AFRICAN REINSURANCE CORPORATION v. INDUSTRIAL TRAINING FUND & ANOR
(2019)LCN/12748(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 27th day of February, 2019
CA/L/569/2016
RATIO
JURISDICTION: WHETHER JURISDICTION IS THE BASES OF A TRIBUNAL
“Jurisdiction is the very basis on which any Tribunal tries a case. A trial without jurisdiction is a nullity The importance of jurisdiction is the reason why it can be raised at any stage of a case, be it at the trial, on appeal to the Court of Appeal or to this Court; afortiori the Court can suo motu raise it. It is desirable that preliminary objection be raised early on issue of jurisdiction; but once it is apparent to any party that the Court may not have jurisdiction, it can be raised even viva voce as in this case. It is always in the interest of justice to raise issue of jurisdiction so as to save time and costs and to avoid a trial in nullity. See also MKPEN TIZA & ANOR v IORAKPEN BEGHA [2005] 15 NWLR (PT 949) 616; PDP v OKOROCHA & ORS (2012) LPELR – 7822 (SC); NWANKWO & ORS v YAR’ADUA & ORS (2010) LPELR – 2109 (SC).” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JUSTICES:
MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
GABRIEL OMONIYI KOLAWOLE Justice of The Court of Appeal of Nigeria
Between
AFRICAN REINSURANCE CORPORATION – Appellant(s)
AND
1. INDUSTRIAL TRAINING FUND
2. DIRECTOR GENERAL, INDUSTRIAL TRAINING FUND – Respondent(s)
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.(Delivering the Leading Judgment):
By a writ of summons dated 10th July, 2014, the 1st and 2nd Respondents herein filed a suit before the lower Court seeking against the Appellant, the following reliefs, to wit:
(a) A liquidated debt of N916,703,476.99 (Nine Hundred and Sixteen Million Seven Hundred and Three Hundred Thousand, Four Hundred and Seventy Six Naira and Ninety-Nine Kobo) being total outstanding balance of statutory contributions due and owed by the Defendant to the Plaintiffs from 2008 to 2013.
(b) Interest at the rate of 21% per annum on the outstanding debt aforesaid, commencing from July 8, 2014 until Judgment is delivered in this Suit and thereafter at the rate of interest until debt is finally liquidated.
(c) Costs of instituting this action.
Upon the close of pleadings, the Appellant filed a Notice of Preliminary Objection and its accompanying processes inter alia on the ground that the Appellant is an International Organization with diplomatic immunities by virtue of which it is exempted from taxes, levies, rates, contribution and other statutory contributions as provided under the Diplomatic Immunities and Privileges Act, 1962 (DIPA), and the Diplomatic Immunities and Privileges (Africa Reinsurance Corporation) Order 1985 (DIPO).
After the parties had filed and exchanged the relevant processes, the Court heard the preliminary objection and delivered its Ruling on 20th March, 2015, dismissing the objection on the ground that the issues to be considered borders on the issues in the substantive suit. Subsequently, upon conclusion of trial, the learned trial judge, AUTA, J., later C.J. (now retired) entered judgment in favour of the Respondents. Dissatisfied with the said judgment, the Appellant filed a Notice of Appeal on 29th April, 2016 predicated on nine (9) grounds of appeal, seeking that the decision of the lower Court be set aside and the suit be dismissed on the ground enumerated in its Preliminary Objection.
In compliance with the practice in this Court, parties filed and exchanged their respective briefs of argument. Appellants Brief of Argument dated 10th December, 2018 and filed 14th January, 2019 but deemed properly filed 15th January, 2019 was settled by Kehinde Aina, Esq.; O. O. Adeleye, Esq.; Faith Ozurumba, (Mrs); O. B. Bioku, Esq.; I. E. Nwokolo, Esq.; of Aina Blankson LP. Four issues were formulated by counsel as follows:
1. Whether the lower Court was right to have invoked and exercise jurisdiction to hear and determine the suit and whether the Respondents have any justiciable cause of action against the Appellant in respect of which the jurisdiction of the lower Court or any other Court can be invoked?
2. Whether having regard to the combined effect of the Agreement establishing African Reinsurance Corporation and the Headquarters Agreement, the Appellant as an International Organization with the status of a diplomatic mission and enjoying diplomatic immunities and exemptions is not exempt from all taxation, direct and indirect, howsoever described?
3. Whether the Industrial Training Funds Act is applicable to the Appellant to make it liable?
4. Whether the Respondents discharged their Burden of proof and established on the preponderance of evidence, their claims before the trial Court?
On the part of the Respondents, three issues were also formulated as follows:
1. Whether the trial Court was right in refusing to uphold the Appellants challenge to the Courts jurisdiction upon the grounds specified in the notice of preliminary objection?
2. Whether the exemptions granted to the Appellant under various laws being relied upon by the Appellant exempt the Appellant from paying the Industrial Training Fund contributions?
3. Whether the Respondents discharged their burden of proof before the trial Court?
Since the issues formulated by the parties are identical, save for semantics, I shall adopt the issues as formulated by the Appellant for the determination of this appeal.
On the first issue, Appellants counsel relying on DAPIANLONG v DARIYE [2007] 8 NWLR (PT 1036) 332 at 402 to 403, emphasized that issue of jurisdiction is so fundamental that it can be raised at any stage of the proceeding. He noted that although the Appellant properly raised the issue of jurisdiction before the lower Court, the learned trial judge declined to deliver a ruling noting that it was premature at that stage of the proceedings. Referring to ANSA v RTPCN [2008] 7 NWLR (PT 1086) 421 at 443; MADUKOLU v NKEMDILIM (1962) ALL NLR 581 at 589 on when a Court will be seised of a matter.
Counsel noted that not only is the Appellant an International Organization operating in Nigeria but one conferred with a diplomatic mission status; that by Section 251 of the 1999 Constitution of the Federal Republic of Nigeria, the lower Court lacked jurisdiction to determine the dispute between the Government of Nigeria and the Appellant being an International Organization established by the unilateral agreement of several Nations, including Nigeria.
