A. M. O. Akinsanya V. United Bank For Africa Limited (1986)

LawGlobal-Hub Lead Judgment Report

KAYODE ESO, J.S.C.

This appeal involves a most important aspect of commercial law. It deals with Bankers Commercial Credits, an aspect of law that arises in connection with international trade. From in between the First World War, and the Second World War, and more so, since the second world war, financing of international trade has been done mainly through Bankers.

This is necessary, especially as international commerce has been instrumental in “squeezing” the world into a commercial size, and thus making international trade and commerce indeed much easier than domestic commerce. As far back as towards the end of the second world war, Scrutton L.J. had stated the principle of confirmed credit with adequate clarity. The Lord Justice said, of commercial credit, in Guaranty Trust Company of New York V. Hannay (1918) 2 KB 623.

“The enormous volume of sales of produce by a vendor in one country to a purchaser in another has led to the creation of an equally great financial system intervening between vendor and purchaser, and designed to enable commercial transactions to be carried out with the greatest money convenience to both parties. The vendor, to help the finance of his business, desires to get his purchase price as soon as possible, after he has dispatched the goods to his purchaser; with this object, he draws a bill of exchange for the price, attaches to the draft the documents of carriage and insurance of the goods sold and sometimes an invoice for the price, and discounts the bill – that is, sells the bill with documents attached to an exchange house. The vendor thus gets his money before the purchaser would, in ordinary course, pay; the exchange house duly presents the bill for acceptance, and has, until the bill is accepted, the security of a pledge of the documents attached and the goods they represent.

The buyer on the other hand, may not desire to pay the price till he has sold the goods. If the draft is drawn on him, the vendor or exchange house may not wish to part with the documents of title till the acceptance given by the purchase is met at maturity. But if the purchaser can arrange that a bank of high standing shall accept the draft, the exchange house may be willing to part with the documents on receiving the acceptance of the bank. The exchange house will then have the promise of the bank to pay, which if in the form of a bill of exchange, is negotiable, and can be discounted at once. The bank will have the documents of title as security for its liability on the acceptance, and the purchaser can make arrangements, to sell and deliver the goods.”

An equally clear statement of this branch of the law will be found in the case of Pavia & Co. S.P.A. v. Thurmann-Nielsen 1952 2 Q.B. 84 where Denning L.J., as he then was, dealt with the increasing sale of goods across the world. He said –

“The sale of goods across the world is now usually arranged by means of confirmed credits. The buyer requests his banker to open a credit in favour of the seller, and in pursuance of that request the banker, or his foreign agent, issues a confirmed credit in favour of the seller. This credit is a promise by the banker to pay money to the seller in return for the shipping documents. Then the seller, when he presents the documents, gets paid the contract price. The conditions of the credit must be strictly fulfilled; otherwise the seller would not be entitled to draw on it.”

However, before I discuss the law further, I would like to set out the facts of this case, then deal, first with one matter arising out of an application by Chief Williams (S.A.N.) learned Senior Advocate representing the Respondents, that is, the United Bank for Africa Ltd., in this case, seeking enlargement of time within which the Respondents may file their notice of Appeal on the decisions by the learned Justice of the Court of Appeal on the issue of jurisdiction, of the trial Court, to deal with this matter.

A.M. O. Akinsanya trading in the name and style of Rocky Merchants, a company with headquarters in Lagos, having decided to import 10,000 metric tons of cement, struck a deal with a Swiss company, known as the Association for Economicatone Industrial Development in the Middle East and African Country (otherwise known as ASDECAMO, for short) and after the deal, he approached and contracted with the United Bank for Africa Ltd. to open a letter of credit for the transaction in favour of ASDECAMO. ASDECAMO will hereinafter in this judgment, be referred to as the Swiss Company or ASDECAMO indiscriminately.

Hereinafter, in this judgment, A.M.O. Akinsanya, aforesaid, will be referred to as the Appellant, while United Bank for Africa will be referred to as the Respondent. The letter of credit was for $570,000 and the application for the letter of credit was tendered as Ex.B. The particulars tendered are that the letter of credit was to be “irrevocable/confirmed” and the amount $570,000 was to be available to the Swiss Bank at sight once ”

accompanied by the following documents …. combined Certificate of Origin, value and invoice “FORM C’ in triplicate including original.

Commercial invoice

Certificate of Origin.

Insurance Covers by consginees

Packing List

Full set of clean on board Bills of Lading , issued to order and endorsed in blank marked ‘Fragile Prepared/Collected detail latest September 3rd 1978′”

One of the very important conditions is –

“It is understood that our engagement (that is Appellant’s engagement) to pay shall continue in force notwithstanding any changes in our and/or your constitution and that no responsibility is to attach to yourselves or your correspondents as to the documents, beyond seeing that they purport to be in order. ”

It was on the strength of this application, that the Respondent, after sending a cable, dated 31st July 1978, to the Banque Pour Le Commerce Int. S.A. a Swiss Bank, hereinafter referred to as the Swiss Bank, confirmed that letter of credit by Exhibit C. Two of the important conditions for the payment of the Letter of Credit, which affect this case, are –

(i) presentation of full set of ‘clean on board’ Bill of Lading;

(ii) shipment of the goods may be made either –

(a) by Conference Line Vessel,

or (b) by non-Conference Line Vessel, but if by non-Conference Line vessel, the shippers must present with the other documents, called for in this Credit, a photocopy of a current Ship Entry Notice in the name of the carrying Vessel duly signed by the Nigerian Ports Authority.

(iii) Bills of Lading must state that the carrying Vessel, if not registered in Nigeria, is not more than fifteen years from date of first registration. This clause is to comply with the Merchant Shipping (Amendment Decree, 1978 which takes effect from 13th August, 1978 and prohibits foreign vessel more than 15 years from trading in or from Nigerian waters.”

Now, this is important; for the main complaint of the Appellant in this case is that Ex. D., which is the Bill of Lading was not signed by ASDECAMO but by Bryanston Italiana S.R.L. Pescara/Italy. And that words “Conference MED &” were typed on a “West Africa Joint Service” paper. Indeed, the sum total contention of the Appellant was that Ex. D. was a forgery, and it was upon the presentation of this forged document that ASDECAMO was paid the sum of $570,000.00.

