THOMPSON & GRACE PHAMACEUTICALS LTD v. SEBAPHARMA GMBH & CO. KG
(2022)LCN/16483(CA)
In The Court of Appeal
(CALABAR JUDICIAL DIVISION)
On Monday, May 30, 2022
CA/C/502/2019
Before Our Lordships:
Raphael Chikwe Agbo Justice of the Court of Appeal
Muhammed Lawal Shuaibu Justice of the Court of Appeal
Balkisu Bello Aliyu Justice of the Court of Appeal
Between
THOMPSON AND GRACE PHAMACEUTICALS LTD APPELANT(S)
And
SEBAPHARMA GMBH & CO. KG RESPONDENT(S)
RATIO
THE FUNDAMENTAL PRINCIPLE OF JURISDICTION
To begin with, jurisdiction is the basis on which any Court or Tribunal tries a case. It is often describe as the lifeline of all trials. Thus, a trial without jurisdiction is a nullity. The question of jurisdiction being radically fundamental can be raised at any stage of proceedings. It is one that cannot be ignored even if it is wrongly raised because it is the lifeline of all trials. See ALIOKE VS. OYE (2018)18 NWLR (Prt. 1651) 247, PDP VS. OKOROCHA (2012)15 NWLR (Prt. 1323) 203 and F.R.N. VS. DURU (2019) 11 NWLR (Prt. 1683) 280. PER ALIYU, J.C.A.
THE POSITION OF LAW ON THE TYPES OF JURISDICTION
As stated earlier, that the jurisdiction being contested is a territorial jurisdiction and or venue for the hearing of the appellant’s claim in this case. Generally, there are two types of jurisdiction, namely, (a) jurisdiction as a matter of procedural law, and (b) jurisdiction as a matter of substantive law. The distinction between substantive jurisdiction and procedural jurisdiction is that counsel may waive a defect in procedure, which is the procedural law. See HERITAGE BANK LTD VS. BENTWORTH FINANCE (NIG) LTD (2015) 9 NWLR (PT. 1625) 420 and BPE VS DANGOTE CEMENT PLC (2020)5 NWLR (PT.1717) 322. Also in the case of MUSA VS. UMAR (2020) 11 NWLR (PT. 1735) 213 at 264, the apex Court held that jurisdiction whether territorial or otherwise, is statutory and it is conferred on the Court by the law creating it. PER ALIYU, J.C.A.
CONDITIONS FOR CHALLANGING THE JURISIDICTION OF THE COURTS
The provisions of Order 22 Rules 1 and 2 of the extant Akwa Ibom State High Court (Civil Procedure) Rules 2009 provides as follows:-
“1. No demurrer shall be allowed.
2. Any party may by his pleadings raise any point of law and the judge may dispose the point so raised before or at the trial.”
It is also pertinent to state here that a challenge to the jurisdiction of a Court could be based on varied and diverse points, for example,
(a) That the judge was not properly appointed.
(b) That the matter in issue is outside the limits of the territorial jurisdiction of the Court.
(c) That the claim is above the justifiable power of the adjudicating Court, and
(d) That the period allowed the Court to embark upon the hearing of the case has expired, etc.
All these are recipe of jurisdictional challenge irrespective of whether or not it is on procedural or substantive law. Consequently, a preliminary objection challenging the jurisdiction of a Court to hear and determine a suit is not a demurrer. Therefore, it is not necessary that statement of defence must have been filed and the facts alleged therein be deemed admitted before the objection can be raised. In ARJAY LTD VS. A.M.S. LTD (Supra), the Supreme Court has held that the issue of jurisdiction is not a matter of demurrer proceedings. It is much more fundamental than that and does not entirely depend as such on what a plaintiff may plead as facts to prove the reliefs he seeks. PER ALIYU, J.C.A.
BALKISU BELLO ALIYU, J.C.A. (Delivering the Leading Judgment): This is an appeal against the Ruling of the High Court of Akwa Ibom State, sitting at Ikot Ekpene Judicial Division delivered on the 1st day of November, 2019 striking out the suit for want of territorial jurisdiction.
