A seller becomes a trustee once there is a valid contract of sale until the sale is fully completed

BINEZ HOTELS LIMITED v. BUREAU OF PUBLIC ENTERPRISES & ANOR

(OGUNWUMIJU; JAURO; SANKEY; OGBUINYA; UMAR: JJ.SC)

Binez Hotels Limited (“the Appellant”) acting through Future View Securities Limited (“the 2nd Respondent”) entered into an agreement to purchase 13,000,000 ordinary shares in Nigerian Cement Company Nkalagu Plc, representing 10% of the company’s issued share capital, for the sum of ₦7,020,000.00. The shares were owned by the Federal Government of Nigeria and were listed on the Nigerian Stock Exchange. Following the Appellant’s payment by cheque, Bureau of Public Enterprise (“the 1st Respondent”) conveyed the approval of the transaction by the National Council on Privatisation, indicating that the sale had received the requisite governmental approval.

Before the transaction could be perfected, however, the necessary share transfer forms required to effect the transfer of the shares were never executed. The National Council on Privatisation subsequently cancelled the ongoing negotiations for the sale pursuant to its statutory powers. Thereafter, the shares were sold to the Ebonyi State Government in accordance with the applicable privatisation framework, and the Appellant’s cheque was promptly returned through the 2nd Respondent without value. Dissatisfied with the cancellation of the transaction and the subsequent sale of the shares, the Appellant commenced an action by originating summons seeking declarations that it had acquired a valid interest in the shares and challenging the Respondents’ actions.