Introduction
In law, it is generally perceived that before an entity can sue and be sued or enter into contract, such an entity must be recognized as an entity in law. This principle of law was fairly settled until May 10, 2024, when the Supreme Court (or the “Court”) delivered a decision in the case of A.G. Bayelsa State v. Abang Odok1 (“Odok”). In this case, the Court pronounced on two major principles of law: (a) the capacity of a law firm (registered as a business name) to enter into a contract and (b) the principle of law regarding the court with the requisite territorial jurisdiction to entertain an application for the enforcement of an arbitral award.
This article examines the facts of the case and the decision of the Supreme Court, as well as carefully analysesthe principles of law enunciated in the case on the distinction between contractual and juristic personality in law and the significance of these two concepts. In achieving the identified objective, the article is divided into five (5) parts – the introductory part of the paper, which introduces the subject, and the second part details the facts of Odok, the third part examines the decision of the Supreme Court in the matter, the fourth part provides a commentary and analysis of the issues of law arising from the decision. The final part contains the conclusion and recommendation.
Facts of the Case
The facts arising from Odok relate to a consultancy service agreement and an addendum (the “Agreements”) entered into by Abang Ogar & Co, a law firm registered by Abang Odok (the “Respondent”), with the Bayelsa State Government (the “Government”) in 2011. By the Agreements, the Respondent agreed to recover funds owed to the Government by various Federal Government agencies. In exchange, the Respondent was entitled to 15% of the recovered sums.
Following the Respondent's recovery of the sum of NGN18,705,308,094.83 (Eighteen Billion, Seven Hundred and Five Million, Three Hundred and Eight Thousand, Ninety-Four Naira, Eighty-Three Kobo) (the “Recovered Amount”), the Respondent wrote to the Government for the sum of NGN2,820,796,214.22 (Two Billion, Eight Hundred and Twenty Million, Seven Hundred and Ninety-Six Thousand, Two Hundred and Fourteen Naira, Twenty-Two Kobo), a sum representing 15% of the Recovered Amount (the “Due Amount”). However, the Government refused to pay the Due Amount. Further to this, the Respondent, in line with the agreed dispute resolution mechanism, commenced arbitration proceedings, and the Chief Judge of the High Court of the Federal Capital Territory appointed the arbitrator. Both parties participated in the arbitration proceedings, and the arbitrator delivered an award in favour of the Respondent. Despite this, the Government failed to comply with the arbitrator's decision.
In consequence, the Respondent commenced a proceeding for the recognition and enforcement of the arbitral award at the High Court of the Federal Capital Territory, Abuja. After several delays occasioned by applications and processes filed by the Attorney General of Bayelsa State (the “Appellant”), the High Court of the FCT delivered judgment in favour of the Respondent. Dissatisfied with this judgment, the Appellant appealed to the Court of Appeal (“CoA”). At the CoA, the Honourable panel of justices affirmed the decision of the High Court of the FCT. Still being dissatisfied with the judgment of the CoA, the Appellant appealed to the Supreme Court.
The Appellant raised two grounds of appeal at the Supreme Court (which were different from the ones raised at the CoA), to wit: whether the arbitral award, which was founded on a contract signed by a law firm (registered as a business name) can be validly recognised by the Court and whether the High Court of the FCT had territorial jurisdiction to entertain the application for the recognition and enforcement of the arbitral award.
The Decision of the Supreme Court
The decision of the Supreme Court on the case can be broken down into two – (a) the decision on the contractual capacity of a law firm and (b) the decision regarding the territorial jurisdiction of the High Court of the Federal Capital Territory.
The Contractual Capacity of a Law Firm (Registered as a Business Name):
The resolution of the Supreme Court on this point was that (a) since law firms accept briefs from clients and get paid for their legal services and (b) there is no principle of law that prohibits a law firm registered as a business name from conducting business, the argument by the Appellant that the arbitral award ought not to be enforced because it was based on a contract signed by a law firm is untenable and ‘does not hold water'.
In addition to the above, the Court noted that it does not lie in the mouth of the Appellant who has taken a benefit from the Agreements to seek to avoid obligations under the agreement (which was voluntarily entered into).
