STATOIL (NIGERIA) LIMITED & ANOR v. FEDERAL INLAND REVENUE SERVICE & ANOR
(2014)LCN/7279(CA)
In The Court of Appeal of Nigeria
On Friday, the 13th day of June, 2014
CA/A/235/2012
RATIO
WHETHER A RESPONDENT CAN FORMULATE GROUNDS OF APPEAL
Strictly speaking, it is the appellants that should formulate what are in their view, the issues arising in the appeal, bearing in mind the amended or additional grounds of appeal. The duty of the respondent is to cross-appeal or file a Respondents’ Notice that the judgment of the lower Court should be affirmed or varied on other grounds. The respondent’s is to answer all material points of substance contained in the appellant’s brief. The brief shall further contain all points raised therein which the respondents intend or wishes to concede, as well as reasons why the appeal ought to be dismissed. See Order 18 rules 3(1) and 4(2) of the Court of Appeal Rules, 2011 and Atanda & Ors. vs. Akanil & Ors. (1989) 2 NSCC (Pt.2) 511 at 537. per JOSEPH TINE TUR, J.C.A.
WORDS AND PHRASES: ARBITATION
In Halsbury’s Laws of England, 4th edition (Reissue) by Lord Mackay of Clashfern, Vol.2 (3), paragraph 1 at page 2, the learned authors of the authoritative work have written that:
“Arbitration is a process used by the agreement of the parties to resolve disputes. In arbitrations, disputes are resolved, with binding effect, by a person or persons acting in a judicial manner in private, rather than by a national Court of law that would have jurisdiction but for the agreement of the parties to exclude it. The decision of the arbitral tribunal is usually called an award.”
Though the agreement to submit future disputes to arbitration usually forms part of the substantive contract, but the arbitration clause is often treated as a separate contract: Bremer Vulkan Schiffbau and Maschinenfabrik vs. South India Shipping Corporation (1981) A.C. 909 or (1981) 1 All E.R.289. per JOSEPH TINE TUR, J.C.A.
WHETHER AN UNINJURED PARTY IN AN AGREEMENT CAN SUE FOR A BREACH IN RESPECT THEREOF
The principles enshrined in decided cases is that only an injured party in an agreement that has been breached may sue the other party for redress, etc: Airoe Construction Co. vs. University of Benin (1985) 1 NWLR (Pt.2) 287 at 292; N.L.N.G. Ltd. vs. A.P.I.C. Ltd. (1995) 8 NWLR (Pt.416) 677; Ikpeazu vs. ACB Ltd. (1965) NMLR 379; LSDPC vs. WL & S Food Ltd. (1992) 5 NWLR (Pt.244) 653; Union Beverages Ltd. vs. PepsiCola International Ltd. (1994) 2 SCNJ 157 and Hill vs. C.A. Parsons & Co. Ltd. (1971) 3 All E.R. 1345. per JOSEPH TINE TUR, J.C.A.
JUSTICES
JOSEPH TINE TUR Justice of The Court of Appeal of Nigeria
MOORE A.A. ADUMEIN Justice of The Court of Appeal of Nigeria
TINUADE AKOMOLAFE-WILSON Justice of The Court of Appeal of Nigeria
Between
1. STATOIL (NIGERIA) LIMITED
2. TEXACO NIGERIA OUTER SHELF LIMITED Appellant(s)
AND
1. FEDERAL INLAND REVENUE SERVICE
2. NIGERIAN NATIONAL PETROLEUM CORPORATION Respondent(s)
JOSEPH TINE TUR, J.C.A. (Delivering the Leading Judgment): The Federal Inland Revenue Service (1st respondent) took out an Originating Summons before the Federal High Court, FCT, Abuja, against (1) Nigeria National Petroleum Corporation (2) Statoil (Nigeria) Ltd. and (3) Texaco Nigeria Outer Shelf Company Ltd. (“the appellants”) supported by affidavit and documentary exhibits on 27th September, 2011 seeking to be determined the following questions:
“1. Whether the Arbitral Tribunal in the Matter of Arbitration between (1) Statoil ((Nigeria) Limited (2) Texaco Nigeria Outer Shelf Limited AND Nigeria National Petroleum Corporation, has jurisdiction to determine the subject matter of the arbitration which deals with taxation of the defendants by the Federal Inland Revenue Service, which jurisdiction is conferred on the Federal High Court by Section 251 of the Constitution of the Federal Republic of Nigeria, 1999 as amended.
2. Whether the Arbitral Tribunal has jurisdiction to enter a valid award on the taxation the defendants which will have a binding effect on the plaintiff in the interpretation, application and administration of the Petroleum Profit Tax Act and the Deep Offshore Act, Education Tax Act, and Company Income Tax Act, and any other statute for the time being in force in Nigeria, as to entitle the plaintiff to seek reliefs being sought in this suit.
3. Whether upon a proper reading of Section 251(1)(n) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) the questions in dispute raised regarding the operation of Production Sharing Contract the subject matter of dispute between parties therein is not within the exclusive jurisdiction of the Federal High Court and thereby rendering the entire purported arbitral proceedings unconstitutional, null and void ab initio.”
The 1st respondent further sought that she be granted the following reliefs against the defendants if the three questions are answered in her favour:
“1. A declaration that the claim of the 2nd and 3rd defendants touching on taxation upon which reference has been made to arbitration is not one which is allowed by law to be settled by Arbitration.
2. A declaration that the determination or claim by way of award before the said Arbitration will impinge on the right of the plaintiff/applicant to assess and collect tax and generate revenue for the Federal Government of Nigeria.
3. A declaration that the reference to the claim of the other defendants against the 1st defendant upon which terms reference has been made to Arbitration is contrary public policy.
4. An order in addition to, or in alternative to (2) above revoking the Arbitration clause in so far as it relates to taxation or in the alternative an order excluding taxation and matters related thereto from the ambit of the arbitration agreement between the defendants.
5. An order restraining the defendants, by themselves, servants, agents, or counsel from continuing with, or purporting to take any benefit from or abiding by any obligations or rights no matter howsoever described or arising from the arbitral proceedings or awards made pursuant thereto.
6. A declaration that the arbitration provisions in the Production Sharing Contract and the defendants’ submission to an arbitration on matters exclusively reserved for the Federal High Court is unconstitutional, null, void and of no effect.”