The claimant now appellant took out a writ of summons and statement of claim on the 13/6/2019 claiming against the respondent herein as follows:
1. A declaration that the sole and exclusive distributorship agreement of Sebamed range of product to the territory of Nigeria and West Africa granted to the claimant by the defendant is still subsisting.
2. A declaration that the defendant has breached the distributorship agreement by their letter of 21st February, 2019 without following the terms and conditions contained in the said distributorship agreement before disengaging the claimant.
3. A declaration that by virtue of the breach of the distributorship agreement, the claimant has suffered consequential losses as its has invested huge amount of money to build up Sebamed product in Nigeria and invested heavily in human and capital development in the marketing of the defendant’s product in Nigeria.
4. An order for the payment of the sum of Four Hundred and Eighteen Thousand Three Hundred and Twenty Nine Euro Sixty cents (€418329.60) being the amount the defendant should have refunded to the claimant in respect of the Memorandum of Understanding between the claimant and the defendant in the funding of the Albino Foundation in Nigeria.
5. An order for the payment of the sum of Fifty Four Thousand Euros ((€54,000) being the amount the defendant received from the claimant for the Sebamed range of products in December, 2018 which the defendant has not supplied to the claimant.
6. An order for payment of special damages in the sum of Three Hundred Million Euros (€300,000,000) being the commission that could have been accrued to the claimant for the sale and marketing of Sebamed products in the territory of Nigeria in fifty years.
7. An order for payment of special damages in the sum of Four Hundred Million Euros (€400,000,000) being the amount of anticipated increase in commission payable to the claimant for the projected period of fifty years for the sale of Sebamed products in the territory of Nigeria.
8. An order for a refund of the sum of Two Hundred and Fifty Million Naira (N250,000,000.00) for the property at Ilorin Street, Surulere and One Hundred and Fifty Million Naira (N150,000,000.00) for the property at No. 78 Femi Ayangtuga Street, Surulere respectively for the properties purchased to enhance the distribution and sale of Sebamed products.
9. An order of injunction restraining the defendant, its agents, privies or assigns from further operating or offering for sale any Sebamed product in the territory assigned to the claimant as contained in the distributorship agreement.
10. An order for confistication and destruction any Sebamed product found in the territory of Nigeria and/or any of the assigned territories of the claimant contained in the distributorship agreement without the distributorship franchisee of the claimant.
11. An order for payment of One Hundred Million Naira (N100,000,000.00) as Solicitor’s fees for the prosecution of this action.
Upon being served with the originating processes in the suit, the respondent filed a conditional appearance and thereafter filed a notice of preliminary objection praying the lower Court for:-
An order striking out the claimant’s suit in its entirety for want of jurisdiction.
In the alternative, an order staying proceedings in the suit in accordance with Section 5 of the Arbitration and Conciliation Act, Cap. A18LFN, 2004 and directing the parties to the suit to submit their dispute to Arbitration in accordance with Clause 11.3 of the Distributorship Agreement dated 3rd March, 2004.
Three grounds upon which the said objection was predicated are:
i. The parties in this suit entered into a Distributorship Agreement dated 3rd March 2004.
ii. By virtue of Clause 11.3 of the Distributorship Agreement, parties expressly agree that differences or divergences between the parties should be settled amicably as possible in adherence to the principles of good faith. And that if such questions cannot be resolved amicably, it should be resolved by arbitration.
iii. The submission of the parties in this suit to amicable settlement effort and arbitration and the outcome of such process is a condition precedent to the commencement of the instant suit or any action whatsoever before this Honourable Court.
iv. That the instant action of the claimant is premature in the light of Clause 11.3 of the Distributorship Agreement which the claimant is in contravention of and that this honourable Court lacks the requisite jurisdiction to entertain the claimant’s action as the Court cannot assume jurisdiction over the dispute unless and until either party has explored all the options as agreed by the parties in the Distributorship Agreement.
v. The suit constitutes an abuse of Court process.
