In The Court of Appeal of Nigeria
On Friday, the 19th day of January, 2018
Before Their Lordships
MOJEED ADEKUNLE OWOADEJustice of The Court of Appeal of Nigeria
HAMMA AKAWU BARKAJustice of The Court of Appeal of Nigeria
BOLOUKUROMO MOSES UGOJustice of The Court of Appeal of Nigeria
1. CHEVRON U.S.A. INC.
2. MR. HERMANT PATELAppellant(s)
1. BRITTANIA-U NIGERIA LIMITED
2. CHEVRON NIGERIA LIMITED
3. BNP PARIBAS SECURITIES CORPORATION
4. SEPLAT PETROLEUM DEVELOPMENT COMPANY LTDRespondent(s)
BOLOUKUROMO MOSES UGO, J.C.A.(Delivering the Leading Judgment): This appeal is from the ruling of Yunusa J. of the Federal High Court, sitting at Lagos, delivered on the 13th May 2014. The ruling was in respect of several applications filed by the defendants in suit No. FHC/L/CS/1171 challenging the jurisdiction of the Federal High Court to entertain the suit of 1st respondent (Brittania-U Nigeria Limited) because, according to the objectors: (1) the Federal High Court lacked subject matter jurisdiction to entertain it, and (2) that the suit disclosed no reasonable cause of action, some defendants were wrongly joined and the suit ought to have been referred to arbitration.
The case of 1st respondent in the lower Court is that, sometime in 2013 she participated in a bid undertaken by 2nd respondent for the sale of its interests in three Oil Mining Leases (OMLs) 52, 53 and 55 (referred to herein as the “Assets”). She averred that, following the bid round and meetings held between her 2nd and 3rd respondents on the 14th of November 2013 the U.S.A. where according to her requirements were reviewed by 2nd and 3rd respondents and further presentations made by her bankers, there was an acceptance of her final bid offer by the vendors and so a contract exists between her and the defendants for the acquisition of 2nd respondent’s 40% interest in the said Oil Mineral Leases but appellants and 2nd to 3rd respondents have refused to declare her the winner and execute with her a Sale and Purchase Agreement, otherwise called SPA. She also averred that 4th respondent was granted unfair, unjust and unauthorized access to her bid documents, her financial model and analysis in breach of a Confidentiality Agreement signed by the parties. She claimed this fact was confirmed by 4th respondent’s Managing Director during an unsolicited visit to her Chief Executive Officer.
She thus approached the Federal High Court for it to declare, basically, that there already exist between her, appellants and 2nd and 3rd respondents a binding contract for the transfer of oil Mineral Leases 52, 53 and 55; that the Court order specific performance of that binding contract and award exemplary damages against the defendants for breach of contract, among other reliefs.
It was to that suit and its claims the defendants, including appellants, raised preliminary objections as earlier mentioned.
Appellants also sought orders referring the dispute for arbitration if the Federal High Court held that it has jurisdiction. They also wanted an order striking 2nd respondent out of the suit on the grounds that she was an agent to a disclosed principal and so wrongly joined.
Ruling of the Court
After hearing counsel on the objections, the learned trial judge, Yunusa J., delivered a composite ruling on the 13th day of May 2014 dismissing all the objections. His Lordship held that the Federal High Court had original jurisdiction to the exclusion of any other Court to hear and determine the dispute in the suit because it is connected to mines and minerals including oil fields, oil mining, geological surveys and natural gas under Section 251(1) of the Constitution which confers exclusive jurisdiction on the Federal High Court; involved the administration or management and control of the federal government or any of its agencies namely NNPC; that the suit involved interpretation of the 1999 Constitution of the Federal Republic of Nigeria which was the exclusive preserve of the Federal High Court; and that the claims in the suit cannot be resolved by arbitration. His Lordship, in answering the question of the reasonableness of the respondent’s cause of action, questioned the fairness and transparency of the bid process organized by the 1st appellant and held that by virtue if that, 1st respondent had a reasonable cause of action to question that exercise.
The appeal and its issues
All the defendants are dissatisfied with the ruling and have lodged appeals to this Court. This is the appeal of Chevron U.S.A. Inc. and Hemant Patel. The twosome shall henceforth be referred to simply as the appellants or 1st or 2nd appellants as the context demands. They initially filed eight (8) grounds of appeal on 30/5/2014 from which they framed the following three issues for determination:
1. Whether the lower Court was right when it held that it had jurisdiction to entertain the substantive suit.
2. Whether the lower Court was right when it held that 2nd appellant whom it had held to be an agent of the appellant was a necessary party to the suit before the lower Court.
3. Whether the lower Court was right when it held that the dispute between the parties cannot be resolved by arbitration.
Second to fourth respondents who also wanted the suit struck out and have their separate appeals understandably pursued their appeal and refrained from opposing the appeal and did not file briefs.
Their common opponent, the 1st respondent, however filed her brief of argument, commencing it with an objection to the eight grounds of appeal of the appellants and the three issue formulated from them, she being of the opinion that they are all repetitive, argumentative and narrative and therefore offend Order 7, Rule 2(3) of 2016 Rules of this Court (then Order 6 Rule 2(3) of the 2011 Rules of this Court at the time the brief was filed). She argued further that Grounds 6 and 7 (which complain respectively of the wrongness of the decision of the lower Court in refusing to order arbitration and strike out 2nd appellant for misjoinder) are grounds of mixed facts and law for which leave to appeal ought to have been obtained to file them and that failure further renders them incompetent. In the alternative, and without prejudice to the objection, she formulated the following three issues for determination:
1. Whether the 1st respondent’s action which connected with and pertaining to the divesting of 40% interest in OMLs 52, 53 and 55 is not within the exclusive jurisdiction of the Federal High Court.
2. Whether arbitration is appropriate to try the dispute amount the parties in respect of the 1st respondent’s action connected with and pertaining to the divesting of 40% interest in OMLs 52, 53 and 55.
3. Whether in view of the pleaded role against the 2nd appellant (the 4th defendant at the trial Court) in the statement of claim (which is not being disputed), the 2nd appellant is not a necessary party to the suit merely because he is an agent of the 1st appellant.
Arguing issue 1 – of Whether the Federal High Court was right when it held that it had jurisdiction to entertain the suit – learned counsel for appellant Mr. A.V. Etuwewe faulted the lower Court’s finding that it had jurisdiction. Counsel is of the view that the lower Court’s ruling on its jurisdiction was based on two primary errors: Firstly, that the lower Court proceeded on erroneous assumptions or wrong perceptions of the nature of the dispute and, secondly, it wrongly interpreted and/or misapplied the provisions of Section 251(1) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) and Section 7(1) of the Federal High Court Act to the facts and circumstances of the case.
Learned counsel submitted that Yunusa J. misconstrued the extent of his jurisdiction under the 1999 Constitution when he held that he had no doubt in his mind that the Federal High Court is a Court of unlimited jurisdiction.
In determining the jurisdiction of the Court, counsel submitted, recourse must be had to the claims before the Court as contained in the writ of summons and the statement of claim, citing SPDC (Nig.) Ltd v. Sirpi Alusteel Const. Ltd (2008) 1 NWLR (PT 1067) 128 @ 147 and Merill Guaranty Savings & Loans Ltd v. Worldgate Building Society Ltd (2013) 1 NWLR (PT 1336) 481 @ 605. He argued that the jurisdiction of the Federal High Court is as defined in Section 251 of the 1999 Constitution of the Federal Republic of Nigeria, that unless the subject matter of the suit is covered by any of the provisions of Section 251 of the Constitution the Federal High Court would not have jurisdiction to entertain it. Rather than diligently examine the respondent’s statement of claim, he argued, Yunusa J. relied on extraneous matters and its own erroneous assumptions to clothe his Court with jurisdiction.
For the Federal High Court to have jurisdiction under Section 251 of the 1999 Constitution of this Country, it was argued citing further the case of Gassol v. Tutare (2013) 14 NWLR (PT 1374) 221 @ 244 – 245 (S.C.), Enterpise Bank Ltd v. Aroso (2014) 3 NWLR (PT 1394) 256 @ 291 (S.C.); Adelekan v. ECU-LINE NV (2006) 12 NWLR (PT 993) 33 @ 52 (S.C.) and Salim v. C.P.C. (2013) 6 NWLR (PT 1351) 501 @ 521-522 (S.C.), the criteria is that the matter must border on the administration, management and control of the Federal Government, the operation and interpretation of the Constitution as it affects the Federal Government, and any action or proceedings for declaration or injunction affecting the validity of any executive, administrative action or decision of the Federal Government and any of its agencies. That was not the case here as none of the parties was a Federal Government agency let alone about the matter being about its management or control or administrative actions. On the contrary, counsel argued, the case of 1st respondent before the Federal High Court was based on a simple contract arising from a bidding process or breach of contract in a bid which was outside its jurisdiction.
Counsel argued, too, the lower Court misconstrued the law when it held that the transaction involves an agency of the Federal Government since the prior consent of the Minister of Petroleum is required before the 1st and 2nd defendants (2nd respondent and 1st appellant) can assign their interest over OMLs 52, 53 and 55 as contained in Section 14 of the Petroleum Act. Sections 44(3) of the Mineral and Mining Act and 14 of the Petroleum Act relied on for that postulation by the lower Court does not convert the grantee of a mining lease into an agency of the Federal Government, counsel argued.
