Shareholder Derivative Action - Nigerian Statutory Innovation - Not Yet a Victory for the Minority Shareholder
Anthony O. Nwafor
What the paper says
The application of majority rule in the enforcement of corporate rights has continued to be the bane of the minority shareholder. The courts over the years have sought to circumscribe this rule by providing some palliatives to the minority shareholders in defined circumstances. One of those ways through which the minority can enforce corporate rights as defined by the courts is by derivative action. In some jurisdictions, including Nigeria, this judicial prescription has come to enjoy statutory recognition thereby closing, to some extent, that level of flexibility often available in judicial decisions. Regrettably, however, this obviously good intention of the legislature has turned out to become another obstacle on the way of minority shareholders in enforcing corporate rights. This article takes a critical look at the provisions of Nigerian law providing for derivative action, highlighting the inherent difficulties in the application of the relevant provisions, and suggesting ways of improvement in the interests of the minority shareholders and the company.
3 citations
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.21 × 0.4 = 0.09 |
| M · momentum | 0.20 × 0.15 = 0.03 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.