It is the submission of counsel that by the Preamble to the Agreement establishing the Appellant, the rights that Respondents may be entitled to against the Appellant are co-extensive to such rights that the Nigerian Government may be entitled; that the Respondents being an organ or agent may be enjoyed by the Nigerian Government under an International Agreement to which the Nigerian State is a signatory; that the lower Court ought to have construed Article 26; 55(2) & (3); 56 of the Establishment Agreement in declining jurisdiction to hear and determine the dispute the between the Appellant and the Respondents. It is the further contention of counsel that the Court must treat as sacrosanct the terms of an agreement freely entered into by the parties, citing OMEGA BANK (NIG) PLC v O.B.C. LTD [2005] 8 NWLR (PT 928) 547; BFI GROUP CORPORATION v BUREAU OF PUBLIC ENTERPRISES [2012] 18 NWLR (PT 1332) 209 SC; ALADE v ALIC (NIG) LTD [2010] 19 NWLR (PT 1226) 209 SC; ABACHA v FAWEHINMI [2000] 6 NWLR (PT 660) 228 at 314, paras B – C.
It is the further submission of counsel that to the extent that the procedures agreed by parties for the resolution of any disputes between the parties as it relates to their relationship is covered under the said Agreements, were not exhausted or countenanced by the Respondents before instituting legal action, the trial Court lacked jurisdiction to entertain the suit, citing MALLAM SAKA AGBODEMU & ORS v MR. AZEEZ AGBOOLA & ORS (2014) LPELR-23794 (CA); AKPENE v BARCLAYS BANK (1977) 1 SC at 38.
On the second issue, counsel emphasized that the Appellant, being an International Organization conferred with diplomatic immunities and privileges is exempted from payment of taxes, whether direct or indirect, particularly in the light of the Establishment Agreement dated 24th February, 1976 and Headquarters Agreement dated 10th August, 1977 executed between the Appellant and the Federal Government of Nigeria, relying on ANSA v RTPCN & 3 ORS [2008] 7 NWLR (PT 1086) 421 at 441; OLUTOLA v UNILORIN [2004] 18 NWLR (PT 905) 416.
He noted that if the lower Court had considered the relevant documents; Articles 1, 23, 46 and 51 of the Establish Agreement and Articles 6 and 14 of the Headquarters Agreement, it would have found that the Respondents claim were non-justiciable as the Appellants were exempted from the payment of taxes, levies, contributions or any other form of statutory charges prescribed by the Industrial Training Act, 1971 (as amended) sought to be exempted by the Respondents.
He relied on ABACHA v FAWEHINMI [2000] 6 NWLR (PT 660) 228 at 345, para G, to note that Courts should desist from a construction that would lead to a breach of accepted rule of international law, also citing Article 26 of the Vienna Convention, 1967. Concluding on this issue, he relied on AMAH & ORS v NWANKWO, ESQ. (2007) LPELR8225 (CA); A.G., LAGOS STATE v A.G., FEDERATION (2014) LPELR-22701 (SC).
On the third issue, Appellants counsel referred to Section 6 of the Industrial Training Fund Act, 2011 to submit that the Appellant does not fall within the categories of bodies covered by the Industrial Training Funds Act; that the Appellant is by no stretch of imagination covered under the definition of a Liable Organization as provided and envisaged under the ITF Act (as amended), as it is neither a private nor a public company within the contemplation of the Act but that the intention of the Nigerian Government, by the various Agreements was to grant the Appellant diplomatic immunities, exemptions and waivers, and in this instance from such contributions demanded by the Respondent under the Industrial Training Fund Act.
On the fourth issue, Appellants counsel contends that the onus of proving the claim sought against the Appellant lies on the Respondents, particularly the basis upon which the liquidated sum was assessed and arrived at, lead evidence on the strength of employees of the Appellant and lead evidence on the pay roll for each of the years 2008 to 2013 for which contribution is being claimed.
He noted that the documents tendered did not proved on the balance of probabilities, any entitlement to the Respondents claim for the sum of N916,703,476.99 and/or that the amount claimed amounts to 1% of the actual payroll of the Appellant in those years.
Counsel referred to the testimony of the Respondents sole witness at pages 312 to 315 of the record of appeal, before urging this Court to scrutinize the Audited Accounts of the Appellant admitted as Exhibit B due to non-compliance with Section 84 of the Evidence Act, and also due to the fact that it does not cover any financial details as relating to the year 2013 for which the Respondents also made a claim.
Relying on Section 16 of the ITF Act, 2011 (as amended), counsel submits that the demand and claim made by the Respondents as it relates to the year 2008 has been caught up by the provision of that section which limits any claim for a due contribution to 6 years. He relied on CHRISTIANA I. YARE v NATIONAL SALARIES, WAGES & INCOME COMMISSION (2013) LPELR – 20520 (SC); MICHAEL OBIEFUNA v ALEXANDER OKOYE (1961) 1 ALL NLR 357; FRED EGBE v ADEFARASIN (No. 2) [1985] 1 NWLR (PT 3) 549; FADARE v ATTORNEY-GENERAL, OYO STATE (1982) NSCC.
Relying on ALHAJI MUKTARI UBA & SONS LTD v LION BANK OF NIGERIA PLC [2006] 2 NWLR (PT 964) 288; MAJA v SAMOURIS [2002] 7 NWLR (PT 765) 78 at 102, counsel contends that the claim by the Respondents is not a liquidated money demand and in the absence of any evidence before the Court from which same can be ascertained as valid, it would be injustice for the Respondents claim to succeed.