The narrow issue before the lower Court for determination, counsel submitted, was whether or not the case of 1st respondent fell within its jurisdiction as prescribed by Section 251(1) of the Constitution of the Federal Republic of Nigeria; that whereas appellants and 2nd to 4th respondents contended that it wasn’t, 1st respondent claimed it was. Rather than take a careful look at the statement of claim to confirm if indeed 1st respondent’s claim could be situated within the provisions of the Constitution, His Lordship, counsel complained, based his decision on the erroneous assumptions that (a) the issue before the Court is the issue of the sale of Oil Mining Lease (OML) which has to do with control of mineral oil, (b) the fact that ownership of minerals, mineral oils and natural gas is vested in the Federal Government of Nigeria is a factor when construing when the considering the jurisdiction of the lower Court, and (c) the necessity of the prior consent of the Minister of Petroleum Resources to transfer interest in oil is important for the purpose of determining the jurisdiction of the lower Court, holding further that the 1st appellant ‘cannot even commence the process of bidding without first obtaining the consent of the Minister of Petroleum’.
Counsel noted that in trying to justify its decision, the lower Court suo motu called in aid the provisions of Section 44(3) of the Constitution, Sections 1(1) and (2) of the Minerals and Mining Act and Section 2(1) of the Petroleum Act and Paragraph 14 First Schedule of the Petroleum Act. Counsel however pointed out that 1st respondent did not mention any of these statutes in her statement of claim let alone rely on them, rather, the arguments and counter arguments of parties bordered on whether the claim of 1st respondent really connects with or pertains to minerals and mines such that the lower Court is vested with exclusive jurisdiction to entertain it. There was no issue to be contested between parties as to whether or not title in oil and gas is ultimately vested in the Federal Government of Nigeria and whether or not prior consent of the Petroleum Minister was needed but not obtained before the invitation for bids for the assets was issued, neither was the interpretation of the Constitution as it relates to the Federal Government or any of its agencies in issue as to warrant the consideration of these extraneous’ matters, counsel argued. The case of 1st respondent from a reading of the statement of claim, counsel argued, was that 1st appellant organized a bid process for the purpose of transferring its 40% interest in Oil Mineral Leases (OMLs) 52, 53 and 55; that she (1st respondent) participated in that process along with others and she submitted the highest bid but was not declared the winner of the bid, nonetheless her representatives met with those of 1st appellant in Houston, Texas, U.S.A. on 14th November 2013 wherein 1st respondent alleged its bid was accepted. It is on the basis of those facts 1st respondent prayed the lower Court for (i) declarations that her bid had been accepted and specific performance of that contract (ii) injunctions to stop appellant from accepting any other bid for the interest. Instead of focusing on this claim of whether the terms of the bid process was breached, Yunusa J., counsel argued, was influenced by the fact that oil and gas in Nigeria is ultimately vested in the Federal Government, the statutory requirement for the Minister’s consent to effect a valid transfer or interest in oil and gas and what counsel referred to as other irrelevant issues in coming to his conclusion. First respondent’s action, counsel argued, was calculated to compel 1st appellant to accept its bid hence she sought an order for specific performance; that she wanted to be recognized as the preferred bidder, with the other leg of her claim being for tortious interference with 1st respondent’s participation in the bid process. It is thus clear, counsel further argued, that the issue to be determined in the case was whether or not 1st respondent had met the bid conditions to the satisfaction of 1st appellant – which he pointed out was at the discretion of 1st appellant without regard to ‘high or highest bidder’ as stipulated in the bid procedure document – to be entitled to the reliefs sought. That claim, counsel submitted, was a case of breach of bid process or at the best an action in simple contract. Assuming that 1st respondent is even granted all her reliefs, counsel argued, the effect will only be that she would be recognized as the winning bidder and a corresponding obligation is placed on 1st appellant to enter into a contract for the transfer of the OMLs to her, subject to necessary approvals: it does not ipso facto vest 1st appellant’s interest in the OMLs with 1st respondent. The terms of a Bid process for the purpose of being considered for acquisition and/or assignment of OMLs and the terms of the actual assignment of OMLs, learned silk argued, are totally different things: a number of contractual and statutory steps must first be taken before the interests in question can be validly transferred. These steps, he said, include preparation and review of transfer documents, execution of the documents, funding of the purchase and ultimately compliance with legal and statutory requirements. Until these steps are taken, counsel submitted, no interest in the lease is transferred and none is received. Bid process, it was further submitted, is separate and distinct from acquisition of OMLs to determine contenders who have the financial and technical capability to acquire the assets; it is an invitation to treat and 1st appellant at all times reserved the right to choose on a discretionary basis.
The fact that oil companies were involved, it was further argued, does not also mean that the biding process is an actual assignment of lease, for which counsel referred us the cases of Shell Nigeria Gas Ltd v. D.O. & G. Ltd(2011) 10 NWLR (PT 1256)457 and SPDC (Nig.) Ltd v. Sirpi Alusteel Const. Ltd supra.
First respondent’s case, counsel still argued, is not about the sale of or assignment of OMLs but about whether 1st respondent’s bid had been accepted as alleged by her; that suit is not connected with or pertaining to mines and minerals as held by the lower Court. Counsel referred to C.B.N. v. System Application Products Nig. Ltd (2005) 3 NWLR (PT 911) 152 where this Court described a bid as ‘nothing more than a buyer’s offer to pay a specified price for something that may or may not be for sale.’ Counsel strongly recommended to us the decision of the Supreme Court in Ports & Cargo Nigeria Ltd v. Migfo Nigeria Ltd(2012) 6 S.C. (PT 111) 1 where the apex Court revisited the ambit of Section 251 of the 1999 Constitution, and, in upturning the judgment of this Court, emphasized that in interpreting the section, the Court must juxtapose it with the reliefs sought by the plaintiff in the action.
Counsel argued, too, that contrary to the ruling of the trial Judge, the ten claims of 1st respondent in the action did not involve any government agency let alone the administration and control of such agency as required by Section 251 of the Constitution to vest jurisdiction on the Federal High Court; it did not also involve interpretation of the Constitution or a proceeding for a declaration or an injunction affecting the validity of any executive or administrative action or decision by a Federal Government agency. Counsel prayed us to note that although 1st respondent had filed processes to amend its statement of claim and join NNPC and the Minister of Petroleum Resources to the suit, that objection to the Court’s jurisdiction was heard and determined upon, neither of the two had been joined. All ten claims of 1st respondent, counsel pointed out were wholly against the appellants and 2nd to 4th respondents none of which is a Federal Government agency.
Learned counsel finally urged us to resolve this issue in appellants’ favour and hold that 1st respondent’s action is not within the Federal High Court.
On issue 2 – of Whether the lower Court was correct in holding that 2nd appellant as a disclosed agent was properly cited in the action – counsel argued that an agent of a disclosed principal cannot be sued, rather it is only the principal that can be sued, for which counsel cited the cases of Uwah v. Akpabio (2014) 7 NWLR (PT 1407) 472 @ 489 (S.C.), Osigwe v. PSPLS Management Consortium Ltd (2009) 3 NWLR (PT 1128) 378 (S.C.), Ukpanah v. Ayaya (2011) 1 NWLR (PT 1227) 61. Relying on paragraphs 6 and 12 of the 1st respondent’s averments in her statement of claim, counsel argued that it was clear that 2nd appellant was only a principal of a disclosed principal, 1st appellant, and could not have been validly sued contrary to the decision of the lower Court. Counsel urged us to resolve this issue in appellants’ favour and strike out 2nd appellant from the suit.
On issue 3, learned counsel for appellants again argued that the lower Court was wrong when it held that arbitration would not resolve the dispute because it would involve a subject matter over which obligation would be imposed on the Minister of Petroleum Resources. The Minister of Petroleum was not even a party to the case and no relief was sought against him, counsel argued, so that contention of the lower Court for refusing arbitration was also baseless. Counsel argued that Clause 9 of the Confidentiality Agreement introduced into the case by 1st respondent provides for a dispute resolution mechanism and states that where parties are unable to resolve any dispute amicably within 30 days, such dispute shall be resolved by binding arbitration. Citing Section 34 of the Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria 2004, providing that the Court shall not intervene in any matter governed by this Act, and the cases of R.C. Omeaku & Sons Ltd v. Rainbownet Ltd (2014) 5 NWLR (PT 1401) 516 @ 533, and Lagos State Water Corporation v. Sakamori Construction Nigeria Ltd (2011) 12 NWLR (PT 1 262) 569 @ 598, counsel argued that the lower Court was bound to give effect to the arbitration Clause in the Confidentiality Agreement and ordered stay of proceedings in the matter pending arbitration. He asked us to reverse the decision of the lower Court on that issue and refer the parties to arbitration.