The Appellant on her part filed two applications on 25/9/2019 praying for injunction restraining the Respondent from participating in any arbitration proceedings and for the Court to enter final judgment against the Respondent herein. In furtherance to that, the Respondent filed another notice of preliminary objection on 15/10/2019 praying the lower Court to strike out the suit for want of territorial jurisdiction on the following grounds:-
i. The Ikot Ekpene judicial division is a forum non-convenience. That is, this Honourable Court lacks the territorial jurisdiction to hear and determine the present suit.
ii. The filing of this action by the claimant in the Ikot Ekpene Judicial Division of the High Court of Akwa Ibom State actuates forum shopping.
iii. The claimant company office address is at 7, Moronu Maduagwu Street, off Alhaji Masha Road, Surulere, Lagos State. The claimant does not have office in Ikot Ekpene.
iv. Abuse of Court process by the claimant in filing the present action in Ikot Ekpene Judicial Division of the High Court of Akwa Ibom State.
v. By virtue of the claimant’s Letterhead, the claimant only has offices in Lagos and Port Harcourt and does not have any office in Ikot Ekpene where this Honourable Court has jurisdiction.
vi. The defendant company does not have office in Ikot Ekpene where this Honourable Court has jurisdiction. Clause 11.1 of the Distribution Agreement dated 3rd March, 2004 provides that the place of performance is the place of business of Sebapharma which is Boppard in Germany.
vii. While the claimant’s address indicated in the distribution Agreement of 3rd March, 2004 is 36, Ayinde Giwa Street, off Alhaji Masha Street, Surulere, Lagos – Nigeria (executed in Boppard, Germany), the Appendix B to the agreement signed between the parties on March 25, 2010 is 7, Moronu Maduagwu Street, off Masha Road, Surulere P. O. Box 2607 Marina, Lagos, Nigeria. The same Appendix shows that Lagos is the place of execution by the claimant.
viii. The Managing Director/Chief Executive and sole witness of the claimant is an indigene of Akwa Ibom and is shopping for forum convenience in filing the present action in the Ikot Ekpene Judicial Division of the High Court of Akwa Ibom State.
This latter application was also supported by an affidavit of 14 paragraphs deposed to by one Femi Adeoye, a litigation Administrator in the Law Firm of Odusinrin & Adefulu. In reaction to the respondent’s latter application, the appellant filed a counter-affidavit of 18 paragraphs deposed to by Kingsley Ebimoh of counsel. And the respondent filed a further affidavit and a reply on point of law.
After considering the parties affidavit evidence and hearing of counsel on their respective written addresses, learned trial judge in a considered ruling delivered on 1/11/2019 found inter alia on page 312 of the record of appeal that: “From the foregoing analysis therefore and matching the above ingredients of territorial jurisdiction with the exhibits herein examined it is true that the instant case has met the three conditions on territorial jurisdiction as decided in the case of INTERNATIONAL TOBBACO CO LTD & ANOR VS. SEA MOUNTAIN CO (NIG) LTD (Supra). In view of the foregoing, I find as a fact and hold that this Court does not have jurisdiction to entertain this case in view of the fact that the place of business of the defendant from Exhibit FA1 and FA2 is Germany and that the defendant equally resides there. Again, the contract has Germany as its place of performance. Yes, I can see that the claimant/respondent signed the contract (Exhibit FA2) in Lagos, Nigeria Lagos and Ikot Ekpene are not the same place. There is no contrary document apart from the oral submissions of counsel for the claimant before the Court showing that the contract was either executed in Ikot Ekpene or performed there for which the territorial jurisdiction of the Court would have been inferred.”
