Federal High Court lacks the jurisdiction to hear and determine a simple contract case

IN THE COURT OF APPEAL IN THE ABUJA JUDICIAL DIVISION
HOLDEN AT ABUJA
ON TUESDAY, 6TH FEBRUARY, 2018
BEFORE THEIR LORDSHIPS:

AHMAD OLAREWAJU BELGORE J.C. A
FATIMA OMORO AKINBAMI J.C. A
PAUL OBI ELECHI J.C. A
BETWEEN
NIGERIAN NATIONAL PETROLEUM CORPORATION ………APPELLANT
AND
1. SLB CONSORTIUM LIMITED
2. THE CHIEF REGISTRAR, FEDERAL HIGH COURT
3. UNION BANK OF NIGERIA PLC …………………..…… RESPONDENTS
Suit No: CA/A/127/2015
LEAD JUDGMENT DELIVERED BY AHMAD OLAREWAJU BELGORE, J.C.A.

FACTS LEADING TO THIS APPEAL
Stripped to bare bones, the facts of this case is that there was a consulting services agreement between the appellant and the 1st respondent scheduled for a duration of 24 months in the sum of USD$28, 008, 000. However, after about five months into the contract, the appellant terminated the contract. Visibly aggrieved, the 1st respondent filed a suit at the Lagos division of the Federal High Court and in the end, judgment was given in the 1st respondent’s favour in the sum of USD$19,850,467.

Dissatisfied with this judgment, appellant appealed to the Lagos division of the Court of appeal. Which Court allowed the appeal in part and remitted the case back to the trial Court for re-trial in respect of the proper assessment of damages. A trial was conducted in compliance with the order of the Court of Appeal and judgment was delivered with a sum of USD$7,155,053 awarded in favour of the respondent.

The appellant, dissatisfied with the judgment, appealed again to the Court of Appeal, Lagos Division while the 1st respondent cross-appealed. Appellant also brought an application for a stay of execution and same was granted by the trial Court, directing that the judgment sum be paid into the Court’s Chief Registrar’s interest yielding account. (The Chief Registrar is the 2nd respondent herein while the bank in which the account is domiciled, Union Bank of Nigeria Plc, is the 3rd respondent in this current appeal). The order for stay of execution was made pending the hearing and determination of the appeal and appellant complied with the order by depositing the judgment sum in the designated account.

When the appeal came up for hearing, the Court of Appeal, Suo motu raised the issue of jurisdiction of the trial Court to entertain matters founded on simple contract and parties were invited to address the Court there on. In a well considered Judgment, the Court held that the Federal High Court lacked the jurisdiction to entertain matters founded on simple contract and consequently, quashed the decision of the trial Federal High Court.

The judgment of the Court of Appeal did not seat well with the 1st respondent so, the 1st respondent filed an appeal to the Supreme Court. At the hearing of the appeal at the Supreme Court, the appellant herein raised a preliminary objection challenging the competency of the 1st respondent’s Originating Summons at the trial Court on the ground that same was signed by a law firm and not a legal practitioner. The Preliminary objection was upheld by the Supreme Court in its judgment entered on the 15th day of April 2011 striking out the 1st respondent’s Originating Summons in the trial Court.

The 1st respondent re-instituted the suit culminating in this present appeal at the Federal High Court, Abuja by an Originating Summons against the appellant, the 2nd and 3rd respondents herein jointly and severally for a declaration that the 2nd and 3rd respondents are obliged jointly and severally to account to the 1st respondent and the appellant herein for the sum of USD$7,155,053 plus all the accrued interests being the judgment sum which they hold on behalf of the 1st respondent and the appellant.

The appellant, in response, filed a notice of preliminary objection contained in a motion supported by an affidavit and a written address. The Appellant also filed a counter-affidavit on the 29th day of February. It was a 27-paragraph counter-affidavit supported by documents as exhibits. In both the preliminary objection and the counter-affidavit, the appellant challenged that the 1st respondent’s claim had long been statute-barred under both the limitation Act, and the Nigerian National Petroleum Corporation Act.