Responding for first respondent, first on the issue of the jurisdiction of the Federal High Court over her claims, her counsel, Messrs, Rickey Tarfa S.A.N. and A. J. Owonikoko S.A.N. leading a battery of other counsel, while recognizing that it is the writ of summons and statement of claim that determines the jurisdiction of Court and simple contracts are outside the jurisdiction of the Federal High Court, placed great emphasis on the fact that the contract between 1st respondent and the 2nd to 4th respondents that is the subject matter of 1st respondent’s claim related to Oil Mineral Leases, otherwise called OMLs. Oil fields and minerals, they argued, is placed in the exclusive jurisdiction of the Federal High Court by Section 251(1) (n) of the 1999 Constitution of the Federal Republic of Nigeria so 1st respondent was right to bring her case to that Court and Yunusa J. equally correct in so finding. Counsel argued that the contract in question over Mineral Leases was not a simple contract that could be entertained by the State High Court but a special contract relating to the ownership of oilfield and required the transfer of interests in mines and minerals from 2nd appellant to 1st respondent. For a valid contract over oil Mineral Leases, counsel argued, consent of the Minister of Petroleum Resources was necessary and mandatory to be obtained. They drew our attention to the fact that 1st respondent already had a pending application before the Federal High Court to join the Minister of petroleum Resources and the Nigerian National Petroleum Corporation (NNPC) to the suit as co-defendants. The combined effect of all, counsel argued, is to call for interpretation of the Constitution as it affects the Federal Government and its agencies. Counsel also referred us to Section 44 (3) of the Constitution of this country which confers the entire property and control of all minerals, mineral oil and natural gases in the Government of the federation. They also made reference to Section 8 (1) (a) Petroleum Act, Cap. P10, Laws of the Federation of Nigeria providing that the Minister of petroleum shall exercise general supervision over all operations carried on under licences and leases granted under that Act. They submitted that in Mobil Producing Nig. Unlimited v. Suffolk Petroleum Services (2013) 16 NWLR (PT 1384) 573 @ 582 (CA) it was clearly stated that a contract pertaining to oil Mineral leases (OMLS) is within the exclusive jurisdiction of the Federal High Court. Counsel referred us to the cases of Mobil Producing (Nig.) Unlimited v. S.P.S. Ltd (2013) 17 NWLR (PT 1384) 579 @ 582 A-B (C.A.) and the case of Federal Government of Nigeria v. Zebra Energy Ltd (2002) 18 NWLR (PT 798) 162 @ 200 – 201, (S.C.). They submitted that Zebra Energy was also about contract for oil license and was commenced in the Federal High Court. They also cited the cases of Barry v. Eric (1998) 8Â NWLR (PT 562) 404: SPDC v. Isaiah (2009) 14 NWLR (PT 1642) 464; NNPC v. Famfa OilÂ Ltd (2012) 17 NWLR (PT 1 328) 148 in support of their argument and described the cases of Onuorah v. Kaduna Refining and Petroleum co. Ltd(2005) 6 NWLR (PT 921) 393, NEPA v. Edegbero (2002) 18 NWLR (PT 798) 79 @ 100, Oliver v. Dangote Ind. Ltd (2009) 10 NWLR (PT 1 150) 467 relied on by appellants as inapposite.
Assuming, but without conceding, that the Federal High Court lacked jurisdiction over the case and it ought to have been filed in the State High Court, they argued, the proper order to make will not be to strike out the case as suggested by the appellants but order it transferred to the State High Court as provided by Section 22 (2) of the Federal High Court Act. Learned counsel cited the dictum of Oputa J.S.C. on that point in A.M.C. v. N.P.A. (1987) 1 NWLR (PT 51) 457 @ 504 and similar dicta in the cases of MC Inv. Ltd v. Duncan (2016) 1 NWLR 193 @ 207 and Sifax (Nig). Ltd v. Migfo (2016) 7 NWLR (PT 1510) 10 @ 55-56 (C.A.) to support that contention. Counsel finally urged us to resolve this issue against appellants.
On appellants’ complaint of misjoinder of 2nd appellant, counsel while recognizing that the law is that an agent of a disclosed principal cannot be sued in contract argued that 2nd appellant was sued as a wrongdoer for the tort of unlawful interference with the contract the subject matter of the suit, it was properly joined notwithstanding that it is the agent of a disclosed principal. This case, it was further argued by counsel to 1st respondent, cannot be conveniently decided without the presence of 2nd appellant. Besides, the claim for unlawful interference, the argument further ran, is an accessory claim to the principal claim of 1st respondent of having acquired the OMLs from 1st appellant, which claim is within the exclusive jurisdiction of the Federal High Court, and to that extent, the accessory claim must follow it.
On whether the lower Court was wrong when it held that the dispute between the parties cannot be resolved by arbitration, counsel argued that not only were the appellants not parties to the confidentiality Agreement which they relied on for this argument as same was between Chevron Africa and Latin America Exploration and Production company as Disclosing Party and 1st respondent as Receiving Party, that agreement was made for the protection of confidential information disclosed by Chevron Africa and Latin America Exploration and Production Company to 1st respondent in the course of the bid process and that company alone can complain if it was breached; that the Confidentiality Agreement is manifestly irrelevant to breach of contract entered into after the successful conclusion of the bid more so when the contract for sale and purchase of the three OMLs is the subject of 1st respondent’s suit; that going by Section 5 of Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria 2004 and the case of Obembe v. Wemabod Estates Ltd (1977) 11 NSCC 264 even if the suit could have been referred to arbitration at the instance of appellants, by filing objections to the jurisdiction of the Court, appellants have taken steps in the proceedings and so waived arbitration; that the Federal Government statutorily has 60% interest in the OMLs in issue and arbitration the Minister of petroleum who represents that interest is not bound by the confidentiality Agreement; that the claims also include the tort of inducing breach of contract against the appellants and other defendants for divulging Confidential passed disclosed to them by 1st respondent which claim (tort) cannot be the subject of arbitration under Nigerian Law.
The torts of unlawful interference with and breach of contract which is part of the reliefs of the 1st respondent, it was further argued, cannot also be the subject of arbitration in Nigeria as parties cannot contract to commit tort. We were finally urged to resolve this issue too against appellants.
Appellants filed a reply brief to specifically respond to 1st respondent’s preliminary objection to their grounds of appeal. Mr. Etuwewe for appellants argued that appellants’ eight grounds of appeal are not narrative or argumentative and do notÂ offend Order 7 Rule 2(3) of the Rules of this Court. Citing the cases of Okechukwu v. INEC (2014) 17 NWLR (PT 1436) 255 @281 (S.C.), Omisore v. Aregbesola (2015) 15 NWLR (PT 1482) 205 @ 257 – 258 and Atuchukwu v. Adindu (2012) 6 NWLR (PT 1297) 534 @ 553 – 554 among others, learned counsel further argued that what is required in the formulation of grounds of appeal is that they must be clear in their complaint and straight to the point. That, he argued, was fulfilled by appellants’ eight grounds of appeal all of which also complain of lack of jurisdiction in the lower Court.
As for the argument that Grounds 6 & 7 are grounds of mixed law and fact and so incompetent, counsel argued that those two grounds raised no question of fact but are complaints of law of lack of jurisdiction in the lower Court first over 2nd appellant who was wrongly joined so the Court does not have jurisdiction over him, and secondly its jurisdiction to entertain the case rather than refer it to arbitration as agreed by parties.
Counsel urged us to dismiss the preliminary objection in its entirety.
RESOLUTION OF ISSUES
Preliminary Objection: Let me first take on the preliminary objection of 1st respondent. As earlier shown in the summation of the arguments of counsel, the preliminary objection was to the effect that appellants’ grounds of appeal are argumentative and narrative and so incompetent. I am not in agreement with. I am rather of the view that appellant clearly set out in a comprehensive and lucid manner their complaints of lack of jurisdiction in the lower Court and so forth in those grounds. Clarity of complaint in a ground of appeal is the main purpose and hallmark of proper formulation of grounds of appeal: Oduneye v. F.R.N. (2014) LPELR-23007(C.A.) 26; NRC v. Cudjoe (2008) 10 NWLR (PT 1095) 329 @ 349: Oloruntoba-Oju v. Abdulraheem (2009) ALL FWLR (PT 497) 1 @ 29 (S.C.). A ground which is clear in its complaint may not be struck out merely on grounds of its being argumentative and narrative. I guess that is also the rationale behind the use of the discretionary ‘May’ in the latter part of Order 7 R. 3 which says:
“Any ground which is vague or general in terms or which discloses no reasonable ground of appeal shall not be permitted, save the general ground that the judgment is against the weight of evidence. And any ground of appeal or party thereof which is not be permitted under this rule may be struck out by the Court of its own motion or on application by the Respondent.”
The employment of the word ‘May’ by the rule maker seems intended to give the Court a discretion in the matter of striking out grounds of appeal when the complaint is that they are narrative or argumentative, which, I venture to think, is a recognition of the fact that the right of appeal is a constitutional one so it is only in cases where the complaint of appellant is really unintelligible that the Court should resort to the extreme measure of striking out appeal or grounds thereof on that ground: see again Oloruntoba-Oju v. Abdulraheem supra.
