Subsidiaries of foreign firms can be joined in Nigerian suit, court holds

The National Industrial Court (NIC), Lagos has dismissed an application filed by Exxon Mobil Corporation, seeking an order striking out its name from a suit by one of its executives, Mr Paul Arinze, challenging his alleged unlawful retirement.

Exxon Mobil Corporation is the American oil giant and parent company of Mobil Producing Nigeria (MPN). The firm is seeking to be removed in a suit against MPN for being a foreign subsidiary that does not do business in Nigeria.

While ruling on the application in a suit number NICN/LA/288/2019, Justice O.A Obaseki-Osaghae dismissed its application and held that the corporation is a necessary party to the suit and has been properly joined.

The applicant had joined MPN as well as Exxon Mobil Corporation as first and second defendants respectively.

The applicant’s counsel, Mr Emeka Ozoani (SAN), had argued that Exxon Mobil was not a stranger to the employment of his client and as such, his client can sue it for any liability arising from any default or wrong done to him in the course of his employment.

He had argued that the applicant is holding both the first and second defendant liable for his unlawful retirement and that it is misleading for Exxon Mobil to state that the claimant’s reliefs were against the first defendant only.

Ozoani added that the second defendant was a proper and necessary party whose presence is required for the just determination of the issues as presented in the suit.

The applicant’s counsel had also argued that the first defendant is a subsidiary of the second and that the incentive award given to the applicant by the second defendant, is as a result of the employment relationship that existed between them in recognizance of the applicant’s diligence and hard work.

He had prayed the court to hold that the applicant’s suit was properly constituted and that the court has unfettered jurisdiction to entertain it.

Meanwhile, Exxon Mobil, through its counsel Mr. Fabian Ajogwu (SAN), filed a motion on notice dated February 3, 2020, seeking an order, striking out its name from the suit “in limine”

He had argued that the reliefs sought by the claimant against Exxon Mobil were not capable of being granted, as the company was neither incorporated nor carries on its business in Nigeria in any manner howsoever. He urged the court to strike out the name of the second defendant from the suit

However, Justice Obaseki-Osaghae held that the basis upon which the claims are made flows from the pleadings. 

“It is clear from the claims and the pleadings that the case against the second defendant falls within the jurisdiction of this court, and there is no condition precedent preventing him access to the court in respect of his alleged forceful termination of employment.

“I hold that the second defendant is a necessary party and has been properly joined; this court is not deprived of jurisdiction to hear and determine the complaint against the second defendant.

“I must also state that the second defendant has in its submission delved into substantive issues that cannot be resolved at this preliminary stage; it is important to bear in mind that at this stage, there is no trial on the merit. The application is hereby dismissed”. 

The issue of whether a multinational operating through an affiliate or subsidiary can be joined in a suit filed against her subsidiary company is settled.

The judge, therefore, adjourned the hearing to November 9, 2020.