Brother Bernard & The Boardroom Battle

Bernard Longe v. First Bank of Nigeria Plc. (2010)

Today’s entry on Casefiles takes us to the heart of Nigerian corporate boardrooms, where power and procedure take center stage in one of the most talked-about corporate law cases in the country’s history.

I’m talking about the case of Bernard Longe and First Bank. The first time I heard about this case was while going over the procedure for removal of directors back in the university as a company law student, and I remember thinking about how unfair it was that the bank had to pay for what was likely a simple oversight. The law can be very particular, and today we’ll examine what happened in the case and how it affects you, particularly if you’re an employer of labor.

What happened?

In the early 2000s, Bernard Longe was the Managing Director (MD) of First Bank of Nigeria Plc, one of Nigeria’s oldest and biggest financial institutions, and by all indications, things were going fairly decently. Things took a turn in 2001, when allegations surfaced that Longe had been negligent or reckless in the manner he approved an unauthorized loan to a company called Investors International (London) Ltd. The loan was meant to assist the company in acquiring shares in NITEL, Nigeria’s national telecommunications company at the time.

One thing led to the other, the bid failed, and the bank lost over $100M. Needless to say, First Bank wasn’t keen on losing such a large amount of money.

As such, in response to this, the board of First Bank made the decision to suspend Longe on April 22, 2002. Which isn’t unusual in the corporate world, right? Organizations sack/relieve their staff all the time, and being a director, Longe was also an employee, which meant he could be dismissed by the board, right? Well, not really.

The real controversy began when, without notifying him as a director or giving him an opportunity to be heard, the board held another meeting on June 13, 2002, where they removed him from office summarily.

Mr. Longe wasn’t thrilled by this.

He soon got a job at the Transnational Corporation of Nigeria (TRANSCORP), but upon getting wind of the reasons for his dismissal from First Bank, he was sent on a compulsory leave pending investigation, as the Nigerian Stock Exchange indicated that dismissed directors of quoted companies should not be permitted to occupy executive positions at other quoted companies.

As you can probably tell by now, Mr. Longe once again was not thrilled by this.

Feeling maligned, he decided to institute an action in court against First Bank, making an argument that under Section 266 of the Companies and Allied Matters Act (CAMA) 2004, every director, whether suspended or not, was entitled to be given notice of any board meeting. He maintained that failure to give him notice, especially of a meeting where his removal was to be decided, rendered the meeting and its resolutions invalid.

The bank, on its part, claimed that since Longe had already been suspended, it had no obligation to notify him of the meeting.

What did the courts say?

Well, they said different things.

The first two courts agreed, and the final court didn’t.

The Federal High Court, which was the first court in which the matter was heard, dismissed Mr. Longe’s case, supporting First Bank’s argument that as he was already suspended, there was no longer any need to inform him of any meetings or give him a notice of removal.

On appeal, the Court of Appeal agreed with the lower court as well, agreeing that the suspension effectively abrogated any right of notice previously held by Mr. Longe

The matter eventually reached the Supreme Court of Nigeria, the highest court in the country, and finally, the court ruled in favor of Bernard Longe.

The court held that under the clear provisions of Section 266(1) of CAMA, every director, including a suspended one, is entitled to receive notice of board meetings. The court declared that the failure to notify Longe rendered the meeting of June 13, 2002, invalid, along with every decision made at that meeting, including his removal as Managing Director.

In an interesting twist, the court also held that Longe’s position as Managing Director could not be separated from his status as a director for notice purposes. It further ruled that the bank could not rely on suspension as an excuse to disregard his statutory rights.

The ruling was particularly significant because it also pushed against the traditional principle in Nigerian employment law that a court will not order reinstatement in private employment contracts. Here, the court essentially invalidated the removal and protected Longe’s position.

By virtue of this, Bernard Longe won the case, and so the suspension was overturned, meaning he actually was considered to have remained the MD after all the time it took to settle the case finally (over half a decade), and as such, he was also entitled to remuneration and got a whole lot of that from First Bank when he was actually removed.

Happy ending for him, not so much for First Bank, who now had to pay additional sums following the $100M+ loss incurred during Mr. Longe’s tenure.

Could Equity Have Saved the Day?

If you’re a law student reading this, you might be wondering, wasn’t this just a minor procedural lapse? Couldn’t the court have excused it in equity, especially considering the scale of the financial loss First Bank suffered under Longe’s watch?

Well, no. Nigerian company law draws a hard line when it comes to statutory provisions like Section 266 of CAMA 2004.

Once the law prescribes a specific procedure, equity cannot override it. The courts were clear that statutory safeguards for directors aren’t there for convenience; they’re mandatory. So no amount of goodwill, financial pressure, or alleged misconduct could cure the defect of failing to give notice.

Sometimes, strict legal rules trump even seemingly fair outcomes.

Why should you care?

Whether you run a company, work in HR, or ever sit on a board, this case is a textbook reminder that procedure matters just as much as substance. You may have all the reasons in the world to discipline or remove someone, but if you do it without following due process, your decision could be set aside.

It also highlights an important corporate governance principle: that even suspended directors retain certain statutory rights until they are properly removed. Ignoring those rights, especially regarding notice of meetings, is a risk no serious board should take, no matter how angry they might be and regardless of the crime committed.

Lastly, this case challenged and reshaped aspects of Nigerian employment and company law, particularly concerning the rare instances where courts might interfere with private employment decisions in the name of statutory corporate protections.

So the next time anyone suggests sidelining a colleague without due notice or skipping steps in a disciplinary process, picture Bernard Longe smiling to the bank over a seemingly harmless and justified dismissal First Bank made eight years ’prior.

And to all HR executives reading this, please always remember to have a legal/compliance professional at hand. Employment contracts and staff handbooks are not enough. Statutory provisions like those in CAMA take precedence, and skipping legal procedures is a risk no organization can afford. It could save you and your organization more than you know.

Don’t worry, I’m here for you ;)