Over and above all, the eight grounds of appeal seem to be complaining one way or the other of lack of jurisdiction in the lower Court. A complaint that a Court lacks jurisdiction cannot be swept under the carpet under guise let alone on the ground only that some procedural rules have not been followed or followed to the letter in drawing the Court’s attention to that fact. A Court that is lacking jurisdiction labours in vain and its proceedings remain a nullity for all times so the manner in which the Court is informed of that invalidity is of little or no moment. No technicality and/or the inept manner a jurisdictional challenge is made can prevent it from being considered: a challenge to the Court’s jurisdiction can be made anyhow and at any time: see Petrojessica Enterprises Ltd v. Leventis Technical Co. Ltd (1992) 5 NWLR (PT 224) 675 @ 693; Gaji v. Paye (2003) FWLR (PT 163) 1 @ 13; Oyakhire v. State (2007) ALL FWLR (PT 344) 1 @ 10; Akegbejo v Ataga (1998) 1 NWLR (PT 534) 459 @ 466, Enugwu v. Okefi (2000) 3 NWLR (PT 650) 620; Galadima v. Tambai (2000) 6 SCNJ 190; Nuhu v. Ogele (2004) FWLR (PT 193) 362 @ 385 (S.C.). Jurisdiction, it must also be noted, is neither gained nor conferred by default: See Aladegbemi v. Fasanmade (1988) 1 NSCC 1087 @ p.1112, Oputa J.S.C.
A complaint of lack of jurisdiction, I should also add, is one of law and not of fact. In any event, it is settled that it is only where facts are disputed that a ground of appeal touching on facts will be considered as facts or mixed law and facts, where the facts pleaded are not disputed as in this case where the issues of the arbitration and misjoinder are based on the facts pleaded by the 1st respondent, the issue is not of fact but of law: See Ogbechie v. Onochie (1986) 2 NWLR (PT 23) 484 @ 491 paras F – G. per Eso J.S.C.; A.G., Kwara State v. Olawale (1993) 3 NWLR (PT 272) 645 @ 662 (S.C.); Arjay Ltd v. Airline Management Support Ltd (2002) FWLR (PT 156) 943 @ 961 (S.C.). In fact, in Okedare v. Adebara (1994) 6 NWLR (PT 349) 157 @ 179 B-G (S.C).
In the result, the preliminary objection is misconceived and hereby overruled and dismissed.
With that, I proceed to the merits of the arguments on the appeal.
MERITS OF THE APPEAL
Issue 1: Whether the Federal High Court was right in its finding that it had jurisdiction to entertain 1st respondent’s suit.
The combatants in the appeal, appellants and 1st respondent, are in agreement that what determines the jurisdiction of the Court is the writ of summons and the statement of claim. They cannot be more correct, for that is the law: see Onuorah v. Kaduna Refining and Petroleum Co. Ltd (2005) 6 NWLR (PT 921) 393; SPDC Nig. Ltd v. Sirpi-Alusteel Construction Co. Ltd (2008) 1 NWLR (PT 1067) 128 @ 147, Tukur v. Government of Gongola State (1989) 4 NWLR (PT 117) 517 @ 549.
Counsel to 1st respondent placed so much reliance on her pending motion to join NNPC and the Minister for Petroleum to support 1st respondent’s claim to the jurisdiction of the lower Court.
Counsel’s thinking is that their status as federal agencies will confer jurisdiction on the lower Court if there wasn’t one, more so as according to counsel, they cannot be impleaded in the State High Court. That is even as 1st respondent avers nothing in her extant pleadings against them in the bid process that is the subject of the suit. In effect, what 1st respondent wants us to do is to decide the matter on the basis of an anticipated case. She assumes and takes for granted that that application will be granted. The issue of jurisdiction of Court can only be decided on what is already before the Court as writ of summons or statement of claim and not on the basis of any other process let alone an anticipated process contrary to the suggestion of 1st respondent. In Society Bic S.A. v: Charzin Industries Ltd (2014) 4 NWLR (PT 1398) 497 @ 551 – 552 it was said per Odili J.S.C., that:
“It can safely be said that jurisdiction is determined by what the plaintiff is demanding and cannot be a situation where the response is anticipated, if I may say so, would be the decider. Going contrary to using the claim as a determinant is like begging the question, allowing the cart before the horse or possible journey into speculation in getting into material outside what the initiator of the Court process has put forward.”
So, what are the said claims of the 1st respondent in the Federal High Court that is said to be outside its jurisdiction? They are contained in paragraph 94 of her statement of claim. They read as follows:
“Whereof the plaintiff claims
Against the 1st Defendant only:
(1) A Declaration that by the final binding offer made by the plaintiff to the 1st defendant on 14th November, 2013 at the invitation of the 1st Defendant in the sum of one billion and fifteen million US dollars (US$1, 025,000.000.00), for acquisition of the 40% participating interest of Chevron Nigeria Limited in Oil Mining Leases 52, 53 and 56 has been accepted by the 1st Defendant by its conduct, oral and written representations made thereafter on which the plaintiff relied and acted to its detriment, and that by provision of the irrevocable Standby Letter of Credit for the sum of the two and hundred and fifty million (US$250) opened in favour of the 1st Defendant, to remain in force until 14th September, 2014 as part payment; and further provision of firm letter of commitment by the plaintiffs bankers for payment of the balance of 765 million US dollars demanded for and duly furnished to the 1st Defendant on 15th November, 2013, the parties have entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the 1st Defendant for valuable consideration.
ALTERNATIVELY to DECLARATION NO.1
(2) A Declaration that the demand by the 1st Defendant on 14th November, 2013 that the plaintiff procures its bankers to furnish firm commitment for payment of its final bidding offer in the sum of one billion and fifteen million US dollars, for acquisition of the 40% participating interest of Chevron Nigeria Limited in Oil Mining Leases 52,53 and 56 amounted to a counter offer to plaintiffs final binding offer which the plaintiff accepted on 15th November 2013 when it provided same to the 1st Defendant for payment of the balance of 765 million US dollars in addition to the irrevocable Standby Letter of Credit for the sum of the two and hundred and fifty million (US$250) opened in favour of the 1st Defendant, to remain in force until 14th September, 2014 by reason whereof the parties have entered into binding contact for the acquisition of the OMLs 52,53 and 55 by the plaintiff from the 1st defendant for valuable consideration.
AGAINST ALL THE DEFENDANTS:
(3) A Declaration that the 1st-4th Defendants have no right to proceed to invite bids, offer or accept, negotiate, purport or so represent or engage in any transaction or contact to transfer, sell, farm out or otherwise deal in, dispose of change encumber, or divest the 40% participating interest of Chevron Nigeria limited in oil mining leases 52,53 and 56 in Nigeria in favour of any other person entity or whomsoever or in derogation from or in disregard of the agreement entered into between the plaintiff and the 1st Defendant on 14th and 15th November, 2013 whereby the parties entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the Plaintiff from the 1st Defendant in the sum of one billion and fifteen million US dollars (US$1, 015,000,000.00).
(4) A Declaration that the letter dated 9th December, 2013 addressed by the 1st Defendant to the plaintiff purporting that the plaintiff’s final binding offer, do not meet the criteria that OMLs had to be sold individually “and that NNPC made clear that without meeting this requirement, the government would not approve the sale of the OMLs. “and further plaintiffs offer”…did not provide the required financial support to satisfy Chevron’s internal treasury requirement” are false, made in bad faith. extraneous to the terms of the bid irrelevant to and ineffectual to determine the contract freely entered into between the plaintiff and 1st Defendant for a valuable consideration which have been secured for full satisfaction.
(5) A Declaration that the letter by 1st defendant dated 9th December, 2013 purporting to inform plaintiff that its bid “do not meet the criteria that OMLs had to be sold individually” and that “NNPC made clear that without meeting this requirement the government would not approve the sale of the OMLs. “and further plaintiffs offer “…did not provide the required financial support to satisfy Chevron’s internal Treasury requirement” is belated and unlawful, the final binding offer sought to be thereby rejected having become subsumed in a valid binding and enforceable contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the 1st defendant in the sum of one billion and fifteen million US dollars (US$1, 015 000,000.00).
6. An Order granting a decree of specific performance directing the 1st and 2nd Defendants to provide the SALE AND PURCHASE AGREEMENT for execution by the plaintiff to evidence its acquisition of 40% participating interest of the 1st Defendant in OMLs 52, 53 and 55 in Nigeria stipulated in the irrevocable standby letter of credit and the Bid process Document pursuant to which the parties conducted the sale.
(7). An Order in the alternative to relief 6 granting special damages against the 1st and 2nd Defendants in the sum of US$10,935,001,000.00 (ten billion, nine hundred and thirty-five million, one hundred United States Dollars) or so much thereof as the Court may adjudge fair and equitable as the enterprise value lost by the Plaintiff on account for failure or breach of the contract of acquisition of 40% participating interest of the 1st Defendant in OMLs 52, 53 and 55 in Nigeria stipulated in the irrevocable standby letter of credit and the Bid Process Document pursuant to which the parties conducted the sale.
(8) Exemplary Damages in the sum of one billion United States dollars (or its naira equivalent) for the wrongful interference by the 2nd – 5th Defendants acting in active connivance or collusion with 1st Defendant to unjustly prejudice and frustrate the contractual relationship between the plaintiff and the 1st Defendant by making illegitimate and unauthorized use of sensitive business and proprietary information disclosed by the plaintiff in support of its bid to acquire the 1st Defendant’s OMLs 52, 53 and 55 and which in formation were known by the 2nd-5th defendants to have been so disclosed in strict confidence and solely for the purpose of supporting the plaintiffs bid but which were divulged to third party leading to huge business losses and reputational damage to the plaintiff.
