UBA PLC & ANOR v. ALABI & ORS
(2021)LCN/15686(CA)
In the Court of Appeal
(LAGOS JUDICIAL DIVISION)
On Thursday, March 04, 2021
CA/L/912/09
Before Our Lordships:
Hussein Mukhtar Justice of the Court of Appeal
Paul Obi Elechi Justice of the Court of Appeal
Patricia Ajuma Mahmoud Justice of the Court of Appeal
Between
1. UNITED BANK OF AFRICA PLC 2. UBA STOCKBROKERS LTD APPELANT(S)
And
1. TOLA ALABI 2. THE NIGERIA STOCK EXCHANGE 3. THE PRESIDENT OF THE NIGERIA STOCK EXCHANGE 4. THE DIRECTOR GENERAL OF THE NIGERIAN STOCK EXCHANGE 5. THE SECURITIES AND EXCHANGE COMMISION 6. THE DIRECTOR GENERAL OF THE SECURITIES AND EXCHANGE COMMISSION RESPONDENT(S)
RATIO
THE JURISDICTION OF THE FEDERAL HIGH COURT
All superior Courts of record in Nigeria, being all creations of the Constitution, have their jurisdictions laid out therein. In the case of the Federal High Court established by SECTION 249 of the 1999 Constitution, its jurisdiction is conferred by SECTION 251 (1) (a) – (s) of the said Constitution.
However for the purposes of this case, the relevant provisions in my view appear to be SECTION 251 (a), (e) and (p) which provide as follows:
251. (1) Notwithstanding anything to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters.
(d) Connected with or pertaining to banking, banks, other financial institutions, including any action between one Bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures;
(e) Arising from the operation of the Companies and Allied Matters Act or any other enactment replacing that Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act;
(p) The administrated or the management and control of the Federal Government or any of its agencies.
The law is well settled as conceded to by both parties that for the Court to determine whether or not it possesses the requisite competence/jurisdiction to hear a matter, it needs to examine those processes that were filed to activate its jurisdiction, which are the writ of summons and the statement of claim: AGF V AG, ABIA STATE (2001) 7 SC, PT1, 32 AT 102 DICKSON OGUNSEINDE VIRYA FARMS LTD V SGB LTD & ORS (2018) LPELR – 43 710 (SC) and MARAFA & ORS V DAN ALHAJI & ORS (2019) LPELR. PER MAHMOUD, J.C.A.
PATRICIA AJUMA MAHMOUD, J.C.A. (Delivering the Leading Judgment): This appeal emanated from the decision of Hon. Justice O. E. Abang of the Federal High Court, Lagos, delivered on the 16th day of July, 2010, wherein his Lordship ruled that he had jurisdiction to hear and determine the plaintiff’s claim before the Court.
The action was commenced by a writ of summons filed on the 5th day of November, 2009 by the Plaintiff/1st Respondent and against the appellants, 1st and 2nd defendants at the trial Court and the 2nd – 6th Respondents were the 3rd – 7th defendants at the trial. In the writ of summons, the plaintiff/1st respondent claimed against the defendants/appellants/2nd–6th Respondents as follows:
i. A DECLARATION by the Honourable Court that the refusal of 1st and 2nd Defendants to procure FIRST BANK PLC SHARES on behalf of the Plaintiff as instructed and mandated during the May, 2007 public offer amounts to breach of the existing contract by the 1st and 2nd Defendants;
ii. AN ORDER OF COURT awarding general damages in the sum of N100,000,000.00 for the Plaintiff against the 1st and 2nd Defendants for the breach of contract occasioned on the Plaintiff by them in refusing to carry out his mandate on the investment;
iii. AN ORDER OF THE COURT directing the 1st and 2nd Defendant to refund the sum of N400,000,000.00 (Forty Million Naira Only) to the Plaintiff as special damages being the 40% equity contribution he made into the investment which said sum was ostensibly diverted into the purchase of other shares which have since lost any value they might have had if any;
iv. AN ORDER OF COURT directing the 1st and 2nd Defendants to render an account of any venture or investment which the Plaintiff’s equity contribution and the loan facility totaling the sum of N100,000,000.00 (One Hundred Million Naira Only) was put into between the period of May, 2007 and March, 2008 being the period the funds were purportedly held idle;
v. AN ORDER OF COURT directing the 1st and 2nd Defendants to refund the sum of N10,214,812.49 (Ten Million, Two Hundred and Fourteen Thousand, Eight Hundred and Twelve Naira, Forty – Nine Kobo) being the interest paid by the Plaintiff on the funds which he did not get any benefit, bonus or dividends whatsoever;
vi. A DECLARATION that the shares purchased by the 1st and 2nd Defendants pursuant to the Offer Letter dated 23rd May, 2007 is the security pledged for the loan and remains the security to be liquidated in the event of any indebtedness and nothing more.
