FELSHADE INT’L (NIG) LTD v. TRAFUGURA BEHEER B.V. AMSTERDAM
(2020)LCN/14306(CA)
In The Court Of Appeal
(LAGOS JUDICIAL DIVISION)
On Tuesday, June 30, 2020
CA/L/127/10
Before Our Lordships:
Mohammed Lawal Garba Justice of the Court of Appeal
Gabriel Omoniyi Kolawole Justice of the Court of Appeal
Balkisu Bello Aliyu Justice of the Court of Appeal
Between
FELSHADE INTERNATIONAL (NIG) LTD APPELANT(S)
And
TRAFUGURA BEHEER B.V. AMSTERDAM (OWNERS OF CARGO OF ABOUT 30, 000 MT OF LOW RUN OF NAPHITHA (REFORMATE) ON BOARD THE MT ”NORD OBSERVER” AT PORT HARCOURT) RESPONDENT(S)
RATIO
THE FUNDAMENTAL PRINCIPLE OF JURISDICTION
It cannot be over emphasized that the jurisdiction of a Court to determine a cause or matter filed before it is fundamental and has been described as the threshold of adjudication. Jurisdiction is so fundamental that it can be raised at any time even on appeal before the Supreme Court. Indeed, in the case of Salisu & Anor. V. Mobolaji & ors. (2013) LPELR-22019 (SC) the Apex Court per Muhammad, JSC reiterated this fundamental nature of jurisdiction to the extent that it can even be raised orally:
“It is not out of place to stress that the issue of jurisdiction is a threshold one which this Court, in Elugbe v. Omokhafe (2004) 11-12 SC 60, has held must not be treated lightly. The point has repeatedly been made that no matter how well proceedings were conducted by a Court the proceedings would come to naught and remain a nullity if same were embarked upon without jurisdiction. This explains the principle of law which allows the issue of jurisdiction to be raised orally and even for the first time in this Court.” PER ALIYU, J.C.A.
WHETHER OR NOT AN APPLICATION BY A DEFENDANT SEEKING THE STRIKING OUT OF A SUIT ON THE GROUND OF LACK OF JURISDICTION IS A DEMURRER
An application by a defendant seeking the striking out of a suit on the ground of lack of jurisdiction is not a demurrer. See Ajayi V. Adebiyi & ors. (2012) LPLER- 7811 (SC). In any event whenever the jurisdiction of a Court is challenged at any level of proceedings, but particularly at trial Court where a suit is commenced, the Court could simply refer to and rely on the writ of summons and the statement of claim to determine the complaint and no more.
This is because generally, it is the relief claimed or sought by the plaintiff, together with the facts relied upon for seeking the relief stated in the plaintiff’s statement of claim that determine the competence of a Court to entertain the matter. A statement of defence has no role to play in the determination of a Court’s jurisdiction. See Nika Fishing Co. Ltd V. Lavina Corp. [supra], K. Maestsch V. Bisima (2014) 10 NWLR (pt. 1416) 479, Adelekan V. Ecu-Line NV (2006) 12 NWLR (pt. 993) 33, B. B. Apugo & Sons Ltd V. O. H. M. B. (2016) 13 NWLR (pt. 1529) 206 and Dec Oil & Gas Ltd V. Shell Nig. Gas Ltd (2019) LPELR-49347 (SC). PER ALIYU, J.C.A.
BALKISU BELLO ALIYU, J.C.A. (Delivering the Leading Judgment): This appeal is against the ruling of the Federal High Court, Lagos judicial division (trial Court) delivered on the 19th May 2009 in respect of Suit No: FHC/L/CS/375/2009 by which the Appellant’ suit was struck out.
The Appellant as the plaintiff before the trial Court filed an admiralty action through a writ of summons dated the 6th April 2009 by which it sought for the following relief against the Respondent as the defendant:
The sum of US41, 806, 270. 16 (forty-one million, eight hundred and six thousand, two hundred and seventy US dollars, sixteen cents only) being for damages and losses accrued as a direct consequence of the sales of the A.G.O. that is against specification to it by the 2nd defendant with interest at 25% per annum from July 2008 till judgment and thereafter at 21% per annum till judgment sum is defrayed.
The writ of summons was accompanied with the Appellant’s statement of claim and the documents the Appellant intended to rely on at the trial, both located in pages 35 to 72 of the record of appeal. The facts of the case stated therein are that the
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Appellant and the Respondent entered into a contract No. 184515 dated 5th September 2008 by which the Appellant agreed to buy from the Respondent (as suppliers and shippers) the total of 25, 820.112MT of automated Gas Oil (AGO), otherwise known as Diesel and the specification of the quality of the product was determined in the contract. The Appellant claimed that it paid for the products and the Respondents arranged the shipping of the cargo on board the ship, MT “Amber Jack” for delivery off shore Cotonou, Benin Republic. Upon receipt of the said cargo, the Appellant claimed that its customers complained that the product failed to meet the specification set by DPR as the colour exceeded the maximum of 3.0 prescribed. Consequently, the customers sought for a total or substantial refund of the money they paid the Appellant for the products on the ground that the Appellant intentionally misled them.
A further survey conducted on the cargo revealed that the colour of the product was between 6 and 7 and the conclusion was that it was “off spects” and unfit for the purpose for which it was imported. The Appellant claimed that the
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Respondent supplied AGO that was improperly refined, and not up to the standard set by the Nigerian Government and in breach of the fundamental term of the contract between them. As a result of the poor quality of the product, the Appellant claimed that it had to sell it at a very low price at huge losses for which it claims the above stated relief.
Simultaneously with the filing of the said originating processes, the Appellant also filed an application by a motion ex-parte and it prayed the trial Court for an order arresting/attaching the Respondent’s 30,000MT of Reformate that was on board MT “NORD OBSERVER” lying at the refinery jetty Port Harcourt Rivers State, pending the provision by the Respondents of a satisfactory and acceptable guarantee from either First Bank of Nigeria Plc or Union Bank of Nigeria Plc to secure the Appellant’s claim. On the 6th April 2009, the trial Court granted the ex-parte application of the Appellant and ordered the arrest of the said cargo of 30, 000 MT of Reformate on board the said ship belonging to the Respondents.
Upon being served with the originating processes, the Respondents entered
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appearance under protest, without filing a defence to the claims of the Appellant. They also filed an application by way of a motion on notice dated the 15th April 2009. By that motion which can be found in pages 131 to 138 of the record of appeal, the Respondents prayed the trial Court for the following reliefs:
1. AN ORDER of the Honourable Court striking out the suit and the present proceedings on the ground that this Honourable Court lacks jurisdiction to determine the suit as presently constituted, and/or any claims arising under or in connection with a Sale Contract dated 5th September 2008.
2. AN ORDER of this Honourable Court setting aside, dissolving and or discharging unconditionally the Interim Order/Order Ex-parte made on the 6th day of April 2009 for the attachment and or arrest of 30,000 metric tonnes of low run Naphtah (Reformate) presently located on board M/T “NORD OBSERVER” at Port Harcourt, to secure the Plaintiff’s purported claim.