In an ordinary contract action, what happened to the cement must necessarily have been of interest, but this is not necessarily relevant, here, for, in the determination of this type of cases, as would soon be seen, only documents are relevant. There would have been no problem however, if the Appellant received the goods and ASDECAMO was paid for them, as per agreement. However, no cement was shipped. There was no ship by name ‘Thomas Mann” the name of the Vessel which was inserted in Exhibit D, as the ocean ship that carried the cement. The so called ‘Thomas Mann’ was disclaimed by Conference Line. It did not belong to them nor, indeed, to any other line. The whole transaction was a colossal fraud on the Appellant. The Respondent’s enquiry yielded no useful result. On 17th October, 1978, they sent a cablegram to the Swiss Bank as follows-

“Natiopar Paris

Attention Department Afrique you are advised that on 21st July 1978 on Behalf of Lagos Central Clients Rocky Merchants Company we open a letter of Credit in favour of ASDECAMO (Association Pour Le Development Economicque el Industriel En Afrique et Moyen Orient) 1219 Le Lignon Geneva stop the L/C covered 10,000 metric tons of cement value US $570,000 stop PBCI BASLE Confirmed the L/C their reference 31-485/MM our LOB 0380/1433 stop PRCI negotiated documents on 12th September 1978 stop We hold B/Lading issued by Black Star Line Limited (Ghana) who are part of the UK Conference Lines on S.S. Thomas Mann which loaded at Bari Italy on 4th September I978 stop The shippers are described as Bryanston Italiana of Pesdara Italy We now find that the UK Conference Line representatives here disclaim all knowledge of the vessel Thomas Mann stop Enquiries at BNL Bari indicate vessel never loaded at Bari stop Vessels has not arrived in Nigeria waters stop We therefore request that you urgently advise PBCI of position and request that they contact ASDECAMO who purportedly Bank with Banque Populare Swiss A/C No. 949740/0 Geneva to obtain any information that may be available stop. Would you also request BNP London to contact Black Star Line London office for any news on Thomas Mann stop. They should also contact Lloyds Register of Shipping to see if they can obtain any trade on this ship’s movements stop Can you also endeavour to make enquiries on Bryanston Italiana stop We await your Telex reply regards Foulkes.

Midbank Lagos UBA Ltd. Head Office, Lagos.

cc: Mr. Caron

Mr Martin

Mr Perrin”

The sum total result was a revelation that ASDECAMO had perpetrated fraud on the Appellant. Curiously though, on 18th October, 1978 the Appellant collected the shipping documents from the Respondents and signed EX J with the following endorsement.

“We have examined the document which we hereby affirm to be acceptable in all respects. Any guarantee held in respect of any discrepancy noted or not noted may be released. Please debit our account accordingly.”

and this was signed by the Appellant. And the exhibit shows the amount involved to be $576,6531, And this of course-followed a letter from the Respondent to the Appellant asking the latter to call for inspection and collection of the documents. The Appellant’s evidence on this was –

“I was requested to go to Geneva and testify before a Magisterial Tribunal on 18/10/78. I finally agreed to go to Geneva on the condition that if all the colleagues (sic) send out by U.B.A. could be given to me, so also the replies thereto. I asked for the photocopies they agreed. ”

The Appellant sued the Respondents in the High Court of Lagos State (Yaya Jinadu J.), who, after taking evidence, found against the Appellant. The Appellant appealed to the Court of Appeal and that Court, in a well considered judgment by Nnaemeka-Agu J.C.A., concurred with by Uthman Mohammed and Kutigi JJ.C.A. dismissed the Appellant’s appeal.

It is from this decision that the Appellant has finally appealed to this Court. In their judgment, the Court of Appeal raised for the first time the issue of jurisdiction of the trial Court. They recalled learned counsel for an address on the issue as to whether or not, this was an admiralty matter, in which case, the jurisdiction would be with the Federal High Court. Both learned counsel were under no difficulty in concluding that the issues here were not in admiralty, they are not matters of carriage of goods by sea, but one of an order for goods in a normal contract between parties dealing with international commercial credit contract.

Nnaemeka-Agu J.C.A. dismissed this issue of lack of jurisdiction in the State High Court. He said

“The gist of the complaint against the respondent bank is that it did not properly discharge its duty with respect to those documents with which the credit was negotiated. It has never been suggested that it was their duty to see that the goods were imported. It was a straight forward banker-customer relationship in international commercial credit transaction. I hold that it was not an admiralty matter but a bank transaction within the jurisdiction of a State High Court.”

The other justices, Uthman Mohammed and Kutigi JJ .C.A. held to the contrary. Both learned counsel have appealed against this majority decision on jurisdiction. I will consider the issue of jurisdiction later. What I would wish to deal with at this stage is the application by Chief Williams for an enlargement of time within which to file notice of appeal against the decision of the Court of Appeal on jurisdiction.

It is, I think better to set out the affidavit relied upon by learned counsel-

” x x x x x

2. The Notice of Appeal at pages 189-190 of the Record of Appeal herein was filed in the court below on the 4th day of January 1985.
3. I am informed by Chief Rotimi Williams, and I verily believe, that at the time he filed the Notice of Appeal, he took the view that the appeal herein was from a final decision of the Court of Appeal, so that it was in order to file the Notice of Appeal within three months.
4. The Appellant herein has duly and punctually complied with the conditions of appeal.
5. I am informed by Chief Rotimi Williams and I verily believe that it was only recently that it occurred to him that in the light of the decision of this Court in Omonuwa v. Oshodin SC/51/84 delivered on 1st February 1985 this Court is likely to regard the decision appealed from in this case as interlocutory and not final.
6. I am informed by Chief Rotimi Williams and I verily believe that he intends humbly and respectfully to request this Honourable Court to reconsider its decision in the aforementioned case of Omonuwa v. Oshodin which is reported in (1985) 2 NWLR 924- The motion in support of which I swear to this Affidavit has been filed in case this Honourable Court is not disposed to reconsider its decision aforesaid.”

On this issue, Chief Williams has filed a detailed brief, which I must say, had been of tremendous assistance in my examination of this thorny problem. And what learned counsel was saying, in effect, is that the decision of this court in Omonuwa v. Oshodin (1985) 2 N.W.L.R. 924, made as recently as barely a year ago, would set back the movement of the law. Learned Senior Advocate argued in that brief, that “unnecessary confusion, uncertainty and anomalies, would arise if the pronouncements of this Court in Omonuwa v. Oshodin (supra) were followed.”

In regard to proceedings and orders made by a Court of first instance, it was Chief Williams’ submission that this court has followed, for about 40 years, the tests laid down by Alverstone C.J. in Bozson v. Altrincham 1903 1 QB 547. That these tests have been adopted in the decision of the West African Court of Appeal, Blay v. Solomon 12 W.A.C.A. 177, and confirmed by the Federal Supreme Court in Ude v. Agu (1961) 1 All N.L.R. 61, rejecting the tests in Salaman v. Warner 1891 1 QB. 734. The decision in Omonuwa v. Oshodin (supra) did not apply to the Court of first instance and so, learned counsel submitted, this Court should be very slow in upsetting a decision which has stood unchallenged for almost forty years.

In regard to the Court of Appeal, Chief Williams submitted that whether a decision of the Court of second instance is final or interlocutory, must not be determined in relation to the proceedings before the court or tribunal of first instance but of the Court of Appeal.

The complaint by Chief Williams is clear, and the present appeal is a good example, for the complaint. When this case came before the Court of Appeal from the Lagos State High Court, that court, suo motu, raised the issue of jurisdiction. There was a split decision. The majority decided that the Court of first instance, that is, the Lagos State High Court, has no jurisdiction over the matter, it being an admiralty matter which should have gone before the Federal High Court. Nnaemeka-Agu J.C.A. took a different view and held that it was a matter for the Lagos State High Court. The decisions were given on 21st November, 1984. If the majority decision (that is, that the Court had no jurisdiction) was a final decision within the meaning of that expression in s.31(2) of the Supreme Court Act 1960, then the notice filed by learned counsel on 14th January 1985, (within the three months period) would have been within time, but would have been filed out of time if the decision were interlocutory (that is, as it was filed more than 14 days after the decision).