Miffed by the above decision, appellant appealed to this Court on the 1/11/2019. The notice of appeal contains two grounds of appeal on pages 314 – 317 of the record of appeal. The said two grounds of appeal shorn of their respective particulars are reproduced hereunder as follows:
GROUND ONE
The learned trial judge erred in law when he held that the Court lacked the jurisdiction to hear and determine the suit by relying on the affidavit evidence of the respondent as contained in the preliminary objection without recourse to the statement of claim of the appellant.
GROUND TWO
The learned trial judge erred in law when he held that the respondent was right to raise preliminary objection without filing statement of defence when the said objection did not challenges the substantive jurisdiction of the lower Court pursuant to Section 272 of the 1999 Constitution as amended.
At the hearing of this appeal on 1/3/22, learned counsel for the appellant Victor Ukutt, Esq., adopted and relied on the appellant’s brief of argument deemed filed on 18/1/22 and appellant’s reply brief deemed filed on 1/3/2022 in urging this Court to allow the appeal. In it, counsel formulated two issues for the determination of the appeal as follows:-
1. Whether the lower Court was right in determining the issue of lack of territorial jurisdiction when the lower Court relied on the affidavit evidence of the Respondent to arrive at the decision without recourse to the Appellant’s writ of summons and statement of claim.
2. Whether the lower Court was right to have upheld the Respondent’s notice of preliminary objection without first filing its statement of defence when the objection did not challenge the substantive jurisdiction of the lower Court pursuant to Section 272 of the 1999 Constitution as amended.
Learned counsel for the Respondent, L. I. Ayeki, Esq., adopts the two issues formulated by the Appellant.
Arguing the first issue, learned counsel for the Appellant submitted that the only relevant documents or processes the lower Court ought to have examine and consider in determining whether the Court has territorial jurisdiction is the Appellant’s writ of summons and statement of claim. He referred to THEOBROS AUTOLINK LTD VS. B. I.A.E. LTD (2013)2 NWLR (Prt.1338) 337, TSK (NIG) LTD VS. OFOCHEM (NIG) LTD (2018) 11 NWLR (Prt.1630) 330, ONUORAH VS. KADUNA REFINING PETRO CHEMICALS Co (2005) 6 NWLR (Prt.921) 393 and hosts of other cases.
Counsel submitted further that the territorial jurisdiction of a Court to hear a case based on contract can be determined by reference to (a) where the contract is made, (b) where the contract is to be performed and (c) where the defendant resides. In aid, counsel relied on Section 17 (1) of the Akwa Ibom State Law, 2000. Order 2 Rule 3 of the Akwa Ibom State High Court (Civil Procedure) Rules 2009 and the case of ARJAY LTD VS. A.M.S. LTD (2003) 7 NWLR (Prt. 820) 577 in contending that since the contract was to be performed in Nigeria and that the appellant has substantial presence within the jurisdiction of the lower Court, it was wrong for the lower Court to decline territorial jurisdiction.
Responding on behalf of the Respondent, learned counsel submitted that contrary to the contention of the appellant, the learned trial judge considered not only the exhibits annexed to the supporting affidavit but also examined and evaluated the Appellant’s writ of summons and statement of claim in arriving at the decision that the lower Court lacks the territorial jurisdiction to hear and determine the Appellant’s suit. He contend that in the face of the documentary evidence regarding the place of execution of Exhibits FA1 and FA2, the averment of the Appellant in paragraph 8 of the statement of claim is a futile attempt to confer artificial jurisdiction on the lower Court. Counsel submitted that the Appellant was forum shopping for where to file her action and that same constitutes an abuse.
The Appellant’s main complaint here is that it was wrong for the lower Court to rely on the affidavit evidence in support of the preliminary objection as against the writ of summons and statement of claim of the Appellant in determining whether it has territorial jurisdiction or not. And that by the averments in the statement of claim, the distributorship contract was consummated within the jurisdiction of the lower Court.