The application was predicated on the following grounds:
i. The Plaintiff’s suit is a claim to recover damages under a contract of sale or supply of goods.
ii. Therefore, the cause of action being a claim in simple contract
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was wrongly dressed up and commenced as an admiralty action in personam in violation of Section 251 of the Constitution of the Federal Republic of Nigeria, 1999 and Sections 1 and 2 of the Admiralty Jurisdiction Act 1991.
iii. Premised on the contents preceding grounds, the orders made by this Honourable Court on the 6th day of April, 2009 for the attachment and arrest of 30,000 metric tons of Low Run Naphtha (Reformate) presently located on board the M/T “NORD OBSERVER” at Port Harcourt, Rivers State on 3rd June 2008 at the instance and upon the application of the Plaintiff was/is premised on the misrepresentation of the Plaintiff that the action is validly an Admiralty Action in personam.
iv. Further, the issuance and service of the Originating Processes in this suit was not accomplished as provided for by the rules of this Honourable Court, in that leave to issue and serve the processes on the Defendant, a party out of the jurisdiction was not obtained by the Plaintiff.
v. Further, the suit was commenced in violation of an agreement between the parties to submit all
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disputes arising under the Sales Contract to determination by the High Court of Justice in England.
vi. Having regard to the applicable law and rules, this Honourable Court lacks jurisdiction to make the Orders pronounced in this suit on the 6th day of April 2009, and the jurisdiction to determine the Plaintiff’s suit as presently constituted.
vii. In the circumstances, the Claimant is not entitled to the orders made by this Honourable Court on the 6th day of April 2009 in these proceedings.
After considering the affidavits in support and in opposition of the application and the respective counsel written submissions; as well as the claim of the Appellant as per its statement of claim, the learned trial Judge delivered the vexed ruling whereby he held that:
“It is therefore my respective view that the plaintiff is bound by the foreign jurisdiction clause embedded in the terms of the agreement between the parties. On this score alone, the plaintiff’s claim cannot be entertained by this Court. In conclusion, having regards to my various conclusions in this matter, this Court lacks jurisdiction to entertain the
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plaintiff’s claim for the reasons extensively given earlier in this ruling. In the circumstances, I am bound without more to put an end to these proceedings by making an order striking out the suit for want of jurisdiction. I have no hesitation in doing so afortiori, the suit is hereby struck out.”
The Appellant was aggrieved with the ruling of the trial Court and it filed its amended notice of appeal on the 10th October 2017, relying on eight grounds of appeal. The record of appeal was deemed properly transmitted on the 20th May 2010 and a supplementary record of appeal transmitted on the 26th August 2014 was deemed properly transmitted on the 9th October 2017.
The Appellant’s brief of argument settled by Ayo Olorunfemi Esq. was deemed properly filed on the 9th October 2017. He raised seven (7) issues for determination from the eight grounds of appeal thus:
i. Whether the Respondent’s application giving rise to the ruling forming the subject matter of this appeal is not a demurrer when the said application extensively challenged and controverted the facts in the statement of claim without filing a defence as
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prescribed under the relevant Rules of Court, which procedure has been expressly abolished? (Ground 1).
ii. Whether the learned trial Judge was right when he held (agreeing with the Respondent) that the subject matter of the Plaintiff’s claim was not in Admiralty cognizable by the Federal High Court, and consequently declined jurisdiction over the matter striking out the Plaintiff’s case and its earlier orders, including the one for the arrest/attachment of the cargo when in addition to facts of Admiralty jurisdiction being sufficiently pleaded, the Plaintiff also pleaded that the entire transaction was financed by a Letter of Credit, a fact admitted by the Defendant? (Grounds 2 and 3).
iii. Whether the learned trial Judge was right when he held that the Appellant was not entitled to apply for an Order attaching the Defendant’s cargo as security for the claim before it. (Ground 4).
iv. Whether the learned trial Judge was right in striking out the proceedings before him based on the Foreign Jurisdiction Clause (FJC) in the contract between the parties, or whether he wrongly applied the decision of the Supreme Court in the case
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of Sonnar Nig. Ltd V. Nordwind (1987) 4 NWLR (pt. 66) 520? (Ground 5)
v. Whether the learned trial Judge’s finding that the property in dispute belonged to the Plaintiff was right or wrong and this has thereby occasioned a miscarriage of justice. (Ground 6).
vi. Whether the learned trial Judge was right when he held the plaintiff’s application to arrest/attach the Defendant’s cargo under Order 17 of the Federal High Court (Civil Procedure) Rules 2000 was inappropriate because Section 5(3) of the Admiralty Jurisdiction Act, 1991 did not permit it and also without the Plaintiff having first called upon the Defendants to secure the claim? (Ground 7).
vii. Whether, after holding that he lacked jurisdiction to entertain the Plaintiff’s/Appellant’s suit, the trial Judge should not have nevertheless proceeded to exercise his power of transfer under the Federal High Court Act (while preserving the order), by transferring the substantive action to the State High Court for Adjudication instead of striking out the suit as he did? (Ground 8).
The Respondents’ brief of argument was settled by Mark Mordi Esq. and filed
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on the 24th October 2018, but deemed properly filed and served on the 4th June 2020. The Respondents proposed the following issues the determination of this appeal:
a. Whether the lower Court correctly found that the subject matter of the action before it was not an admiralty matter over which the Federal High Court had exclusive jurisdiction?
b. Whether the lower Court rightly discharged the interim order of attachment on the basis that there was no basis to grant same in the first place?
c. Whether the lower Court was correct in striking out the action on the ground that it was filed in breach of the foreign jurisdiction clause?
d. Whether the error in the Ruling of the lower Court on the ownership of the arrested cargo is substantial to warrant a reversal of the decision of the lower Court?
e. Whether the Respondent could validly challenged the jurisdiction of the lower Court by means of a demurrer application?
f. Whether in view of the circumstances of this case, the lower Court could have validly transferred the matter to the State High Court.
Regrettably, none of the six issues proposed by the Respondents reproduced
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supra was tied or married to any of the eight (8) grounds of appeal.
The Appellant’s Reply brief was filed on the 13th June 2019 and consequentially deemed properly filed and served on the 4th June 2020, the day the appeal was called for hearing. Learned Appellant’s counsel Femi Olorunfemi Esq. leading Miss Adedepo Aromire adopted the Appellant’s two briefs and prayed the Court to allow the appeal and order the trial of the Appellant’s suit on the merit or in the alternative transfer the suit to the High Court of Lagos State for determination pursuant to Section 22(2) of the Federal High Court Act. On his part, the Respondent’s learned Counsel, Mark Mordi Esq. leading O. E. Okugani Esq. adopted the Respondent’s brief and urged upon the Court to dismiss the appeal and to affirm the ruling of the trial Court.