The Originating Summons was supported by a 15 paragraph affidavit deposed to by Mr. Ejiro M. Ejemeyovwi, Esq., a Legal Practitioner in the Department of the Federal Inland Revenue Service. The facts in dispute are as follows:
The 1st respondent was established by the Federal Inland Revenue Service (Establishment) Act, 2007 and conferred with powers to assess, collect and account for revenue accruable to the Federal Government of Nigeria and other related matters. This fact is not denied by the appellants and the 2nd respondent. The 1st respondent subsequently became aware that the Nigerian National Petroleum Corporation (NNPC) (2nd respondent) had entered into a Production Sharing Contract (PSC) with Statoil (Nigeria) Ltd. (1st appellant) and Texaco Nigeria Outer Shelf Company Limited (2nd appellant) as evidence in Exhibit FIRS “A.” The purpose of Exhibit FIRS “A” was for the appellants to carry out petroleum operations in the areas covered by the agreement. There was a clause that disputes arising in the course of executing the agreement shall be referred to arbitration. When a dispute subsequently arose, the parties went to Arbitration under the Arbitration and Conciliation Act, Cap. A18, Laws of the Federation of Nigeria, 2004. Exhibits FIRS “B” is the Notice of Arbitration by the appellants before the Arbitral Tribunal. Paragraphs 10-15 of the affidavit of Ejiro M. Ejemeyovwi, Esq. reveals the dispute that led to the 1st respondent instituting this originating summons to wit:
“10. That I was informed by Ike Odume of General Counsel to the plaintiff and I verily believe him that what forms the issues/disputes between the defendants before the Arbitral Tribunal are in essence, issues, and controversies arising from the differing interpretations of the Petroleum Profit Tax Act and other tax Legislations and that these issues/disputes and controversies are within the jurisdiction of the Federal High Court.
11. That the plaintiff had in the past communicated to the defendants, her position on all issues listed in paragraph 9(i) to (iv) above.
12. That one Mr. Mark Anthony Dike in the employ of the plaintiff appeared before the Tribunal and objected to the jurisdiction of the Tribunal to entertain such matters as shown in paragraph 9. I am informed that a ruling by the tribunal on this matter of jurisdiction no matter how perverse shall be binding and final.
13. That the proceedings and ultimately the award of the Arbitral Tribunal will impinge on the functions and powers of the plaintiff to assess, collect and account tor taxes under the tax legislations particularly the Petroleum Profit Tax and Education Tax.
14. That the Tribunal instead of declining jurisdiction to entertain these issues seeing that these issues are non-arbitrable, continued proceedings and thereby acted ultra vires and consequently ousted jurisdiction of the Federal High Court.
15. I swear to this affidavit believing it to be true and in accordance with the Oaths Act of 1990.”
The appellants filed this motion on 20th October, 2011 objecting to the jurisdiction of the Federal High Court to entertain the Originating Summons. The objection was predicated on the grounds that the 1st respondent lacked the legal standing to institute the summons not being a party to Exhibit FIRS “A”. That Originating Summons constituted an abuse of Court process and thirdly, it was filed in violation of Section 34 of the Arbitration and Reconciliation Act (supra) which limits the instances in which a Court can intervene in matters governed by the Act. The appellants gave notice to rely on the contents of the affidavit by Cephas Caleb dated 20th October, 2011 in another motion on notice. On 23rd November, 2011 the appellants also filed a motion praying for stay of further proceedings in the Court below on the grounds that the Originating Summons was vexatious, oppressive and constituted an abuse of judicial process. The grounds upon which the application was hoisted were as follows:
“(a) The applicants and the 1st defendant herein entered into a Production Sharing Contract (PSC) the terns of which provide for the resolution of any disputes arising thereto by arbitration.
(b) Following a dispute which arose between the Applicants and the 1st defendant concerning the interpretation and performance of the PSC, the applicants commenced arbitration against the 1st defendant.
(c) The 1st defendant, at a time that the arbitral proceedings are subsisting, instigated and/or collude (sic) with the plaintiff, a total stranger to PSC and the arbitral proceedings, to commence the present proceedings against the 1st defendant and the applicants.
Particulars of Instigation/Collusion:
(i) The 1st defendant furnished the plaintiff with a copy of the PSC, a confidential document to which the plaintiff is not a party to enable the plaintiff to commence this action. This copy of the PSC is attached to the affidavit in support of the plaintiff’s originating summons as Exhibit FIRS “A”.
(ii) The 1st defendant furnished the plaintiff with a copy of the Notice of Arbitration filed by the Applicants pursuant to arbitration proceedings between the Applicants and the 1st Defendant. The arbitral proceedings are confidential and the plaintiff is not a party to them.
(iii) In a similar arbitration involving another PSC Contractor where issues identical to those raised in the arbitration between the Applicants and the 1st defendant were raised, the 1st defendant procured one Mr. Mark Anthony Dike (a senior official in the employment of the plaintiff) to appear before that other Arbitral Tribunal to make the very same arguments which the plaintiff is making in this case. See paragraph 12 of the plaintiff’s affidavit at which the plaintiff alluded to Mr. Dike’s testimony but erroneously stated that the testimony was given in the arbitration between the applicants and the 1st defendant.
(iv) So far as the plaintiff is concerned, it had always taken the position that disputes regarding crude allocation under the Production Sharing Contract should be resolved in arbitration.
(v) The present claim represents a volte face on the plaintiff’s earlier position, and this shift in the plaintiff’s position arose only out of the plaintiff’s desire to co-operate with NNPC, a fellow agency of the Federal Government of Nigeria, in NNPC’s defence in the arbitral proceedings.
(vi) Although the 1st defendant has been sued as a “defendant” in these proceedings, alongside the applicants, the 1st defendant has filed a process supporting the case asserted in the Originating Summons.
(vii) The relief sought in the Originating Summons are calculated to benefit the 1st defendant rather than the plaintiff.
(d) It is vexatious, oppressive, and an abuse of process where one party procures another to sue that party and other defendants in order to obtain reliefs that will benefit the procuring party.
(e) In the premises, further proceedings in this suit should be stayed until an award is made in the arbitration commenced by the applicants against the 1st defendant on the ground that the suit is vexatious, oppressive and an abuse of the judicial process of this Honourable Court.”
Again on 23rd November, 2011 the 2nd appellant filed a motion praying that Mr. Ejiro M. Ejemeyouwi, Esq., should be directed by the learned Federal Judge to appear at the hearing of the Originating Summons for the purposes of being cross-examined on the contents of his sworn affidavit. The grounds for bringing the application were as follows:
“1. The plaintiff/respondent which on the face of its Originating Summons lack the legal standing (locus standi) to institute this suit, claims reliefs on the basis that any potential award in the arbitration commenced by the 2nd and 3rd defendants against the 1st defendant pursuant to a production sharing contract to which the plaintiff is not a party will impinge on the plaintiff’s discharge of its statutory function.
2. In support of the aforesaid contention of the plaintiff, Mr. Ejire M. Ejemeyovwi has deposed at paragraph 14 of the affidavit in support of the plaintiff’s originating summons that “the (arbitral) proceedings and ultimately the award of the Arbitral Tribunal will impinge on the functions and powers of the plaintiff to assess, collect and account for taxes under the tax legislations particularly the Petroleum Profit Tax Act and Education Tax Act.”