The question then is, what is it Is the decision final or interlocutory Chief Williams said that our decision in Omonuwa v. Oshodin (supra) would make it interlocutory. But would it And if it would, could this Court have been right in not following the old authorities established for upwards of forty years In Omonuwa v. Oshodin (supra), this Court, as per Karibi-Whyte J.S.C. said (and this was one of the portions relied upon by Chief Williams)

“In my opinion an interlocutory order on appeal ranks as an interlocutory appeal. The judgment of the Appeal Court is a judgment on an interlocutory appeal. It can only assume the character of a final judgment when it finally determines the right of the parties.”

Would the rights of the parties in the instant appeal be finally determined if the trial Court had no jurisdiction to deal with the rights In other words, if a court is incompetent to deal with a matter before it, are the rights of the parties in the matter still subsisting As the Court of Appeal decided that the Lagos State High Court was incompetent and devoid of jurisdiction, would that be the end of the matter But, in so far as the majority decision of the Court of Appeal was concerned, it had finally determined the suit brought before that Court by declaring that the Court of trial had no jurisdiction. The subsequent examination of the issues by the majority of the Court that the trial Court had jurisdiction should not exist to complicate matters or inhibit the conclusion that a decision by the Court of Appeal that the trial Court had no jurisdiction had finally determined the rights of the parties And finally, would the pronouncement of this Court in Omonuwa v. Oshodin, that a decision “can only assume the character of a final judgment when it finally determines the right of the parties” still make the decision of the Court of Appeal in the instant appeal, on jurisdiction, against which the United Bank for Africa is appealing, final, and not interlocutory, contrary to the submission of learned counsel

There is of course the problem that would arise if the minority decision were the judgment of the Court and there is an appeal therefrom, that is, from a decision that the State High Court has jurisdiction. The problem that would arise is whether the decision is final or interlocutory. I think an answer to all these will depend on what test the Court decides to apply – the Bozson v. Altrinchan U.D.C. test – see (1903) 1 Q.B. 547 or the Salaman v. Warner test (1891) 1 Q.B. or has Omonuwa v. Oshodin propounded another test, and if so, what is it I will have to discuss all these cases to answer these questions.

Let me say straight away, that I am in full agreement with Chief Williams, that the ratio in Omonuwa v. Oshodin (supra) did not touch the age long distinction, settled in this country, between final and interlocutory decision, in courts of first instance. Let me trace the matter historically. In Blay v. Solomon 12 W.A.C.A. 177 Verity, C.J. examined the issue briefly, but thoroughly. He said –

“In Standard Discount Co. v. Le Grange (2) Brett, L.J. said-

“No order, judgment or other proceeding can be final which does not at once affect the status of the parties for whichever side the decision be given.”

In Bozson v. Altrincham Urban District Council, in a passage cited with approval by Swinfen Eady, L.J. in M. Isaac and Sam Ltd. v. Salbstein & Anor. Alverstone, L.C.J., said-

“It seems to me the real test for determining this question ought to be: does the judgment or order, as made, finally dispose of the rights of the parties’

In Ex parte Moore, In re Faithful, Brett, M. R., said-

‘If the Court orders something to be done according to the answer to the enquiries, without any further reference to itself, the judgment is final.’

We think that the application of these principles to the present case is conclusive.’ (Italics mine). Let us then call this, the Blay v. Solomon cum Bozson v. Altrmcham test. And the emphasis which is placed by the test is that the judgment or order is final only when it finally disposes of the rights of the parties, that is, makes an order which would not bring the matter further back to itself. Omonuwa v. Oshodin recognises the good reasoning in the Bozson v. Altrincham test and though critical of it, as ‘the nature of the order made test.’ yet, realised that it has been approved and applied in our courts.

Karibi-Whyte, J.S.C. said-

“In Standard Discount Co. v. Le Grange and Salaman v. Warner, the test applied was the nature of the application to the Court, and not the nature of the order made. In Salter Rex and Co. v. Ghosh 1971 2 All E.R. 865. Denning M. R. considered the test of the nature of the order, applied in Bozson v. Altrincham UDC (supra), and observed that although Lord Alverstone C.J’s test in Rozson’s case may be right in logic, Lord Esher’s test of the nature of the application in Salaman v. Warner was right in experience. Bozson v. Altrincham UDC. (supra) has been approved and applied in our court and I think this is good reasoning. ‘

(Italics mine)

There is no doubt that there is a lot of force in the criticism, made in Omonuwa v. Oshodin, of the “nature of the order” test. It is true ‘it ignores the issue or issues giving rise to the application and consequently the order.’ Omonuwa v. Oshodin, however, recognised that –

“All the cases agree on the proposition that a decision between the parties can only be regarded as final when the determination of the Court disposes of the rights of the parties, and not merely an issue, in the case.”

The difference between the tests in Salaman v. Warner and Rozson v. Altrincham (or Blay v. Solomon) is borne out vividly from the submission of counsel in the Bozson v. Altrincham case. The dicta of the Lord Justices in the case are rather short. I will like to set out both the submission of counsel and then the dicta of the Court.

Learned counsel for the defendants –

“The test for ascertaining whether an order is final or interlocutory, as laid down by the Court of Appeal in Salaman v. Warner is that an order is not a final order unless it is one made on such an application or proceeding that, for whichever side the decision is given, it will, if it stands, finally determine the matter in litigation. In the present case the decision of Wills, J. as given did in fact put an end to the litigation but it would have been otherwise if the decision had been in favour of the plaintiff, because then the case would have had to go before the official referee. The order of Wills, J. was therefore, according to the rule enunciated in Salaman v. Warner, an interlocutory order. The principle of that case was affirmed in In re Herbert Reeves & Co. but there is an earlier decision of the Court of Appeal, Shubrook v. Tufnell, which was not cited in Salaman v. Warner, and which appears to be in conflict with it.”