A calm perusal of the issues for determination raised by each party shows that the Appellant’s issue 1 is the same with the Respondent’s issue 5, its issue 2 is the same with the Respondent’s issue 1, its issue 3 is the same with the Respondent’s issue 2, issue 4 is the same with the
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Respondent’s issue 3, issue 5 is the same with the Respondent’s issue 4 and Appellant’s issue 7 is same with the Respondent’s issue 6. It means the parties are in substantial agreement with the issues for determination arising from the 8 grounds of appeal. I will proceed to review the argument on the Appellant’s issues as canvassed by learned counsel on both sides.
ISSUE 1
This issue distilled from ground 1 of appeal questioned the competence of the application of the Respondents upon which the vexed ruling was delivered in view of the fact that demurrer is abolished by the relevant Federal High Court (Civil Procedure) Rules 2000. In arguing this issue, the learned Appellant’s counsel submitted that the Respondent in its application delved into the substance of the Appellant’s suit through its affidavit in support of the application by which it controverted facts in the statement of claim without filing a defence, and that the learned trial Judge’s mind was swayed by those facts in the affidavit in coming to his decision. He relied on the case of Ege Shipping & Trading Ind. V. Tigris Int’l Corp
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(1999) 14 NWLR 9pt. 637) 70 at 84, and others to the effect that the only proper way to challenge averments in a statement of claim is by filing a statement of defence and not through an application to dismiss the plaintiff’s suit in limine. He argued that the application of the Respondent was akin to demurrer which has been abolished under the rules of the trial Court and he urged the Court to resolve this issue in favour of the Appellant.
The Respondent’s learned counsel argued this issue under its issue 5 in page 26 paragraphs 89 to 90 of the Respondent’s brief. He submitted that it is settled law that an application challenging the Court’s jurisdiction is not a demurrer and can be prosecuted even without filing a defence. He relied on the case of Elabanjo V. Dawodu (2006) 15 NWLR (pt. 1001) 76 in urging the Court to discountenance the argument of the Appellant. Further that the Appellant who argued that the trial Court was swayed by the facts deposed in the Respondent’s affidavit, but the Appellant failed to show any specific fact relied upon by the trial Court other than the facts contained in the Appellant’s
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pleading. He urged the Court to resolve this issue against the Appellant.
By way of reply on points of law, the Appellant’s learned counsel insisted that the Rules of Procedure of the trial Court expressly prohibited demurrer and the Respondent ought to have filed a statement of defence and not controvert the facts in the statement of claim by way of affidavit evidence.
ISSUE 2
The Appellant’s issue two distilled from grounds 2 and 3 of appeal questioned the trial Court’s agreement with the Respondent that the Appellant’s claim is not in admiralty, as such the trial Court has no jurisdiction to determine it. The learned Appellant’s counsel’s submission on this issue is contained in pages 8 to 12 (paragraphs 4.7 to 4.12) of the Appellant’s brief. He submitted that jurisdiction of a Court is determined not only by the nature of the claim but also by other considerations. However he did not state the other considerations he referred to, but only referred to the claims of the Appellant in the writ and statement of claim, particularly paragraphs 9 to 12, 20, 26 and 29 of the statement of claim which facts he
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posited showed that the AGO was shipped by sea on board a vessel. It was also loaded from a mother vessel and transported to the Appellant. The transaction/contract was conducted through a letter of credit and the Appellant’s claim for damages included cost of freight and demurrage. The learned Counsel argued that the combined reading of the said paragraphs showed that the contract was not just for the supply but a contract of carriage of goods by sea. As such he submitted that it is within the jurisdiction of the trial Court as provided by Sections 1(1) (g) and 19 of the Admiralty Jurisdiction Act No. 59 of 1991 (AJA, 1991), read together with the provisions of Section 251(1) (g) of the Constitution of Nigeria, 1999 as amended. He placed reliance on a host of cases including the case of G & C. Lines & Ors V. Hengrace Nig. Ltd & Ors. (2001) 7 NWLR (pt. 711) 51 (CA), to submit that the trial Court was clearly conferred with exclusive jurisdiction to determine the Appellant’s case and we were urged to so hold and resolve this issue in favour of the Appellant.
The learned Respondents’ counsel extensive reply to this issue
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is contained from page 3 to 15 of the Respondent’s brief. The position of the Respondents is that the suit of the Appellant is not an admiralty matter but a simple contract for sale of goods, and therefore the learned trial Judge was right to decline jurisdiction to determine it. He referred to paragraph 9 of the statement of claim which described the nature of the contract and paragraph 33 of the statement of claim whereby the Appellant claimed damages and losses accrued as a direct consequence of the supply of the AGO that was supplied off specification. He submitted that the contract document described the Appellant as the buyer and the Respondent as the seller of the AGO, as such; the Sales of Goods Act is the regulating law governing the contract. Further submitted that the contract between the parties stipulates that the entire cost and risk of shipment of the cargo were on the Respondent and the title in the goods passed to the Appellant only upon taking delivery. That, the Appellant claim was not premised on any bill of lading showing evidence of a contract of carriage by sea, and the fact that the cargo was shipped by sea does not alter the
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essential character of the contract entered into between the parties as sale contract.
With regards to the Appellant’s alleged claim of freight and demurrage losses, the Respondents argued that the alleged losses occurred after the Appellant took delivery of the AGO using its own vessels, as such those claims are not applicable to the contract since the Appellant took delivery of the cargo and they allegedly accrued because of the Appellant’s inability to dispose the cargo easily to its buyers in Nigeria, which was not part of the contract between it and the Respondents. The learned Respondent’s counsel argued that in any case, demurrage being damages to be paid by a charterer of a ship for delaying the ship beyond the stipulated lay days was not applicable to this case since there was not such agreement between the parties. That the clause 16 of the contract applies only when the Appellant failed to take delivery of the cargo within stipulated time from the mother vessel at Cotonou.
With regards to the authorities cited by the Appellant, learned Respondent’s counsel submitted that they do not take precedence over Supreme
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Court’s decisions the Respondent cited and in fact, the facts and circumstances of those cases are different from the facts of this case. He relied on the cases of B. B. Apugo V. Orthopaedic Hospitals Management Board (2016) 13 NWLR (pt. 1529) 206, Chevron (Nig.) Ltd V. Lonestar Drilling Nigeria Ltd (2007) 16 NWLR (pt. 1059) 168, Aluminium Manufacturing CO. Ltd V. N.P.A. (1987) 1 NWLR (pt. 51) 475, Iroegbu V. MV Calabar Carrier (2008) 5 NWLR (pt. 1074) 314 and others, mainly to the effect that it is not every transaction that involves shipping by sea that can found an action under the Admiralty jurisdiction of the Federal High Court.
On points of law, the Appellant’s learned counsel submitted that the damage to the AGO cargo complained of occurred during the course of the carriage by sea and that it pleaded to this fact in paragraph 11 of its statement of claim, which made it more than a simple contract of sale of goods.