The Territorial Jurisdiction of the High Court of the FCT
For context, the Appellant had argued that the Respondent ought to have commenced the action in Bayelsa State, where the Bayelsa State Government resided, and not in the Federal High Court (which the Appellant alleged had no connection with the Agreement). In dismissing this argument, the Court held that the territorial jurisdiction of courts cannot be exercised in the enforcement of award proceedings.
The substance of the Court's decision was premised on the provision of section 32 of the 1988 Arbitration and Conciliation Act (the then subsisting Act), which requires an application for the enforcement of awards to be brought before the High Court of a State, the High Court of the FCT, or the Federal High Court. Further, the Court held that the matter was performed in Abuja.
Commentary and Analysis
In law, persons are classified into two; (a) natural or (b) artificial.2 While a natural person derives their personhood from their human individuality, an artificial person, on the other hand, derives their juristic personality by force of law. In the case of Nkpornwi v. Ejire3 , the Court of Appeal pronounced on how an artificial entity derives its personhood. Specifically, the Court held that:
“An artificial person, in order to be a legal or juristic person, should be vested with the right to sue and be sued in that legal or juristic name. As a matter of general legislative practice, the enabling statute establishes the legal or juristic person by name followed by words, ‘which shall be a body corporate with perpetual succession and common seal, which can sue or be sued in its corporate name'. There is nothing sacrosanct about the above words. No draftsman is under any compulsion to use those words. But whatever words are used, the draftsman should leave no one in doubt as to the legal or juristic nature of the body. If from the totality of the enabling statute, the corporate element and the power to sue and right to defend any action can be inferred, the law will presume that status”.4
The above decision of the Court is to the effect that before an entity can be said to be a juristic person in law, such an entity must have, by the enabling statute, been imbued with such legal personality. The provisions of the Companies and Allied Matters Act, 2020 (“CAMA”) contains varying provisions that indicate the types of entities vested with juristic personality under the Act. Specifically, entities incorporated under Part A of the Act,5 a limited liability partnership,6 and an incorporated trustee.7 Although section 817 of CAMA requires every business name to be registered, however, such registration does not vest legal personality on an entity registered as a business name. This position has received judicial imprimatur in the case of Nigerian Army v. Samuel8 where the Supreme Court held that “a business name cannot sue or defend an action in a court of law, not being recognised as a legal person”.9
Applying the above principles to the case under review, it can be said that under Nigerian law, a law firm (registered as a business name) cannot sue or be sued. Fortunately, this is the same position held by the Supreme Court in the case. However, in a fundamental twist in trying to validate the contract entered into by Abang Ogar & Co, a law firm registered as a business name, with the Bayelsa State Government, the Court attempts to separate the concept of juristic personality from contractual personality. The concept of juristic personality has been examined above. For context, the term, contractual personality signifies the capacity for an entity to enter into contracts.
There is a widely held view that an entity's contractual capacity is tied to its juristic personality. Hence, every entity that has contractual capacity also necessarily has a juristic personality. 10 This view is inferred from the provision of the statute vesting legal personality on an entity. For example, section 756(a) of CAMA details the effect of registration of a limited liability partnership, including the power of the partnership to ‘acquire, own, hold and develop and dispose of property, whether movable or immovable, tangible or intangible'. This provision technically alludes to the power of a limited liability partnership (and in effect, the power of every entity having a juristic personality) to enter into a contract to hold properties.11
However, the decision in Odok seems to shift away from this position in trying to separate contractual capacity from juristic personality. The traditional position of Nigerian law (before the position espoused in Odok) was that business names do not have distinct legal personalities, as the law does not intend to create an artificial person in business names in the same way it does with companies. As a result, business names do not possess the ability to enter into contracts on their own, and the business owner is responsible for all aspects of the business, including contracts made by or on behalf of the business.12 The Supreme Court appears to be shifting away from this traditional view, now recognising that business names can enter into valid and enforceable contracts under their registered names.