THE EARL OF HALSBURY L.C.: The learned counsel for the defendant has very properly called our attention to the fact that the authorities on this point are not in harmony. I prefer to follow the earlier decision. I think the order appealed from was a final order, and the appeal is therefore brought within the prescribed time. LORD ALVERSTONE C.J. I agree. It seems to me that the real test for determining this question ought to be this: Does the judgment or order, as made, finally dispose of the rights of the parties If it does, then I think it ought to be treated as a final order; but if it does not it is then, in my opinion, an interlocutory order. “

(Italics mine)

In Salaman v. Warner, itself, Lord Esher M. R., put the matter thus”

Taking into consideration all the consequences that would arise from deciding in one way and the other respectively, I think the better conclusion is that the definition which I gave in Standard Discount Co. v. La Grange is the right test for determining whether an order for the purpose of giving notice of appeal under the rules is final or not. The question must depend on what would be the result of the favour of either of the parties. If their decision, whichever way it is given, will, if it stands, finally disposes of the matter in dispute, I think that for the purposes of these rules it is final. On the other hand, if their decision, if given in one way, will finally dispose of the matter in dispute, but, if given in the other, will allow the action to go on, then I think it is not final, but interlocutory. That is the rule which I suggested in the case of Standard Discount Co. v. La Grange, and which on the whole I think to be the best rule for determining these questions; the rule which will be most easily understood and involves the fewest difficulties. As an example of the difficulties produced by the opposite view, take the case where an order is made staying or dismissing an action as frivolous and vexatious; if that is a final order, the period during which an appeal may be brought is a year. In this case, the Divisional Court allowed what is really equivalent to a demurrer to the statement of claim, and, as long as that decision stands, it is no doubt final in one sense; but, if they had disallowed the point taken, then the action must have gone to trial. If in such a case the order were final, there would be a year to appeal in, and the case might have to go on after that lapse of time, when there might be increased difficulty in dealing with the matter in dispute from the death or disappearance of parties or witnesses. We think that the rule I have mentioned is the best to adopt, and, applying it to this case, the result is that the order appealed against is interlocutory, not final.”

(italics mine)

And that was the situation when Verity C.J. preferred in Blay v. Solomon the Bozson test to the Salaman test.

The matter was brought to a head (for so it was thought) in Ude and others v. Agu and Others (1961) 1 All N.L.R. 66.

Brett, F.J. in the Federal Supreme Court emphasised the difference in the two tests and said –

“In England, it appears from the notes in the Annual Practice to O. 58 r. 4 of the Rules of the Supreme Court that the Court of Appeal has at different times adopted two different tests for determining whether a decision is an interlocutory or a final one for the purposes of an appeal. One, which the editors of the Annual Practice say is generally preferred is that stated by Lord Alverstone, C.J., in Bozson v. Altrincham V.D.C. (1903) 1 K.B. 547 –

“Does the order as made finally dispose of the rights of the parties If it does then I think it ought to be treated as a final order: but if it does not it is then, in my opinion, an interlocutory order…

The other, as stated in Salaman v. Warner (1891) 1 O.B. 734, is that an order is an interlocutory order unless it is made on an application of such a character that whatever order had been made thereon must finally have disposed of the matter in dispute. Thus, one test looks at the nature of the proceedings; the other (which is generally preferred) looks at the order made.

In Blay v. Solomon (1947) 12 W.A.C.A. 175 the West African Court of Appeal followed the test which looks at the order made, and in my view it is clearly the proper test for this Court to adopt, particularly having regard to the fact that there is a constitutional right of appeal against a final decision of a High Court sitting at first instance, whereas an appeal against an interlocutory decision is now left to be conferred by legislation and no such legislation has yet been enacted, so that an appeal does not at present lie at all against an interlocutory decision.”

(again italics mine)

And so, it has been that the Courts in this country have adopted the test that looks at the order made as against the test that looks at the nature of the proceedings. It is also clear that before Omonuwa vs. Oshodin, the two tests have been regarded as contradictory.

In England, the position is clear from the White Book, it has always been held that there is a diference in the tests offered in Salaman v. Warner and the test in Bozson v. Altrincham. The nature of the application or proceedings test (Salaman v. Warner) has always been regarded as different from the nature of the order test.

In the White Book, that is, the Supreme Court Practice (UK Rules), under the heading of Pleading and under Order 18/11/5, is a note to the effect that an order dismissing the action under 0.33, r. 7 is a final order within O.59, r.4(1) if it finally disposes of the rights of the parties: if it does not, then it is an interlocutory order (Bozson v. Altrincham U.D.C. [1903] 1K.B. 547 which to this extent overrules Salaman v. Warner (1891) 1 O.B. p. 736; Re Grossdell, 1906,2 K.B. 569).

Bozson v. Altrincham, it was agreed, has overruled Salaman v. Warner. In regard to appeals to the Court of Appeal: Under Order 59/4/2, the following note appears:

“An interlocutory order is to be contrasted with a final order Section 68(2) of the J. A. 1925 Vol. 2 Pt. 9A provides any doubt which may arise as to what decrees, orders or judgments are final, and what are interlocutory, shall be determined by the Court of Appeal.”

Accordingly, its decision whether the order is final or not is not subject to appeal. The test, as stated by Lord Alverstone C.J. in Bozson v. Altrincham U.D.C. 19031 K.B. 547 p. 548 is, ‘Does the ….. order, as made, finally dispose of the rights of the parties If it does, then I think it ought to be treated as a final order; but if it does not, it is then in my opinion, an interlocutory order.’ A different test is stated in Salaman v. Warner (1891) 1 O.B. 734, namely, that an order is an interlocutory order unless it is made as an application of such a character that whatever order had been made thereon must finally have disposed of the matter in dispute the latter test (sic, that is, the test in Salaman v. Warner, or rather the nature of application test) ….. regards the nature of the proceedings; the former (which is generally preferred) looks at the order made.”

(Italics mine)

And so, it was recognised, even in the United Kingdom Practice Book, that the Bozson v. Altrincham is generally preferred. But notwithstanding the preference, the English Court of Appeal that has a final say in the matter, as a result of the Judicial Act (1925) s.68 refused to be glued to the preferred test. Lord Denning M.R. would seem to be more enamoured of the Salaman v. Warner test, as would be seen presently, in some of the decisions in the Court of Appeal. ……,

I have no difficulty in agreeing with Chief Williams at this stage, therefore, that in this country in so far as the court of first instance is concerned, the nature of the order test should be adhered to and the test as pronounced by Alverstone, C.J. in Bozson v. Altrincham should be upheld by the Courts. There is no more magic in the Bozson v. Altrincham test. It is as a matter of practical convenience to stick to one test if it has been accepted for so long, and there is really nothing wrong with that.

I will deal with the difficulties as they arise in a Court of Appeal, presently, but meanwhile as a final point of the issue, as it arises in the Court of first instance, I will make reference to another jurisdiction. Chief Williams directed our attention to the development of the law in Malaysia. In the case of Heron bin Mohd. v. Central Securities PC 1983,76; the Privy Council held.

“The Malaysian Courts have considered the question of whether orders are final or interlocutory in a number of cases extending over a period of 20 years and commencing with Ratmaner Cummerasary (1962) 28 MLJ 330. In that case, the Malaysian Court of Appeal examines several English cases including Salaman v. Warner (1891) 1 Q.B. 734, 736 where Fry L.J. formulated the test in these terms:-

‘I think that the true definition is this. I conceive that an order is ‘final’ only where it is made upon an application or other proceeding which must, whether such application or other proceeding fail or succeed, determine the action. Conversely, I think that an order is ‘interlocutory’ where it cannot be affirmed that in either event, the action will be determined’

The Court compared this with the test advanced by Lord Alverstone C.J. in Bozson v. Altrincham U.D.C. namely:

‘Does the judgment or order, as made finally dispose of the right of the parties If it does, then I think it ought to be treated as a final order: but if it does not, it is then, in my opinion, interlocutory order.’

