a suit number and court will be assigned to the matter and such matter will be listed on the court’s cause list.
Meanwhile, companies may prefer to settle matters that arise against it in an amicable way. In such a case, the alternative dispute resolution mechanism will be used to settle the matter. Mechanisms such as arbitration, mediation, reconciliation or negotiation will be implemented for the timely settlement of the dispute.
It is also trite to state that there is a limitation period by the statute of limitation that can prevent an action to be instituted in court by a plaintiff. On that note the statute of limitation must be considered to ensure that the time limit for bringing an action against a company has not passed; limitation periods differ and usually dependent on the circumstance of the case and when the cause of action arose.
In conclusion, a company can be sued in its capacity because upon registration it becomes a legal personality that can sue or be sued. Various disputes that may arise between a company and an individual or between two corporate entities such as negligence, breach of contract, and among others can be resolved by a court of competent jurisdiction.
Before an action can be brought against a company, the cause of action must be genuine in order for the court to adjudicate on the matter. Nevertheless, most organizations or businesses prefer to settle matters amicably rather than resorting to court to protect the image of the company.
The jurisdiction of a court is pertinent to be considered when suing a company, and a lawyer must be involved in the process of suing, from filing the court’s documents to the judgment.
By Litigation, Arbitration & Disputes Resolution Department at Resolution Law Firm