In reaching this decision, the Court relied on the definition of “business name” as provided by section 588 of the Companies and Allied Matters Act Cap. C20 LFN 2004 (now Section 868(1) of CAMA). The Court held that a business name is the name under which any business is carried on, either by an individual, firm, or corporation. It reasoned that a business is carried on by agreements, and the dayto-day transactions of a law firm, for instance, involve accepting instructions from clients and getting paid for legal services rendered. Since each of these briefs constitutes a contract, the Court concluded that a law firm registered as a business name has the legal capacity to enter into contracts.
While the decision of the Court is commendable as it seeks to underscore the legitimacy of contractual agreements entered into by law firms whose business names are registered (as well as other business names), we respectfully submit that the Court may have based its ruling on a flawed premise. The Court, in its decision, acknowledged that a “business name” refers to “a name or style under which any business is carried whether in partnership or otherwise.” 13 (Emphasis Ours.) This suggests that a business name is merely a designation under which the business owner or proprietors choose to operate, rather than an entity with a separate legal personality. Essentially, a business name serves as a registered alias for the owners, enabling them to conduct business under a name other than their legal forenames and surnames.
Therefore, it remains the proprietor or owners of the business who are conducting the day-to-day activities and transactions of the business. To hold otherwise, would be inconsistent with established corporate law principles and could undermine the fundamental rule that only legal persons, natural or artificial, can enter into contracts. It is important to preserve the distinction between a business name, which is simply the name under which a business is conducted, and a separate legal personality that allows an entity the right to independently enter into agreements.
Furthermore, the decision of the Supreme Court may have far-reaching consequences for contracts entered into by law firms registered as business names. While the consequences may not be obvious for simple contracts, the consequence may be far reaching for non-simple contracts. Where the contracts relate to buying and selling of, say, real property, the implication, therefore is that a law firm (registered as a business name) can enter into such contracts in its name, and a title document can be issued in the name of law firm (registered as a business name). This conflicts with previously heald decisions where the courts have held that business names cannot own real properties. See, the case of Orajiaku v. Minister of FCT & Anor14 , where the Court of Appeal held that, “an unincorporated body is not a juristic person and cannot enter into any contract or transaction and or own land in its unincorporated name save through trustees."
Perhaps, a more telling reason the court dismissed the arguments of the Appellant that the Agreements were void for lack of capacity of the Respondent was that the Appellant, who had taken benefits under the Agreements (that is, having been paid sums owed to it by the relevant Federal Government Agencies), was trying to avoid its obligations under same. According to the Court, “it does not lie in its mouth to seek to avoid its obligations under the contract, voluntarily entered into, by bringing on board technicalities concerning the fictional incapacity of the respondent to enter into the Consultancy Service Agreement to deprive the respondent the fruit.”15 It further held that “[s]uch conduct is against public policy.” 16
Hence, it is safe to argue that the decision in Odok was more of an effort to achieve substantial justice, in light of the peculiar facts and circumstances of the case, rather than an endorsement of the broader notion that law firms registered as business names or business names in Nigeria possess the capacity to enter into contracts. As such, we opine that the decision should not be interpreted as a blanket endorsement of or as a precedent for the argument that law firms registered as business names or business names in Nigeria have the capacity to enter into contracts.
On a related note, the Appellant's argument that the Agreements were invalid due to the lack of capacity of the Respondent was misplaced, as a contract will not be invalid merely because it was entered into by a business name. The legal implication of a registered business name is that the business name and its proprietor are regarded as one and the same person. As such, any contract purportedly entered into by a business name would be legally deemed to have been executed by the proprietor or partners of the business name and, therefore, enforceable by or against them personally.17 Thus, the notion that a contract entered into by a business name is inherently invalid due to a lack of capacity is erroneous.
Regarding the decision of the Court on the territorial jurisdiction of a Federal High Court to entertain an application for enforcement/ refusal of the arbitral award, our position is that the decision of the Supreme Court is very sound on the point. Section 58(1) of the Arbitration and Mediation Act, 2023 (formerly section 32 of the Arbitration and Conciliation Act, 1988) provides that “a party to an arbitration agreement may request the Court to refuse recognition or enforcement of the award”. Section 91 of the Arbitration and Mediation Act defined a court to mean ‘the High Court of a State, the High Court of the Federal Capital Territory, Abuja, or the Federal High Court' (see Section 57, Arbitration and Conciliation Act).