vii. A DECLARATION that the Plaintiff is not indebted to the 1st and 2nd Defendants in any sum whatsoever since he did not benefit from the facility either by way of his instructions being executed by 1st and 2nd Defendants to procure shares, payment of anticipated dividends, withdrawal or any transfer of funds or shares to his benefit.
viii. AN ORDER OF COURT directing the 1st and 2nd defendants to pay an interest of 21% per annum on the damages sought in reliefs (ii), (iii), (iv), and (iv) from the date of filing this suit and subsequently at the rate of 6% per annum from the date of judgment until it is finally liquidated.
ix. AN ORDER OF COURT directing the 3rd and 7th Defendants to investigate the circumstances surrounding this transaction and where the 1st and 2nd Defendants are found to have acted in a manner depicting gross misconduct, to withdraw the 1st and 2nd Defendants’ licenses to deal on their floors, in addition to deleting their names from their registers and withdrawal of membership of their regulatory bodies.
At the conclusion of pleadings the 1st and 2nd defendants/appellants by a Notice of Preliminary Objection dated and filed on the 22nd March, 2010 challenged the jurisdiction of the trial Court to hear and determine the claim of the plaintiff before the Court. After hearing the Preliminary Objection, his Lordship delivered his ruling and held that it had the requisite jurisdiction to hear and determine the plaintiff’s suit. It is against this ruling that the appellants have filed this appeal vide the Notice of Appeal dated and filed on the 28th day of July, 2010 and containing three grounds with their particulars as follows:
GROUND ONE
The learned trial Judge erred in law when he held that because the 1st Appellant is incorporated and regulated by the provisions of the Companies and Allied Matters Act 1990 as amended the Federal High Court has jurisdiction to hear and determine the 1st respondent’s suit therein.
PARTICULARS OF ERROR
i. The 1st Respondent’s suit does not relate to or arise from the operation of the companies and Allied Matters Act or any other enactment replacing that Act or regulating the operation of the companies incorporated under the Companies and Allied Matters Act.
ii. The 1st Respondent’s suit is one predicated wholly on an alleged breach of a simple contract between the 1st Respondent and the Appellants.
GROUND TWO
The learned trial judge erred in law when he held that the Federal High Court has jurisdiction to entertain the 1st Respondent’s suit when on the pleadings the claim is one that falls within the exclusive jurisdiction of the Investment And Securities Tribunal and the domestic forum established under the Investments and securities Act 2007 for the enforcement of such claim has not been exhausted.
PARTICULARS ERROR
i. The 1st Respondent’s pleading and the relief claimed seek an enforcement of the provisions of the Investments and Securities Act 2007.
ii. The Investment and Securities Act 2007 made adequate provision for the resolution of dispute through its domestic forum
GROUND THREE
The learned trial Judge erred in law when he held that since the 2nd to 6th Respondents are agencies of the Federal Government, the Federal High Court has the jurisdiction to hear and determine the 1st Respondent’s suit against the Appellants and the 2nd to 6th Respondents.