(9) An order of perpetual injunction restraining the Defendants, their Servants, agents privies, proxies, front, staffers or hirelings howsoever called from proceeding to invite bids, offering or accepting, negotiating or engage in any transaction or contract calculated or purporting, to transfer, sell, farm out or otherwise charge, encumber deal in,
dispose of or divest the 40% participating interest of Chevron Nigeria limited in Oil Mining Leases 52,53 and 56 in Nigeria in favour of any person, entity or whomsoever at all in derogation from or in disregard of the agreement entered into between the plaintiff and the 1st Defendant on 14th and 15th November, 2013 whereby the parties entered into binding contract for the acquisition of the OMLs 52, 53 and 55 by the plaintiff from the 1st defendant in the sum of one billion and fifteen million US dollars (US$ 1,015,000,000.00).
(10) Cost of this suit.
(Emphasis all mine).
None of these claims, it should be noted, called for interpretation of the Constitution or related to a federal agency let alone relate to the equally important element of determination of the administration and control of such federal agency to confer jurisdiction on that ground, contrary to the holding of the lower Court.
First respondent’s rather verbose pleadings of 94 paragraphs is not any different and cannot be different in any case as they cannot depart from her reliefs. I shall reproduce a few paragraphs of that pleadings, where she averred as follows:
8. The 5th Defendant amongst other indigenous oil and gas industry operators participated in bids by private and confidential treaty in the divestment of 1st defendant from its state in OMLs 52, 53 and 55 assets in the oil industry in Nigeria, which took place between the months of June and October. 2013.
9. The Plaintiff avers that the 1st Defendant owns 40% interest in Oil Mining Leases (OMLs) 52, 53 and 55 in Nigeria under a joint venture agreement with the Nigerian National Petroleum Corporation who hold the remaining 60%.
10. The Plaintiff avers that the 1st Defendant was desirous of outrightly assigning/divesting its 40% interest OMLs 52, 53 and 55 to any interested person through private sale by competitive bidding.
11. The Plaintiff further avers that the 1st Defendant consequently engaged the services of the 3rd Defendant BNP Paribas Securities Corp as its Financial Advisers- and to handle the process of assigning/divesting its 40% interest in OMLS 52, 53 and 55.
12. The 4th Defendant was appointed and given the responsibilities of the bid coordinator by the 1st and 2nd Defendants.
13. The plaintiff avers that by a Bid Procedures document dated June 2013, the 1st Defendant through its Agent, BNP Paribas Securities Corp., advised bid participants of the procedures to be followed with a view to assigning the 40% interest of Chevron Nig. Ltd in OMLs 52,53 and 55 to any interested person in Nigeria as a single transaction.
The plaintiff shall rely at the trial of this suit on the Bid Procedures dated June, 2013, the 1st – 4th Defendants are hereby giving notice to produce the Original in their custody.
14. The plaintiff avers that the said transaction was to be conducted in two stages, subject to any changes which may be considered appropriate by the 1st Defendant.
15. The Plaintiff avers that the first stage was for review of information memorandum and indicative offer. Any interested party was required to execute confidentiality agreement and such party was to be subsequently invited to submit indicative offer.
16. The Plaintiff further avers that the second stage includes due diligence, contract document and binding offer. The Plaintiff and a limited number of participants who submitted indicative offer at stage 1 were found acceptable and proceeded to Stage II which involved conduct of due diligence virtual data room, (VDR) management presentation, physical data room, contract documents and finally submission of a binding offer that will be appraised by the 1st to 4th Defendants to culminate in choosing a preferred bidder.
17. The preferred bidder was to be informed of the success of its bid and invited to submit a final binding offer to acquire interest in the targeted OMLS which the plaintiff shall rely of the trial of this suit on the Bid Procedures documents containing different stages in the bid process up to completion of the assignment of the targeted OMLS to the successful bidder.
The plaintiff shall at the trial of this suit rely on the Bid Procedures Document containing different stages in the bid process up to completion of the assignment of targeted OMLs to the successful bidder.
18. The Plaintiff avers that in compliance with the first requirement as contained in the Bid Procedures, the Plaintiff duly executed a Confidentiality Agreement dated 14th day of June, 2013 with the 2nd Defendant and submitted it to the 1st/2nd Defendant accordingly; and was given to understand that all other participating bidders executed similar confidentiality agreements with the 1st and 2nd Defendants of the material time.
The Plaintiff shall rely on a copy of the confidentiality agreement dated 14th day of June, 2013, the 1st-4th Defendants are hereby given notice to produce the Original in their custody.
19. The Plaintiff avers that on 29th July, 2013, the Plaintiff by a letter dated 29th July, 2013, submitted the required indicative Offer with necessary bid documents by which it offered to buy the 40% interest of the 1st Defendant in OMLS 52, 53 and 55 in Nigeria in the sum of US$1, 200,000,000.00 (one billion, Two hundred Million United States Dollars).
The Plaintiff shall rely on the letter of 29th July, 2013 indicative offer with necessary bid documents, the 1st – 4th Defendants are hereby giving notice to produce the Original in their custody.
20. The Plaintiff avers that it was successful of the first stage and was invited by the 1st to 4th Defendants to proceed to the second stage. The Plaintiff shall rely on the 1st to 4th Defendants’ email dated 6th August, 2013.
65. On the 10th December, 2013 the plaintiff was shocked and completely bewildered to receive from the 1st Defendant a letter dated 9th December, 2013 purporting to be responding to the pre-action notice of 5th December, 2013 and in which the 1st Defendant alleged, inter alia, that it was entitled to unilaterally resile from its agreement to conclude the sale at any time; and further that insinuated that the final bidding offer made by plaintiff to acquire the targeted 3 OMLs did not meet requirement by NNPC that the OMLs had to be sold individually, and that NNPC would not approve the sale of the OMLs and further that the plaintiffs offer also did not provide the required financial support to satisfy Chevron’s internal Treasury requirement.
66. Plaintiffs states the reason advanced in the said letter to the effect that its final binding offer “to not meet the criteria that OMLs had to be sold individually “and that “NNPC made clear that without meeting this requirement, the government would not approve the sale of the OMLs. “and further plaintiffs offer”… did not provide the required financial support to satisfy Chevron’s internal Treasury requirement” are false. The reasons were advanced in bad faith deriving from extraneous matters unrelated to the terms of the bid, and were never contemplated by parties to be valid for rescinding the contract freely entered into between the plaintiff and the 1st Defendant for a valuable consideration which have been secured for full satisfaction.
67. The Plaintiff states that the reasons proffered by the 1st Defendant for seeking to avoid its contractual obligations to the plaintiff are disingenuous and totally extraneous to the terms of the bid or the additional terms unilaterally imposed by the 1st-4th Defendants to be complied with by the plaintiff all of which were duly satisfied before a final agreement was executed by parties on 14th November, 2013.
The plaintiff shall rely on the 1st Defendant’s letter dated 9th December, 2013.
68. Furthermore, 1st – 4th Defendants had been representing to the plaintiff that it had a settled bargain, and in that respect had been demanding the plaintiff to perform its own obligating under the contract by providing and keeping open in favour of the 1st Defendant, the irrevocable standby letter of credit for the sum of US$50 million which is to be converted to immediate value upon signing of the Sales and Purchase Agreement, and further bank assurance for payment of the balance upon security of collaterals consisting of part of the assets of the plaintiff.
The plaintiff shall rely on its email of 2nd December, 2013 and its Solicitors letter of 4th December, 2013 and the 1st to 4th Defendants are hereby given notice to produce the copy in their custody.
69. Further or in the alternative to the case of the plaintiff that it had secured a binding and enforceable agreement of the 1st Defendant for acquisition of the targeted OMLs for the total sum of US$1,015 billion, the plaintiff avers that failure of the 1st Defendant to proceed to conclude the transaction was by reason of unlawful interference in the transaction by the 2nd, 3rd, 4th and 5th Defendants with a view to stalling it, and paving way for some other interested third parties personified or connected to the 5th Defendant.
These claims and averments of 1st respondent show without any doubt that her simple case before the Federal High Court was for that Court to declare that the elements of a binding contract – of offer and acceptance and consideration – were already in place between her and appellants in respect of her bid for 1st appellant’s 40% interest in Oil Mineral Leases 52,53 and 55 so it was not open to 1st appellant or any of the defendants to back out or refuse to execute with her a Sale and Purchase Agreement (SPA) to consummate that agreement. That simple, cut and dried case, in my humble opinion, does not by any means impinge on mines and oil fields to confer jurisdiction on the Federal High Court; it is a case that merely calls for application of elementary principles of contract law to determine whether there was indeed a contract in place between the parties which the defendants are trying to back out of. lt is a simple case of interpretation of the conduct of the parties to decipher if a contract had come into existence between them in respect of her bid. It is a case which can be settled even without any reference to oil minerals. Settle that simple issue and the case is done. Such is not of itself and by itself a special contract relating to operation of mines and minerals as the lower Court reasoned; it is rather a simple case of breach of contract case which in my humble view is within the exclusive jurisdiction of the State High Court rather than the Federal High Court.