On the part of the Respondents, counsel argued on the first issue that question of jurisdiction is determined on the writ of summons and statement of claim, relying on SOCIETY BIC S.A. v CHARZIN INDUSTRIES LTD [2014] ALL FWLR (PT 739) 1271; OGARA v ASADU [2014] FWLR (PT 754) 56. He referred to Section 6(1) of the ITF Act to submit that the trial Court was right to have assumed jurisdiction to determine the reliefs sought by the Respondents. He also referred to Section 251(1) of the 1999 Constitution (as amended); Section 11(1) ITF Act; CANNAN CONSULT v GOVERNING COUNCIL, FEDERAL POLYTECHNIC, ADO EKITI [2013] ALL FWLR (PT 708) 1003;Order 3(2)(a) of the Federal High Court Civil Procedure Rules, 2009.
He relied on EROKORO v GOVERNMENT OF CROSS RIVER STATE [1991] 4 NWLR (PT 185) 322; FRINANAM NIGERIA SERVICES LIMITED v UKUEKU [2006] ALL FWLR (PT 293) 299 before submitting that the learned trial judge was right in dismissing the Appellants Notice of Preliminary Objection on the ground that the said objection was premature since doing otherwise have been tantamount to prejudging the substantive suit at the interlocutory stage. Counsel also noted that the Appellant failed to file its Application to contest the jurisdiction of the Court within 21 days allowed by Order 29 of the Federal High Court Civil Procedure Rules, 2009, which he argued albeit erroneously, is in support of the position that issue of jurisdiction can be raised by parties at any stage of the proceeding, citing SENATE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA v NZERIBE [2004] ALL FWLR (PT 215) 361.
He cited UNION BANK OF NIGERIA PLC v ROMANUS UMEODUAGU [2004] ALL FWLR (PT 221) 1552; BELLO v A.G., OYO STATE [1986] 5 NWLR (PT 45) 828; 7UP BOTTLING COMPANY LIMITED v ABIOLA & SONS BOTTLING COMPANY LIMITED [2001] ALL FWLR (PT 70) 1611; OGUNSANYA v DADA [1990] 6 NWLR (PT 156) 351 on when cause of action arise in a suit. He submits that the Respondents cause of action arose when the Appellant in violation of the provisions of the ITF Act refused and neglected to pay its outstanding statutory training contribution to the Respondents, as disclosed in their claim endorsed in the Writ of Summons and Statement of Claim.
It is also the contention of counsel, referring to Section 5(1) of Arbitration and Conciliation Act; CONFIDENCE v THE TRUSTEES OF THE ONDO STATE COLLEGE OF EDUCATION STAFF PENSION [1992] 2 NWLR (PT ) 390, paras B – D, that the incorporation of an arbitration clause in agreement does not oust the jurisdiction of the Court. Cited KURUBO v ZACH-MOTISON (NIG) LIMITED [1992] 5 NWLR (PT 239) 102 on whether and how the right to arbitration can be waived.
On the Respondents second issue, counsel referred to Section 6(1) and 16 of the ITF Act before noting that the Appellant by its letter dated 5th June, 2014, Exhibit B4 and D4 before the trial stated that the Appellant is an international financial institution which admits the fact that the Appellant is engaged in commerce and industry. He referred to the definition of employer according to the Blacks Law Dictionary; also rely on NDOMA v CHUKWUOGOR [2004] ALL FWLR (PT 217) 735; BUHARI v OBASANJO [2005] ALL FWLR (PT 258) 1604 at 1662, para 47; NIGERIA PORT AUTHORITY PLC v PLASTICS LTD [2006] ALL FWLR (PT 297) 1028, submit that the Appellant is one of the every employer contemplated under Section 6(1) of ITF Act, whether it is a local or an international financial institution.
Referring to Section 4(1) & (2) of the Diplomatic Immunities and Privileges (African Reinsurance Corporation) Order, 1985, counsel submits that the Appellant is only exempted from certain taxes, levies that are specifically mentioned in that section. Counsel submits further that the ITF contribution is not a certain non-beneficial portion of rate and tax or property and other municipal tax normally payable by property and other municipal taxes, urging the Court to consider the principle expressed as expression unis est exclusion alterius the express mention of one thing in a statute automatically excludes any other which would have been implied, citing AWUSE v ODILI [2004] ALL FWLR (PT 212) 1625; A.G., BENDEL v AIDEYAN [1989] 4 NWLR (PT 188) 646 at 672.
Regarding the Headquarter Agreement, counsel contends that it is obvious from Article 14 thereof that the Appellant is only exempted from all taxation and custom duties, specifically those mentioned in the section to include Direct Tax, Indirect Tax, all other taxes, Indirect levies, custom duties and levies. He then submits that the Industrial Training Fund Contribution is neither a tax nor indirect levy, as the 2011 amendment to the Act has expunged the word levy from the extinct Act and replaced same with contribution.
After defining contribution, he referred to Section 1, 2, 7(a) and 8 ITF Act to submit that the 1st Respondent has become a regulatory body established by the Federal Government of Nigeria regulating the activities of all employers of labour in ensuring that all their employees are adequately trained; that the 1st Respondent is therefore not about the employer but the employee, relying on INDUSTRIAL TRAINING FUND v LAGOS STATE WATER CORPORATION (Unreported CA/L/253/97).
On the third issue, Respondents counsel said that the Appellant at no time during the trial of the suit denied the fact that the Audited account tendered by the Respondents belongs to the Appellant nor do the Appellant tendered any other account to controvert the one tendered by the Respondents. He referred to the Appellants annual turnover for 5 years as evidenced by the Audited Account published by the Appellant on its website. Referring to Section 6 of the ITF Act, counsel submits that the Appellant did not deny that it does not have up to five employees in its organization. That the Appellant had all the opportunity at the trial Court to produce its own evidence to controvert and challenged the evidence tendered by the Respondent but fail to avail itself of the opportunity, citing ACB PLC & ANOR v EMOSTRADE LIMITED [2002] FWLR (PT 104) 540 at 550, and the Court should accept the unchallenged evidence of adduced by the Respondents, citing SIAPEM SPA v INDIA TEFA [2001] FWLR (PT 74) 377 at 394; MUOFUNANYA v NWADIOUGBU [2014] ALL FWLR (PT 727) 628 at 807.