3. By a counter-affidavit dated 28th October, 2011, filed on behalf of the 2nd and 3rd defendants and in opposition to the plaintiff’s originating summons, Mr. Cephas Caleb stated particularly at paragraphs 11, 12 and 19 of that counter-affidavit that the proceedings in the arbitration and their eventual outcome would not impinge on the plaintiff’s discharge of its statutory powers.
4. In the premises, there is clearly an apparent contradiction and it has become necessary that Mr. Ejiro M. Elemeyovwi be compelled by this Honourable Court to attend Court in order to be cross-examined on the said facts.”
The alternative prayer was that the 1st respondent should have exhausted all internal remedies stipulated under the Act before seeking redress in a Court of justice. On 15th November, 2011 Counsel agreed that the applications should be heard together. Learned Counsel adopted their written addresses on 23rd November, 2011. A consolidated ruling was delivered on 30th March, 2012 dismissing all the objections. Being aggrieved by this ruling Statoil (Nigeria) Ltd. and Texaco Nigeria Outer Shelf Ltd. filed a Joint Notice of Appeal on 12th April, 2012. Five grounds accompany the Notice.
The appellants’ brief, settled by Babatunde Fagbohunlu, SAN, was filed on 22nd June, 2012. The 1st respondent’s brief, settled by Emmanuel Asido, Esq. was filed on 3rd October, 2013 with a deeming order on 15th April, 2013. J.T.O. Ugboduma, Esq. settled the 2nd respondent’s brief which was filed on 7th November, 2012 with a deeming order on 15th April, 2013. This prompted the appellant to file a reply to the 1st respondent’s brief on 29th April, 2013. On the 14th June, 2013 appellants again filed a reply in respect to the 2nd respondent’s brief of argument. When the appeal came up for hearing on 24th March, 2014 the learned Counsel adopted their respective briefs of argument.
The appellants set out the following issues for determination:
“(a) Whether having failed to consider or make a definite pronouncement on the material issue of instigation and/or collusion clearly existing between the 1st respondent and the 2nd respondent, the decision of the lower Court should be set aside and the proceedings before the lower Court stayed on the basis they constitute an abuse of the judicial process of the lower Court (Grounds 1 & 2 of the Notice of Appeal)
ALTERNATIVELY:
(b) Whether having accepted that the affidavit evidence before it “appeared to be conflicting”, the lower Court erred when it refused the Appellants’ application seeking the attendance of the 1st respondent’s deponent at the hearing of the Originating Summons for the purpose of cross-examination (Grounds 3 & 5 of the Notice of Appeal).
(c) Whether, considering the trial Court’s comments in its ruling dated 30th March, 2012, that the Appellants’ application is “calculated attempt to stall the hearing of the Originating Summons”, it is not apparent that the lower Court had unfavourably prejudged the appellants’ defence to this suit, such that this matter ought to be remitted to another Judge of the Federal High Court for hearing of the substantive suit (Ground 4 of the Notice of Appeal).”
In the course of arguing the appeal this Court was informed that the learned Federal Judge – Adamu Bello, F.J., had since retired from Judicial Service. Therefore issue (c) formulated by the appellant for determination by this Court is no longer an issue. Besides, the issue did not arise from any ground of appeal hence is struck out. See Akinlagun vs. Oshobajo (2006) 12 NWLR (Pt.993) 60 at 80. The 1st and 2nd respondents distilled similar issues for determination as follows:
“(i) Whether the learned trial Judge was justified in law in his ruling of 3rd March, 2012 when he refused the appellants’ application to stay further proceedings in this suit (Grounds 1 and 2 of the grounds of appeal).
(ii) Whether the learned trial Judge was justified in law in his ruling of 30th March, 2012 when he refused the Ejemeyovwi (deponent to the affidavit in support of the Originating Summons filed in this suit) to appear before the lower Court for the purpose of being cross-examined by the appellants’ Counsel. (Grounds 3, 4 and 5 of the grounds of appeal).”
My humble opinion is that it is the appellants that being aggrieved with the ruling of the learned Federal Judge of 30th March, 2012 have appealed to this Court seeking a rehearing under Section 15 of the Court of Appeal Act, 2004 read together with Order 6 rule 2(1) of the Court of Appeal Rules, 2011. Strictly speaking, it is the appellants that should formulate what are in their view, the issues arising in the appeal, bearing in mind the amended or additional grounds of appeal. The duty of the respondent is to cross-appeal or file a Respondents’ Notice that the judgment of the lower Court should be affirmed or varied on other grounds. The respondent’s is to answer all material points of substance contained in the appellant’s brief. The brief shall further contain all points raised therein which the respondents intend or wishes to concede, as well as reasons why the appeal ought to be dismissed. See Order 18 rules 3(1) and 4(2) of the Court of Appeal Rules, 2011 and Atanda & Ors. vs. Akanil & Ors. (1989) 2 NSCC (Pt.2) 511 at 537. The gist of the learned SAN’s argument is that the 1st respondent was not a party to Exhibit FIRS “A” hence could not have instituted the originating summons. That there was instigation and or collusion between the 1st and 2nd respondents in instituting the originating summons for the purpose of nullifying the arbitral proceedings. This constituted an abuse of Court process. Counsel submitted that the learned Federal Judge did not consider all the arguments in his ruling and therefore erred in law, hence the ruling of 30th March, 2012 should be set aside, citing Olowolagba vs. Bakare (1998) 3 NWLR (Pt.543) 528 at 534 paragraphs “F”-“G” and Onifade vs. Olayiwola (1990) 7 NWLR (Pt.l61) 130 at 165.
It was also submitted by the learned SAN that the categories of what constitutes abuse of Court process is not closed: Umeh vs. Iwu (2008) 8 NWLR (Pt.1089) 225; Saraki vs. Kotoye (1992) 9 NWLR (Pt.264) 156 at 188; Amaefule vs. State (1988) 2 NWLR (Pt.75) 156 at 177; African Re Corp vs. JDP Construction (Nig.) Ltd. (2003) 13 NWLR (Pt.838) 601 at 635 paragraphs “G” – “H”. Therefore, the learned Federal Judge should have stayed further proceedings before the lower Court: Akilu vs. Fawehinmi (No.2) (1989) 2 NWLR (Pt.102) 122 at 165. The learned SAN cited in argument Joint Stock Asset Management Company Ingosstrakh – Investments vs. BNP Paribas SA (2012) ECWA CIV 644 as having established the principle that Courts of law usually discourage suits which are a result of instigation and/or collusion for purposes of oppressing litigants. The Court was urged to resolve these issues in favour of the appellants.
The learned Counsel to the 1st respondent drew this Court’s attention to suit No.FHC/ABJ/CS/766/2011 where the learned silk’s application for stay of further proceedings in similar vein was refused. It was submitted that the learned silk should not complain at this stage of the appeal proceedings. Counsel contended that the appellants never established any collusion between the 1st and 2nd respondents. Counsel prayed that paragraphs 8-11 and 13 of the affidavit in support of the application for stay of further proceedings by Cephas Caleb should be struck out as they offend the provisions of Section 115(1)(3) and (4) of the Evidence Act, 2011 being legal arguments or conclusions: UBA Ltd. vs. S.G.M. Ltd. (1996) 10 NWLR (Pt.478) 381 at 386 – 387.