It is now well settled that the Federal High Court lacks jurisdiction over cases of breach of contract of this kind. That jurisdiction belongs to the State High Courts. That was confirmed first in SPDC Nig. Ltd v. Sirpi Alusteel Construction Co. Ltd (2008) 1 NWLR (PT 1067) 128 @ 150 cited by both parties. There this Court also stated, unequivocally (as has again been reconfirmed very recently by this Court per Mbaba J.CA, in MTN Communications Ltd v. Abia State Government (2016) 1 NWLR (PT 1495) 475 @ 501, following the statement of the law by the apex Court in Adetayo v. Ademola (2010) 15 NWLR (PT 1215X69 @ 190), that the fact that a party to a dispute is a federal agency does not mean that it can only be sued in the Federal High Court. Hear Galadima J.C.A. (as he then was) at P.150:
“It must always be borne in mind that the fact that a party to a suit is a federal agency does not place it under the exclusive jurisdiction of the Federal Court so that the fact that a party is an oil company does not mean that actions in respect of commercial contracts in which it is a party are only suable in the Federal High Court… the Federal High Court does not have exclusive jurisdiction in all matters involving the Federal Government or any of its agencies.”
With his brother Rhodes-Vivour, J.C.A. (as he also then was) quipping in thus at p. 152:
“In my respectful view, the statement of claim reveals a clear case of breach of contract, and such an action or cause of action is actionable in the High Court and not in the Federal High Court.”
This statement of the law has been since confirmed by the apex Court in Onuorah v. Kaduna Refining and Petroleum Co. Ltd (2005) 6 NWLR (PT 921) 393 at 405, where Akintan J.S.C delivering the judgment of the Court (with his brothers Onu, Ejiwunmi, Tobi and Edozie JJ.S.C concurring actively) said this at p.407:
“A close examination of the additional jurisdiction conferred on the Federal High Court in the section and by the 1979 Constitution clearly shows that the Court was not conferred with jurisdiction to entertain claims founded on contract as in the instant case. In other words, Section 230(1) provides a limitation to the general and all-embracing jurisdiction of the State High Court because the items listed under the said Section 230(1) can only be determined exclusively by the Federal High Court. All other items not included in the list would therefore still be within the jurisdiction of the State High Court. In the instant case, since disputes founded on contract are not among those included in the additional jurisdiction conferred on the Federal High Court, that Court therefore had no jurisdiction to entertain the appellant’s claim. The lower Court therefore acted rightly in its decision that the Federal High Court lacked jurisdiction to entertain the claim…
“The question whether the respondent is a subsidiary or agent of NNPC or not has no role when a consideration of the jurisdiction of the Court is being made. This is because, as already stated above the determining factor the Court, which in this, is was founded on breach of contract.”
The apex Court recently reconfirmed this position in P & C.H.S. Co. Ltd v. Migfo (Nig.) Ltd (2012) 18 NWLR (PT 1333) 555, the facts of which are rather similar to this one. Migfo’s case was also about a bid process. Like here the plaintiffs/respondents in Migfo sought declarations that by the intentions, declarations, understanding, joint venture agreement and irrevocable commitments expressed by them as plaintiff and the 2nd defendant in the Technical Proposal/ Bid Documents there was a binding agreement, a joint venture and partnership agreement allegedly them concerning the control and management of Terminal C of Tin Can Island Port, Apapa which parties were bound to honour. They thus approached the Federal High Court claiming nine reliefs like the instant one, with the reliefs 1, 2, and 9 mirroring all others being:
1. A declaration that the intentions, declarations, understanding, joint venture agreement and irrevocable commitments expressed by plaintiffs and the 2nd defendant in the Technical Proposal/ Bid Documents dated June, 2005 and their executed Memorandum of Understanding dated 27th July, 2005Â submitted to the Bureau Of Public Enterprises in respect of their bidding for the management and operation of Terminal C, Tin Can Island Port, Apapa, Lagos in the name of the 2nd defendant, are binding on the plaintiffs and the 2nd defendant.
2. A declaration that the intentions, declarations, understanding, joint venture agreement and irrevocable commitments expressed by plaintiffs andÂ the 2nd defendant in the Technical Proposal/Bid Documents dated June, 2005 and their executed Memorandum of Understanding dated 27th July, 2005 submitted to the Bureau of public Enterprises in respect of their bidding for the management and operation of Terminal C, Tin Can Island Port, Apapa, Lagos, the plaintiffs and the 2nd defendant are joint venture bidders for and joint partners in respect of the management and operation of Terminal C, Tin Can Island Port, Apapa, Lagos.
9. An order directing the 2nd defendant to specifically perform intentions, understanding, joint venture agreement and irrevocable commitments expressed by plaintiffs and the 2nd defendant in the Technical Proposal/ Bid Documents dated June, 2005 and their executed Memorandum of Understanding dated 27th July, 2005, on the shareholding and management structures of the joint venture as relating to the defendant and its business as Management/ Operator of the said Port.
Like this case, preliminary objection was raised to the jurisdiction of the Federal High Court to entertain the action but the trial judge, relying on similar arguments like those of Yunusa J. here also held that the case was related to the management and control of Tin Can Island Port, a maritime facility and so covered by Section 251(1) (g) of the 1999 Constitution and within the exclusive jurisdiction of the Federal High Court. That decision was upheld by this Court unanimously. Upon further appeal to the Supreme Court, both decisions were upturned, also unanimously, with Ngwuta J.S.C. saying thus at 604 – 605:
“In my humble view, the sum total of the intention, understanding, joint venture agreement and irrevocable commitments ….’ which form the basis of the questions asked in the originating summons and the reliefs sought speaks of contract sought to be declared binding on the parties and, to be enforced, as well as specific performance of the contract.
“The questions raised and the declarations and orders sought are predicated on contract between the parties. The mere fact that the intentions, declarations, understanding, joint venture agreement and irrevocable Technical Proposal/ Bid documents and Memorandum of Understanding all refer to and relate to the management and operation of Terminal C, Tin Can Island Port, Apapa, a maritime structure for maritime operations, does not make the transaction between the parties less of a contractual relationship.”
With his brother Tabai J.S.C. saying (at p. 600) that:
“I have no doubt in my mind that the dispute is simply on the alleged joint ownership contract and the claim is founded on that alleged contract. It is settled that the Federal High Court lacks jurisdiction in matters of simple contract such as the instant case, I agree entirely with the learned senior counsel for appellants that Onuorah v Kaduna Refining and Petroleum Co. Ltd (2005) 6 NWLR (PT 921) 393 at 405 is quite apposite.”
Counsel for 1st respondent tried strenuously to draw a parallel between this case and the case of Federal Government of Nigeria v. Zebra Energy Ltd (2002) 18 NWLR (PT 798) 162 to submit that Zebra Energy also related to Oil Mineral Lease and was commenced in the Federal High Court from where it ended at the Supreme Court. I am afraid the material facts of Zebra Energy which conferred jurisdiction on the Federal High Court are not in this case. In Zebra Energy the defendant was the Federal Government of Nigeria (not mere oil Company like this one) and the subject matter of the case was whether the administrative action of the Federal Government withdraw and cancel the Allocation of oil Block, otherwise called oil Petroleum Lease (OPL) 248, already allocated by it to zebra Energy. In the said letter of withdrawal dated 08th July 1999 and reproduced at p. 190 of that case, the Federal Government of Nigeria through its Director of Petroleum Resources, Mr. Dublin-Green, informed Zebra Energy thus:
WITHDRAWAL OF ALLOCATION OF OPL 248
I have been directed to inform you of the cancellation of the allocation of OPL 248 recently allocated to your company.
2. This is in accordance with the recommendation of the Panel appointed by the President and commander in chief of the Armed Forces of the Federal Republic of Nigeria, to review all contracts, Licences and appointments made between the 1st January and 28th May, 1999.
3. Any further information you may require on this matter should be addressed to the Director, Petroleum Resources, 7, Kofo Abayomi street, Victoria Island Lagos.
Director, of Petroleum Resources.
It is this decision of the Federal Government of Nigeria, Zebra Energy challenged, correctly, in the Federal High Court. In other words, both Federal Government as defendant and subject matter to confer jurisdiction in the Federal High Court were present in Zebra Energy. It is worthy of note, too, that all Oil Minerals in Nigeria, it is common ground even in this case, belong to the Federal Government and it is the final approving authority in transfer of oil Mineral Leases. That final transfer, unlike the situation here, was what sought to be withdrawn by the Federal Government.
I also make bold to say that, it also seems fairly clear that the intention behind the enactment of Section 251(1) of the Constitution of this country (as amended) is that Federal matters – that is, matters reserved for the Federal Government in the Constitution – ought to be and must be litigated only in its own Court, the Federal High Court. That intention and conclusion is not far-fetched when one relates the items (including mines and minerals) listed and reserved for the Federal High Court in Section 251 (1) to those reserved exclusively for the Federal Government in the Exclusive List in Part 1 of the Second Schedule of the 1999 Constitution of the Federal Republic of Nigeria (as amended). Each and all of the items reserved for the exclusive jurisdiction of the Federal High Court in Section 251(1) of the Constitution is/are also in the Exclusive Legislative List. Mines and minerals, for instance, is Item 38 of the Exclusive Legislative List. Viewed from this practical angle, it can hardly be seriously asserted that the issue in this case of whether two registered companies (both being oil companies notwithstanding) have reached a binding agreement contract in a bid process from which neither party can renege from is a federal matter within the exclusive jurisdiction of the Federal High Court.
