Emerging Developments in Corporate Derivative Actions under the Nigerian Companies And Allied Matters Act 2020

Company upon its incorporation becomes a legal personality /corporate entity which 
among things confer upon the company status of a juristic person. It becomes a distinct 
person, different and separate from its members, directors, employees and shareholders. 
Being a juristic person, an incorporated company is capable of suing and being sued in its 
corporate name. It can institute an action to enforce legal rights arising from contracts, 
ownership of properties, appointment and termination of employees’ employment, and 
many other actions known to the law. In the course of day-to-day affairs/management of 
the company, dispute of necessity may be resolved using the instrument of judicial process. 
Statutorily, where a wrong is done against a company, the proper party to sue is the 
company itself. However, the Companies and Allied Matters Act 2020 introduces new 
instances and circumstances wherein other interested parties can institute an action in the 
name of the company and on its behalf. This paper examines in some depth the legal 
process for instituting actions in the name of the company by parties other than a company 
in view of the recent innovations in the Companies and Allied Matters Act 2020, the service 
of Court processes. It further explores the possibilities of adopting arbitration as an 
alternative dispute resolution mechanism for resolving derivative claims.