Counsel submitted that the statutory responsibility to assess and enforce the payment of taxes accruable to the Federal Government vested on the 1st respondent. The 1st respondent was not expected to abdicate that role nor to stand by for a contrived arbitral tribunal that would eventually make a binding order to the prejudice of the proper computation of taxes accruable to the Federation Account. This is more so as the staggering amounts claimed by the appellants in the arbitral proceedings comprises revenues already taxed by the 1st respondent and by extension, the appellants’ production, royalties, petroleum profit tax, etc. The whole game, argued the learned Counsel, was to exclude the 1st respondent from the clandestine arrangement in the Arbitration Tribunal so that in the event the award is made, as it is evident that the tribunal is rail-roaded and programmed for that purpose, the 1st respondent as the Central and component part of the Government of the Federation, will be compelled to disgorge revenues already and severally collected, and allocated, which will form part of the awards to be eventually made by the Arbitral Tribunal. Counsel argued that the 1st respondent’s statutory functions conferred on her the locus standi to institute the originating summons. The suit was not initiated to enure to the benefit of the 2nd respondent who was sued as a party to the arbitral agreement. Counsel referred to C.B.N. vs. Ahmed (2001) 11 NWLR (Pt.724) 369 at 401 and Saraki vs. Kotoye (1992) 9 NWLR (Pt.264) 156 as laying down the principle that where there is a right to bring an action, the state of mind of the person cannot affect the validity or propriety of that exercise. Counsel argued that before abuse of judicial process can be established, there must be in existence a multiplicity of law suits against the opponent in respect of the same subject matter based on the same issues, hence, the authorities cited by the learned silk on behalf of the appellants did not apply to the facts of this appeal. Counsel urged that these issues should be resolved against the appellants.
Similar argument was patterned by the 2nd respondent’s learned Counsel who in addition cited the following authorities: TSA Ind. Ltd. vs. F.B.N. Plc (No.1) (2014) 14 NWLR (Pt.1320) 326 at 344; Global Soap & Detergent Ind. Ltd. vs. NAFDAC (2011) All FWLR (Pt.599) 1025 at 1048 and Taiwo vs. Akinbolaji (2012, 2 NWLR (Pt.1284) 201 at 212 – 213. Counsel urged this Court to hold that there was neither collusion/instigation nor an abuse of process in instituting the originating summons. The issues should be resolved against the appellants.
The arguments in the appellants’ reply brief is almost a repetition of the earlier argument adumbrated. The learned silk however cited Karibo vs. Grend (1992) 3 NWLR (Pt.230) 426 at 441 as showing that all issues raised for determination by a party should be considered and pronounced upon. Secondly, this Court should not strike out any of the paragraphs alleged by the 1st respondent as offending Section 115 of the Evidence Act, 2011. Learned SAN drew this Court’s attention to the fact that arbitral proceedings are strictly confidential: Oxford Shipping Co. Ltd. vs. NIPPON Yusan Kaisha, The Eastern Saga (1984) 3 All E.R.835 at 842 and Shona-Jason Ltd. vs. Omega Air Ltd. (2006) 1 NWLR (Pt.960) 1. The Court should infer collusion/instigation between the 1st and 2nd respondents since the credibility of witnesses was not involved: Royal Ade (Nig.) Ltd. vs. N.O.C.M. Co. Plc (2004) 8 NWLR (Pt.874) 206 at 230; Balogun vs. Akanji (1988) 1 NWLR (Pt.70) 11; Olujinle vs. Adeagbo (1988) NWLR (Pt.75) 238 at 255; Obinna Osuoha vs. State (2010) 16 NWLR (Pt.1219) 364 at 37.
The issues in controversies will be resolved by an examination of the terms of Exhibit FIRS “A”. Paragraph 5.1 of the Production Sharing Contract (PSC) Exhibit “FIRS A” shows it was entered into on 18th May, 1993 between the “Nigerian National Petroleum Corporation (The Corporation)” and “Statoil (Nigeria) Limited and BP Exploration (Nigeria) Limited (The Contractor)”. The “whereas clauses” in the contract are as follows:
“THIS CONTRACT is made and entered into this 18th day of May, 1993 BETWEEN THE NIGERIAN NATIONAL PETROLEUM CORPORATION, established under the Laws of the Federal Republic of Nigeria, with its Head Office No.7 Kofo Abayomi Street, Victoria Island, Lagos (hereinafter referred to as “the CORPORATION” which expression shall, where the con so admits, include its successors and assigns) of the one part, AND STATOIL (NIGERIA) LIMITED and BP EXPLORATION (NIGERIA) LIMITED both companies incorporated under the Laws of Nigeria and having their registered offices at Jiton Court, 1 Oyinka Abayomi Drive, Ikoyi, Lagos collectively known as Statoil/BPX Alliance (hereinafter called the “CONTRACTOR” which expression shall, where the con b admits, include its successors and assigns) of the other part.
WHEREAS, by virtue of Section 1 of the Petroleum Act, 1969 Cap.350, Laws of the Federation of Nigeria, 1990 as amended the Federal Republic of Nigeria (‘Nigeria”) is vested with the entire ownership and control of all petroleum in, under or upon any land which is in Nigeria or under the territorial waters of Nigeria or forms part of the continental shelf of Nigeria or within the Exclusive Economic Zone of Nigeria; and
WHEREAS, the CORPORATION is the holder or is entitled to hold the Oil Prospecting Licence (OPL) No.217 (Deep Offshore) and any subsequent Oil Mining Lease(s)) (OML(s) derived therefrom; and
WHEREAS, the said area of the OPL and any subsequent OML(s) shall constitute the Contact Area; and
WHEREAS, by virtue of the Nigerian National Petroleum Corporation Act, 1977 Cap.320, Laws of the Federation of Nigeria, 1990, CORPORATION has the right, power and authority to enter into this contact; and
WHEREAS, the CONTRACTOR represents that it has technical competence and professional skills necessary to conduct petroleum operations and has the funds both local and foreign for carrying on the said operations and has agreed to conduct the said operations;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein reserved and contained, it is hereby agreed as follows…”
Paragraph 3.1 of Exhibit FIRS “A” sets out the issues in dispute that have been submitted to the Arbitral Tribunal for resolution. Paragraph 3.1 Clause 21 of the PSC (the “arbitration agreement”) provides inter alia that, “…The Nigerian Arbitration and Conciliation Act Cap.19, Laws of the Federation of Nigeria, 1990 shall apply to this contract. The venue of the arbitration shall be any where in Nigeria as agreed by the parties.” The Right Honourable Lord Saville of Newdgate 1 of 24 Lincoln’s Inn Fields, London WC 2A 3EG, United Kingdom was appointed by the parties as the sole Arbitrator to determine the dispute and make the necessary awards. Paragraphs 6-8.2 of Exhibit FIRS “A” read as follows:
“6. GENERAL NATURE OF CLAIM:
6.1 In accordance with Articles 3(3) of the First Schedule to the Arbitration Act, the general nature of the claim is set out below. Pursuant to Article 18 of the First Schedule to the Arbitration Act, full particulars of the dispute and the claim will be set out in the Statement of Claim in due course. The claimants’ rights to modify and/or supplement the claim set out in this Notice of Arbitration are fully reserved.