In response, the 1st respondent relied on a letter, Exhibit SE2 addressed to the Attorney General of the Federation and written by one Chief Sena Anthony, Coordinator, Corporate Secretariat/Legal Division & Secretary to the Corporation Ref. CSLD. 1099 dated September 11, 2007, to say that the letter amounted to an admission by the appellant of its indebtedness to the 1st respondent and that same admission gave rise to the present cause of action.

After the parties had adopted their respective written addresses, the trial Court delivered its ruling on the preliminary objection and judgment on the merit of the originating summons to the effect that the letter, Exhibit SE2 amounted to an admission or acknowledgement of the indebtedness of the appellant to the 1st respondent and that the appellant being an agency of the Federal Government, the Federal High Court had jurisdiction to hear and determine the case.

The appellant has now appealed to the Court of Appeal against the decision of the Federal High Court, Abuja Division.

ISSUE(S) FOR DETERMINATION
In the appellant’s brief, three issues were distilled for determination by this Court, namely:
1) Whether the trial Court had jurisdiction to entertain the suit as constituted by the 1st respondent (Ground one of the Notice of Appeal);
2) Whether the trial Court was correct or otherwise entitled to rely on a letter marked Exhibit SE2 as the appellant’s acknowledgment of indebtedness to the 1st Respondent (Ground three of the Notice of Appeal);
3) Whether the decision of the trial Court on the 1st Respondent’s originating summons is sustainable in law and on the fact? (Grounds Two and Four of the Notice of Appeal).

ISSUE 1
The crux of the appellant’s argument in respect of this issue is that the 1st Respondent’s suit did not fall within the jurisdiction of the Federal High Court since it was founded on simple contract for consultancy. It was submitted that the holding of the trial Court is an attempt to recover a statute-barred debt, which is said to have been revived by a letter of acknowledgment. It was further argued that debt recovery is outside the jurisdiction of the Federal High Court.

The appellant canvassed that having dragged the Appellant into eleven years of comprehensive litigation in respect of the alleged breach of Exhibit SE1, the re-filing of the 1st Respondent’s Suit in the instant case constitutes an abuse of the process of Court and it should be dismissed.

The appellant submitted that the contract, having been terminated in 1999, the 1st respondent was not entitled to claim any relief or benefit under such contract in 2011 having exceeded the stipulated period of limitation of 6 years from the date the cause of action arose as contained in Section 7 (1) (a) of the Limitation Act of the FCT, Nigeria.

ISSUE 2
Shorn of all coatings, appellant’s submission here is that the letter- Exhibit SE2 does not fulfill the requirement of Section 44(2)(b) of the Limitation Act, which stipulates the form and manner of acknowledgment capable of reviving a statute-barred action; and Section 12 (1) of the Nigerian National Petroleum Corporation Act, Cap. N123, Law of the Federation of Nigeria, which provides that actions against the Corporation must be prosecuted within 12 months.

It was further submitted that an action caught by statute of limitation cannot be revived by a subsequent admission.

ISSUE THREE
In this regard, it is submitted that the trial Court failed to consider and determine the question posed in the originating summons, just as it failed to resolve the conflicts in the affidavit of the appellant and the 1st respondent. It is also submitted that the trial Court failed to determine the case on the strength or weakness of the 1st respondent’s case. It was submitted that the failure of the trial Court to consider and answer the question posed in the originating summons amounted to a miscarriage of justice.

It was pointed out that what the 1st respondent claimed in its relief (vi) of the originating summons is USD$5,835,000 but what the trial Court awarded was USD$7,155,053. This is submitted to be a perversity of the decision of the trial Court. The appellant urged the Court to allow the appeal and set aside the decision of the trial Court.

RESPONDENT’S ARGUMENT
ISSUE ONE
Relying on Section 251 (1) (R) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, 1st respondent submitted that the trial Court had jurisdiction to this matter because the matter is seeking declaratory and injunctive reliefs in respect of which exclusive jurisdiction is conformed on the Federal High Court.

On the issue of abuse of Court process, 1st respondent pitched his tent on the fact that since the Supreme Court made it clear in Exhibit NNPC 3 that it should be taken that no proceeding had ever happened either before the Federal High Court or the Court of Appeal, it was like if no proceedings were ever taken between the parties.