PARTICULARS OF ERROR
i. No executive or administrative action or decision of the 2nd to 6th Respondents is being challenged by the 1st Respondent’s suit.
ii. The 2nd to 6th Respondents never gave any decision relating to or concerning the subject matter of the dispute between the Appellants and the 1st Respondent.
iii. The Order/reliefs sought by the 1st Respondent against the 2nd to 6th respondents are Orders/reliefs that can issue upon the enforcement of the provisions of the Investments and Securities Act 2007 by the domestic forum established pursuant to the provisions of the Investment and Securities Act 2007.
Whereof the appellants sought an order of this Court allowing the appeal, setting aside the ruling of the trial Court delivered on the 16th day of July, 2010 and striking out the plaintiff/1st Respondent’s claim in the lower Court for want of jurisdiction.
In compliance with the Rules of this Court parties filed their briefs of argument. The appellants brief was settled by MR. MATHEW ESONANJOR on the 2nd day of November, 2010 while that of the 1st Respondent was settled by MR. OLUYINKA OYENIJI on the 20th day of December, 2010 and deemed on the 20th January, 2011.
In arguing the appeal, MR. Mathew Esonanjor of counsel for the appellant adopted their brief as their legal argument in support of their appeal. In it, the appellants distilled the following issue for determination:
“Whether having regard to the plaintiff’s claim, the lower Court was right in holding that it had jurisdiction to entertain the suit.”
MR. Esonanjor submitted that in determining whether or not a Court has jurisdiction, it is the writ of summons and the statement of claim, i.e. the originating process that are considered. Counsel referred to the cases of ADEYEMI V OPEYORI (1976) 9-10 SC 31; ALAMIEYESEIGHA V IGONIWARI (NO 2) (2007) 7NWLR, PT 1034, 524; AGF V ABIA STATE & ORS (2001) 7 SC, PT 1, 32 AT 102 PARA 20; ODUGBO V ABU (2001) 7 SC, PT1, 168 AT 202 PARAS 30 – 35 and APC LTD V NDIC LTD (2006) 15 NWLR, PT 1002, 404 AT 448 PARA A and 449 PARAS D – G. Counsel referred to the claim of the plaintiff/1st respondent as contained at pages 3 -14 of the record and the jurisdiction of the Federal High Court as established by Section 251 (1) (a) – (s) of the 1999 Constitution to submit that the claim of the plaintiff which is an allegation of a breach of a simple contract, does not fall within the ambit of matters within the Constitution. Counsel referred to the case of UNACHUKWU V AJUZIE (2009) 4 NWLR, PT 1131, 336 AT 348, PARAS F – G to contend that matters of simple contract such as the plaintiff’s claim are outside the provisions of SECTION 251 (1) (a) – (s) of the Constitution and therefore not within the jurisdiction of the Federal High Court. Counsel also referred to the case of NJIKONYE V MTN NIG. COMMUNICATIONS LTD(2008) 9 NWLR, PT 1092, 339 AT 368 PARA H and 369, PARAS C – E. It was the further contention of counsel that the fact that the 3rd – 7th defendants/2nd – 6th Respondents are agents/agencies of the Federal Government does not make the claim relatable to the administration, management or control of the Federal Government or any of its agencies as to make the claim one cognizable by the Federal High court. Counsel also argued that the claim is also not one for a declaration or injunction affecting the validity of any executive or administrative action or decision as to fix it within the meaning of SECTION 251 (1) (R) of the Constitution thus ascribing jurisdiction to the Federal High Court. In support of this proposition of law, counsel catalogued five cases: FEDERAL COLLEGE OF EDUCATION (SPECIAL) OYO V AKINYEMI (2008) 15 NWLR, PT 1109, 21 AT 53, PARAS A – D; MINISTER OF WORKS V TOMAS (NIG) LTD (2002) 2 NWLR, PT 752, 740 AT 788; OLADIPO V NIGERIA CUSTOM SERVICE BOARD (2009) 12 NWLR PT 1156, 563 AT 586, PARAS B – E, 586 – 587 PARAS A – C; ONUORAH V KADUNA REFINING & PETROCHEMICAL CO LTD (2005) 6 NWLR, PT 921, 393 and EKITI STATE HOUSE OF ASSEMBLY V FAYOSE (2010) 2 NWLR, PT 1179, 511 AT 528 PARAS A – D and 529, PARAS B – E.
