348.

An application made or an action brought or intervened in under section 6

shall not be stayed or dismissed by reason only that it is shown that an alleged
breach of a right or a duty owed to the company has been or may be approved by
the shareholders of such company, but evidence of approval by the shareholders
may be taken into account by the Court in making an order under section 347.
Evidence of shareholders’ approval not decisive (Sec 348-349)
349. An application made or an action brought or intervened in under section 346
shall not be stayed, discontinued, settled or dismissed for want of prosecution
without the approval of the Court given upon such terms as the Court deems fit
and, if the Court determines that the rights of any applicant may be substantially
affected by such stay, discontinuance, settlement or dismissal, the Court may order
any party to the application or action to give notice to the applicant.

Under the Companies and Allied Matters Act (CAMA) in Nigeria, sections 348 and
349 govern the approval of shareholders for certain actions taken by a company.
While shareholder approval is often a significant factor in decision-making within
a company, these sections acknowledge that it may not always be decisive.
The need for members' approval of a director's long term contract of two years in
Section 317(1) is additional to the requirement for members' approval in Sections
348 and 349. But for approval by the members in a general meeting of the
directors' service contracts as mentioned above, the contract will be voidable at the
instance of the company, and not only the company but also the director is liable to
account for any gain or benefit obtained by reason of the contract or for any
damage or loss suffered by the company as a result of the contract. This is provided
for in Section 318. The court also has jurisdiction to set aside the contract, or any
related transaction or arrangement, or to make such order as it thinks fit for
restoring the company to the position it was in before the contract was made. Also,
compensatory damages may be awarded against the director for breach of duty in
Section 319. The offences in Sections 320 and 321 may be committed by the
default of either the director or the officer in default. By virtue of Section 320(3) of
CAMA, provisions for waiver of the requirement of notice for certain transactions,
specified in the Articles of Association under Section 320(4), are void if the
requirements are not complied with in relation to any transaction or contract in
which a director of the company is interested.
Section 349 addresses the power of the shareholders to override the decisions of
the directors. It allows shareholders, in general meetings, to take actions that would
normally be the prerogative of the board of directors. However, it also recognizes
that certain decisions may require a higher threshold or may be subject to specific
provisions in the articles of association. In both cases, while shareholder approval
is essential and usually holds significant weight in corporate decision-making,
these sections acknowledge that there may be circumstances where it is not the sole
determining factor. Factors such as provisions in the articles of association,
entrenchment clauses, or specific statutory requirements may influence the final
decision-making process, even if shareholders have given their approval.

In summary, while shareholders' approval is crucial, it may not always be decisive

if other legal or governance provisions dictate otherwise, as recognized by sections
348 and 349 of CAMA.

Costs Of Action(Sec 347)

In connection with an action brought or intervened under section 346 of this Act,
Powers of the court. The court may, at any time, make any such order or orders as
it deems fit.
The Court may make an order
(a) authorizing the applicant or any other person to control the conduct of the
action.
(b) giving directions for the conduct of the action.
(c) directing that any amount adjudged payable by a defendant in the action is paid,
in whole or in part, directly to former and present security holders of the company
instead of to the company.
(d) requiring the company to pay reasonable legal fees incurred by the applicant in
connection with the proceedings.
In essence, Section 347 stipulates that if a shareholder brings an action against a
company and is successful in that action, the costs incurred by the shareholder
should be borne by the company unless the court directs otherwise. This provision
aims to ensure that shareholders are not unduly burdened with the financial costs of
seeking legal remedies against the company for actions that are deemed to be in the
company's interest or are in pursuit of justice.

However, it's essential to note that the court has discretion in determining whether
the costs should be borne by the company or by the shareholder personally. Factors
such as the nature of the action, the conduct of the parties involved, and the overall
circumstances of the case may influence the court's decision regarding the
allocation of costs.