The Malaysian Court of Appeal unanimously adopted the test in the Bozson case in preference to that in the Salaman case. ‘

I have said earlier that the Court of Appeal in England would appear to prefer the Salaman v. Warner test. For an appreciation of the difficulty in this matter and before I turn to the decision of this court in Omonuwa v. Oshodin I would like to refer to a 1971 judgment of the Court of Appeal in England where Lord Denning M.R. in Salter Rex & Co. v. Ghosh (1971) 2 Q.B. 597 preferred to apply the SaJorrum test. He said it had always been applied in practice, while the Bozson test was right in logic. Whatever the semantics might have been, the Bozson test has not only always been right in logic in this country, it has also been applied in practice or rather ‘preferred’ in practice.

In the English case (supra) Lord Denning’s application of the Salaman test made a difference to the case. If the Bozson test had been applied, the order appealed from, that is, refusing a new trial would have been final and not interlocutory as the Salaman test, when applied, made it. But that is England. And this is the type of problem that would arise if the two tests are kept afloat in this country. I can appreciate learned counsel Chief Williams’ concern therefore for asking the Courts in this country to keep to one test only – and that is the one suggested in Bozson v. Altrincham, for as this court said in Omonuwa v. Oshodin (supra), despite the elusive impression of decided cases, the ideal is to provide a workable test for the determination of the issue when it arises. And a workable test, to my mind, ought to be certain. I think, to leave it fluid, as it is done in England, would provoke decisions like that of Lord Denning M. R. in Salter Rex & Co. v. Ghosh (supra) or Technistudy Ltd. v. Killand (1976) 3 All E.R. 632 when in the latter the Master of the Rolls suggested ‘rumaging’ through the Practice Books to see what has been done in the past! And I am of the opinion, with respect to the learned Master of the Rolls in England that such attitude would make an already difficult problem only the more compounded. For indeed, this is what it does in England.

In Becker v. Marvin City Corpn. PC (1977) A.C. 271 a Privy Council appeal from Australia, Lord Edmund Davies, delivering the decision of the Board, noted the frequent difficulty given rise to by the situation of enquiring whether a decision is final or interlocutory. In Hunt v. Allied Bakeries Ltd. (1956) 1 W.L.R. 1326 Lord Evershed M.R. had to adjourn, make enquiries as to the practice of the court and also consult the other divisions of the Court of Appeal before deciding whether an order was final or interlocutory. In re Page (1910) 1 Ch. 489 Buckley L.J. felt some difficulty especially as the order in the case would put an end to the matter and logically, per adventure, that would have been final. He said –

‘To my mind, it would be reasonable to say that this is a final order’

But then, he continued –

‘I am not prepared to differ from the view taken by the other members of the Court. I yield my judgment to them without saying that I am completely satisfied ….. ‘

(Italics mine)

Such is the difficulty. Such is the uncertainty! There is no doubt that I see nothing obnoxious in the Salaman v. Warnertest, as a test; but I think it is more practicable and more certain to keep to just one test – the Bozson v. Altrincham test which has been preferred in this country for so long. Very recently, in this court, in Western Steel Works Ltd. and Anor v. Iron & Steel Workers Union (1986) 3 NWLR 617 at p.625 Obaseki, J.S.C., tended to agree with the observation of Lord Denning M.R. as stated above in the two cases, I have referred to, when the learned Master of the Rolls said it was impossible to lay down any principles about what is final and what is interlocutory. Obaseki J.S.C. went on and said-

“Whenever the question of jurisdiction of any court is raised, it is a question that touches the competence of the court that is raised. It does not raise any issue touching the rights of the parties in the subject matter of the litigation or dispute”

(Italics mine)

It is to be observed, with all respect, that, once the nature of the Order test is accepted, the order is final if, in the words of Brett M.R., in Ex Parte Moore, in re Faithful (supra)

“the court orders something to be done according to the answer to the enquiries, without any further reference to itself.”

In other words, if the court of first instance orders that a matter before it be terminated (struck out) for it has no jurisdiction to determine the issue before it, that is the end of all the issues arising in the cause or matter and there is no longer, any issue between the parties in that cause or matter that remains for determination in that court. But it would be interlocutory if its order is that it has jurisdiction for there will be reference of the remaining issues in the case to itself. When a Court of Appeal rules and orders that a court of first instance had no jurisdiction in a cause which has been brought before it that is the end of the matter in so far as that particular litigation goes between the parties in that Court of Appeal. There is no further reference to the Court which has made the order in either case. And that has determined the rights of the parties in both cases before the court making the order. And applying that test to the instant case, if the order made by the majority of the Court of appeal had been made by the trial court itself that that trial court had no jurisdiction, that is final. And according to the nature of that order, there is no further reference to that court of trial. If the order had been by the trial court that it had jurisdiction, that is interlocutory according to the nature of the order made as there are issues still to be determined. The result will not be the same if the nature of the proceedings or application test is followed.

I have so far discussed the problem as arising in the Court of trial. And this takes me now to the problem as arising in the Court of Appeal and the test suggested in the Omonuwa v. Oshodin case.

I have held the view and it is my conclusion that the decision of this Court in Omonuwa v. Oshodin should not relate to the problem as arising in the Court of trial. I accept the submission of Chief Williams, on this point that the ratio of the case could not be made to apply to decisions in the Court of First Instance.

And now to deal with the issue as the problem arises in the Court of Appeal, the decision in Omonuwa v. Oshodin criticised the non application of either the Salaman v. Warner test or the Bozson v. Altrincham (in what I have termed earlier also as the Blay v. Solomon test), in both D.P.P. v. Chike Obi (1961) 1 All N.L.R. 458 and Adegbenro v. Akinlola (1962) 1 All N.L.R. 442 at 474. Karibi-Whyte J.S.C. said-

“In these two cases, the court has applied neither the test of the nature of the order nor of the application in determining the application from which the order was made. With due respect, this approach has never been the test applicable and clearly not the laws.

The Court relied on the function of determining a reference to it and was not concerned with the determination of the rights of the parties.”

Learned Senior Advocate, Chief Rotimi Williams has criticised this statement of the Court as not being correct. He said –

“There may well have been some typographical error in the print of the first sentence quoted above. Nevertheless, it seems plain that his Lordship took the view that the established test or tests for ascertaining whether a judgment is final or interlocutory was not applied. With the utmost respect to his Lordship, that is not so.”

What the Court did in the Chike Obi (supra) case was to distinguish the proceedings on the reference from the proceedings in the course of which the question arose in the lower court. They did the same thing in the Adegbenro v. Akintola case (supra) the court holding as follows:

Is it a final decision The decision may not be final in the proceedings before the Chief Justice, but so far as the Federal Supreme Court is concerned it is final. The Court has finally disposed of the matter referred to them, namely the question as to the interpretation of the Constitution. This Constitution accords with that adopted by Brett, Ag. C.J.F. in Dr. Chike Obi v. Director of Public Prosecutions (No.2) F.S.C. 56 of 1961. Their Lordships have accordingly reached the conclusion that the decision of the Federal Supreme Court on the reference under s.108 was a final decision … ”

While these decisions fully support the submission of Chief Williams that it is the Court that makes the order that matters, the Court did not in fact look at it from the ‘nature of the application’ or ‘nature of the order’ angle as such. I would agree, however, that Bozson v. Altrincham U.D.C. was applicable and if it had been so applied, the decision in each of the two cases would have been the same, that is, it was clearly final and not interlocutory.’ And when this Court said that its approach has never been the test applicable”, all the court was saying was that the approach of not applying either test but applying the test of relying “on its function of determining a reference to it and not being concerned with the determination of the rights of the parties – has never been the test applicable and clearly not the laws”.