In further pushing its position and supporting the ruling of the lower Court, counsel to first respondent tried to make heavy weather of the fact that appellant did not cite any case where it was decided that a case concerning interest in Oil Mineral leases (O.M.L.) can be litigated in the State High Court. Well, there is in fact such a case decided by this Court, incidentally by this division too. That is in the unreported case of CA/L/353/2015: The Shell Petroleum Development Co. of Nigeria Ltd v. Crestar Integrated Natural Resources Limited, delivered on 12th July 2017. That case was quite similar to this case. The issue there was contract for joint ownership of OML and Shell Petroleum Development Company’s refusal to execute a Sale and Purchase Agreement (S.P.A.). There, Nimpar J.C.A. (with the concurrence of Tijjani Abubakar and Ogakwu JJ.CA), addressing almost all, if not even all the issues here, had this to say:
“Can it also be said that the claim or the reliefs have anything to ‘connected to’, ‘pertaining to’, ‘relating to’, or ‘arising from’, ‘ancillary to’ minerals or mines? I have been trying to explain that there is no how a challenge to the jurisdiction of the Court will not be grounded in the claim and it must be emphasized that it is not the submissions of counsel but the claim of the claimant that will determine jurisdiction. This is because only the claim or the reliefs donate jurisdiction.”
“I have viewed the claim again and I do not find that it has anything to do with OML 25 other than who are the participating owners and sharing ratio. It is only the interest in OML 25 that is sought to be defined., i.e., the transfer and nothing directly with OML 25 or its operations. The claim has not affected the operations of OML 25 and its explorations and related activities but simple contract, the SPA. Those phrases cannot also be the reason to stretch the jurisdiction of the Court when the subject matter of the claim is simple contract. The claim is founded on a contract for the assignment of part interest in OML25 being the interest of the applicants and it cannot be equated to a challenge of the actions of NNPC. NNPC has no role in dividing (sic, deciding) who takes what share of ownership in the OML 25. The respondent sought to bring in the issue of administrative or executive actions but I have said earlier that this contention cannot stand.
The full gist of the grouse of the respondent is clearly demonstrated by the aggregate facts as stated, in the statement of claim crystallized in the reliefs above. The respondent carefully crafted its reliefs and all that concerns NNPC is that the appellants should put NNPC on notice. The biting complaint of the respondent is breach of Agreement (SPA) to assign to the respondent their 45% interest in OML 25 and to become the operator, to search for, win, work, carry and dispose of petroleum from the oilfield. Until the agreement is executed, the list of things to do in the oilfield cannot materialize. At the stage it is, is like somebody knocking at the door seeking to enter the house. Until the door is opened can he claim what is inside the house as his own? So how then does the respondent’s claim have anything to do with mineral or mines as decided by the Court below. Until the assignment is fully executed and the respondent takes benefit, it is a busy body, the respondent has nothing to do with OML 25 until the SPA agreement is fully implemented. …..
“The statement of claim has nothing to do with the operations of oilfield OML 25, It was merely asking to enforce the agreement and the right to participate in OML 25. That is different from an operating duly which can only arise upon the fulfillment of the SPA agreement.Â The NNPC or the interpretation of the Petroleum Act is not the case of the respondent going by its pleadings. I think it must be clearly understood that for the dispute to fall under the Federal High Court’s jurisdiction where the foundation is in an area of mines and minerals and admiralty or any item listed under Section 251 (1) of the Constitution, it must not directly involve issues or question of contract, payment for services rendered or the agreement but touching on the core substance of the item listed. The dispute should border exactly on what the subject matter is. There is a thin but dividing line there but quite discernible and a clear understanding on how to determine whether the Federal High Court has jurisdiction was further demonstrated in the case of …..
“The clear cut and settled point is that the Federal High Court has no jurisdiction in matters of simple contract; this was decided in a long line of cases thus, Onuorah v. Kaduna Refining & Petrochemical Co. Ltd supra; Ports and Cargo Handling Services co. Ltd v. I.T.P.P supra; and Adelekan v. Ecu-Line NV supra. The decisions in the above cases are all applicable because the underlining factor therein is that they were all contractual disputes with nothing to do with the main subject matter of the item or subject area whose jurisdiction is squarely given to the Federal High Court.”
And zeroing in finally, Her Lordship held as follows:
“I have stated earlier that the claim did not relate to any relief to such issues of mines and mineral, it is merely seeking reliefs related to a breach or attempted breach of contract. If the relationship had gone beyond contact and delved into how the OML shall be operated in its core areas, then it can come under the Federal High Court’s jurisdiction. The trial Court held that he is undoubtedly convinced that it has jurisdiction because the dispute is connected to OML and the oilfield. I searched for the connection but see none. The OML 25 happens to be the subject of the contract and nothing else. Expectedly, all contracts are in respect of some subject matter and it could relate to anything like maritime, aviation, weights and measures, drugs, arms and any of the items listed in Section 251(1). Parties should not have lost sight of the guiding principle of jurisdiction which is the claim. It also depends on how the said claims is framed and linked with the item/subject matter. If the arguments of the respondent and the trial Court are to fly, what is the dispute with OML 257. Nothing. I disagree with the Court below that it has jurisdiction in the matter as properly constituted.”
For reasons earlier stated, I reach exactly the same conclusion as our learned brothers above.
Perhaps I should further emphasize the fact that, the mere fact that the name ‘mines, minerals and oilfields’ is mentioned in a case does not without more turn it to one for mines and minerals under Section 251(1)(n) of the 1999 Constitution and within the exclusive jurisdiction of the Federal High Court. Hence it has been settled by the apex Court, after a fierce battle by the litigants, that the issue of compensation for land acquired for oil prospecting and location of minefield and/or which of two or more persons is entitled to compensation for such land, despite the fact that an oil company was a party to the case, is not one that borders on mines and minerals under Section 251(1)(n) of the 1999 Constitution and within the jurisdiction of the Federal High Court but is rather a matter within the jurisdiction of the State High Court: see Nkuma v. Odili (2006) ALL FWLR (PT 313) 24 (S.C.). In the same vein, it has also been decided that the issue of who is entitled to rents for land on which a mine field is located by an oil prospecting company is one within the jurisdiction of the State High Court rather than the Federal High Court: see NAOC v. Kemmer (2001) 8 NWLR (PT) 506 (C.A.).
For each and all of the foregoing reasons, I hold that the Federal High Court lacked jurisdiction over the straight forward claims of 1st respondent in the instant case of whether or not it had reached a binding contract with 2nd respondent for the transfer of 2nd respondent’s 40% interest in Oil Mineral Leases (OMLS) 52, 53 ad 55. I accordingly resolve issue 1 in favour of the appellants.
And all that ordinarily renders academic all other issues. Nevertheless, being just an intermediate Court of appeal, we are bound to resolve all other issues too. On that note, I proceed to the other two issues.
Coming to the 2nd issue of the misjoinder of 2nd appellant, an undisputed disclosed agent of the 1st appellant, subject to what I have said about the jurisdiction of the lower Court over the dispute, there is some substance in that argument
as far as the reliefs for declaration of binding contract and specific performance of that contract are concerned, and that is because of the settled position of the law that an agent of a disclosed principal cannot be sued on a contract, only his principal can be sued: see Leventis Technical Ltd v. Petrojessica Enterprises Ltd (1992) 2 NWLR (PT 224) 459 (S.C.), Osigwe v. PSPLS Management Consortium Ltd (2009) 3 NWLR (PT 1128) 378 (S.C.), B.M. Ltd v. Woermann-Line (2009) 13 NWLR (PT 11257) 142 (S.C.). Second appellant was therefore wrongly joined as far as the reliefs for declaration of binding contract from the bid, injunction and for damages for breach of contract are concerned.
I must say, however, that appellants’ counsel was incorrect when he tried to generalize the aforementioned position of contract law to all the claims of 1st respondent including the tortuous claim of inducing breach of contract against 2nd appellant. The law of agency operates in a very limited manner in the law of tort. In fact it even changes nomenclature in a sense in tort law to vicarious liability, meaning that a master is vicariously liable for the actions of his servant done within the course of his employment. That is just how far the principle of agency applies in tort law; for in tort, every person, including a servant or agent, is responsible for his actions and can be sued directly for his tortuous actions, just as a master can also be joined or sued separately for the actions of the servant done in the course of his employment for the master or principal: see Ifeanyi Chukwu (Osondu) Ltd v. Soleh Boneh Ltd (2000) 5 NWLR (PT 656) 322 (S.C.). It can never be open, and has never been open, to a driver who negligently causes an accident in the course of his employment, or for a physician who causes medical negligence while working in a government or someone else’s hospital to plead that they cannot be sued because they were working for disclosed principals. The apex Court in its later decision in lyere v. Bendel Feed & Flour Mills Ltd (2009) ALL FWLR (PT 453) 1217 not only confirmed its earlier decision in Ifeanyichukwu (Osondu) Ltd v. Soleh Boneh Ltd on this point but expatiated further on the principles of agency in tort law and actions, with Mahmud Muhammad J.S.C. (as he then was) saying at p. 1235-1236 thus:
“In case of tort-feasors, each of two or more joint tort-feasors is liable for the entire damage resulting from the tort. De Bodreugun v. Arcedekere (1302) Y0 30 Edw 1 (Rolls Series) 106. The following; for instance, are joint torffeasors,
1. Employer and employee where the employer is vicariously liable for the tort of the employee.
2. Principal and agent where the principal is liable for the tort of the agent.”
It follows from the above discourse that while 2nd appellant was wrongly joined in reliefs 3 – 6 and 9 (reliefs 1 and 2 being against 1st appellant alone), it was properly joined in reliefs No. 8 which sought exemplary damages from it and the other defendants for, among others, inducing breach of the contractual relationship between 1st respondent and 1st appellant. Same goes for relief No. 10 for cost of the suit. The lower Court ought to have pronounced on this issue in so far as it was canvassed before it. This issue, albeit merely academic, is partly resolved in favour of 1st appellant.