ISSUE 3
In this issue the Appellant raised the question whether he is not entitled to the ex-parte order of arrest and detention of the Respondents’ cargo as security for his claim before the trial Court.
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Learned Counsel submitted that since the Appellant’s claim disclosed prima facie case against the Respondents, it was entitled to the interim order of injunction that the trial Court granted in its favour to secure its claim especially as the Respondent is neither resident nor did it have any known assets within the jurisdiction of the trial Court. He relied on the Order 12 Rule 3 of the Admiralty Jurisdiction Procedure Rules (AJPR) 1993 and the case of MV “ARAZ” V. L. P. SHIPPING (1996) 6 NWLR (pt. 457) 720 at 730 in support.
It was his further contention that the learned trial Judge was misled by the Respondent’s argument to misconceive the purport of the decision of the English Court of Appeal in Nippon Yusen Kaisha V. Karageorgis (1975) 2 Lloyds Law Report 137, as supporting the argument of the Respondent to the effect that in Nigeria a plaintiff has no right to obtain security for his claim by attaching the Defendant’s assets prior to the determination of his claim. He relied on Order 17 of the Federal High Court (Civil Procedure) Rules, which allowed the practice; and insisted that the trial Court was entitled to, and
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rightly made the order of arrest against the cargo of the Respondents and he urged the Court to so hold and resolve this issue in favour of the Appellant.
The Respondent’s submission on this issue is contained in pages 15 to 19 (paragraphs 52 to 66) of the Respondent’s brief. The learned Respondent’s counsel argued that the grant of the interim order of attachment against the Respondent’s cargo amounted to nullity in the absence of jurisdiction of the trial court on the substantive suit. That even assuming the claim of the Appellant was an admiralty claim, it is not every type of admiralty claim that allows the plaintiff to arrest maritime property such as a vessel or a cargo. He submitted that only in cases where the plaintiff’s claim is an admiralty claim in rem that an arrest of maritime properties can validly be effected as provided by Section 7 of the Admiralty Jurisdiction Act,1991 and Order 7 Rule 1(1) of the AJPR 1993. He further submitted that it was because the Appellant knew his claim was not an admiralty action in rem that was why he relied solely on Order 17 of the lower Court’s Rules as justification for
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the grant of the interim order of arrest. But that the lower Court rejected the argument of the Appellant on the basis that by the provisions of Order 17 of the FHC Rules, it could only secure an attachment of property upon a failure to furnish adequate security for the claims. The lower Court found that the Appellant’s failure to apply that adequate security be furnished meant that the order for attachment was defective and therefore it was justified in the light of Order 17 of its Rules to set aside the interim order of arrest, particularly because in the Appellant’s motion ex-parte for the grant of the attachment order, it stated that the cargo sought to be attached was on board a vessel at Port Harcourt in Rivers State. As such, going by the provisions of Order 17 of the FHC Rules, the only Court that could validly make the order of arrest was the Port Harcourt division of the Federal High Court and for this reason alone, the interim order of attachment ought to be discharged.
In response to the Appellant’s argument to the effect that the interim order of arrest was justified in order to secure the claims of the Appellant against
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a defendant who is not resident nor has any known asset within jurisdiction, he argued that the Appellant failed to justify its position that maritime properties can be attached as security for a claim in an action other than an admiralty action in rem. That the cases of MV “Araz” V. LPG Shipping (supra) and M/V Da Quing Shang V. P.A.C. Ltd (supra) relied upon by the Appellant do not apply to this case because in those cases, the vessels were arrested by the Court on the basis that the action was properly commenced as an admiralty action in rem, though in MV Araz’s case the arrest order was subsequently discharged when it turned out that the action filed was not an admiralty claim in rem.
Conclusively, the learned Respondent’s counsel maintained that a party seeking security in any action other than an admiralty action in rem must comply strictly with the provisions of Order 17 of the FHC Rules and such attachment can only be made where the defendant is unable to comply with the Court’s directives to provide security, and the only competent Court to make such order for the provisions of security is the court within the
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judicial division where the property sought to be attached is situated. We were urged to discountenance the argument of the Appellant under this issue.
By way of reply on law, the Appellant’s learned counsel repeated his earlier submissions, insisting that the Appellant was entitled to secure his claims against the Respondents.
ISSUE 4
This issue is distilled from ground 5 of appeal by which the Appellant raised the question whether the learned trial Judge was right to terminate the proceedings before him based on a Foreign Jurisdiction Clause contained in the contract between the parties, in view of the Supreme Court’s decision in Sonnar Nig. Ltd V. Nordwind (1987) 4 NWLR (pt. 66) 520. The Appellant’s learned counsel referred to the said contract between the parties and paragraphs 10, 11, 13, 14 and 15 of the Appellant‘s statement of claim which disclosed its case at the lower Court that the contract was never made available to it until after the encashment of the letter of credit by the Respondent. He submitted that the Respondent couldn’t seek to controvert these allegations without filing a defence and going to
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trial. He relied for support on the case of Ege Shipping & Trading Ind. V. International Corp. (1999) 14 NWLR (pt. 637) 70 at 84 B-C.
With regards to clause 19 of the contract, he argued that since from the averments of the Appellant in its statement of claim, it made out a complaint of breach of a fundamental term of the contract, which automatically entitled it to avoid the contract altogether, but also entitled it to mitigate its losses. He contended in the circumstance, the substance of clause 19 of the contract (the foreign jurisdiction clause) can be ignored for being no longer binding on the Appellant. Alternatively, the said clause 19 of the contract amounts to an ouster of lower Court’s jurisdiction and it is therefore null and void in view of the provisions of Section 20 of the AJA, 1991. He further argued that there is a difference between arbitration clause in a contract and a foreign jurisdiction clause and this was held in the case Sonnar Nig. Ltd V. Nordwind (supra). He urged the Court to so hold and to resolve this issue in favour of the Appellant.
The Respondent’s argument in response of this issue is contained in
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pages 19 to 25 of the Respondent’s brief. It was submitted that the trial Court found the Appellant’s argument to the effect that it is entitled to avoid the contract because it was deceived into entering it to be false. Further that the Appellant’s argument that since the Respondent alleged breach of a fundamental term of the contract entitled it to treat the contract as having been discharged including the foreign jurisdiction clause is completely flawed. He relied on the English Court of Appeal’s decision of Deutsche Bank V. Asia Pacific Broadband Wireless Communications (2008) EWCA Civ. 1091, where it was held that a foreign jurisdiction clause like an arbitration clause ought to be treated as distinct and separate from other provisions of the contract and it survives even where there is an invalidation of the main agreement. Therefore, that even assuming it is correct that the sales contract is void for deceit or terminated for fundamental breach as asserted by the Appellant, the foreign jurisdiction clause survives such termination or invalidation of the contract and the parties would still be required to resolve questions of
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contractual breaches in the judicial forum elected by them.