I think it might all be question of semantics – the difference being between, not applying a test and non applicability of a test.

Now, what is the test suggested by this Court in Omonuwa v. Oshodin Karibi-Whyte J.S.C. said-

“All the cases cited agree on the proposition that a decision between the parties can only be regarded as final when the determination of the Court disposes of the rights of the parties (and not merely an issue) in the cases. Where only an issue is the subject matter of an order or appeal the determination of that Court which is a final decision on the issue or issues ‘before it, which does not finally determine the rights of the parties, is in my respectful opinion interlocutory” ….

The learned Justice of the Supreme Court went on with full concurrence of all the other Justices:

“In my opinion, the ideal approach is to consider both the nature of the application, and the nature of the order made in determining when an order or judgment is interlocutory or final in respect of the issues before it as between the parties to the litigation ….. ”

Apparently, that is taken as applying the Salaman v. Warner test, (as already discussed) as against the Bozson v. Altrincham test. But with respect, it cannot be taken as so applying it, that is, in contradistinction to the Bozson v. Altrincham test, as has been discussed earlier in this judgment. For, the judgment under reference, Omonuwa v. Oshodin, classified both Salaman v. Warner and Omonuwa v. Oshodin together as belonging to one class. Karibi-Whyte J.S.C. said-

“1 “It would seem clear from the cases and the dicta cited that two tests for determining what is interlocutory or what is final have emerged from the cases. There are the cases which adopt the nature of the application to the Court as the determining factor whether the order is interlocutory or final, and there are others which consider the nature of the order made. Whereas Gilbert v. Endean; Blake v. Lathem; Salter Rex & Co. v. Ghosh, the Technistudy Ltd. v. Kellard 1976; represent the first view, Salaman v. Warner; Rozson v. Altrincham V.D.C.; Blay & Ors. v. Solomon represents the second view. ”

However, I think the important thing is how the judgment has been understood (or misunderstood). In Agbajo v. A.-G. Federal Republic of Nigeria (1986 2 N.W.L.R. 938, the Court of Appeal, as per Omo-Eboh J.C.A. (see also the judgments of the other justices) were in no doubt that the decision of Omonuwa v. Oshodin binds, the Court of Appeal, and clearly so, to adopt the two tests, that is, the nature of the application and the nature of the order test. Incidentally, the Court of Appeal found difficulty in fitting in the Salaman v. Warner test into the case and so ended, and rightly in my view, with the Rozson v. Altrincham test.

Obaseki J.S.C. in Western Steel Workers Ltd. and Anor. v. Iron and Steel Ltd. and Anor. (supra) put the matter thus – “where (in the Court of Appeal) this question (is) whether a ruling on an issue of jurisdiction raised in limine is final or interlocutory … the ruling that a dismissal on grounds of want of jurisdiction is a final judgment.”

I think the correct attitude is to be found in the dictum of Brett M.R. in the case of Ex parte Moore, In re Faithful which I have referred to supra. Once there is no further reference to a court after it has made its order, that something be done according to ,he answer to the enquiries, all the rights and not just an issue or some issues, have been determined. In which case, in a Court of Appeal, it is in regard to the proceeding before that Court, and the nature of the order made thereupon by that court, that would determine whether the matter is final or interlocutory. See Chike Obi v. D.P.P. (supra); Adegbenro v. Akintola (supra). And this will still be in accord with the Rozson v. Altrincham test if applied in the Court of Appeal.

And so, in interpreting section 31(2)(a) of the Supreme Court Act which provides –

“31 – (2) The periods prescribed for the giving of notice of appeal or notice of application for leave to appeal are –

(a) in an appeal in a civil case, fourteen days in an appeal against an interlocutory decision and three months in an appeal against a final decision:

the expression “an interlocutory decision” or “a final decision” would be construed as a decision – interlocutory or final- of the Court of Appeal itself. And in respect thereof, it is the Bozson v. Altrincham test, or nature of the order made test, that would be applicable.

And applying that test to the instant appeal, the majority in the Court of Appeal, having determined that the Court of Trial had no jurisdiction, had nothing further to determine in regard to the rights of the parties, (their subsequent examination of the issues (assuming they are wrong) notwithstanding). The decision is therefore final as being a final decision of the Court of Appeal, and the Appellant would need no leave of this Court to file an appeal on the grounds of jurisdiction. Their application is unnecessary and it is hereby struck out.

JURISDICTION

The next issue for consideration is jurisdiction. Uthman Mohammed J.C.A. said pointedly that a State High Court has no jurisdiction to try any case on a matter concerning the opening of letter of credit, in which there is a collateral agreement of carriage of goods by sea. The learned Justice of the Court of Appeal relied upon the decision of this Court in America International insurance Company v. Ceekay Trader Ltd. (1981) 5 S.C. 81, that the Administration of Justice Act of England, 1956 being the law which had given jurisdiction to the Judges of the English Court of Admiralty is applicable to Nigeria, and that the Federal High Court by virtue of section 7(1) of the Federal Revenue Court Act 1973 has the exclusive jurisdiction to hear and determine all claims within the Admiralty jurisdiction. As the conditions for the carriage of the goods in this case, and the age of the ship which must be so used, relate to a claim arising out of an agreement relating to the carriage of goods in a ship or to the use of hire of a ship it is an Admiralty matter by virtue of the decision of this Court in American International insurance Co. v. Ceekay Trades Ltd. (supra) which approved the decision of the English decision in The St. Elefferio 1957) p.179.

In the instant case, the learned Justice of the Court of Appeal held that there was a contract between ASDECAMO, the sellers of the cement and Bryanston Italiana S.R.L. to carry the cement by sea to Lagos adding that the contract was within the overall contract between the buyer and the seller.

Then he concluded –

“Both Chief Williams and Professor Kasunmu argue that the matter between the Appellant and the Respondent involves documents only. I agree that documents were involved but in my opinion the contents of these documents is that vital issue in this case. If one is only concerned about forgery of the documents one could only concern oneself with comparison of handwriting and signature. But one goes to complain against that failure of a contracting partner to comply with terms given in a document, those terms have become part of the over all agreement between the parties. The appellant is complaining here that because the additional instructions were not complied with there is said to be a breach of the contract between the buyer and the issuing bank. It is my view that the terms set out in those additional instructions are caught up by s.1(i)(h) of the Administration of Justice Act 1956 and therefore within the Admiralty jurisdiction of the Federal High Court. If ASDECAMO applied to be made a third party of one of the parties makes it a co-defendant to the suit, the State High Court would have to determine on how the cement was carried in a ship to Apapa or make a ruling on the use or hire of Thomas Mann and whether it is a conference line vessel or not. This definitely is not within its jurisdiction.