The counsel to the Bayelsa Government attempted to make the argument that enforcement/ setting aside proceedings ought to have been commenced in Bayelsa State rather than the High Court of the Federal Capital Territory, Abuja. However, the reasoning of the counsel is flawed. Arbitration proceedings are sui generis proceedings. It is not uncommon for parties seeking to enforce an arbitration to select jurisdictions that are likely to enable them to satisfy their arbitration award. An attempt by the Bayelsa State Government to confine the Respondent to Bayelsa state may have the effect of defeating the purposes of the relevant arbitration law (which is primarily aims to give effect to parties' decision to have their dispute resolved through a private means).
Conclusion
Moving away from the discussions above, it is somewhat unclear whether the ruling in Odok pertains solely to law firms registered as business names or if it has broader implications for business names generally in Nigeria. Nonetheless, the decision indicates a possible shift in the paradigm as it relates to the capacity of a business name to contract. It is important to note that the time-honoured principle that business names do not possess a distinct legal personality has not been thrown overboard by Odok. Instead, the decision appears to reflect an approach aiming to achieve substantial justice within the circumstances of that particular case, rather than a sweeping change in legal doctrine.
In light of this, it remains safer and more prudent to adhere to established practices when entering into contracts on behalf of a business name. This includes ensuring that contracts clearly identify the individual or individuals behind the business name, as business names do not possess the capacity to enter into contracts independently.
Footnotes
1. (2024) LPELR – 63035 (SC).
2. Elvia Arcelia Quintana Adriano, ‘The Natural Person, Legal Entity, or Juridical Person, and Juridical Personality' Penn State Journal of Law & International Affairs Vol. 4 Issue 1 Available online at https://elibrary.law.psu.edu/jlia/vol4/iss1/17 on March 25, 2025.
3. (2009) 9 NWLR (Pt. 1145) 131.
4. ibid, p. 189 para. B – F
5. See, Section 42 of the Companies and Allied Matters Act, 2020
6. ibid, Section 756.
7. ibid, Section 830.
8. (2013) 14 NWLR (Pt. 1375) 466.
9. Some Rules of Court permit the institution of suits in the name of a business name. See, for example, Order 13, Part II of the High Court of the FCT Civil Procedure Rules 2025 and Order 15 Rules 24-26 of the High Court of Lagos State Civil Procedure Rules 2019. According to the aforementioned Rules, a firm can sue and be sued in its name, provided the names and addresses of the partners constituting the firm is declared in writing. More so, according to the Rules, where the names are declared the suit shall proceed in the same manner and the same consequences shall follow as though the partners had been named for instance, as claimants in the originating process. Nonetheless, the proceedings may proceed in the name of the firm.
10. Although the converse may not always be applicable. This is so because some entities that have juristic capacity may not necessarily have the power to enter a contract.
11. One argument about this could be that the provisions virtually only say what is sufficient. It does not stipulate what is necessary. It says that if you have personality, you can own property and enter into contracts. It does not say that one who lacks personality can neither own property nor enter into contract. Conversely, another argument that may be made is that the express mention of one thing is the exclusion of all others. Implying that if an entity has not been expressly imbued with power to sue and be sued or act (and such other related powers) it cannot exercise such powers in its name.
12. See, Chitty on Contracts Vol. 1 General Principles (32nd edition, Thomson Reuters (Professional) UK Limited, 2015 paragraph 10-064 page. 933, where the author alluded to the connection between legal personality and contractual personality.
13. Section 868(1) of the Companies and Allied Matters Act 2020 (which is in pari materia with Section 588 of the repealed Companies and Allied Matters Act 1990).
14. (2022) LPELR-58269 (CA)
15. Per Justice John Iyang Okoro JSC (p. 20).
16. Ibid. p. 21.
17. See F.B.N. Plc v. Maiwada (2013) 5 NWLR (Pt. 1348) 444, P. 487, paras. A-B; Olalekan v. G.T.B. Plc (2023)16 NWLR (Pt. 1911) 441, Pp. 462-463, paras. B-H.
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