The Lagos State High Court, Tafawa Balewa Square has granted an injunction restraining Game Discount World (popularly known as “The Game Stores”) and four others from shutting down its business and disposing of its assets or interests.
The court, in a December 19, 2022 ruling, further ordered Game Stores and other respondents to maintain the status quo with regard to the terms of the Sale of Business Agreement (SBA).
Earlier this year, there were reports that the Game Stores had concluded a contract for the sale of its business and assets to a Nigerian entity- Xanderwill Limited.
Apparently, the Game Stores is alleged to have attempted resiling from the agreement when Game Stores announced its shutdown and exit from Nigeria on or before December 25, 2022 without selling the business and assets to Xanderwill Limited.
Following alleged attempts to breach the sale of business agreement with Xanderwill Limited, a dispute was declared and referred to arbitration. Additionally, Xanderwill Limited filed a suit marked LD/6413GCM/2022 at the High Court of Lagos State, to restrain the Game Stores (the 1st Respondent in the suit) from engaging in any act that will essentially impact negatively on the pending arbitral proceedings. Consequently, the firm’s application for injunction was granted.
The court declared that “an interim order of injunction restraining the 1st respondent or anyone acting through it or by it from selling, transferring, disposing, converting, charging, divesting the sale assets or business of the defendant as defined in the SBA executed on April 26, 2022 and all related (Nigerian SBA) between the applicants and the 1st – 3rd defendants, (other than as contemplated/agreed in the Nigerian SBA, or from taking any other action to negate the commercial terms of the Nigerian SBA pending the hearing and determination of the accompanying originating motion on notice.
“An interim order of injunction restraining the 1st-3rd respondents from selling, transferring, disposing, converting, charging, divesting their interests, shares and portion of the investments, assets compromised in the Sale Assets, the Business as defined in the Sale of Business Agreement executed on April 26, 2022 and all related agreements (Nigerian SBA) between the applicants and the 1st -3rd defendants…”
The court also granted an injunction restraining the 1st – 3rd defendants or anyone acting through or by them from terminating, winding down, winding up, shutting down, and/or discontinuing the 1st respondent’s business and operations in Nigeria.
Apart from restraining the defendants from terminating, revoking or cancelling any business license, permits, lease agreements, etc. with respect to the business and operations of the firm, the court ordered the 4th defendant to refrain from paying or otherwise making available to the 1st-3rd defendants the Escrow Agreement executed on or about April 26, between the applicants, the 1st-3rd defendants, and the 4th defendant in any manner that will be prejudicial to the applicants.
“An interim order of injunction, restraining the 5th respondent from accepting, honouring, recognising any filings pertaining to the winding up, sale/transfer/conversion/divestment of shares or interest, change in management or shareholding structure of the 1st respondent, (other than as contemplated/agreed in the Nigerian SBA,” the court held.
Given the injunctions, the Game Stores is required to comply with the terms of the SBA to Xanderwill Limited, pending the conclusion of arbitration between the parties.