In addition to my opinion above I will say that the leading document which formed the bases of this case is the bill of lading. Contracts of carriage of goods by sea are mainly evidenced by a bill of lading. The contents of the bill of lading, exhibit D, are the points upon which the appellant argued that the respondents were in breach, because they failed to examine it and discover that the bill carried details which they did not agree upon.

A Bill of Lading is not itself the contract of carriage between the shipper and the ship owner, or the shipper and the charterer, but is evidence of its terms.

(Italics mine for emphasis)

Let us see if the facts of the case justify that conclusion reached in law by the learned Justice of the Court of Appeal, but first we should examine the argument of Nnaemeka-Agu J.C.A. (who dissented) on jurisdiction. The learned Justice of the Court of Appeal referred to the English decision in The Jade (1976) 1 All E.R. 44 and the decision of this Court in American International Insurance Co. v. Ceekay Trustees Ltd. (1981) 5 S.C. 81 and held-

“Bearing this principle and the above definition of carriage of goods” in mind, it is difficult to say that what is in issue in this case is a contract for carriage of goods in a ship. It appears to me that the contract in question in this appeal is one in contemplation of an order of goods and not one of carriage of goods in a ship. It is a normal contract between a customer and his local bank in an international commercial contract. It is a letter of credit transaction and in such transactions credits are by their nature separate and distinct contracts from the sale or carriage or other contracts that may emerge from such transactions: See Uniform Customs and Practice for Documentary Credit (1974) General Provisions (c)”.

To determine the issue of jurisdiction having regard to the facts, I think it would be best to examine the nature of this type of transaction. Historically, once the notion of commercial credits was accepted as a patent factor in international trade, attempts were then made from time to time for the standardization of the conditions on which Bankers would be prepared to issue and act on commercial credits. The year 1933 saw the commencement of such standardization. The International Chamber of Commerce formulated a Uniform Customs and Practice for Commercial, Documentary Credits, hereinafter also referred to as Uniform Customs. The British Banks had some objections to the rules at the time, and it was not until about thirty years later, that is, in 1962, when the 1962 Revision was completed, that the British and the Dominion Banks saw fit to join the operation of the Rules. In 1974, the Uniform Customs were revised, and it is this revised edition that affects the instant case. Though, it was again revised in 1983, the revision of 1983 is not material to this case, thus action taken having been commenced in August, 1979 the incident itself having happened in 1978.

I will, from time to time, refer to some of the provisions of these Uniform Customs, but meanwhile, I will refer to their general provisions and definitions for they are very important in the determination of this appeal, and moreso in the determination of the issue of jurisdiction. The general provisions and definition provide inter alia –

“(b) For the purposes of such provisions, definitions and articles the expressions ‘documentary credits(s)’ and ‘credits(s)’ used therein mean any arrangement, however named or described, whereby a bank (the issuing bank), acting at the request and in accordance with the instructions of a customer (the applicant) for the credit),

(i) is to make payment to or to the order of a third party (the beneficiary) or is to pay, accept or negotiate bills of exchange (drafts) drawn by the beneficiary, or

(ii) authorises such payments to be made or such drafts to be paid, accepted or negotiated by another bank, against stipulated documents, provided that the terms and conditions of the credit are complied with.

(c) Credits, by their nature, are separate transactions from the sale or other contracts on which they may be based and banks are in no way concerned with or bound by such contracts.

(d) Credit instructions and the credits themselves must be complete and precise.

In order to guard against confusion and misunderstanding, issuing banks should discourage any attempt by the applicant for the credit to include excessive detail.

The bank first entitled to exercise the option available under Article 32 shall be the bank authorised to pay, accept or negotiate under a credit. The decision of such bank shall bind all parties concerned.

A bank is authorised to pay or accept under a credit by being specifically nominated in the credit. A bank is authorised to negotiate under a credit either-

(i) by being specifically nominated in the credit, or

(ii) by the credit being freely negotiable by any bank.

A beneficiary can in no case avail himself of the contractual relationships existing between banks or between the applicant for the credit and the issuing bank.”

(Italics mine)

As Lord Denning said, in Pavia & Co. S.P.A. v. Thurmann-Nieber, (1952) 2 Q.B. 84-

“The sale of goods across the world is now usually arranged by means of confirmed credits. The buyer requests his banker to open a credit in favour of the seller and in pursuance of that request the banker or his foreign agent, issues a confirmed credit in favour of the seller. The credit is a proviso by the banker to pay money to the seller in return for the shipping documents. Then the seller, when he presents the documents, gets paid the ‘contract price. The conditions of the credit must be strictly fulfilled; otherwise the seller would not be entitled to draw on it.”

A more authoritative statement in the matter of documentary credit is to be found in the pronouncement of Lord Diplock in United City Merchants (Investments) Ltd. v. Royal Bank of Canada (1983) A.C. HL 168. As the law Lord said, for the proposition upon the documentary credit point both in the broad form or in the narrower form, there is paucity of direct authority in both the English and Privy Council cases and were in the Courts in the United States of America. That being the case, it is no wonder then, that there is no precedent in this country to turn to in this matter, the more so as this country is quite young in entering into international commercial credit, which type of transaction is based on documents.

Lord Diplock separated the contracts into four parts and though the present transaction is concerned principally with only one of the contracts the contract between the Buyer and the issuing Bank, it could be desirable, especially for the proper understanding of this type of transaction, to refer to the four contracts, as specified in the aforesaid judgment of Lord Diplock THE FIRST CONTRACT:

The underlining contract for the sale of the goods in question. In this contract, only the Buyer and the Seller are involved. Indeed, without this underlining contract, the other three contracts, which I will refer to presently, would not arise. The Buyer and the Seller negotiate and agree upon the terms for the purchase of the goods, the mode of the credit and the mode of transportation or dealing of the goods from the country of purchase to the country to which the goods are to be delivered.

Where the mode of payment chosen in the contract between the Buyer and Seller is that of documentary credit, the Buyer is under duty to the seller to ensure that a credit is issued. within a reasonable time or an agreed time and the credit must comply with the conditions which have been laid down by the parties to the agreement. Indeed, Article 37 of the Uniform Customs provides –

“All credits, whether revocable or irrevocable must stipulate an expiry date for presentation of documents for payments, acceptance or negotiation, notwithstanding the stipulation of a latest date for shipment”

In which case, a statement of the latest date for shipment is not even sufficient. If the credit contains no expiry date, the Seller is entitled to reject it. In Article 41 of the Uniform Customs, is the following provision –

“Notwithstanding the requirement of Article 37 that every credit must stipulate an expiry date for presentation of documents, credits must also stipulate a specified period of time after the date of issuance of the Bills of Lading or other shipping documents during which presentation of documents for payment, acceptance or negotiation, must be made. If no such period of time is stipulated in the credit, banks will refuse documents presented to them later than 21 days after the date of issuance of Bills of Lading or other shipping documents”

Finally, on the contract between the Buyer and the Seller, the acceptance of documents under a letter of credit does not preclude the Buyer from rejecting the goods subsequently, if the goods, on their arrival, do not conform to the contract of sale.