In response to the Appellant’s argument that in view of the provisions of Section 20 of the AJA, 1991, the foreign jurisdiction clause amounts to ouster clause and therefore null and void, the Respondent submitted that the provision of that Section does not apply to the instant case being not an admiralty action contemplated by the said Section 20. That even assuming the Appellant’s claim was an admiralty claim, Section 10(1) of the same Act makes it clear that an admiralty Court is bound to give effect to foreign jurisdiction clause in a contract, and that the use of the expression “without prejudice to any other power of the Court” used in Section 10 subordinates Section 20 to it (Section 10). He further submitted that the attitude of the Nigerian Courts has moved from one of hostility towards the enforcement of foreign jurisdiction/arbitration clauses contained in qualifying agreements under the AJA. That the current position of the law in Nigeria is that foreign jurisdiction clauses wound no longer be considered as an ouster of the Court’s jurisdiction, but
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would be enforced in deserving circumstances. In support of this proposition, learned Counsel relied on the Supreme Court’s decisions in The Owners of the MV Lupex V. NOC & S Ltd (2003) 15 NWLR (pt. 844) 469, Nika Fishing Co. Ltd V. Lavina Corp. (2008) 16 NWLR (pt. 1114) 504, Onward Enterprises V. MV Matrix & Ors. (2010) 2 NWLR (pt. 1179) 520.
It was further contended that the Appellant’s attempt to distinguish foreign jurisdiction clause with arbitration clauses is inconsequential because the relevant consideration is that parties to the contract chose different forum other than the national Courts to hear and determine their dispute arising from the contracts they entered into. That in the circumstances of the instance case, the learned trial Judge was justified in its decision and the Court was urged to discountenance the Appellant’s argument under this issue.
By way of reply on points of law, the Appellant’s learned counsel re-iterated that the foreign jurisdiction clause contained in clause 19 of the contract is void because the contract is tainted with fraud.
ISSUE 5
Under this issue, the learned
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Appellant’s counsel submitted that the learned trial Judge’s misdirected himself when, while interpreting Order 17 of the FHC Rules concluded that the attached cargo belonged to the Appellant (Plaintiff). He submitted that the Appellant neither by originating processes nor in its motion ex-parte did it aver or claim that the cargo attached belonged to it. If it were so, the Appellant would not have applied for the attachment of its own properties. The cargo attached belonged to the Respondents and that was why they applied for the discharge of the order of attachment. He contended that this wrong finding of facts and misdirection has swayed the learned trial Judge’s mind, leading to wrong conclusion and has occasioned miscarriage of justice to the Appellant. We were urged to hold that the attached property rightly belonged to the Respondents
The Respondents argued this issue in pages 25 to 26 of the Respondents’ brief to the effect that the erroneous finding of the trial Court that the attached property belonged to the Appellant was not substantial to justify the setting aside of the ruling, especially because the conclusion
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reached by the lower Court for discharging the order of arrest is unaffected by the error on the ownership of the cargo. He drew our attention to the fact that the discharge of the arrest order by the trial Court was because the Appellant failed to comply with the provisions of Order 17 of the FHC Rules, which reasoning he submitted was sound. He relied on the decision of this Court in the case of Hon. Ekpekikpe Ekpo V. INEC & Ors. (2013) LPELR- 20359 (CA), in support.
ISSUE 6
In arguing this issue, the Appellant’s learned counsel reproduced Order 17 of the FHC Rules and Sections 5(3) and 7 of the AJA 1991 which community reading he argued showed the purport of arrest and attachment of property of a defendant was to obtain a pre-judgment security. As such the plaintiff needs not first call on the Respondent to provide security because such move would afford the Respondent opportunity to dissipate the asset and cause the Appellant irreparable damage. That in this case, Section 5(3) of the AJA 1991 does not apply because the Appellant’s case was not for maritime lien for supply and carriage by sea of AGO. The Court is urged to hold that in
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the circumstances of this case, the Appellant’s application pursuant to Order 17 of the FHC Rules 2000 was appropriate and to resolve this issue in favor of the Appellant.
The Respondent’s reply to this issue has already been captured under issue 3 (supra). The learned Respondents’ counsel submissions in paragraphs 56 to 59 of the Respondents’ brief are to the effect that it was because the Appellant’s suit was not an admiralty claim in rem and in order to avoid the provisions of Section 7 of the AJA 1991 and Order 7 Rule 1(1) of the AJPR 1993 that it relied solely on Order 17 of the FHC Rules as justification for seeking the interim order of attachment of the cargo. It was submitted that the Appellant however failed to comply with the said provisions of Order 17 by making the application before the Competent Court within the judicial division where the property attached were situated, that is Port Harcourt, in Rivers State.
ISSUE 7
This issue questioned the learned trial Judge’s decision striking out the suit after holding that he had no jurisdiction to determine it. The Appellant argued that having held that he
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had no jurisdiction on the Appellant’s suit, he ought to have transferred it to the State High Court in accordance with Section 22(2) of the Federal High Court Act. He relied on the cases of Inah V. Ukoi (2002) 9 NWLR (pt. 773) 563, Mokelu V. Fed. Commissioner for Works & Housing (1976) NMLR, 329
The Respondent’s reply to the argument on this issue is contained in pages 27 to 30 of the Respondent’s brief. It was submitted therein that from the wordings of Section 22(2) of the FHC Act, there are other grounds other than the fact that such cause or matter was taken in the Federal High Court instead of the High Court of a State or of the Federal Capital Territory Abuja, in which it ought to have been brought. The learned counsel posited that the Section did not provide that the Court must not strike out the matter, since there may be other reasons that may warrant a striking out order such as lack of locus standi or cause of action etc. It therefore means that the trial Court can only exercise its power of transfer to the Courts mentioned in the section if that was the forum in which the matter ought to have been brought as provided by
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the Section.
He further submitted that in this case, the foreign jurisdiction Clause 19 contained in the contract between the parties, by which they agreed that any dispute arising from the contract will be submitted to the High Court of England, is one of such reasons under which the trial could strike out a matter. This is because neither it nor the state High Court was the forum chosen by the parties for the resolution of their dispute under the contract. The trial Court was therefore right to strike out the matter so that the dispute can be settled in the High Court of England chosen by the parties.
He also contended that Section 22(2) of the FHC Act is unconstitutional in view of Section 274 of the Constitution of the Federal Republic of Nigeria 1999 which provides that only the state houses of assembly can make rules regulating practice and procedure of the High Court of States. He argued that the said Section imposes an obligation on the State High Courts to receive the cases transferred without reciprocal provisions for the State High Court to transfer cases within the jurisdiction of the Federal High Court. He relied on the case of
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A.G. Lagos State V. A. G. of the Federation & Ors. (2003) LPELR-620 (SC) in support. The Court was urged to discountenance the argument of the Appellant and uphold the decision of the lower Court.
