Court dismisses firms’ appeal challenging Nigerian courts jurisdiction over mining dispute

The Court of Appeal, Lagos Division, has dismissed the appeal filed by James Bay Resources Limited and others challenging the jurisdiction of the federal high court to hear disputed oil mining license suit.

Others listed as appellants in the suit are James Bay Energy Nigeria Limited, Mr. Stephen Shefsky, Crestar Integrated Natural Resources Limited and Mr. Adeniyi Olaniyan, while the seven respondents are Mak Mera Nigeria Limited, Mr. Wale Sola, Chief Samuel Olorunfemi, Shell Petroleum Development Company of Nigeria, the director, Department of Petroleum Resources, minister of Petroleum Resources and the Corporate Affairs Commission (CAC).

Justice Ibrahim Buba of the Federal High Court, Lagos had ruled that he has jurisdiction to adjudicate on the suit filed by Mak Mera Nigeria Limited and its managing director, Mr. Sola against the appellants.

The plaintiffs at the high court had sued the defendants asking the court to declare that they were entitled to beneficial interests in Oil Mining License (OML-90) and (OML-25) pursuant to an agreement between them (plaintiffs) and James Bay Resources Limited, a Canadian company.

The plaintiffs also sought orders of the Court to invalidate the registration of a company known as Crestar Integrated Natural Resources Limited who is the 4th respondent in the suit, for being unlawful in that it contravenes the provisions of the Nigerian Oil and Gas Industry Contents Development Act, CAP N124A, Laws of the Federation of Nigeria, 2004.

When the matter first came up at the Federal High Court, the respondents filed a notice of preliminary objection to the jurisdiction of the court on the ground that the agreement between the parties provided that where a dispute arises, the Courts in Ontario, Canada would exercise jurisdiction over the matter.

They further argued that in the alternative, the Lagos High Court and not the Federal High Court should adjudicate on the matter.

But after hearing party’s submissions, Justice Buba overruled the respondent’s objection. Dissatisfied with the decision, the respondents lodged an appeal against the judgment at the Court of Appeal, Lagos Division.

After hearing the parties, the Court of Appeal in a judgment delivered on June 5, 2020 and read by Justice Tijjani Abubakar, unanimously dismissed the appeal.

The court instead upheld the submissions of the respondent’s counseled by Mr. Adekunle Oyesanya (SAN), to the effect that the agreement of the parties notwithstanding, Nigerian courts have jurisdiction to adjudicate over the matter.

The court cited previous decisions of the Appellate Court in cases like Lignes Aeriennes Congolaises (LAC) -V- Air Atlantic Nigeria Ltd. (A.A.N) (2006) 2 NWLR (Pt. 963) 49, where it was held that parties cannot whimsically subject themselves to the jurisdiction of a foreign court to the exclusion of Nigerian courts, where there are obvious facts justifying exercise of jurisdiction by Nigerian courts.

“I am fully convinced that the trial court found solid and good grounds to assume jurisdiction and dismiss the appellants’ application challenging its jurisdiction to hear and determine the suit,” the appeal court held.

Moreover, the court held that to refer the dispute to Ontario court would be prejudicial to other parties in the suit that are not privy to the agreement.

The court also found that the matters in the suit as regarding mineral resources are vested in the Federal High Court and as such not a matter of simple contract for determination in the Lagos High Court as the appellants averred.

In dismissing the application, the court ordered that the suit be remitted back to the Federal High Court to be heard and determined expeditiously.

“On the whole therefore, appellants appeal is demonstrably frivolous and vexatious. It deserves to be and is hereby dismissed by me. The ruling delivered by Buba, J on February 24, 2015 in suit N0: FHC/L/CS/1388/14, dismissing appellants’ application and holding that the court is richly vested with the jurisdiction to hear and determine the respondents’ suit is hereby affirmed by me. The suit is hereby remitted to the lower court to be heard and determined expeditiously,” Justice Abubakar held.