Counsel submitted also that the plaintiff/1st Respondent’ claim at the lower Court neither arose from the operation of the Companies and Allied Matters Act nor was it premised on the acquisition of shares of either of the appellants but on an alleged breach of an existing contract to procure the shares of First Bank PLC as instructed by the Plaintiff/1st Respondent. Based on all these contentions, counsel submitted that the trial lower Court was in error in holding that it had jurisdiction to hear and determine the plaintiff’s suit. Counsel prayed the Court to allow the appeal, set aside the decision of the lower Court given on the 16th July, 2010 and strike out the 1st Respondent’s suit at the trial lower Court for want of jurisdiction.
The 1st Respondent who was served with hearing notice of this matter on the 19th day of November, 2020 against the hearing of 8th December, 2020 was absent and unrepresented. 2nd – 4th Respondents were served with hearing notice on the 25th November, 2020 while the 5th & 6th Respondents were served on the 30th November, 2020. They were all absent and unrepresented. From the records of the Court only the 1st Respondent had complied with the Rules of Court by filing his brief of argument. In the circumstances and pursuant to the powers conferred on the Court by ORDER 19 (9) (4) of the Rules of Court, 2016, the 1st Respondent’s brief filed on the 20th December, 2010 but deemed properly filed and served on the 20th January, 2011 was deemed as properly argued. In it, the 1st Respondent adopted the sole issue submitted for consideration by the appellant. In advancing his argument on the sole issue, counsel conceded that in determining whether or not a Court has jurisdiction, it is the plaintiff’s originating process (i.e. Writ of Summons endorsed with the statement of claim that will be considered). Counsel however maintained that from the Writ of Summons, the instant claim is not predicated on a simple breach of contract but rather on procurement of shares of First Bank PLC and a SHARE PLUS FACILITY for the purchase and management of shares portfolio by the 1st and 2nd/defendants/Appellants, the mismanagement of same by the appellants which mismanage various grounds as prescribed in the COMPANY AND ALLIED MATTERS ACT, 1990.(CAMA). Counsel referred to the cases of STB V OLUSOLA (2008) 1 NWLR PT 1069, 599 and BPE V REINSURANCE ACQUISITION GROUP LTD (Unreported Appeal NO. CA/A/195/M/2005 and TANAREWA (NIG) LTD V PLASTIFARM LTD (2003) 14 NWLR, PT 840, 360.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”></br<>
Counsel referred to the case of UBA PLC v. BTL IND LTD (2006) 19 NWLR, PT 1013, 77 to contend that at best the matter is a“customer – banker relationship” in respect of which both the Federal High court and State High Court have concurrent jurisdiction. That since the Claimant/1st Respondent had sought for reliefs and mandatory orders against the 3rd – 6th Respondents, agents of the Federal Government, this suit was rightly instituted at the Federal High Court. Counsel urged the Court to hold that the Federal High Court was duly seised with jurisdiction to entertain the matter and to dismiss the appeal.
All superior Courts of record in Nigeria, being all creations of the Constitution, have their jurisdictions laid out therein. In the case of the Federal High Court established by SECTION 249 of the 1999 Constitution, its jurisdiction is conferred by SECTION 251 (1) (a) – (s) of the said Constitution.
However for the purposes of this case, the relevant provisions in my view appear to be SECTION 251 (a), (e) and (p) which provide as follows:
251. (1) Notwithstanding anything to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters.
