Frutta Juice & Services Limited has asked the Federal High Court in Lagos to stay the execution of a ruling permitting the advertisement of a winding-up petition against the company until the court determines its appeal.
The company, which is the respondent in the winding-up proceedings filed by Saudi Modern Packaging Factory Company Limited, also urged the court to restrain the petitioner from publishing the petition in the Federal Government Official Gazette, or any newspaper in the country.
The application followed a July 24, 2026, ruling by Justice Musa Kakaki, granting Saudi Modern Packaging Factory leave to advertise its petition seeking to wind up Frutta Juice over an alleged $ 53,026 debt.
Frutta Juice, in a motion on notice filed through its lawyers, Lexworth Legal Partners, argued that allowing the advertisement to proceed while its appeal was pending could irreversibly damage its business.
The firm further asked the court to stay all further proceedings in the suit, including the hearing of the substantive winding-up petition fixed for November 24, 2026, pending the determination of the appeal.
In its Notice of Appeal, Frutta Juice challenged the entirety of Justice Kakaki’s ruling, arguing that the judge erred in granting leave to advertise the petition without adequately considering whether the winding-up proceedings constituted an abuse of court process against a solvent, operational company.
The company contended that the lower court had failed to properly exercise its discretion under Rule 19(1) of the Companies Winding-Up Rules, 2001.
It also faulted the court for finding that the alleged debt was undisputed and that its defence was insufficient, arguing that such findings amounted to a determination of substantive issues at an interlocutory stage.
Frutta Juice maintained that the ruling had prejudged issues reserved for the substantive hearing and violated its constitutional right to a fair hearing.
The company said its appeal raised “serious, recondite and arguable points of law” concerning the order permitting the publication of the winding-up petition.
In the affidavit filed in support of the application, a lawyer in the firm representing Frutta Juice, Fahrd Adams, said the company was an active commercial entity with significant investments, a nationwide production and distribution network and approximately 177 direct and indirect employees.
He stated that publicising the winding-up petition during the pendency of the appeal could have severe consequences for the company.
According to him, “Financial institutions and commercial banks will immediately freeze the operating accounts of the Respondent/Applicant,” while trade creditors and international suppliers could terminate credit facilities and supply contracts.
He further stated that the company’s “commercial standing, market goodwill, and financial solvency” could be destroyed beyond repair if the advertisement proceeded.
The company argued that any success it might achieve at the Court of Appeal would be rendered nugatory if its business suffered irreversible damage before the appeal was determined.
In its written address, Frutta Juice urged the Federal High Court to preserve the subject matter of the appeal, relying on judicial authorities on the principles governing stay of execution and preservation of the res.
Its counsel argued that the balance of convenience favoured the company because it stood to suffer substantially greater damage if the status quo was not maintained.
The lawyers also argued that the company had demonstrated exceptional circumstances warranting a stay, particularly the alleged fair-hearing issues raised in the appeal.
They cited the Supreme Court decision in Air Via Ltd v Oriental Airlines Ltd (2004) 9 NWLR (Pt. 878) 298, arguing that premature advertisement of a winding-up petition could inflict severe and irreversible commercial injury on an operating company.
Frutta Juice, therefore, urged the court to stay the July 24 ruling and all further proceedings in the suit pending the determination of its appeal.
While granting leave for the petition to be advertised, Justice Kakaki held that the alleged indebtedness had not been denied by Frutta Juice and that the company’s explanation concerning the delay in payment amounted substantially to a defence on the merits.
The judge consequently ordered the petitioner to advertise the winding-up petition in the Federal Government Official Gazette, THISDAY and The Guardian and to file an affidavit of compliance with proof of publication.
The Court of Appeal is being asked to determine whether the Federal High Court was right to grant leave to advertise the petition.