By way of a reply on law, the Appellant’s learned counsel contended that it is not the position of the law presently that Section 22(2) of the Federal High Court Act is unconstitutional. On the contrary, the Supreme Court of Nigeria has on several occasions interpreted upheld the said provision. He referred to the cases of UME V. Nigerian Copyright Commission (2014) LPELR-23362 (CA, Mokelu V. Fed. Commissioner for Works & Housing (1992) 5 NWLR (pt. 244) 675 and Fasakin Foods Nig. Ltd V. Shosanya (2006) 10 NWLR (pt. 987) 126 in urging the Court to discountenance the Respondent’s argument on this issue.
I have given due consideration to the issues raised and argued by the Appellant which are substantially the same with the issues proposed by the Respondent, which is why the Respondents’ argument on their issues could and have been subsumed into the Appellant’s 7 issues for determination as can be seen from the learned counsel argument supra. It is
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clear to me that the central complaint of the Appellant from its eight ground of appeal is the holding of the trial Court that it lacks jurisdiction to determine the Appellant’s suit because it was not an admiralty claim. It is my view that this appeal can be determined on the Appellant’s issues 2 and 4 and I compressed the other five issues into these two and I will be guided by them in the determination of this appeal. As a reminder, they are re-numbered issues 1 and 2 slightly modified and are stated below:
1. Whether the learned trial Judge was right when he held that the subject matter of the Appellant’s claim was not in Admiralty cognizable by the Federal High Court, and consequently declined jurisdiction over the matter striking out the Appellant’s case and its earlier orders including the order for the arrest/attachment of the cargo when in addition to facts of admiralty jurisdiction being sufficiently pleaded, the Appellant also pleaded that the entire transaction was financed by a letter of credit, a fact admitted by the Defendant.
2. Whether the learned trial Judge was right in striking out the proceedings before
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him based on the Foreign Jurisdiction Clause (FJC) in the contract between the parties.
RESOLUTION OF ISSUE ONE
It cannot be over emphasized that the jurisdiction of a Court to determine a cause or matter filed before it is fundamental and has been described as the threshold of adjudication. Jurisdiction is so fundamental that it can be raised at any time even on appeal before the Supreme Court. Indeed, in the case of Salisu & Anor. V. Mobolaji & ors. (2013) LPELR-22019 (SC) the Apex Court per Muhammad, JSC reiterated this fundamental nature of jurisdiction to the extent that it can even be raised orally:
“It is not out of place to stress that the issue of jurisdiction is a threshold one which this Court, in Elugbe v. Omokhafe (2004) 11-12 SC 60, has held must not be treated lightly. The point has repeatedly been made that no matter how well proceedings were conducted by a Court the proceedings would come to naught and remain a nullity if same were embarked upon without jurisdiction. This explains the principle of law which allows the issue of jurisdiction to be raised orally and even for the first time in this Court.”
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The Appellant argued that the Respondent’s application amounted to a demurrer because the Respondents did not file a statement of defence. This argument is grossly misconceived and hereby discountenanced in view of the fundamental nature of jurisdiction highlighted supra. An application by a defendant seeking the striking out of a suit on the ground of lack of jurisdiction is not a demurrer. See Ajayi V. Adebiyi & ors. (2012) LPLER- 7811 (SC). In any event whenever the jurisdiction of a Court is challenged at any level of proceedings, but particularly at trial Court where a suit is commenced, the Court could simply refer to and rely on the writ of summons and the statement of claim to determine the complaint and no more.
This is because generally, it is the relief claimed or sought by the plaintiff, together with the facts relied upon for seeking the relief stated in the plaintiff’s statement of claim that determine the competence of a Court to entertain the matter. A statement of defence has no role to play in the determination of a Court’s jurisdiction. See Nika Fishing Co. Ltd V. Lavina Corp. [supra], K. Maestsch V. Bisima (2014) 10 NWLR
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(pt. 1416) 479, Adelekan V. Ecu-Line NV (2006) 12 NWLR (pt. 993) 33, B. B. Apugo & Sons Ltd V. O. H. M. B. (2016) 13 NWLR (pt. 1529) 206 and Dec Oil & Gas Ltd V. Shell Nig. Gas Ltd (2019) LPELR-49347 (SC).
In this appeal, the trial Court being the Federal High Court is a specialized Court with specialized/specific jurisdiction donated by Section 251 (1) of the Constitution of Nigeria, 1999 (as amended). Among its specialized jurisdiction is the admiralty or maritime jurisdiction, a class of admiralty claims in rem. This is provided for in Section 251(1)(g) of the Constitution and Section 1(1) (a) and 2 of the AJA, 1991.
The writ of summons commencing the Appellant’s suit filed before the trial Court is contained in page 35 of the record of appeal. The Appellant titled the writ as an “ADMIRALTY ACTION” which indicated that the Appellant invoked the admiralty jurisdiction of the trial Court in his claims. This also means that ab initio, the suit was filed pursuant to the provisions of the AJA, 1991 activating the trial Court’s admiralty jurisdiction to determine the suit. I have earlier stated the relief sought by the
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Appellant as endorsed on its writ of summons. The Appellant claimed the sum of US$41, 806, 270. 16 as damages and losses it suffered as a result of supply of AGO to it that was off specification by the Respondent. To support this claim, the Appellant relied on the stated facts that gave rise to the claim, which I already stated supra. Specifically, the Appellant averred in paragraphs 8 to 11 and 24 and 25 of its statement of claim as follows:
8. “The Plaintiff then approached the Defendant for the supply of Automative Gas Oil (AGO) otherwise known as Diesel Oil (“the cargo”) and the Defendant agreed to supply the said cargo.
9. By a contract No 184515 dated about the 5th of September 2008 between the Plaintiff as the Buyers and the Defendant as suppliers, the Defendant agreed to supply and ship by sea a total of about 23, 820. 11 MT of Automative Gas Oil (AGO), known as Diesel to the Plaintiff, as more particularly set out in the said contract. The Plaintiff hereby pleads and shall rely on the Contract of Sale aforesaid at the trial in this action.
10. It is the case of the Plaintiff that the supply of the cargo which was
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completely out of specification as stipulated in the contract is not within the contemplation of the parties so as to bring it within the ambit of any arbitration clause, if any.
11. It is specific and fundamental term of the contract that:
a) The maximum colour specification of the cargo shall be 3.0 while the flash point shall be 66.
b) The quality of the product shall be as already determined at the Mother Vessel’s load post but that independent inspector shall determine the quality at ship to ship location.
The plaintiff then took steps to open a letter of credit in the sum of about US$26, 875, 000 out of which the Defendant encashed the sum of US$ 25, 865, 149. 63 being the full payment for the quantity of 25, 798. 65MT of AGO actually shipped….
12. The Defendant then arranged shipment of the cargo on board the MT “Amber Jack” for delivery at offshore Cotonou.
16. On or about the 10th day of September, 2008, the Plaintiff had arranged a charter of the MT “Aetos” to take delivery of its cargo of about 25, 820MT from the plaintiff’s (Defendant’s?) nominated vessel “Amber
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Jack” at offshore Cotonou
24. Further it is the case of the Plaintiff that the Defendant did not set out to, or indeed supply the cargo as agreed by the parties but rather a cargo that was not properly refined according to the standard set by the Nigerian government and/or contract for the supply hereof.