(d) Connected with or pertaining to banking, banks, other financial institutions, including any action between one Bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures;
(e) Arising from the operation of the Companies and Allied Matters Act or any other enactment replacing that Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act;
(p) The administrated or the management and control of the Federal Government or any of its agencies.
The law is well settled as conceded to by both parties that for the Court to determine whether or not it possesses the requisite competence/jurisdiction to hear a matter, it needs to examine those processes that were filed to activate its jurisdiction, which are the writ of summons and the statement of claim: AGF V AG, ABIA STATE (2001) 7 SC, PT1, 32 AT 102 DICKSON OGUNSEINDE VIRYA FARMS LTD V SGB LTD & ORS (2018) LPELR – 43 710 (SC) and MARAFA & ORS V DAN ALHAJI & ORS (2019) LPELR.
The narrow issue to determine in this appeal flowing from the sole issue distilled and adopted for determination by the parties is whether or not as per the relevant provisions of the Constitution vis-à-vis the claim of the plaintiff/1st respondent before the lower Court, the Court has jurisdiction? In other words, is the claim based on a simple contract as alluded to by the 1st & 2nd defendants/appellants or it is one that touches on the operation of companies and so fall within the jurisdiction of the Federal High Court as held by the learned trial judge?
In an attempt to answer this poser, I have soberly considered the submissions of both counsel to the two parties in this matter. There is no doubt that in the face of reliefs (i) & (ii) of the plaintiff/1st respondent’s claim before the lower Court the argument of the appellants’ counsel that it is a claim premised on a simple contract to purchase shares and its breach thereof may be persuasive. The principal claim in these two reliefs is that the Court should declare whether the failure or refusal of the 1st and 2nd defendants/appellants to procure First Bank PLC shares on behalf of the plaintiff/1st respondent in line with his instructions or mandate during the May, 2007 Public Offer amounts to a breach of contract between the parties. There are however other ancillary reliefs sought by the plaintiff/1st Respondent which though incidental/consequential claims are predicated upon the principal claim. These ancillary/consequential claims flow from the nature of the contract between the parties. This has to do with purchase of shares which is regulated by CAMA, CAP C 20 Laws of the Federal Republic of Nigeria 2004. I therefore agree and uphold the contention of the 1st respondent’s counsel that if the transaction in the contracts has to do with purchase of shares, then it brings into the equation the issue of CAMA. By the combined effect of SECTIONS 37, 124, 125, 126 and 146 1 – 6 and 567(1st Schedule) of CAMA, 2004, only the Federal High Court can entertain this suit.
I am fortified in this position by the decisions of my learned brother AGUBE JCA (in STB V OLUSOLA (supra) and the case of BAMAK PHARMACY & STORES LTD & ORS V ABUJA MUNICIPAL AREA COUNCIL (2010) LPELR – 3850 (CA). What is more, from all the surrounding circumstances of this case I agree with the learned counsel to the Respondent that if anything, this case is at best one of those hybrid cases where both the Federal and State High Courts have concurrent jurisdiction. This is if the relationship between the plaintiff/1st respondent and the 1st defendant/appellant especially is treated as that of customer – banker. The purport of SECTION 251 (1) (d) of the Constitution is to share concurrent jurisdiction between the Federal High Court and the State High Court.
This provision at the risk of repetition provides thus:
“251 (1) (d) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil causes and matters – (d) Connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures;
Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.”
In interpreting the purport of the proviso to SECTION 251 (1)(d) the apex Court in the case of UBA PLC V BTL INDUSTRY LTD( SUPRA) held thus:
“In FMBN v. NDIC ((supra), this Court held that disputes over maters listed in Section 251 (1) (d) of the Constitution (suspension and modification) Decree NO. 107 of 1993 like banking, banks, other financial institution etc arising from simple customer/banker relationships are by virtue of the provision to the subsection exempted from the exclusive jurisdiction of the Federal High Court. And in NDIC v. OKEM ENTERPRISE LTD., this Court construed the provision to Section 251 (1) (d) of the 1979 Constitution to have examined the exclusive jurisdiction of the Federal High Court over the matters listed in the subsection of the dispute is between an individual customer and his bank and that in such cases both the Federal High Court and State High Court enjoy concurrent jurisdiction. I don’t think we have any cause whatsoever to depart from that construction. It appears to be the most rational construction to be accorded the provision and I have no other choice than to adopt the interpretation as to the purport and or effect of Section 251 (1) (d) of the Constitution (suspension and modification) Decree NO 107 of 1993….”
