Facts:

The 3rd and 4th Appellants are beneficiaries and administrators of the estate of their deceased father, Dr. Vittorio Fabbri who held shares in Impex, which holds the shares in the 1st and 2nd Appellants. In turn, the 1st and 2nd Appellants are the two shareholders in Pan Ocean Oil Corporation Limited.

Sometime in 2005, the 1st Respondent instituted a suit at the Federal High Court, Abuja against Pan Ocean Oil Corporation Limited. The 1st respondent sought the leave of court to call, hold, and conduct a meeting of the Board of Directors of Pan Ocean Oil Corporation Limited. In addition, the 1st Respondent sought that one director (the 1st respondent) be deemed as a quorum at the meeting to make the meeting and any decision taken at the meeting binding on Pan Ocean Oil Corporation Limited. And on 24th November 2005, the Federal High Court granted the reliefs sought by the 1st Respondent.

Following the order, the court-ordered meeting was held on 29th November, 2005. At the meeting, the 1st Respondent inter alia allotted 7,500 unallotted shares of Pan Ocean in the following manner: 5,500 ordinary shares to himself and 1,000 ordinary shares each to two other persons. Prior to this allotment, the authorized share capital of PAN Ocean was 10,000 ordinary shares out of which the 1st and 2nd Appellants already held 1,250 shares each. Subsequent to this, the 1st Respondent approached the Federal High Court seeking an order to validate the business that was transacted at the meeting of 29th November, 2005 particularly, the allotment of the 7,500 shares. In praying the court for the validation order, the 1st Respondent represented to the court that notices of general meeting were sent to the existing shareholders (i.e. the 1st and 2nd Appellants) which notices were returned undelivered and that it was impossible to hold the general meeting of Pan Ocean to enable the only existing shareholders (the 1st and 2nd Appellants) to ratify the allotment of the 7,500 shares to himself and two others. The court made an order validating the 1st Respondent’s allotment of 7,500 shares of Pan Ocean to himself and two other persons.

Aggrieved by the events, the appellants jointly instituted an action against the respondents at the Federal High Court, Lagos. The appellants’ complaint essentially was that the 1st Respondent had conducted the affairs of Pan Ocean Corporation Limited in an illegal or wrongful manner. The appellants sought an order inter alia setting aside the order validating the issuance and allotment of 7,500 ordinary shares of Pan Ocean Oil Corporation Limited at the meeting of 29th November 2005. They further sought an order directing the 2nd Respondent to expunge from its records all documents and other filings made by or on the authority of the 1st Respondent pursuant to the court order made on 8th February 2006. The 1st and 2nd Appellants commenced the action in their capacity as shareholders of Pan Ocean Oil Corporation Limited. The 3rd and 4th appellants commenced the action as Administrators of the Estate of Dr. Vittorio Fabbri. The 3rd and 4th Appellants stated that they were the children of Dr. Vittorio Fabbri, their late father, who was the sole shareholder of the 1st and 2nd Appellants. They further stated that they were named beneficiaries of the Estate of Dr. Vittorio Fabbri and were appointed with one Mr. John Benjamin as the Administrators of the Estate. The 3rd and 4thappellants, however, did not claim to be suing either on behalf of Pan Ocean Oil Corporation Limited or the 1st and 2nd Appellants.

The 1st Respondent filed his statement of defence to the action. He also filed a preliminary objection by which he challenged the competence of the action on the ground that the 3rd and 4th Appellants lacked the locus standi to institute the action because they were strangers to the 1st and 2nd Appellants. After hearing the preliminary objection, the trial court held that the 3rd and 4th Appellants, not being members of Pan Ocean Oil Corporation Limited, lacked the necessary locus standi to institute the action and it entirely dismissed the appellants’ action.

Dissatisfied with the ruling, the appellants appealed to the Court of Appeal, which allowed the appeal in part by substituting the order of dismissal with an order striking out the suit on the basis that the appellants lacked locus standi to institute the action.

Further dissatisfied with the decision of the Court of Appeal, the Appellants appealed to the Supreme Court where they contended among other grounds that the Court of Appeal erred in striking out the suit on the bases that the 1st and 2nd Appellants lacked locus standi to institute the action, and that the 3rd and 4th Appellants lacked the capacity to sue on behalf of the 1st and 2nd appellants, which were issues not raised before the Court of Appeal.