To begin with, jurisdiction is the basis on which any Court or Tribunal tries a case. It is often describe as the lifeline of all trials. Thus, a trial without jurisdiction is a nullity. The question of jurisdiction being radically fundamental can be raised at any stage of proceedings. It is one that cannot be ignored even if it is wrongly raised because it is the lifeline of all trials. See ALIOKE VS. OYE (2018)18 NWLR (Prt. 1651) 247, PDP VS. OKOROCHA (2012)15 NWLR (Prt. 1323) 203 and F.R.N. VS. DURU (2019) 11 NWLR (Prt. 1683) 280.
As stated earlier, that the jurisdiction being contested is a territorial jurisdiction and or venue for the hearing of the appellant’s claim in this case. Generally, there are two types of jurisdiction, namely, (a) jurisdiction as a matter of procedural law, and (b) jurisdiction as a matter of substantive law. The distinction between substantive jurisdiction and procedural jurisdiction is that counsel may waive a defect in procedure, which is the procedural law. See HERITAGE BANK LTD VS. BENTWORTH FINANCE (NIG) LTD (2015) 9 NWLR (PT. 1625) 420 and BPE VS DANGOTE CEMENT PLC (2020)5 NWLR (PT.1717) 322. Also in the case of MUSA VS. UMAR (2020) 11 NWLR (PT. 1735) 213 at 264, the apex Court held that jurisdiction whether territorial or otherwise, is statutory and it is conferred on the Court by the law creating it.
Be that as it may, the central issue is whether the trial judge relied solely on the affidavit evidence in support of the preliminary objection without recourse to the writ and statement of claim, the provisions of Order 2 Rule 3 of the Akwa Ibom State High Court (Civil Procedure) Rules 2009 emphatically provides that:
“13. All suits for specific performance, or upon the breach of any contract, may be commenced and determined in the judicial division in which such contract was made or ought to have been performed or in which the defendant resides or carries on business.”
Parties in this case are ad idem that the suit at the lower Court being a distributorship agreement fall within the ambit of a contract. Thus, the territorial jurisdiction of a Court to hear a case based on contract can be determined by reference to the following:-
(a) Where the contract is made,
(b) Where the contract is to be performed, and
(c) Where the defendant resides.
The appellant has averred in paragraph 8 of the statement of claim that the distributorship agreement was signed by it in Ikot Ekpene, Akwa Ibom State, Nigeria in 2004 and so also the amendment of the distributorship agreement in 2010. Contrariwise, Exhibit FA1 and FA2 attached to the affidavit in support of the preliminary objection clearly shows that appellant signed the said distributorship agreement in Boppard Germany and Lagos, Nigeria. And in his ruling, the learned trial judge having applied the common denominator as set down in Order 2 Rule 3 of the applicable rules of Court to the distributorship agreement between the parties concludes on pages 311-312 of the record that:-
“On the face of Exhibit FA1 from my examination, I can see and confirm that the address of the defendant is “Binger St. 80, 56, 56 Boppard, while the address of the claimant is 36 Ayinde Giwa Street, off Alhaji Masha Street, Surulere, Lagos, Nigeria.
In Exhibit FA2 (Appendix 3 to the Agreement signed between Sebapharma GMBH & CO LTD and Thompson & Grace Pharmaceutical Limited of March 3, 2004, I can see and confirm from the front page of Exhibit FA2 that the address of the claimant is still Lagos State Nigeria. Under the signature column on Exhibit FA2, I can further see that Exhibit FA2 was signed for and on behalf of SEBAPHARMA GMBH & CO NIF by Frank Albert, (Area Sales Manager Latu America (Africa Bodwin Nostia 3 (export Director) and Thomas Muner (Vice Chairman of Board, Germany on 25/3/2010.”
From the above, the distributorship agreement was neither made in Ikot Ekpene nor meant to be performed there. Furthermore, the respondent does not reside in Ikot Ekpene. There is also no gainsaying the fact that territorial jurisdiction implies a geographical area within which the authority of the Court may be exercised and outside which the Court has no power to act.
Counsel for the Appellant has rightly posited that jurisdiction of the Court is generally determined by examining the statement of claim.