On whether the Respondents suit is statute barred, he referred to Section 6(1) and 16 ITF Act, to submit the latter section define prescribed date in respect of every subsequent year to mean a date not later than 1st April of the following year. He noted that the ITF contribution is paid in arrears and not in advance since it is the percetum of annual salaries and wages of employees that had already being paid by the employer in the previous year, so that the Appellants contribution for the year 2008 became payable from January 2009 to 1st April 2009 and actionable from 2nd April 2009 and same applies to the subsequent years being demanded in this suit, hence the claim is not statute barred.
RESOLUTION
The first issue to be considered here is whether the lower Court was right to have assumed jurisdiction to determine the present suit? No doubt, jurisdiction is the life of every form of adjudication, and without it, no Court or Tribunal can proceed to competently determine a suit or matter brought before it. It is a threshold issue that can be raised by any party, or even the Court at any stage of the proceedings, even for the first time on appeal. See what the Supreme Court said in ELABANJO & ANOR v DAWODU [2006] 15 NWLR (PT 1001) 76; (2006) LPELR – 1106 (SC) where MOHAMMED, JSC held:
Jurisdiction is the very basis on which any Tribunal tries a case. A trial without jurisdiction is a nullity The importance of jurisdiction is the reason why it can be raised at any stage of a case, be it at the trial, on appeal to the Court of Appeal or to this Court; afortiori the Court can suo motu raise it. It is desirable that preliminary objection be raised early on issue of jurisdiction; but once it is apparent to any party that the Court may not have jurisdiction, it can be raised even viva voce as in this case. It is always in the interest of justice to raise issue of jurisdiction so as to save time and costs and to avoid a trial in nullity.
See also MKPEN TIZA & ANOR v IORAKPEN BEGHA [2005] 15 NWLR (PT 949) 616; PDP v OKOROCHA & ORS (2012) LPELR – 7822 (SC); NWANKWO & ORS v YAR’ADUA & ORS (2010) LPELR – 2109 (SC).
In the present case, when the issue of jurisdiction was raised by the Appellant, the learned trial judge had held the view, while delivering his Ruling found at pages 279 to 311 of Volume I of the record of appeal, particularly at page 311 thereof, that objection raised by the Appellant is premature as the arguments relating thereto borders on issues in the substantive suit. Indeed, the Apex Court has warned in a plethora of decisions that it is not proper for a Court to pronounce on substantive matters or issues in an interlocutory proceedings or make comment which might appear to prejudge or predetermine the issues that are to be considered in the substantive proceedings. See UNIVERSITY PRESS LTD v I. K. MARTINS NIGERIA LIMITED (2000) LPELR – 3421 (SC); OKOTIE-EBOH v MANAGER & ORS (2004) LPELR – 2502 (SC). Therefore, the learned trial judge acted within the boundary of the law when he expressed the view that the issues raised vide the arguments of counsel on the objection to the Courts jurisdiction, which touches on the substantive suit are at best left till that part of the proceedings.
But the question remains, does the lower Court have jurisdiction to entertain the present suit as constituted?
Appellants counsel is of the view that the jurisdiction conferred upon the Federal High Court under Section 251 of the 1999 Constitution does not extend over a dispute between Nigeria and a Sovereign or an entity with a diplomatic mission status. This argument seems to me clearly misplaced and misconceived.
Recall that the law is well settled that the issue of jurisdiction is determined from the averments and reliefs sought in the claimants writ of summons and statement of claim. See IKINE & ORS v EDJERODE & ORS (2001) LPELR-1479 (SC); ADETONA & ORS v IGELE GENERAL ENTERPRISES LIMITED (2011) LPELR- 159 (SC); AREMO II v ADEKANYE [2004] 13 NWLR (PT 891) 572. I have gone through the averments contained in the Respondents statement of claim and it is quite obvious that the Respondents claim relates exclusively on the payment of statutory contribution by the Appellant to the Respondents pursuant to the relevant provisions of the Industrial Training Fund Act (As Amended), 2011. Of particular relevance are the reliefs sought by the Respondents at pages 8 to 9 of the record, to wit:
a. A liquidated debt of N916,703,476.99 (Nine Hundred and Sixteen Million Seven Hundred and Three Thousand, Four Hundred and Seventy Six Naira Ninety Nine Kobo) being total statutory contribution due and owed by the Defendant to the Plaintiffs from 2008 to 2013.
b. Interest at the rate of 21% per annum on the outstanding debt aforesaid, commencing from 8th July, 2014 until Judgment is delivered in this suit and thereafter at the same rate of interest until the entire debt is totally liquidated.
c. Costs of instituting this action.
Looking at the above reliefs sought by the Respondents vis a vis the provision of Section 251(1) (a) of the 1999 Constitution, I am persuaded to reach the conclusion that the lower Court, the Federal High Court can competently and even exclusively determine the suit as constituted. Section 251(1)(a) of the Constitution confers exclusive jurisdiction on the Federal High Court in civil causes and matters relating to the revenue of the Government of the Federation in which the said Government or any organ thereof or a person suing or being sued on behalf of the said Government is a party. The Respondents claim in the form of statutory contribution being demanded from the Appellant no doubt relates to the revenue of the Federal Government and on this basis alone, the lower Court is competent to adjudicate upon the claim of the Respondents. See NDIC v OKEM ENTERPRISE LTD & ANOR (2004) LPELR-1999 SC; A-G., OGUN STATE & ORS v A-G., FEDERATION (2002) LPELR 621 (SC).