What this means is twofold: Firstly, that the jurisdiction of the State High Court in transactions involving an individual and his bank has been preserved. Secondly, although the Federal High Court has jurisdiction in such disputes, it is not to the exclusion of the State High Court. Simply put, both the Federal High Court and the State High Court have concurrent jurisdiction in transaction involving an individual customer and his bank. See also the cases of FMBN V NDIC (1999) 2 NWLR, PT 591, 333 and NDIC V OKEM ENTERPRISES LTD & ANOR (2004) 10 NWLR, PT. 880, 107 like TABAI, JSC expressed this interpretation given by the apex Court as the most rational Construction. This is because the said provision cannot be interpreted to have the effect of conferring exclusive jurisdiction on the State High Court and taking away completely the jurisdiction of the Federal High Court to entertain cases and matters relating to individual customer and bank transactions.
There is no controversy between the parties in this suit whether the present dispute is one between an individual, TOLAI ALABI, plaintiff/1st respondent and his bank, 1st defendant/appellant, UBA PLC in respect of transactions between them. In view of the authorities cited, this dispute falls squarely within the proviso to Section 251 (1) (d) and therefore within the concurrent jurisdiction of both the Federal High Court and the State High Court. In consequence, I hold that the trial Court has subject matter jurisdiction and properly assumed same in this matter. The effect of this holding is that the sole issue is resolved against the appellants and in favour of the 1st Respondent. It is indeed a very sad commentary on the state of our legal and appellate systems that an interlocutory appeal would remain in Court for over a decade. It is sadder still in the instant case where the appellants, financial giants by all standards in our financial landscape would have had nothing to lose had they allowed this matter to conclude at the trial Court. They could still have appealed even on jurisdiction. Their action to say the least appears calculated to frustrate the plaintiff/1st respondent into abandoning this claim.
It is however a welcome development that this Court by its practice and procedure has made this practice almost extinct, but it still abounds. And because some may still find their way to being heard due to a large extent to the porous nature of our system, it is not enough to keep lamenting. More drastic and punitive measures need to be put in place to check this monster that is a big clog in the wheel of justice. For what justice will the 1st Respondent get if this matter is sent back for Hearing in the Federal High Court after 12 years of coming to Court and not knowing how long the wheel of justice will grind before the conclusion of hearing and how long the appellate processes will take through this Court and the apex Court. A system that produces only pyrrhic/justice should be done away with.
In sum, this appeal fails. It is hereby dismissed. I assess costs at N500,000 against the Appellants and in favour of the 1st Respondent.
HUSSEIN MUKHTAR, J.C.A.: I have had the advantage of previewing the leading judgment just rendered by my learned brother Patricia Ajuma Mahmoud, JCA. I agree fully with the eloquent reasons therein and the conclusion that the appeal lacks merit
The appeal is accordingly dismissed. I adopt the consequential orders as made in the judgment.
PAUL OBI ELECHI, J.C.A.: I have read in draft the lead judgment just delivered by my learned brother Patricia Ajuma Mahmoud JCA.
I agree with him that the Appeal lacks merit and ought to be dismissed.
I too dismiss same and abide by the order as to costs.
Appeal Dismissed.
Appearances:
Mr. Mathew Esonanjor with him, MR. J. O Osaro For Appellant(s)
Respondents were absent and unrepresented, even though served with hearing notice. For Respondent(s)