6.2. Unless otherwise indicated or the con otherwise requires, capitalized terms in this section bear the meaning given to them in the PSC.
6.3 In breach of the PSC, the Respondent has, inter alia:
(a) disputed the CONTRACTOR’S entitlement to allocations of Cost Oil in such quantum as will generate an amount of proceeds sufficient for recovery of Operating Costs in Oil Prospecting Licences 213, 217 and 218 and the Oil Mining Leases 132, 128 and 129 derived therefrom;
(b) disputed the manner in which Capital Costs are amortized and recovered;
(c) disputed the manner in which Tax Oil is computed and the manner in which the CONTRACTOR has prepared Petroleum Profits Tax (PPT) returns, including inter alia as regards:
(i) the consolidation for PPT purposes of Oil Prospecting Licences 213, 217 and 218 and the Oil Mining Leases 132, 128 and 129 derived therefrom;
(ii) the basis for the determination of qualifying capital expenditure for the purposes of determining capital allowances, and the treatment of Investment Tax Credit;
(iii) the treatment of certain cost items, including, but not limited to, sole costs, acquisition costs, interest expenses, Signature Bonuses and Production Bonuses;
(iv) the timing of capital allowances; and
(v) the timing of computation of PPT;
(d) filed with the Federal Inland Revenue Service (FIRS) PPT returns other than those prepared by the CONTRACTOR and sent to the Respondent for onward filling with the FIRS; and
(e) lifted, and indicated its intention to continue to lift. Available Crude Oil to which the CONTRACTOR is entitled.
7. INDICATION OF THE AMOUNT INVOLVED:
7.1 By reason of the Respondent’s breaches, the CONTRACTOR had, as at 30 April, 2011, suffered loss and damages in an amount estimated to be approximately US$123 million (exclusive of interest).
7.2 The above indication of the amount involved is provided in accordance with Article 3(3)(e) of the First Schedule to the Arbitration Act. This indication shall not be binding and the amount of the CONTRACTOR’S loss and damages shall be fully quantified and updated in due course.
8. RELIEF AND REMEDIES SOUGHT:
8.1 The Claimants seek:
(a) Damages or such other relief as may be appropriate in respect of the CONTRACTOR’S losses resulting from the Respondent’s breaches of the PSC;
(b) Declaratory relief in respect of the parties’ contractual rights and obligations;
(c) Injunctive relief (including, if necessary, interim measures of protection) and/or specific performance of the Respondent’s contractual obligations;
(d) Interest;
(e) Further or other relief;
(f) Costs.
8.2 Full particulars of the relief and remedies sought by the Claimants will be set out in the Statement of Claim in due course. The Claimants’ right to modify and/or supplement the relief and remedies set out in this Notice of Arbitration are fully reserved.”
Paragraph 7.1 of the Arbitral Agreement shows that the appellants and the Nigerian National Petroleum Corporation (2nd respondent) are disputing the colossal sum of US$123million (exclusive of interest) before the Arbitrator.
In Halsbury’s Laws of England, 4th edition (Reissue) by Lord Mackay of Clashfern, Vol.2 (3), paragraph 1 at page 2, the learned authors of the authoritative work have written that:
“Arbitration is a process used by the agreement of the parties to resolve disputes. In arbitrations, disputes are resolved, with binding effect, by a person or persons acting in a judicial manner in private, rather than by a national Court of law that would have jurisdiction but for the agreement of the parties to exclude it. The decision of the arbitral tribunal is usually called an award.”
Though the agreement to submit future disputes to arbitration usually forms part of the substantive contract, but the arbitration clause is often treated as a separate contract: Bremer Vulkan Schiffbau and Maschinenfabrik vs. South India Shipping Corporation (1981) A.C. 909 or (1981) 1 All E.R.289.
Section 34-35 of the Act (supra) reads as follows:
“34. Extent of Court intervention:
A court shall not intervene in any matter governed by this Act except where so provided in this Act.
35. Extent of application of this Act to arbitration:
This Act shall not affect any other law by virtue of which certain disputes:-
(a) may not be submitted to arbitration; or
(b) may be submitted to arbitration only in accordance with the provisions of that or another law.”
The Arbitration and Conciliation Act (supra) recognizes the fact that certain issues may not form part of an arbitration agreement, example, if they will violate the Constitution or any other statutory enactment nor could they be submitted to Arbitration Tribunals. Some issues may be submitted to Arbitral Tribunals only in accordance with the provisions of the Constitution or other laws of the land where the agreement was entered into or governs the arbitral agreement.
The learned authors of Halsbury’s Laws of England (supra) wrote at page 7 paragraph 6 of their authoritative work as follows:
“6. Proper law of the arbitration agreement:
The proper law of the arbitration agreement governs its validity, interpretation and effect. That proper law is determined in accordance with the general principles of the conflict of laws, namely, the law chosen by the parties or, in the absence of such choice, the law of the country with which the agreement is most closely connected.”
Where the parties have submitted their dispute to an Arbitration Tribunal, the interpretation of the terms of the arbitral agreement, and the award, shall have regard to the general principles of conflict of laws of the land chosen by the parties, or the laws of the country with which the agreement is most closely connected. See Whitworth Street Estates (Manchester) Ltd. vs. James Millers & Partners Ltd. (1970) A.C. 583 or (1970) 1 All E.R. 296.
The 1st respondent not being a party to the arbitration agreement had no locus standi to appear before the Arbitration Tribunal to challenge the agreement (Exhibit FIRS “A”), nor the jurisdiction of the Tribunal to hear and determine the issues in dispute. However, Section 12(1)-(4) of the Arbitration and Conciliation Act (supra) provides instances when an arbitral agreement, or the jurisdiction of an Arbitral Tribunal could be challenged by a party to the agreement. Section 12(3)(a) and (4) of the Act (supra) is also authority that plea of lack of jurisdiction can be raised by any party to the agreement in the course of the arbitral proceedings. The power to set aside an arbitral award is also conferred under Section 29 of the Act (supra) on a party to the arbitral agreement.