Meanwhile, it is also the contention of the Appellants counsel that the lower Court lacks jurisdiction over the instant case involving the Appellant, an International Organization endowed with diplomatic status and that where any dispute arise between the Nigerian Government and the Appellant, the forum for the resolution of that dispute is not the municipal Court of Nigeria but such dispute settlement platform as agreed by all the Sovereign Member States establishing the Appellant. It appears to me that Appellants counsel has not considered and perused carefully the provisions contained in the Agreement Establishing the Appellant, the African Reinsurance Corporation (Africa Re) (Establishment Agreement) captured at pages 137 to 163 of Volume I of the record of appeal, else he would not have canvassed the argument being considered here. Indeed, by the said Establishment Agreement, which Appellants counsel has branded to support his argument in defence of the Appellant, African States, who are members of the African Union, on whose behalf the Agreement is signed, and the African Development Bank, agreed to establish the Appellant, and by Article 48, it was agreed that:
1. Legal actions may be brought against the Corporation in a Court of competent jurisdiction in the territory of a country in which the Corporation has its Headquarters, or has appointed an agent for the purpose of accepting service or notice of process, or has otherwise agreed to be sued.
The above provision is clear and unambiguous to the effect that legal proceedings may be commenced against the Appellant in Court of competent jurisdiction in either of three forums mentioned therein. One, where the Appellants Headquarter is located; second, where the Appellant has appointed an agent for the purpose of accepting service of processes; third, where the Appellant has by consent agreed to be sued. By Article 23(1) of the Establishment Agreement, it was agreed that the headquarters of the Appellant Corporation shall be in the Federal Republic of Nigeria and it is in this regard that I take judicial notice of the fact that the headquarters of the Appellant is presently situate in Lagos, Nigeria, within the jurisdiction of the lower Court; it is therefore erroneous, to say the least, for counsel to argue that the Federal High Court of Nigeria does not have the necessary competence to adjudicate upon the dispute between the Appellant and the Respondent.
Let me briefly say that the fact that the Appellant is conferred with diplomatic status does not remove the claim outside the jurisdiction of the lower Court, because, contrary to the argument canvassed by the Appellants counsel, which I found not to be well founded, Section 251(1)(h) of the 1999 Constitution confers exclusive jurisdiction on the Federal High Court in civil causes and matters bothering on diplomatic, consular and trade representation, which I believes adequately covers the instant case.
I must not fail to say that the reference by the Appellant to Article 55(2) & (3) and 56 of the Establishment Agreement and Article 26 of the Headquarter Agreement is without any meritorious basis and does not help the Appellants case in any way. For easy reference, Article 55 reads:
1. The text of this Agreement in the working languages approved by the AU shall be equally authentic.
2.Any question of interpretation or application of the provisions of this Agreement arising between any shareholder and the Corporation or between shareholders of the Corporation shall be submitted to the Board of Directors for decision.
3. In any case, where the Board of Directors has given a decision under paragraph 2 of this Article, any shareholder may require that the question be referred to the General Assembly, whose decision shall be final. Pending the decision of the General Assembly, the Corporation may, so far as it deems necessary, act on the basis of the decision of the Board of Directors.
Article 56 on the other hand provides:
Subject to the provisions of the foregoing Article, any dispute between shareholders or between the Corporation and or more shareholders with respect to the interpretation or implementation of this Agreement shall, if possible be settled by negotiation. Failing settlement by negotiation, and unless the parties agree to another method of settlement, any such dispute shall be submitted to arbitration by a Tribunal of three arbitrators. One of the arbitrators shall be appointed by the Corporation, another by the shareholder concerned, and the two parties shall appoint the third arbitrator, who shall be the Chairman of the Tribunal:
Whereas Article 26 of the Headquarters Agreement states as follows:
1. Any dispute between the Corporation and Nigeria concerning the interpretation or application of this Agreement or of any supplementary agreement, which is not settled by negotiation or other agreed mode of settlement, shall be referred for final decision to arbitration by a Tribunal of three arbitrators, one to be appointed by the General Manager, one to be appointed by the Government and the third arbitrator to be chosen by the two, or if they should fail to agree on his appointment, by the President of the International Court of Justice or, should its President be a national of Nigeria by the Vice-President of that Court
The Appellants counsel had relied on the above provisions to argue that until and unless the Respondents fully exhaust the dispute resolution clause that recognizes the submission of dispute to the Appellants Board of Directors, General Assembly, Negotiation and Arbitration, the lower Court lack the jurisdiction to hear and determine the suit. He had contended, albeit erroneously that the question the lower Court was confronted with was the issue of interpretation and implementation of the various Agreement between Nigeria and the Appellant. With respect to the learned counsel, the dispute before the Court principally and exclusively borders on the payment of statutory contribution being demanded by the Respondents from the Appellant; this is the basis upon which the Respondents have approached the lower Court and not as to the interpretation and/or implementation of the various Agreements executed by the Appellant and Nigeria.
The way I see it that questions bordering on the interpretation of the various Agreements were inflated by the Appellant as a defence to the claim brought against it by the Respondents; and as I have earlier stated, it is the claim of the claimant that determines the jurisdiction of the Court and not the statement of defence.
The dispute as disclosed by the averments contained in the Statement of Claim falls within a narrow compass, to wit, payment of statutory contribution due to the Respondents, and by every implication, it is only the Federal High Court that can competently adjudicate on the claim. The provisions of Articles 55 & 56 of the Establishment Agreement as well as Article 26 of the Headquarter Agreement will only be invoked where the subject matter of dispute, as disclosed by the Statement of claim revolves around the interpretation or implementation of the various Agreements. All I have been trying to say, having regard to the decision of the Apex Court in the locus classicus case of MADUKOLU v NKEMDILIM (1962) 2 SC NLR 341 is that the lower Court was not only properly constituted as regards member; the subject matter of the case is within its jurisdiction and no feature in the case prevents it from exercising its jurisdiction. Therefore, it is my respectful view that lower Court has jurisdiction to determine the present suit as constituted. This issue is resolved against the Appellant and in favour of the Respondent.