25. By reason of the breach of the fundamental term of the Contract by the defendant as aforesaid, the Plaintiff had to sell about 10, 000MT of the cargo at between N34-38 per liter and thereby has suffered substantial damages.
The Appellant also included claims of special damages listed in paragraph 28 to 31 of the statement of claim for freight and demurrage incurred through the charter of two vessels that took delivery of the cargo from the Respondent’s Mother ship “Amber Jack”.
The contract entered into by the Appellant and the Respondent was attached to the statement of claim and it is copied in pages 53 to 70 of the record of appeal. It contained all the terms agreed on for the sale and delivery of the cargo of AGO.
It was the contention of the Appellant that the above reproduced paragraphs 8 to 12 and 20,
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26 and 29 of its statement of claim disclosed facts showing that the suit was an admiralty claim within the contemplation of Sections 1(1) and 19 of the Admiralty Jurisdiction Act 1991 (AJA, 1991). The reasons for this submission according to the Appellant’s learned counsel are; (1) the AGO was shipped by sea on board a Vessel, (2) the transaction was conducted through a letter of credit by which it paid for the AGO; (3) the AGO was loaded from a Mother Vessel and transported to the Appellant and (4) that the Appellant made a special claim of freight and demurrage.
In his ruling the learned trial Judge considered the provisions of Sections 1(1), and 2 of the AJA 1991 vis-a-vis paragraphs 8, 9 and 10 of the statement of claim and held at pages 542 to 543 that:
“From the above quoted paragraphs of the statement of claim, it is clear that the contract between the parties is that of selling and buying of AGO of a specific character and quality…. For the plaintiff’s claim to fall within the Admiralty jurisdiction of the Court, the action must be one of damages or loss of goods occasioned by carriage of such goods by sea
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and such carriage starts from when the goods are loaded on board the vessel to when the goods are delivered to the consignee…. The plaintiff’s case is not about any such loss or damage to the cargo between the offloading across space from a ship. His case is about a contract for the sale of cargo which the defendant sold against specification-that is the plaintiff’s main grouse in this matter.”
Was he right to so hold is the crux of this issue. In the case of B. B. Apugo & Sons Ltd V. O. H. M. B. (supra) the Apex Court relied on its earlier decisions in I.T.P.P. Ltd V. UBN (supra) and Chevron Nig. Ltd V. Lonestar Drilling (supra)to hold that:
“An action for breach of contract for the supply of goods conveyed by sea is not an admiralty action. The mere facts that the transaction between the parties giving rise to the plaintiff’s claim involved the conveyance of a rig purchased from India to Nigeria by sea did not give the transaction the character of admiralty claim.”
See also the case of Adelekan V. Ecu_line NV (supra), AMCON & Anor. V. Aerospace Industries Ltd & Anor. (2019) LPELR- 47324
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(CA), ITClick Networx ltd & Ors V. Visada Networks AS (2018) LPELR-46559 (CA) and Ports & Cargo Handlings Services CO. Ltd V. Migfo (Nig.) Ltd & Anor. (2012) LPELR – 9725 (SC) and Pacers v. MV “Dancing Sister” &Anor. (2012) NSCQR-28.
The consensus of the plethora of authorities of this Court and the Apex Court, including the ones highlighted above, which settled the principle of law in line with the AJA 1991, is that the admiralty jurisdiction of the Federal High Court cannot be invoked in claims that are based on simple contract even where such contract involved the transportation of goods by sea on board a vessel. I have given ample consideration to the averments of the Appellant and especially the relief he claimed. It is clearly without any ambiguity, a claim for damages for losses allegedly suffered as a result of the sale and supply of the AGO that was off specification. This has nothing to do with the carriage of the cargo by sea because the complaint clearly related to the refining of the AGO prior to its loading on the ship. Therefore, the learned Appellant’s counsel argument that because the AGO was transported by
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sea, it is an admiralty claim is misconceived, baseless and it is hereby discountenanced.
The learned Appellant’s counsel also contended that because the transaction was made through a letter of credit, it is an admiralty claim. I am unable to appreciate this argument of counsel for the simple reason that the purpose of a letter of credit is just to finance (pay for) the international contracts of sale of goods. Letter of credit is a promise by the buyer’s bankers to pay money to the seller of goods in return for the shipping documents, which if presented, the buyer’s bankers will pay the seller the contract price. See Nwangwu V. First Bank (2008) LPELR-4478 (CA). Clearly, the fact that the Appellant paid for the AGO through a letter of credit does not change the character of the contract from contract of sale and supply of the AGO shipped across the sea, or change the nature of the relief for breach of contract claimed.
With regards to the submission of the Appellant that its claims of freight of demurrage gives the contract the character of an admiralty claim, I agree with the Respondent’s submissions that these losses
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occurred after the Appellant took delivery of the AGO, as such any claim thereafter cannot be found in admiralty. I rely on the case of Pacers Ltd V. MV “Dancing Sister” (supra), where Ngwuta, J.S.C. held at page 329 paragraph A-B that:
“The rule is that the admiralty jurisdiction of the Federal High Court cannot be invoked once the goods on board the ship have been discharged on the harbor or delivered to the point of destination. For the admiralty jurisdiction to be properly invoked, the goods or cargo must remain in the vessel. The Appellant cannot invoke the admiralty jurisdiction of the Federal High Court to seek damages for the loss or damage to goods, which had been discharged. To claim damages for tort of negligence, he has to approach the High Court in its general as distinct from its special admiralty jurisdiction.”
See paragraph 25 of the Appellant’s statement of claim (supra) indicating that the Appellant received the AGO and started selling it before filing this suit. The argument of the Appellants is discountenanced.
In the final analysis, I cannot find any fault with the above quoted holding of the
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learned trial Judge. He was on strong legal ground as shown in the above highlighted decisions of this Court and the Apex Court. The transaction that led to the filing of this case was a simple contract of sale of goods and not an admiralty claim as such, the trial Court lacked jurisdiction to determine the Appellant’s suit. It means the answer to issue one is in the affirmative and I resolve issue against the Appellant.
The Appellant’s learned counsel submitted that the trial Court having declined jurisdiction ought to have transferred the matter to the High Court of Lagos State as the Court in which the suit ought to have been filed in the first place and not strike out the suit. He relied on Section 22 (2) of the Federal High Court Act.
The Respondents’ counsel argued per contra, that the said Section did not provide that the Federal High Court must not strike out the suit where it has no jurisdiction. He contended that the said Section 22(2) is unconstitutional.
I must hasten to state that there is no decision of this Court or the Apex Court in which the provisions of Section 22(2) of the FHC Act were declared unconstitutional.
