MONTERO AND ANOTHER vs. REDCO LTD. AND ANOTHER

The 1st plaintiff, Mr Montero, was the managing director of Redco Ltd., a company in which the 2nd plaintiff (a Spanish group of companies) held 40% shares, while the Bank for Housing and Construction held 60%. Following concerns that Mr Montero had been incarcerated in connection with alleged criminal activities and was also operating private businesses said to be in direct competition with Redco Ltd., the board directed him to hand over management to his deputy, Mr D. B. Pabi, pending further notice. The plaintiffs challenged the validity of that decision on the basis that the board meeting lacked quorum and that the board could not lawfully take such action without compliance with the company’s regulations, including the requirement that at least one representative of the Spanish group be present. They sought, among other reliefs, an interim injunction to restrain the defendants from acting on the suspension decision. Portion of judgment: “The first plaintiff and the Spanish group, the second plaintiff herein, contended that the board of directors which took the said decision did not form a quorum, and therefore the decision was unlawful and the court should declare the same null and void.”

JUDGMENT OF ABBAN J. A. This is an interlocutory appeal from the ruling of the High Court, Accra dated 2 July 1985. In that ruling the learned High Court judge refused to grant the appellants (hereafter called the plaintiffs) an interim injunction restraining the respondents (hereafter called the defendants) from suspending the first plaintiff as the managing director pending the determination of the suit. The plaintiffs had sued for the following reliefs: (1) an order to restrain the defendants from taking decisions which are contrary to the regulations of Redco Ltd., a limited liability company registered under the Companies Code, 1963 (Act 179); and (2) An order of the court to declare the decision contained in the first defendant’s letters dated 8 and 22 May 1985 void and of no effect.” The two plaintiffs in the court below were Mr Montero and a Spanish group of companies with a long name. For the sake of brevity they will hereinafter be referred to as the S...