The second issue is whether the Appellant is not exempted from all taxation, howsoever described, having regard to the Establishment Agreement and the Headquarter Agreement? Appellants counsel is seriously of the view that the Appellant having been conferred with diplomatic status enjoy such immunities as will entitle it to be exempted from the statutory contribution being claimed against it by the Respondent. Reliance is placed on Articles 23, 46 & 51 of the Establishment Agreement and Article 14 of the Headquarters Agreement.
Now, Article 23 of the Establishment Agreement reads:
1. “The Headquarters of the Corporation shall be in the Federal Republic of Nigeria.
2. The member State in whose territory the Headquarters is to be located shall be bound by the provisions of the Headquarters Agreement.
3. The Headquarters Agreement shall be concluded by the Corporation and the host country not later than thirty days from the inaugural meeting of the Corporation and shall immediately on signature become effective and binding.
Article 46 which deals with status, immunities, exemptions and privileges, provide as follows:
To enable the Corporation effectively fulfill its purpose and carry out the functions entrusted to it, the status, immunities, exemptions and privileges set forth in this Chapter shall be accorded to the Corporation in the territory of each member State; and each member State shall inform the Corporation of the specific action which it has taken for such purpose.
In the Headquarters Agreement, it is provided in Article 6 thereof as follows:
Without prejudice to the provisions of Article 48(2) of the Agreement establishing the African Reinsurance Corporation, the Government will take whatever required action in order that the Corporation shall not be dispossessed of its rights in the Headquarters nor deprived of the enjoyment of such rights except with its express consent.
While Article 14 of the said Agreement states that:
The Corporation, its property, other assets, income as well as its operation and transactions shall be exempt from all taxation and from all customs duties. This exemption shall apply in particular, but without limitation by reason of this enumeration:
(a) to direct and indirect taxes and all other taxes and indirect levies in force in Nigeria. The list of such direct and indirect taxes and other taxes and indirect levies shall be determined by exchange of letters. If need be, this list shall be modified whenever the laws of Nigeria relating to taxes or levies are modified. Without prejudice to special concessions offered by the Government to the Corporation by Supplementary Agreements, it is understood that the Corporation will not claim exemption from taxes which are, in fact, no more than charges for public utility services; and
(b) to all customs duties and other levies, prohibitions and restrictions on imports and exports in respect of all articles imported and exported by the Corporation for official purposes, subject to import and export prohibitions orders in force in Nigeria as applicable to other international organizations resident in Nigeria. The Government shall grant exemptions in respect of allotments of petrol or other required fuels and lubricating oils for each vehicle in quantities prevailing for diplomatic missions in Nigeria.
Also of particular relevance to the issue at hand is the Diplomatic Immunities and Privileges (African Reinsurance Corporation) Order, 1985 made pursuant to the Diplomatic Immunities and Privileges Act, 1962, which provides in Section 4 thus:
(1) “The offices and properties of the Corporation shall be exempted from levies in respect of certain non-beneficial portion of rates and taxes, that is to say, property and other municipal taxes normally payable by property owners but which are not charges levied for specific services rendered.
(2) All goods which are imported or exported by the Corporation and which are necessary for the proper performances of its activities, shall be exempted from all customs duties and other charges excepting payments for services rendered; and for the sole purpose of servicing its conferences and similar programmes, the Corporation shall be allowed to import free of custom duty reasonable quantities of drinks and tobacco.
As I already mentioned, the Appellant came into legal existence pursuant to the execution of the Establishment Agreement by members of the African Union, and the African Development Bank. See the Preamble at pages 141 of Volume I of the record of appeal.
It is pursuant to the said Establishment Agreement, particularly Article 23 thereof, which mandates that the Headquarters of the Corporation shall be in Nigeria, that the Headquarters Agreement was executed between the Corporation and the Nigerian Government in Lagos on 10th August, 1977. The combined effect of the provisions of Articles 1, 23, 46 & 52 of the Establishment Agreement and Articles 6 & 14 of the Headquarters Agreement implies that the Appellant is exempted from taxes and levies in force in Nigeria.
Respondents counsel strongly made the point in their brief of argument that exemptions granted to the Appellant under the various Agreements as well as the 1985 Order do not include contributions being sought by the Respondents pursuant to the provisions of the ITF Act. The question to be considered then is, whether the exemptions granted to the Appellant is limited as to make it liable for the payment of statutory contribution under the ITF Act? The answer to this question no doubt rests on a consideration of several elements bordering on state obligation under international treaties vis a vis the enforcement of municipal laws.
Without doubt, the Establishment Agreement executed by member states on 24th February, 1976 in Yaounde, Cameroon, qualifies as a treaty within the realm of international law. As a matter of fact, Article 2 of the 1969 Vienna Convention on the Law of Treaties defines treaty as an international agreement concluded between states in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation. Even though it may be said that the Agreements being considered in this case may not necessarily come within the purview of the 1969 Convention, it is necessary to bear in mind, the provision of Article 3 thereof, which states that the fact that the present Convention does not apply to International agreements concluded between States and other subjects of international law or between such other subjects of international law, or to international agreements not in written form, shall not affect the legal status of such agreements; the application to them of any of the rules set forth in the present Convention to which they would be subject under international law independently of the Convention; and the application of the Convention to relations of States as between themselves under international agreements to which other subjects of international law are also parties.
Coming home, the local statute in Nigeria, the Treaties (Making, Procedure etc) Act, LFN, 2004 applicable to the instant case, similarly defines treaty to mean instruments whereby an obligation under international law is undertaken between the Federation and other country and includes conventions, Act, general acts, protocols, agreements and modivendi, whether they are bilateral or multi-lateral in nature. See Section 3(3) of the Act. Simply put, a treaty is basically an agreement between parties on the international scene. According to Malcolm N. Shaw, International Law, 5th Edition, Cambridge: Cambridge University Press, 2003, page 811, the fundamental principle of treaty law is undoubtedly the proposition that treaties are binding upon the parties to them and must be performed in good faith, based on the rule expressed as pacta sunt servanda, which underlies the entire system of treaty-based relations between states.
