Authored By: Favour Vincent Udoh
University of Uyo, Nigeria
COURT: SUPREME COURT OF NIGERIA
DATE DECIDED : 21st June,2024.
CITATION: (2025) 3 NWLR (Pt. 1979) 197
BETWEEN:
BRITTANIA-U NIGERIA LIMITED V.
1.CHEVRON NIGERIA LIMITED
2.BNP PARIBAS SECURITIES CORPORATION
3.CHEVRON U.S.A. INC.
4.MR. HERMANT PATEL
5.SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD.
NATURE OF THE CASE
This was a contractual case.
PROCEDURAL HISTORY
Brittania U Nig. Ltd filed a suit against Chevron Nigeria Ltd in order to claim the Oil Mining Lease which it won on bidding. The issue of jurisdiction was raised and ruled in favour of the Applicant, that the Federal High Court had jurisdiction to entertain the case.
Consequently, Chevron Nigeria Ltd appealed the case to the Court of Appeal of Nigeria, Lagos Division and the issue of jurisdiction was ruled in their favour that the Federal High Court had no jurisdiction to entertain the suit since it was a simple contract. Advertently, Brittania U Nig Ltd decided to appeal the case to the Supreme court of Nigeria .
FACTS
The Appellant filed and instituted an action against the Respondents in the Federal High Court, Lagos Division, Nigeria (hereinafter referred to as ‘Trial Court’). The Appellant stated that 1st Respondent, owned 40% shares in the Oil Mining Lease(OML) in three oil blocs and had decided to divest its shares to any interested private person through a competitive bidding which the 1st to 4th Respondents handled.
Appellant claimed he won the bidding after participation, but the Respondents refused to consummate the purchase agreement. Accordingly, Applicant stated that the confidential agreement entered into with the 1st to 4th Respondents was breached ,since it was divulged to the 5th respondent.
Respondents upon being served, entered Preliminary Objections that:
- The Trial court had no jurisdiction to entertain the case of the Appellant.
- The Appellant had no reasonable cause of action to institute the proceeding.
- The Trial court in its ruling held that it had jurisdiction to entertain the suit and that there was a reasonable cause of action. Thus, the case was decided in favour of the Appellant.
Dissatisfied with the decision of the trial court, the Respondents appealed the case to the Court of Appeal and also distilled two issues for consideration:
- Whether the trial court was correct when it held that it had jurisdiction to entertain the claims of the appellant; and
- Whether the trial court was correct when it held that the case, as formulated by the appellant, disclosed a reasonable cause of action?
The Court of Appeal in its judgment stated that the Appellant case was premised on a simple contract, and as such, does not fall within the enumerated jurisdiction of the Federal High Court (herein referred to as Trial Court).
In furtherance, the appellate court also disclosed that the Appellant had no reasonable cause of action to institute the suit. The appeal of the Respondents was allowed while the Appellant’s case was struck out.
The Appellant further appealed to the Supreme Court and also formulated three (3) core issues.
ISSUES
Primary Issue
- Whether the Court of Appeal correctly held that the trial court lacked jurisdiction to entertain the appellant’s suit on the state of pleadings and the processes on record before the trial court.
Sub Issues
- Whether the Court of Appeal rightly held that the suit of the appellant did not disclose a reasonable cause of action against the 2nd respondent for purportedly being an agent of a disclosed principal.
- Whether the proper order for the Court of Appeal was to strike out the suit and not to transfer the suit to the High Court of Lagos State?
APPELLANT CASE
The appellant claims that the first respondent owned 40% of Oil Mining Leases(OMLs) in Nigeria under a joint venture agreement with the Nigerian National Petroleum Corporation, who owned the remaining 60% of the Oil Mining Leases. Being desirous of divesting its interest, the first respondent invited interested private persons to compete through a competitive bidding, and acted in conjunction with the third respondent, its parent company. The Ist Respondent also engaged the services of the second respondent to handle the bidding process and appointed the fourth respondent as the Bid Coordinator.
The Appellant claims to have been the successful bidder . Consequently, rejection letters were issued to other competitors. In furtherance of its commitment to the transaction, it submitted the sum of Two Hundred and Fifty Million US Dollars ($250,000,000.00)by way of irrevocable letter of credit to the first to the fourth respondents. Also, he received three facility letters from three banks. According to the Appellant, the 1st Respondent refused to complete the purchase transaction by reason of unlawful interference .The first to the fourth respondents unlawfully interfered in the Bid process by disclosing confidential information of its Bid to the fifth respondent and the media.However,the Respondents failed to award the Appellant the Oil Mining Lease.
RESPONDENTS CASE:
The Respondents main issue was that the Trial court had no jurisdiction in the case because it was a ‘Simple contract’ and the Federal High Court had no jurisdiction in simple contract as enumerated in the Constitution of the Federal Republic of Nigeria 1999.Thus,the Respondents contested the jurisdiction of the trial court till the apex court(Supreme court).