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Indeed, the Apex Court in the case of A. G. Lagos V. A. G. Federation & Ors. (supra) cited by the Respondents’ learned counsel did not declare the section as unconstitutional. On the contrary, the Apex Court in the recent case of DEC OIL & GAS LTD V. SHELL NIG. LTD (supra) held categorically that:
“Section 22(2) of the Federal High Court Act is made by the National Assembly for due preservation of cases that have been instituted in wrong Courts. It is not contrary to any provisions of the Constitution and this Court has in a number of cases upheld its validity…”
See Gafar V. The Govt of Kwara State (2007) 4 NWLR (pt. 1024) 375, Oliver V. Dangote Int’l Ltd (2009) 10 NWLR (pt. 1150) 467 where the validity of the said section was upheld and enforced.
Therefore, I agree that though the trial Court rightly declined jurisdiction to determine the Appellant’s suit, it was bound by the provisions of Section 22(2) to transfer the suit to the High Court of Lagos State to determine, and not strike out the suit. Having failed to do so, this Court is empowered by Section 15 of the Court of Appeal Act to do what the
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trial Court failed to do. The order of striking out of the suit is set aside for non-compliance with Section 22(2) of the Federal High Court. It is hereby ordered that this suit shall be transferred to the High Court of Lagos State for determination.
ISSUE 2
This issue has to do with the foreign jurisdiction clause contained in the contract of the parties. In view of my resolution of issue one against the Appellant to the resultant effect that the trial Court and indeed by implication this Court has no jurisdiction to determine the Appellant’s suit that was founded on simple contract of sale of goods, I cannot determine this issue. The reason is that in order to determine the alleged breach of contract, being the central issue of controversy, the High Court of Lagos State must examine the terms agreed by the parties including the foreign jurisdiction clause contained therein.
In the final analysis, this appeal fails save for the order of striking out the suit. I affirm the Ruling of the Federal High Court delivered on the 19th May 2009 in respect of the Suit No: FHC/L/CS/375/2009 except the order of striking out as stated supra. Appeal
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dismissed by me. As ordered earlier, the case shall be transferred to the High Court of Lagos State for determination.
MOHAMMED LAWAL GARBA, J.C.A.: The law has repeatedly been stated by this Court and Apex Court that the relevant and material processes to be considered by a Court in the determination of whether it is vested or conferred with the requisite judicial power and authority i.e., jurisdiction or competence to entertain and adjudicate over a case, are the writ and/or Statement of claim or other processes setting out the facts on which the claims/reliefs sought in the case are predicated. Put differently, the Plaintiffs claim is to be used to determine the jurisdiction of the Court over a case. See Utih vs. Onoyievwe (1991) 1 NWLR (Pt. 166) 166, Tukur vs. Governor, Gongola State (1989) 40 (Pt. 117) 517, Onuorah vs. K.R.P.C. (2005) 6 NWLR (Pt. 121) 393, Nkuma vs. Odili (2006) 6 NWLR (Pt. 977) 582, Gafar vs. Governor, Kwara State (2007) 4 NWLR (Pt. 1024) 375.
In this appeal, the facts set out in the Appellant’s Statement of Claim clearly show that the relationship between the Appellant and Respondent was purely a commercial agreement/contract for
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the sale and purchase of Automotive Gas Oil (AGO) known commonly as Diesel which was to be transported by sea from source to destination.
The facts also disclose that the Diesel was transported, supplied or delivered at the destination agreed to by the Respondent and complete delivery taken by the Appellant from the ship which transported the Diesel to its own ship. The facts also indicate that after taking delivery, the Appellant had sold the Diesel to its customers and according to the Appellant, it was because of complaints from its customers that it subsequently realized that the Diesel it had taken delivery of, was not of the quality agreed to in the contract which had been completely performed. The primary basis of filing the Appellant’s suit under the Admiralty jurisdiction of the Lower Court was that the Diesel was transported and delivered aboard a ship.
The position of the law stated in the case of Pacers Muiti-Dynamics Limited vs. Dancing Sister, cited in the leading judgment, “has taken the wind out of the sail of the Appellant’s suit filed under the admiralty jurisdiction of the Lower Court since admittedly, the Diesel
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transported by or aboard a ship was no longer in the vessel at the time of the suit, but rather, had been delivered at the point of destination agreed to by the parties.
For that reason, the Lower Court acted on the firm terrain of the law in declining jurisdiction over the Appellant’s suit which arose from a purely simple contract of sale and purchase of the Diesel in question.
Ordinarily, the principle of judicial procedure and practice evolved by the Court over the years, is that once a Court decides and rules that it lacks the requisite jurisdiction to adjudicate over a case, the only consequential order it could validly make in the case, is to strike out the case. Oloriode vs. Oyebi (1984) SNLR 390 Balonwu vs. Chinyelu (1991) 4 NWLR Pt. 183 30, Republic Bank Limited vs. CBN (1998) 13 NWLR (Pt. 581) 306, Okolo vs. UBN Limited (2004) 3 NWLR (Pt. 859) 87. Johnson vs. Lufadeju (2002) 8 NWLR (Pt. 768) 192. Obi vs. INEC (2007) 7 SC 268. Gombe vs. P. W. Nigeria Limited (1995) 6 NWLR (Pt. 402) 402, Fasakin Foods Limited vs. Shosanya (2006) 4SC (Pt. II) 204.
However, the Lower Court, by virtue of provisions of Section 22(2) of the Federal High Court, Act
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no case or matter shall be struck out merely on the ground that such case or matter was taken in that Court instead of the High Court of a State or the Federal Capital Territory (FTC). Rather, the judge may transfer to the appropriate Court where the case or matter ought to have been taken.
Being statutory, the Lower Court has a duty to apply the provisions of Section 22(2) and transfer the case to the appropriate Court where it should have been taken, rather than strike out the case.
I agree with the reasoning and conclusion by my learned brother Balkisu Bello Aliyu, JCA in the leading judgement which I read before now, that the appeal lacks merit on the issue of lack of jurisdiction on the part of Lower Court over the Appellant’s suit which arose out of simple contract.
I also agree that the order of striking out the suit ought not be sustained and is also set aside by me. The suit is ordered to be transferred to the High Court of Lagos State for determination in line with the provisions of Section 22(2) of the Federal High Court Act as contained in the lead judgment.
GABRIEL OMONIYI KOLAWOLE, J.C.A.: My Lord, the HON. JUSTICE B. B. ALIYU, JCA obliged me with a
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preview of the lead judgment just delivered in which the appeal was found unmeritorious and consequently, was dismissed.
I do not have any useful addition to make and I agree that the appeal be dismissed.
I abide with the consequential order made in the lead judgment. Appeal dismissed.
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Appearances:
AYO OLORUNFEMI, ESQ., WITH HIM, ADEDAPO AROMIRE (MISS) For Appellant(s)
MORDI ESQ., WITH HIM, O. E. OKUGUNI For Respondent(s)