If a party to an arbitral agreement can challenge the jurisdiction of the Arbitration Tribunal, or that the arbitral agreement was ab initio, null and void, what about a person or authority, such as the 1st respondent, who was not a party to the agreement but complains or that if an award is eventually made one way or the other is of the view that the proceedings or subsequent award by an arbitral tribunal constitute an infringement of some provisions of the Constitution or the laws of the land or impede her constitutional and statutory functions, or powers? Would the person be debarred from seeking declaratory remedies in a Court of law, for instance by an action seeking declaratory remedies, or by originating summons? I do not think so. Where there is proved a wrong, there has to be a remedy.
The principles enshrined in decided cases is that only an injured party in an agreement that has been breached may sue the other party for redress, etc: Airoe Construction Co. vs. University of Benin (1985) 1 NWLR (Pt.2) 287 at 292; N.L.N.G. Ltd. vs. A.P.I.C. Ltd. (1995) 8 NWLR (Pt.416) 677; Ikpeazu vs. ACB Ltd. (1965) NMLR 379; LSDPC vs. WL & S Food Ltd. (1992) 5 NWLR (Pt.244) 653; Union Beverages Ltd. vs. PepsiCola International Ltd. (1994) 2 SCNJ 157 and Hill vs. C.A. Parsons & Co. Ltd. (1971) 3 All E.R. 1345.
Section 57(1) of the Arbitration and Conciliation Act (supra) defines “Court” to mean “the High Court of a State, the High Court of the Federal Capital Territory, Abuja or the Federal High Court.” A “party” “means a party to the arbitration agreement or to conciliation or any person claiming through or under him and “parties” shall be construed accordingly.”
The 1st respondent may not be a named party to the arbitral agreement of 18th May, 1993. However, paragraphs 11 – 16 of the Counter-affidavit sworn to by Cephas Caleb on 20th October, 2011 is a tacit admission that the 1st respondent has the necessary locus standi to have taken out the originating summons on 24th August, 2011 to have the three questions determined by the lower Court, and to further seek the declaratory reliefs set out in the motion. The said paragraphs of the Counter-affidavit read as follows:
“11. I know that the ultimate result of an arbitral award favourable to the 2nd and 3rd defendants would include that the tax returns prepared by the 2nd and 3rd defendants in accordance with the PSC will be filed with the plaintiff, instead of the returns calculated by NNPC in breach of the PSC.
12. I know that the plaintiff is not bound to accept the returns filed with it in accordance with an arbitral award favourable to the 2nd and 3rd defendants. Pursuant to its statutory powers, the plaintiff may reject the tax returns filed with it, and make an assessment of the tax payable by the defendants based on its understanding of the applicable tax regime.
13. I know that if the plaintiff does exercise its authority to reject tax returns filed with it, and to make its own assessment of the tax payable, the 2nd and 3rd defendants (and/or the NNPC) may then seek recourse against the plaintiff’s assessment at the Tax Appeal Tribunal, which is a body established to resolve dispute between tax payers and the plaintiff.
14. I know that considering that the plaintiff is not a party to the arbitral proceedings involving the defendants and as the 2nd and 3rd defendants have not sought any relief against the plaintiff, the proceedings in the arbitration and their eventual outcome will not in any way impede the plaintiff’s discharge of its statutory duty of assessing, collecting and accounting for federal taxes.
15. I verily believe that it will better serve the interests of justice and protect the institution of arbitration if the plaintiff’s Originating Summons is dismissed.
16. I make this affidavit in good faith verily believing the contents to be the true in accordance with the Oaths Act.”
The appellants have also conceded that the 1st respondent has the statutory duty of assessing, collecting and accounting for Federal taxes. The appellants cannot be heard to argue that the 1st respondent lacked the locus standi to institute the originating summons.
Locus standi to institute an action simply confers the right to be heard in Court or to participate in the proceedings to determine the civil rights or obligations, whether founded on the Constitution or any other enactment, by a Court or tribunal in favour of an aggrieved citizen.
The principal question to be determined in the Originating Summons is whether the breaches alleged by the appellants, and the reliefs claimed, can form part of an arbitral agreement, and whether an Arbitral Tribunal, but not the Federal High Court, should be the forum to entertain the dispute.
In Nigerian Ports Authority vs. Panalpina World Transport (Nig.) Ltd. (1973) 1 All NLR (Pt.1) 486 the authority instituted the first suit LD/493/70 against (1) The Panalpina World Transport (Nig.) Ltd. and Palm Line Agencies of Nigeria Ltd. The second suit No. LD/494/70, was against United Africa Company of Nigeria Ltd. The two suits were consolidated and tried together in the High Court of Justice, Lagos. The principal relief sought in the first suit was a declaration that the decision of the Arbitration Board established under the provisions of Section 4 of the Ports (Amendment) Decree, 1969 and published or delivered on Wednesday, 8th July, 1970 was illegal, null and void and of no effect. The plaintiff further sought a declaration that as from 1st December. 1969 each of the defendants held as her agents on her behalf in Warri Port “relevant assets” as defined in Section 9 of the Ports (Amendment) Decree, 1969. The plaintiff also demanded for a true account of all the monies received or held by the defendants until such date as the assets were handed over to her. The plaintiff further claimed that the sums found due upon taking an account should be paid to her. The argument by the defendants was that the arbitral award was final in their favour and that the immovable property was situate in Warri out of the jurisdiction of the High Court, Lagos. The learned trial Judge heard evidence but declined jurisdiction on the grounds that the cause of action involved immovable property not in Lagos, but Warri as argued by the defendants. The matter went to the Supreme Court on appeal. In allowing the appeal, the Supreme Court held per Coker, JSC at page 502 that:
“…The subject-matter of the declaration sought in this case is the ruling of the Arbitration Board and as the parties reside within the jurisdiction it is idle to contend that that is a matter over which the Court could not exercise jurisdiction…”
His Lordship continued at page 503 of the judgment as follows:
“In the case in hand, it is clear that what the appellants sought in the first claim is a declaration as between the parties on the legality of the ruling referred to. The claim is aimed at the respondents and what they considered their entitlement by virtue of the ruling aforesaid. A defendant is within the jurisdiction and the plaintiff wants him compelled to do something personally even though the subject-matter of the compulsive action is situate outside the jurisdiction of the Court. We think on this basis that the first item of claim on the plaintiffs’ writ is an action in personam and not being an action for declaration of title to foreign land it is one over which the High Court, Lagos should have exercised jurisdiction.”
The Supreme Court addressed a situation where a plaintiff seeks a declaration that a decision or ruling of an Arbitration Board or Tribunal was “illegal, null and void and of no effect.” Coker, JSC held at page 510 lines 24-39 of the judgment as follows:
“We must now turn to the consideration of whether that decision is in the circumstances “illegal, null and void and of no effect.” The phrase is a compendious legal jargon by which acts done or steps taken by a defendant wrongly are characterized and apart from the claim of illegality which implies that the act or step was done or taken contrary to the relevant law, the other words collectively connote a state of actual nullity and a state of legal no-existence ex tunc. See in this connection the observations of the Privy Council (Lord Upjohn) in the case of Alfred Duroyappah, etc, vs. W.J. Fernando & Ors. (1967) 2 A.C. 337 at pp.352 and 353. If as indeed we have concluded the arbitration board’s ruling was given in excess or lack of jurisdiction the ruling is a nullity and a declaration to that effect is the least which the appellants ex debito justitiae are entitled to, at against those who stand to benefit from that ruling.”