And coming finally to whether the lower Court should have referred the action to arbitration, I am unpersuaded, firstly, by the argument of counsel for 1st respondent that by filing processes to object to the jurisdiction of the lower Court and asking it in the alternative to refer the matter to arbitration if it had jurisdiction the appellants waived their right to ask for stay of the case pending arbitration. There is no incongruity in that. It is settled that appearing before the Court to ask for stay to raise a preliminary issue on waiver does not constitute waiver to arbitration, and it is so even if the defendant files a defence and indicates that he would preliminarily object that the suit was not properly brought before the Court: see Fawehinmi Construction Co. Ltd v. Obafemi Awolowo University (1998) 6 NWLR (PT 553) 171 @ 193 (S.C.), per Belgore J.S.C. (as he then was).
Having said that, it is settled that before the question of ordering an arbitration will arise, the following must exist: (1) there must be an agreement between the parties thereto or a statutory provision which compels arbitration in such matters, (2) the parties before the CourtÂ must be parties to the agreement or the transaction which compels arbitration, (3) the arbitration sought must be within the contemplation of the arbitration agreement or circumstances calling for it, and (4) the application for arbitration and stay of proceedings must be made in time as envisaged under Section 5 of the Arbitration Act: See Nigeria L.N.G. Ltd v. A.D.I.C. Ltd (1995) 8 NWLR (PT 416) 677 @ 698. Here there is an arbitration Clause in the Confidentiality Agreement relied on by 1st respondent and frontloaded by her as contained at pages 59 to 65 of Volume 1 of the records of appeal. I note, however, that that agreement is signed by only 1st respondent’s representative. But that is not an Issue here so let me let sleeping dogs lie.
Now, the said Confidentiality Agreement shows on its face that it is made between ‘CHEVRON AFRICA AND LATIN AMERICA EXPLORATION AND PRODUCTION COMPANY, A DIVISION OF CHEVRON U.S.A.INC. [1st appellant] as ‘Disclosing Party” and BRITTANIA-U Nigeria Ltd [1st respondent] as ‘Receiving Party’. Counsel for 1st respondent was therefore incorrect when he argued that appellants are not parties to the Confidentiality Agreement. First appellant, at least, is undoubtedly a party to it. The next question is whether the arbitration sought was within the contemplation of
the arbitration agreement or circumstances calling for itÂ as to compel an order staying the proceedings and referring the dispute for arbitration. The answer to that, I am afraid, is in the negative. The reason for that is that the Confidentiality Agreement in issue was evidently intended to protect only information disclosed to the Receiving party (1st respondent) by the Disclosing party (1st appellant) and not the other way round. This is evident in all its contents particularly Clauses 2.1 and 2.2 which read thus:
2.1. Confidentiality; In consideration of Disclosing Party disclosing the confidential information to Receiving Party, Receiving Party shall keep all the confidential information confidential in accordance with the terms of this Agreement. Receiving Party acknowledges the competitive value of the Confidential information and that such information is a trade secret. Accordingly, Receiving Party acknowledges that any disclosure of confidential information in violation of this agreement may seriously and adversely affect the interest of Disclosing Party .
2.2 Non-Disclosure; Receiving Party shall keep all Confidential Information disclosed by Disclosing party to Receiving Party confidential and not disclose, trade, or otherwise divulge the confidential information or the fact that confidential information has been provided to Receiving Party to any person without the prior written consent of Disclosing Party, except as permitted by Section 3. Receiving Party shall not discuss with or offer to any third party an equity participation in the interest without the prior written consent of Disclosing Party. Any disclosure of confidential information by Receiving party shall be subject to the terms of this Agreement.
It is this one-way provision in the Agreement that Clause 9 therein provided for settlement by arbitration in case of breach by 1st respondent, the Receiving Party. There is no provision in it for corresponding breach by 1st appellant or any of the appellants of confidential information that may be disclosed to them by 1st respondent let alone a provision for arbitration in that event. Incidentally, the only claim of 1st respondent concerning breach of confidential information is in respect of confidential information disclosed by her to appellants which she claims they in turn disclosed to Seplat Petroleum Development Company Limited (4th respondent) to her disadvantage. This is clear not only from paragraphs 18, 74 and 75 of her statement of claim where she pleaded the said Confidentiality Agreement but also from her relief No 8 where she claimed from the defendants including appellants thus:
a. Exemplary Damages in the sum of one billion United states dollars (or its naira equivalent) for the wrongful interference by the 2nd- 5th Defendants acting in active connivance or collusion with 1st Defendant to unjustly prejudice and frustrate the contractual relationship between the plaintiff and the 1st Defendant by making illegitimate and unauthorized use of sensitive business and proprietary information disclosed by the plaintiff in support of its bid to acquire the 1st Defendant’s OMLs 52, 53 and 55 and which information were known by the 2nd -5th defendants to have been so disclosed in strict confidence and solely for the purpose of supporting the plaintiffs bid but which were divulged to third party leading to huge business losses and reputational damage to the plaintiff.
This claim not being within the contemplation of the confidentiality Agreement in issue and its arbitration provision, arbitration cannot and could not have been validly ordered. It is for this reason that I shall uphold the decision of the lower Court refusing to order arbitration and not for the reason Yunusa J. advanced for it. Decisions are not set aside merely on grounds of wrong reasons advanced by the Court in support of it; if the decision is correct, it will be upheld notwithstanding the wrong reasons the lower Court gave for it.
In any event, having held that the lower Court lacked jurisdiction to entertain the action, it follows that it could not have lawfully ordered arbitration. It is only a Court with jurisdiction over a suit that can make orders in it. If the Federal High Court lacked jurisdiction, the one and only order it can lawfully make, where appropriate, is one under Section 22 of the Federal High Court for transfer of the case to the appropriate State High Court: see Akinbobola v. Plisson Fisco Nig. Ltd (1991)1 NWLR (PT 157)270 @ 277 & 288 paras F-G (S.C.). In the result, this issue is resolved against the appellants.
In the final analysis, following the success of almighty issue 1 and issue 2 in part, I hold that there is merit in the appeal. I hold that the Federal High Court lacked jurisdiction to entertain suit No: FHC/L/CS/1171/2013. lf it had jurisdiction, I have already held in the sister appeals of CA/L/495/16 and CA/L/557/14 by appellants’ co-defendants that 1st respondent lacked reasonable cause of action. And that is sufficient reason why an order for transfer of the suit to the State High Court cannot be made.
In the result, the appeal is allowed, the ruling of Yunusa J. of 13/05/2014 in Suit FHC/L/CS/1171/2013 is hereby set aside and substituted with an order striking out that suit from the Federal High Court.
Parties shall bear their costs.
MOJEED ADEKUNLE OWOADE, J.C.A.: I read in advance the Judgment delivered by my learned brother BOLOUKUROMO MOSES UGO, JCA.
I agree with the reasoning and conclusion. I also dismiss the Preliminary Objection and allow the Appeal.
I abide with the consequential order and the order as to costs.
HAMMA AKAWU BARKA, J.C.A.: Having read the judgment of mylearned brother BOLOUKUROMO MOSES UGO JCA just delivered in draft before now, I agree with the reasoning and the conclusions arrived at, and join in allowing the appeal, thereby setting aside the decision of Yunusa J. in suit No: FHC/L/CS/1171 delivered on the 13th May , 2014. I abide on all order’s made, including that as to costs.
A.V. Etuwewe, Esq.For Appellant(s)
A.J. Owonikoko, Esq. S.A.N. with him, Dr. O. Famuyiwa, B.C. Mbaezue, Esq., I. Magbagbeola, Esq., E.O. Osifo, Esq. and T. Ugo, Esq. for 1st respondent.
A.O. Ayodeji, Esq with him, M. Mbaneme, Esq. for 2nd and 3rd respondents.
Mrs. Chinasa Unaegbunam with her, Mrs. Queenette Hogan for 4th respondent.For Respondent(s)
A.V. Etuwewe, Esq.For Appellant
A.J. Owonikoko, Esq. S.A.N. with him, Dr. O. Famuyiwa, B.C. Mbaezue, Esq., I. Magbagbeola, Esq., E.O. Osifo, Esq. and T. Ugo, Esq. for 1st respondent.
A.O. Ayodeji, Esq with him, M. Mbaneme, Esq. For second and third Respondents.