Before I proceed any further, I think I ought to reproduce the relevant provision of the ITF Act, empowering the Respondents to demand the statutory contributions they have made as per their writ of summons and statement of claim. Section 6(1) of the Act states that:
(1) Every employer having either 5 or more employees in his establishment, or having less than 5 employees but with a turnover of N50m and above per annum, shall, in respect of each calendar year and or the prescribed date, contribute to the Fund one percentum of his total annual payroll.
It appears to me that the Appellant, by the tenor of the above provisions and in so far as it is an employer that has 5 or more employees in its establishment, falls within the category of persons liable to contribute to the fund. In the Respondents brief, counsel appear to have conveniently shut his eyes to the provision of Section 6(1) of the Act, by contending that only liable organizations, which he argues, includes only private or public companies in the free trade zone requiring approval for expatriate quota are liable to contribute to the Fund.
In this regard, it must be pointed out that Section 6(3) sought to be relied upon by the Respondents does not operate in isolation; and as a matter of fact, it supplements the provision of Section 6(1) which aptly embodies the category of persons liable to contribute to the Fund. By Section 6(1), two categories of persons are liable to contribute to the Fund. The first class includes every employer having either 5 or more employees. The second class includes those having less than 5 employees but with a turnover of 50million naira per annum. By virtue of Section 6(3), the liability is extended to companies situate in the free trade zone who require approval for expatriate quota and/or utilizing custom services in matters of export and import. The implication is that if in any event those companies have by any legal framework, been enjoying such exemption, by this provision, such exemption has been abolished and they become liable to make contribution under the ITF Act. Therefore, I am not with respect, prepared to hold the view, within the narrow scope of the Appellant being an employer of more than five or more employees that the Appellant is not covered under the ITF Act.
Be that as it may, the ultimate question still remains whether the payment of the statutory contribution can be demanded from the Appellant by the Respondents? I have earlier reproduced the relevant provisions of the Establishment Agreement and the Headquarter Agreement as well as the 1985 Order, which by necessary implication exempts the Appellant from taxes and levies mentioned therein. In this connection, attention must be drawn to accepted rules in the interpretation of treaties. These rules have been put forward by several authors and jurists to aid the Court in resolving the problems faced in the area of interpretation of treaties. See U. O. Umozurike, Introduction to International Law, Ibadan: Spectrum Books Limited, 2005, pages 172 to 175; J. Stone, Fictional Elements in Treat Interpretation, 1 Sydney Law review, 1955, page 344.
Learned Author, U. O. Umozurike (supra) outlined about eight rules to be applied in treaty interpretation. First rule is the Textual, Grammatical or Literal Rule, wherein the Court is enjoined to give effect to the ordinary and natural meaning of the provision of a treaty. Second rule is the systematic interpretation, wherein, rather than consider words in isolation, the Court considers them within the context of the paragraphs, articles of the treaty as a whole. Third rule, is the Teleological or Functional Approach, whereby a Court determines the objects and purposes of a treaty and resolves ambiguities by giving effect to them. Fourth rule is the Historical Interpretation (Travaux Preparatoires) where the meaning of the text contained in the statute is clarified by reference to the drafting history or preparatory work. Fifth rule is the logical interpretation wherein the object is to eliminate self-contradictions, inconsistencies and absurdities by means of logical reasoning. The sixth rule is the Authoritative Interpretation which the learned author stated, may take the form of preparatory material inserted at the time of the treaty or subsequently with the consent of the parties in order to aid interpretation. The seventh rule relates to subsequent practice whereby important weight is attached to the practice of states and international institutions, which must be consistent and accepted by the parties to be relevant in interpretation. The eight rule is what the author referred to as “inter-temporal law”?. Here the Court must apply present international law to treaties even though the law may have been different at the time the treaty was concluded.
I believe the above rules were aptly covered by the three rules enumerated by Malcolm N. Shaw (supra) at pages 838 to 839 in the following words:
As far as international law is concerned, there are three basic approaches to treaty interpretation. The first centres on the actual text of the agreement and emphasizes the analysis of the words used. The second looks to the intention of the parties adopting the agreement as the solution to ambiguous provisions and can be termed the subjective approach in contradistinction to the objective approach of the previous school. The third approach adopts a wider perspective than the other two and emphasizes the object and purpose of the treaty as the most important backcloth against which the meaning of any particular treaty provision must be measured. This teleological school of thought has the effect of underlining the role of the judge or arbitrator, since he will be called upon to define the object and purpose of the treaty, and it has been criticized for encouraging judicial law-making.
The learned author concluded and I believe he was manifestly right that any true interpretation of a treaty in international law will have to take into account all aspects of the agreement, from the words employed to the intention of the parties and the aims of the particular document. It is not possible to exclude completely any of these components. In the present case, going by the wordings of the various agreements and the 1985 Order, it will seem that the Appellant is only exempted from the payment of direct and indirect taxes and all other indirect levies in force in Nigeria pursuant to Article 14(a) of the Headquarters Agreement; and levies in respect of certain non-beneficial portion of rates and taxes mentioned under paragraph 4(1) of the 1985 Order. Truly, as rightly argued by the Respondents counsel, nowhere in the agreements relied upon by the Appellant was it stated that the Appellant is exempted from contribution.
Counsel buttressed the point that the law regulating the Industrial Training Fund prior to the extant 2011 (amended) Act had copiously made use of the word levy but same has been expunged and replaced with the word contribution, which according to counsel is not levy because it is neither a charge on consumption nor expenditure, privilege or right. I agree with the learned counsel on this point but I am also not mindful of the provision of Article 51 of the Establishment Agreement which broadly states that each member state shall in particular undertake to exempt the Corporation (Appellant) from all duties and taxes arising from its activities on its national territory. Obviously, taking into account the object and purpose of the Establishment Agreement as a whole, to foster the development of the insurance and reinsurance industry at national and regional levels, with a view to achieving a better spread of risks and continuously increasing the continents capacity to retain reinsurance premiums as well as to promote the growth of the national, regional and sub-regional underwriting and retention capacities and support African economic development; (See the preamble and Article 3 of the Establishment Agreement) as well as the immunities, status, exemptions and privileges which member states have agreed will be accorded to the Appellant, I am persuaded that the Appellant is exempted from the payment of kind of levy sought to be enforced against it by the Respondents.