Having arrived at the conclusion that the Arbitral Award of 8th July, 1970 was illegal, null and void and of no effect the Supreme Court entered judgment in favour of the appellant and granted all the declaratory and executory remedies claimed by the appellant.
Paragraph 7.1 of the arbitral agreement (Exhibit FIRS “A”) shows that the Arbitral Tribunal is to determine the dispute and damages suffered by the appellants as a result of the alleged breach by the 2nd respondent put at $123million exclusive of interest. As I write this judgment the rate of exchange in terms of Naira and Kobo conversion is N165.00 per dollar. If this is multiplied per Naira it comes to about N20.295billion which is a colossal sum of revenue the 1st respondent alleges ought to be paid into the Federation Account. Paragraph 7.2 of the Arbitral Agreement further shows that the amount involved is not binding on the parties. The appellants’ loss and damages shall be fully quantified and updated from time to time, or in due course, showing that the breach/damages is continuous. I am of the humble opinion that it will be in the best interest of the 1st respondent not to wait or stand by for the Arbitration Tribunal to complete the proceedings and make an award. 1st respondent has the locus standing to act timeously to arrest the situation by a declaratory action or originating summons in a Court of law. Where the claim succeeds, the Court may make a declaration that the arbitral agreement was void ab initio or that the Arbitral Tribunal lacked the jurisdiction to have entertained the dispute on grounds of constitutional or statutory illegality, etc.
The importance of Nigerian Ports Authority vs. Panalpina World Transport Nig. Ltd. & Ors. (supra) is to show that an arbitral agreement could be challenged and declared a nullity by a competent Court in a substantive action or originating summons on grounds of excess or lack of jurisdiction on the Arbitral Tribunal, or that the agreement was ab initio, null and void, having no effect in law or in fact. Order 3 rules 6 and 7 of the Federal High Court (Civil Procedure) Rules, 2009 reads as follows:
“6. Any person claiming to be interested under a deed, will enactment or other written instrument may apply by originating summons for the determination of any question of construction arising under the instrument and for a declaration of the rights of the persons interested.
7. Any person claiming any legal or equitable right in a case where the determination of the question whether such a person is entitled to the right depends upon a question of construction of an enactment, may apply by originating summons for the determination of such question of construction and for a declaration as to the right claimed.”
The rights of the 1st respondent can be determined by the construction of Section 251(1) of the Constitution of the Federal Republic of Nigeria, 1999 and of any other enactments for the Court to grant declaratory and executory reliefs as may meet the justice of the controversy. The learned Federal Judge considered these arguments by the appellants’ learned Counsel before dismissing the preliminary objection.
I am not impressed by the argument of the learned SAN that there was instigation or collusion between the 1st and 2nd respondents to institute the originating summons in the Court below. The word “collusion” means inter alia, there was an agreement to defraud another or to do or obtain something forbidden by law.
A “collusive action” is one between two parties who have no actual controversy, being merely for the purpose of determining a legal question or receiving a precedent that might prove favourable in related litigation. This is also termed a “fictional action” which is an action, usually, unethically brought, solely to obtain a judicial opinion on an issue of fact or law, rather than for the disposition of a justiciable controversy.
To “instigate’ is to goad or incite someone to take some actions or course of action against another. See Black’s Law Dictionary, 9th edition, pages 34, 300 and 868. It is not within the province of the appellants to be heard to argue, that a person, body or authority that instituted an action in a Court of Justice to protect or secure statutory or constitutional rights, privileges, or immunity, etc, was acting in collusion, or on the instigation of another person or authority as urged on the Court below and in this Court by the learned Senior Advocate of Nigeria representing the appellants.
Accordingly, I resolve issue one, against the appellants.
ISSUE TWO:
The complaint of the appellant on issue two is that the learned Federal Judge erred in law to have refused an application to summon Mr. Ejiro Eyemeyovwi, Esq., for cross-examination, citing Order 27 rule 1 of the Federal High Court (Civil Procedure) Rules, 2009. The purpose of summoning the deponent, according to the learned silk, is that there was a factual conflict in the affidavit regarding the impact of the arbitral proceedings, and the potential award, if eventually made, the 1st respondent’s ability to properly discharge her statutory functions of assessing, collecting and accounting for Federal taxes would be in jeopardy. That summoning of the deponent was to test his veracity under cross-examination. The learned silk considered this as a crucial issue in the Court below, hence he did argue that the failure to grant the application led to a miscarriage of justice and the appeal should be allowed, citing Folbod Investments Ltd vs. Alpha Merchant Bank Ltd. (1996) 10 NWLR (Pt.478) 344 at 356. Further argument is that where a party applies that a deponent to an affidavit should be summoned to be cross-examined, such a request should not be turned down by the learned trial Judge unless exceptional reasons exist to justify the refusal. The learned silk gave examples, as where the deponent is not a compellable witness, or the cross-examination would relate to matters extraneous to the proceedings. Senior Counsel urged this Court to resolve this issue in favour of the appellants.
Learned Counsel to the 1st and 2nd respondents referred this Court to pages 11 and 12 of the ruling of the learned Federal Judge where he held that it is not in all cases of conflict in an affidavit that oral evidence will be required. Counsel cited Garba vs. Sheda International (Nig) Ltd. (2002) FWLR (Pt.113) 245 at 261 paragraph “A” – “D”; Nwosu vs. Imo State Environmental Sanitation Authority (1990) 2 NWLR (Pt.135) 688 at 718 paragraph “E” and Garba vs. University of Maiduguri (1986) 1 NWLR (Pt,18) 550 as showing some circumstances when oral evidence may be resorted to, so as to resolve conflicts in affidavits. Counsel examined the originating summons, the questions for determination and the reliefs sought to submit that they relate to the interpretation of Section 251 of the Constitution of the Federal Republic of Nigeria, 1999, relevant Tax Acts read together with Exhibit FIRS “A”. Counsel urged this Court to hold that the failure to summon Mr. Ejiro Ejemeyovwi, Esq. to be cross-examined was not fatal to the ruling of the learned Federal Judge. Learned Counsel to the 2nd respondent also cited the following authorities: Bob vs. Akpan (2010) All FWLR (Pt.501) 896 at 747 to 948; Aze vs. Okweremuo (2010) 17 NWLR (Pt.1221) 53. 1st and 2nd respondents learned Counsel urged that this issue should be resolved against the appellants.