However, objection to the jurisdiction of a Court can be taken at any time depending on what materials are available. Thus, it could be taken in any of the following situations:
(a) On the basis of the statement of claim, or
(b) On the basis of evidence received or
(c) By motion supported by affidavit giving the full facts upon which reliance is placed, or
(d) On the face of the writ of summons where appropriate as the capacity in which action was brought or against who action was brought.
In the instant case, the Appellant filed a writ of summons and statement of claim before the Respondent filed a preliminary objection to the territorial jurisdiction of the trial Court. In the circumstances, the preliminary objection was properly raised and there were materials upon which the trial Court could determine whether or not the trial Court had territorial jurisdiction to hear and determine the Appellant’s suit. Thus, the first issue is resolved against the Appellant.
On the second issue, learned counsel for the appellant submitted that with abolishing of demurrer in most State High Courts including the High Court of Akwa Ibom State, a preliminary objection based on procedural law cannot be raised without the defendant first filing his statement of defence. He contended that the lower Court was in error to have entertained the respondent’s preliminary objection which resulted in the striking out of the appellant’s suit.
In his response, counsel to the respondent submitted that where the jurisdiction of a Court is in question and same is being challenged by a defendant, it is not a requirement that the defendant must have filed a statement of defence before he can challenge or raise the question of jurisdiction of the Court for determination.
The provisions of Order 22 Rules 1 and 2 of the extant Akwa Ibom State High Court (Civil Procedure) Rules 2009 provides as follows:-
“1. No demurrer shall be allowed.
2. Any party may by his pleadings raise any point of law and the judge may dispose the point so raised before or at the trial.”
It is also pertinent to state here that a challenge to the jurisdiction of a Court could be based on varied and diverse points, for example,
(a) That the judge was not properly appointed.
(b) That the matter in issue is outside the limits of the territorial jurisdiction of the Court.
(c) That the claim is above the justifiable power of the adjudicating Court, and
(d) That the period allowed the Court to embark upon the hearing of the case has expired, etc.
All these are recipe of jurisdictional challenge irrespective of whether or not it is on procedural or substantive law. Consequently, a preliminary objection challenging the jurisdiction of a Court to hear and determine a suit is not a demurrer. Therefore, it is not necessary that statement of defence must have been filed and the facts alleged therein be deemed admitted before the objection can be raised. In ARJAY LTD VS. A.M.S. LTD (Supra), the Supreme Court has held that the issue of jurisdiction is not a matter of demurrer proceedings. It is much more fundamental than that and does not entirely depend as such on what a plaintiff may plead as facts to prove the reliefs he seeks. In the instant case, the Respondent’s objection to the territorial jurisdiction of the trial Court was properly raised. The second issue is also resolved against the Appellant.
In the result, the appeal is meritless and it is accordingly dismissed with costs which I assessed at N100,000.00 against the Appellant and in favour of the Respondent. The Appellant’s claim in suit no. HT/22/2019 is hereby struck out for want of territorial jurisdiction in the trial Court.
RAPHAEL CHIKWE AGBO, J.C.A.: I was privileged to read in draft the lead ruling of my learned brother, Aliyu JCA and I agree completely with both the reasoning and conclusion. The prayers sought by the applicant are clearly overreaching and should not be allowed. The exhibits sought to be tendered at this stage were available to the applicant at the trial stage and therefore not allowable. I too dismiss the application.
MUHAMMED LAWAL SHUAIBU, J.C.A.: I have had the privilege of reading in draft the lead judgment of my learned brother, Balkisu B. Aliyu, JCA. I entirely agree that the trial High Court had no territorial jurisdiction to hear the claimant/appellant’s claim as true contract was neither made in Ikot Ekpene nor meant to be performed there. It is also clear that the respondent resides in Boppard, Germany outside the territorial limits of the trial Court. I too affirm the decision of the trial Court and abide by all the consequential orders including the order as to costs.
Appearances:
VICTOR UKUTT ESQ. For Appellant(s)
L. I. AYEKI ESQ. For Respondent(s)