I am further persuaded by the unambiguous text of Article 14 of the Headquarters Agreement which aptly states that the Appellant, its property, other assets, income as well as its operation shall be exempt from all taxation and from all customs duties, and this exemption shall apply without limitation to those taxes and/or levies enumerated under the said Article. This means that the fact that a particular levy or tax or payment is not listed under Article 14 cannot preclude the Appellant from insisting on exemption. As a matter of fact, Article 14(a) expressly states that without prejudice to special concessions offered by the Government, it is understood that the Corporation (Appellant) will not claim exemption from taxes which are, in fact, no more than charges for public utility services.
This is obviously the only limitation to the exemption granted to the Appellant, and unless it is shown that the contributions being sought by the Respondents from the Appellant are charges for public utility services, I am persuaded to hold the view that Appellant is exempted from paying such contribution.
I cannot pretend that I fully appreciate the contention of the learned Respondents counsel in this area of his argument. It is my respectful view that it is of no moment that the payment sought to be enforced against the Appellant is labeled contribution under the ITF Act, what is relevant is that in so far as the contribution is a form of levy, the Appellant is exempted from making such payment. Any contrary conclusion will be manifestly absurd and a tacit negation of the rule expressed as pacta sunt servanda. Needless to say that the Apex Court has admonished every Court in this country to desist from a construction of municipal or local law that will lead to a breach of accepted rule of international law. In the words of UWAIFO, JSC, in ABACHA & ORS v FAWEHINMI (2000) LPELR-14 (SC) 184 to 185, paras B D;
There is therefore a presumption that a statute (or an Act of Parliament) will not be interpreted so as to violate rule of international law. In other words, the Courts will not construe a statute so as to bring it into conflict with international law. Thus it was observed in Bloxam v. Favre (1888) 8 PD 101 at 107 (adopting the opinion expressed in Maxwell on Interpretation of Statutes) that
every statute is to be so interpreted and applied, as far as its language admits, as not to be inconsistent with the comity of nations or with the established principles of international law. The application of this principle does not imply that a statute will declared ultra vires as being in contravention of a treaty or of an international law, or that the treaty is superior to the national laws (a completely erroneous concept), but that the Courts would desist from a construction that would lead to a breach of an accepted rule of international law
Certainly, I am aware that 1st Respondent was established to promote, accelerate and encourage the acquisition of indigenous skills required in industry and commerce to meet the developmental needs of Nigeria, and it is on this basis that, by Section 1 of the ITF Act, a fund was established. This is no doubt a welcome development and a landmark initiative which should be encouraged but not at the expense of derogation of our obligations under international agreements. Needless to say that the obligation of Nigeria in relation to the activities of the Corporation is dual in nature; first as a member state/shareholder under the Establishment Agreement and secondly, as the host of the Appellants Headquarter and by virtue of the various agreements executed, it is bound to perform its obligations and cannot therefore, invoke the provisions of its local law to supplant its obligations. This will not be encouraged.
Be that as it may, I am mindful of the admonition of the Apex Court in a plethora of decisions that trial Court and even this Court must consider and pronounce on every issue submitted to it by the parties and it is in this regard that I shall proceed to consider the last issue in this appeal as to whether the Respondents have discharged the burden of proof which rests on them in the instant case?
478 of Volume II of the record of appeal, the learned trial judge held as follows:
The case the Plaintiff has laid down during trial is that the Defendant is liable to pay to the ITF contribution which they have failed to do. They tendered the Audited Accounts of the Defendant which is Exhibits B in support of their case. Exhibit B1 is the pre-action notice; they also tendered various Exhibits in support of their case. I believe at that stage they have discharged the burden of proof on them. At that stage the Plaintiff has discharged the burden of proof and it then shifted to the Defendant. In civil case the onus of proof does not remain static but shifts from side to side. I believe the defendant was given enough opportunity to challenge the amount claimed by the plaintiff. The defendant should have sent the correct statement of account to the plaintiff if they were not satisfied with the one used. They chose not to challenge it and this Court will hold that they do not oppose the audited accounts.
In conclusion, based on the evidence before the Court, I find merit in the case of the Plaintiff… Save for the position I have earlier stated that the Appellant is exempted.
I agree with the learned trial judge that the Respondents claim ought to succeed. I share similar sentiments expressed above and I adopt same as my view in this appeal. I therefore resolve the issue in favour of the Respondents.
To this end, this appeal succeeds in part on the second issue formulated by the Appellant. Therefore, having regards to the Establishment Agreement and Headquarter Agreement as well as other legal framework earlier considered, this Court finds and hereby declare that the Appellant is exempted from the statutory contribution sought to be enforced by the Respondents under the Industrial Training Fund.
The judgment of the Federal High Court, coram I. N. AUTA, C. J. (now retired) delivered on 9th February, 2016 is hereby set aside. Parties to bear their respective costs in this appeal.
MOHAMMED LAWAL GARBA, J.C.A.: My learned brother Abimbola Osarugue Obaseki-Adejumo, JCA has adequately considered the issues that fall for decision in this appeal in the lead judgement and I agree with the conclusion and the terms thereof.
GABRIEL OMONIYI KOLAWOLE, J.C.A.: I agree with the lead judgment delivered by my learned brother, ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, JCA. I also abide with the consequential order as to
Appearances:
Kehinde Aina, with him, O. B. Bioku, Kingsley Amaefule, Kelly Agbonze and Chinelo Ekedukwe For Appellant(s)
Respondents not represented. For Respondent(s)