The learned silk had nothing new to argue in the reply brief filed in answer to the briefs of the 1st and 2nd Counsel to the respondents. The arguments are merely a repetition of what was in the appellants’ main brief of argument. Counsel finally urged this Court to resolve this issue in favour of the appellant. That the appeal should be allowed.
I shall begin by referring to Section 116 of the Evidence Act 2011 which reads as follows:-
“When there are before a Court affidavits that are irreconcilably in Conflict on crucial facts, the Court shall for the purpose of resolving the conflict arising from the affidavit evidence, ask the parties to proffer oral evidence as to such facts, and to hear any such oral evidence of the deponents of the affidavits and sue other witnesses as men be called by the parties.”
Order 27 Rule 1 of the Federal High Court (Civil Procedure) Rules, 2009 also provides as follows:
“Upon motion, summons, petition or other application, evidence may be given by affidavit, but the Judge may, on his own motion or an application, order the attendance for cross-examination of the deponent end where, alter an order has fun made the person in question does not attend, the person’s affidavit shall not be used as evidence same by special leave.”
For a party to invoke the provisions of Section 116 of the Evidence Act, 2011 and Order 27 Rule 1 of the Federal High Court (Civil Procedure) Rules, 2009 the Court has to ask the parties to proffer oral evidence where there are affidavits that are irreconcilably in conflict on crucial facts. The cross-examination shall however be confined or limited to the resolution of the irreconcilable conflicts arising from the affidavits. This is the purport of the phrase “the Court shall “…ask the parties to proffer oral evidence as to such facts…” etc. This means that it is within the province of a court, faced with affidavits that are irreconcilably in conflict, to ask all the parties to proffer oral evidence. The power of invoking the provisions of Section 116 of the Evidence Act, 2011 is conferred on the Court, but certainly not just on one of the parties in the proceedings. Both parties must be given the opportunity to proffer oral evidence to resolve the irreconcilable conflicts on crucial facts or matters in the affidavit. Where there is no irreconcilable conflict in the affidavits on crucial facts the Court shall not be bound to invoke the provisions of Section 116 of the Evidence Act (supra). Even where such conflicts do exist but are not found by the Court to be crucial to the determination of the issues in controversy, there will be no necessity of asking both parties to proffer oral evidence. This will however depend on the facts and circumstances of each proceeding.
Discretion is vested in the Judge, either on his own motion or an application, to, by order, summon the deponents of any affidavit to appear for cross-examination. Like in every situation, where discretion is vested on a Court or a Judge to act or refrain from so acting, an application can be refused by the learned trial Judge, depending on the circumstances of each case. The aggrieved party will have the onus to show on appeal that the learned trial Judge did not exercise his discretion judicially or judiciously, and how the refusal led to a miscarriage of justice. In Falobi vs. Falobi (1976) NMLR 169 the Supreme Court set aside the Judgment of the High Court of the defunct Western State of Nigeria sitting at Ibadan for following reasons at page 178 of the judgment:
“…There can be no doubt that at the time he was considering the application, the learned trial Judge had two conflicting affidavits before him, one sworn to by the wife and the other by the respondent husband. It is clear that the principal issues in conflict deal with the means of the parties; and these are issues which the Court must consider in coming to a decision as to whether it should make an order for maintenance under Section 12(3) of the Infants Law.
We have pointed out on numerous occasions that when a Court is faced with affidavits which are irreconcilably in conflict, the judge hearing the case, in order to resolve the conflict properly, should first hear oral evidence from the deponents or such other witnesses as the parties may be advised to call. It does not matter whether none of the parties asked to be allowed to cross-examine any of the deponents or to call any witness. Such omission by the parties should not be taken to amount to consent that affidavit evidence should be used in such circumstances. (See Akinsete vs. Akindutere (1966) 1 All NL.R. 147 at P.118; Eboh & Ors. vs Oki & Ors. (1974) 1 SC. 179 at PP. 189 – 190; Olu-Ibukun & Anor vs Olu-Ibukun (1974) 2 SC. 41, 48; and Uku & Ors. vs Okumagba & Three Ors. (1974) 3 SC.35, 56, 64 – 65.)
Since the decision of both the High Court and the former Western State Court of Appeal were based on these conflicting affidavits, we do not think they should be allowed to stand. The appeal is reluctantly allowed.”
The ratio decidendi in Falobi vs. Falobi (supra) is that the principal issues in conflict could not be determined by affidavits which are irreconcilably in conflict. Where the crucial or principal issue in controversy is on a point of law, example the interpretation of some provisions in the constitution or a statute or to determine the issue of jurisdiction of a Court or Arbitral Tribunal, there will be no need for an affidavit: Okefie vs. Olughor (1995) 5 SCNJ 217 at 230; Momoh vs. UAB Petroleum Inc. (2000) 2 SC. 142; Sanusi Bros. (Nig.) Ltd. Vs. Cotici, etc, (2000) 6 SC (Pt.3) 43. Furthermore, where there is no serious contradiction in the affidavits relied upon by the parties or deponents, oral evidence may not be needed. See Odedeyi vs. Odedeyi (2000) 2 SC. 93.I am of the humble opinion that the issues for determination in the lower Court concerned the interpretation of Section 251(1)(n) of the Constitution and other related tax enactments hence like the learned Federal Judge, I do not see how the refusal to summon Mr. Ejiro Eyemeyovwi, Esq. for cross-examination led to a miscarriage of justice. I am of the further opinion that the appellants have not been able to impeach the decision of the learned trial Judge in not calling Mr Ejiro Ejemeyovwi, Esq., to appear for cross-examination. I resolve this issue against the appellants.
Accordingly, this appeal lacks merit and is dismissed with N50,000.00 costs to the 1st and 2nd respondents.
MOORE A.A. ADUMEIN, J.C.A.: I had the privilege of previewing the judgment just delivered by my learned brother, Joseph Tine Tur, JCA. My learned brother has exhaustively discussed the issues identified in this appeal.
I have nothing to add to the detailed judgment of my learned brother, save to say that I agree that the appeal has no merit and it should be dismissed. I also dismiss this appeal and abide by the order for costs.
TINUADE AKOMOLAFE-WILSON, J.C.A.: I had the privilege of reading in draft the lead judgment of my learned brother, Tur, JCA. The two issues formulated are similarly resolved against the appellant.
I agree with the conclusion reached by my learned brother, Tur, JCA. I also dismiss the appeal in its entirety. I endorse the order as to costs.
Appearances
Chukwuka Ikwuazom, Esq. with him H. Abdulkareem, Esq. and C. Abalaka, Esq.For Appellant
AND
L.E. Nwosu, SAN with J.U.K. Igwe, SAN; A.N. Ayaoga, Esq.; S. Onyemenam, Esq, and Z.A. Nwosu, Esq. – for the 1st Respondent
J.T.O. Ugboduma, Esq. – for the 2nd RespondentFor Respondent