COURT ANALYSIS
LEGAL REASONING
The court clarified that the Federal High Court had no jurisdiction to entertain issues based on enforcement of regular contracts. It cannot hear and determine a claim for specific performance of contract or for damages for breach of contract. Therefore, the trial court lacked the jurisdiction to entertain the claim and the Court of appeal did not err in law when it started so. It is the State High Court that possesses the requisite jurisdiction to entertain the case and appropriately, the case was transferred to the State High Court by the Supreme Court.
The court also held that a cause of action is reasonable, when only the facts in the statement of claim are considered to have some chance of success or facts calling for determination by the court. Thus, for a statement of claim to be said to disclose no reasonable cause of action, it must be such that no defendant can understand what claim he is required to meet and the case stated in it must be unsustainable, or unarguable or incontestably bad. In this instance, the court held that the Lower court decision was perverse when it held that the claim of the Appellant had no reasonable cause of action.Thus,it should be set aside.
RELEVANT LAW/DECISION OF THE COURT
In deciding the jurisdictional issue, the court stated that Jurisdiction is the power to inquire into facts, apply the law, make decisions and declare judgment and it can only be determined in the light of the enabling statute. Thus, a court of law cannot add to or subtract from the provisions of a statute. This was based on the case of Elelu-Habeeb v. A.-G.Fed.[1] The court also held that Jurisdiction of the Federal High Court is vested in Section 251(1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended). Consequently, the Federal High Court had no jurisdiction to entertain matters based on enforcement of regular contracts. It cannot hear and determine a claim for specific performance of contract or for damages for breach of contract. Crestar Integrated NaturalResources Ltd v. S.P.D.C.N. Ltd[2].
On issue 2,the court relied on the case of Nicon Insurance Corporation v. Olowofoyeku[3] In deciding that, the decision of the Court of Appeal that the appellant’s entire case had no reasonable cause of action was erroneous and perverse because the facts alleged in the Appellant statement of Claim have some chances of success and they raise some issues of law or fact calling for a determination by the court.
On issue 3,the court commended that the Court of Appeal was right when it held that the Trial court had no jurisdiction BUT it erred when it struck out the suit. By virtue of Section 22 of the Federal High Court[4], the courts have held that the proper order to make, after coming to the conclusion that the Federal High Court had no jurisdiction to entertain a case, was to transfer the case to the appropriate State High Court with jurisdiction and not strike it out. The court relied on the decision of Petrojessica Enterprises Ltd v. Leventis Trading Co. Ltd[5]The Supreme court found merit in the Appellant case, though in part. Thus, it set aside the decision of the Court of Appeal except that it had no jurisdiction to entertain the case. Also, the court ordered that the matter be transferred and filed at the High Court of Lagos State Issues raised by the Appellant were meritorious and the appeal was allowed in its favour..
CONCURRENT DECISION
The Justices of the Supreme court of Nigeria gave a concurrent decision after a careful perusal of the leading judgment delivered by the Honourable Justice Habeeb Adewale OlumuyiwaAbiru, JSC. Learned silks concurred fully with the judicial reasoning and conclusion. There was no dissenting opinion.
CONCLUSION
Conclusively,Brittania U Nigeria’s case is an important case in contract law as it remains a precedent for cases involving enforcement of regular, simple and technical contracts.
More importantly, the decision in this case has also established the key principles of jurisdiction which is the life wire and bloodline of court without which there can be no recourse.Courts, depending on hierarchy should be able to fathom the jurisdiction they have to avoid striking out important cases and also, avoid abuse of court processes.
REFERENCE(S)
- Elelu-Habeeb v. A.-G.Fed(2012) 13 NWLR (Pt. 1318) 423.
- Section 251(1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended).
- Merill GuarantySavings & Loans Ltd. v. World Gate Building SocietyLtd. (2013) 1 NWLR (Pt. 1336) 581.
- Crestar Integrated NaturalResources Ltd v. S.P.D.C.N. Ltd (2021) 16 NWLR(Pt. 1800) 453.
- Nicon InsuranceCorporation v. Olowoofoyeku (2006) 5 NWLR (Pt.973) 244.
- Section 22 of the Federal High Court, Cap 134, Laws of Federation 2004.
- Petrojessica Enterprises Ltd v. Leventis Trading Co. Ltd(1992) 5 NWLR (Pt. 244) 675.
[1] (2012) 13 NWLR (Pt. 1318) 423
[2] 2021) 16 NWLR(Pt. 1800) 453
[3] (2006) 5 NWLR (Pt.973) 244
[4] Cap 134, Laws of Federation of Nigeria 2004.
[5] (1992) 5 NWLR (Pt. 244) 675