It was further argued that the cause of action in this suit accrued in September 2011 when the 1st respondent discovered Exhibit SE2 and that the suit was re-filed around that exhibit. That since the earlier suit was commenced within limitation period and was only struck out by the Supreme Court in 2011 on the ground of jurisdiction, the time is frozen and the re-filed suit will be considered to have been filed within limitation period allowed by the Limitation Act and the NNPC Act. ISSUE TWO

In debunking appellant’s contention that the Attorney General of the Federation to whom Exhibit SE2 was addressed is not an agent of the appellant, the 1st responded posited that the Attorney General of the Federation is not a stranger, because he is an agent of the Federal Government, the Chief Law Officer of the Federation and a Minister who can effect the payment over and above the appellant.

With regard to the issue of the suit being statute-barred, it is submitted that what the Court is to look at is the claim of the plaintiff in its suit of summon and/or statement of claim. That the cause of action herein arose from Exhibit SE2 and the instant suit was commenced within two months of the emergence of cause of action (discovery of Exhibit SE2).

ISSUE THREE
In response to issue 3, the 1st respondent answered in the affirmative. It submitted that by the finding of the learned trial Chief Judge in respect of the central question in the originating summons that Exhibit SE2 constituted an admission by the appellant of its indebtedness to the 1st respondent, all other question became academic.

It was canvassed that the case of the 1st respondent before the trial Court was based on the admission made by the Appellant in Exhibit SE2 and that once an admission is detected, all the necessity of proof becomes unnecessary as facts admitted need no proof.
Although the 1st respondent agreed that the sum of USD$7,155,053 awarded by the trial Court should be treated as an error, it prayed the Court to use its power under Section 16 of the Court of Appeal Act to correct the error by reducing the judgment sum to USD$5,835,000 as claimed by the 1st respondent.

THE COURT’S FINDINGS
The Court observed that the questions posed and the reliefs sought in the 1st respondent’s originating summons at the trial court pointed clearly to enforcement of contractual agreement contained in Exhibit SE1. Consequently, the suit is based on a simple contract of Consultancy Service and its enforcement against a government agency.

The Court, without mincing words, pointed out that ordinarily, where the Federal Government or any of its agencies is a party to a suit, the Federal High Court has jurisdiction to entertain it. The only impediment to its jurisdiction is where the subject matter is outside its limited exclusive constitutional jurisdiction. In which circumstance, the Federal High Court will not have jurisdiction to hear and determine the case.

The Court went on to consider the jurisdiction of the Federal High Court as contained in Section 251 and further considered the plethora of Supreme Court cases on the Jurisdiction of the Federal High Court where the Supreme Court came to an irresistible conclusion that it is not enough to accede jurisdiction to the Federal High Court for the reason only that one of the parties is the Federal Government or any of its agencies. Rather, it has to be ascertained that the subject matter is within the scope of the limited exclusive constitutional jurisdiction of the Federal High Court before it can have the jurisdiction to entertain the suit.

The Court came to the conclusion that the 1st respondent’s suit as constituted, borders on a simple contract, which is not within the jurisdiction of the Federal High Court. To this end, the Court found that the Federal High Court lacks the jurisdiction to hear and determine this case same having been constituted as a simple contract.

Having found that the Federal High Court, Abuja lacked jurisdiction to hear and determine the 1st respondents’ originating summons, the Court of Appeal did not proceed to consider other issues raised in this appeal.
COURT’S HOLDING

Flowing from above, the Court of Appeal held that the appeal succeeds and same was allowed. The proceedings and ruling of the Federal High Court, Abuja conducted without jurisdiction were set aside and the preliminary objection to the hearing of the Suit No. FHC/ABJ/CS/921/2011 as contained in the appellant’s notice of motion dated January 23, 2011 was upheld. The 1st respondent’s originating summon dated and filed on November 4, 2011 was struck out for being incompetent. No cost was awarded.

Appearances:
For Appellants(s): Olawale Akoni, SAN with him, Ajokpaoghene Utake, Esq.
For Respondent(s): Adewale Adesokan, SAN with him, Sunday Edward, Esq., Henry O. Chichi, Esq., Kelechi Ogbonna, Esq.

Compiled by Lawpavilion