THE SECOND CONTRACT:

The second contract is between the Buyer and the Issuing Bank. This is the contract that is material to this case, for the action is between the Buyer (Appellants in this case and the Issuing Bank (the Respondent in this appeal). What are the principles involved in this second contract For, it is after examining the principles, that one could fit the facts of this case into them.

The relationship is one of a Banker and Customer. But not quite. In an ordinary banking transaction, a customer requiring a loan or overdraft facility enters into a simple informal contract known to the common law or, if a statutory provision is involved in the contract – known to statute. In an application for a documentary credit under discussion, there is a standard form of application the form usually incorporates the Uniform Customs and the Buyer is required to fill the document where the terms of the contract are set out in detail. In the instant appeal, such application is Exhibit B. Exhibit B is the form provided by the Issuing Bank, the Respondents, in this case, and though the Uniform Customs are not specified in Exhibit B, Exhibit C which the Respondent issued to the Paying or Confirming Bank, that is, the Swiss Bank, the following is contained.

“Except as otherwise stated this credit is subject to the Uniform Customs and Practice for Documentary Credits (1974 Revision) International Chamber of Commerce Brochure No. 290.

It is to be noted however, that non-incorporation of this Uniform Customs in Ex.B., is certainly not an issue in this case. The issuing Bank (Respondent in this case) has a duty to ensure that the letter of credit issued to the Seller, in this case, ASDECAMO, complies strictly with the instructions of the Buyer (in this case, the Appellant) contained in the application for the credit and also that the credit is to the effect that payment, acceptance or negotiation is effected only on presentation of documents which fully accord with the terms of the credit.

At this stage, it is to be observed that in Exhibit C, the Documentary credit is Irrevocable. Now what is an irrevocable letter of Credit The Credit in Ex. C is stated to be irrevocable in compliance with Article 1 of the Uniform Customs which stipulates that credits may be either revocable or irrevocable and that all credits should clearly indicate whether they are revocable or irrevocable, for by virtue of article 3 an irrecovable credit is a definite undertaking by the Issuing Bank (the Respondents herein), provided that the terms and conditions of the credit are complied with:-

(i) to pay, or that payment will be made if the credit provided for payment, whether against a draft or not;

(ii) to accept drafts if the credits provide for acceptance by the Issuing Bank or to be responsible for their acceptance and payment at maturity if the credit provides for the acceptance of drafts drawn on the applicant for the credit or any other drawee specified in the credit.

(iii) to purchase or negotiate, without recourse to drawers and or bona fide holders, drafts on the applicant for the credit or on any other drawer specified in the credit, or to provide for purchase or negotiation by another bank, if the credit provides for purchase/ or negotiation.”

Let us see if, and how the Respondents complied with the instructions contained in EX.B. Ex.C was what followed. It was issued by the Respondent to the Confirming Bank, that is the Swiss Bank, and it is in substantial agreement with exhibit B. And that being the case, the Respondent will be under duly to indemnify the Buyer, that is the Appellant, against any liability the latter may incur to the seller if the credit fails to be honoured by the Swiss Bank, that is, the Seller, the Swiss Company, performed strictly its own side of the agreement.

The confirming Bank, Banque Pour le Commerce Int. S.A. referred to as the Swiss Bank, is not the Buyer’s (that is the Appellant’s) agent. It is however the Respondent’s (the Issuing Bank’s) agent. The Appellant (Buyer) would be entitled to reject the documents even for an apparent defect on the face of the document and refuse to be bound by the act of the Swiss Bank. If the Swiss Bank had been the Appellants’ agent, the Appellant would, of course, not have been entitled to do this. This is important, for if the Swiss Bank honoured a credit, as it is being claimed in the instant appeal, on acceptance by it of defective documents, and the Buyer rejects the documents as he would have the right to do, or as he is doing in the instant case, he could proceed, as he had done in this case, against the Issuing Bank, the Respondent, basing the action on the contract between the Buyer and the Issuing Bank, that is, the contract between the Appellant and the Respondent. So it is the conforming, or not, of the documents that matter.

It is this, therefore, that leads me now to a comparison of Ex.C. which indicates the documents which the Swiss Bank must rely upon before honouring the credit and Ex.D., the Bill of Lading presented by the Seller (the Swiss Company) to the Confirming Bank the Swiss Bank. And this is the true basis of the present action.

THE THIRD CONTRACT

I have, earlier in this judgment referred to EX.B. (the instructions given by the Appellant to the Respondent). I have also referred to Ex.C. and had emphasised the importance of “Conference” and “non Conference” Lines in the latter Exhibit and the complaint of the Appellant about the non existence of the supposed carrying vessel “Thomas Mann” and the disclaimer of this “vessel” by Conference Line.

I will therefore leave the facts meanwhile and return to the principles of documentary credit as respects the third contract. This is the contract between the Issuing Bank, the Respondent and the Confirming Bank, that is the Swiss Bank. The Swiss Bank will only be entitled to reimbursement or remuneration, as the case may be, from the Respondent if it complies strictly with the instructions in the letter of credit. Once it complies with those instructions as they appear on the face of the documents, there is no problem. But what happens if the Swiss Bank had honoured the credit on defective documents Let us examine Article 12 of the Uniform Customs in this regard.

The Article provides –

(a) Banks utilizing the services of another Bank for the purpose of giving effect to the instructions of the applicant for the credit do so for the account and at the risk of the latter (that is the applicant).

(b) Banks assume no liability or responsibility should the instructions they transmit not be carried out, even if they have themselves taken the initiative in the choice of such other Bank.

(c) The applicant for the credit shall be bound by and liable to indemnify the banks against all obligations and responsibilities imposed by foreign laws and usages.”

Though it would appear that this article particularly sub (a) and (b) provide both the Issuing Bank, the Appellant, and the Confirming Bank (the Swiss Bank) with immunity, the learned authors of Law of Bankers’ Commercial Credits – H. C. Gutteridge and Maurice Megrah are of the view and I am in full agreement that the provision should not be taken to give banks a carte blanche to do as they please and “if one commits a flagrant mistake, the responsibility and the loss will not be with the applicant for the credit.” – Applied to this case, the Appellant should not bear the responsibility and loss, if the Swiss Bank pays upon defective documents. This accords with ordinary laws of the land and commonsense. A person shall not profit by his own delict.

If the confirming Bank that is the Swiss Bank, as the agent of the Respondent, had been held to have acted on defective documents and the Appellant had as a result thereby incurred a loss, then the Appellant could claim against the Respondent, who could in turn refuse to reimburse the Swiss Bank. But if the documents presented to the Swiss Bank are ex facie in conformity with the relative conditions of the credit “Ex.C.” it would not matter if there is dispute between the Buyer (the Appellant) and the Seller ASDECAMO). The Respondent would be obliged to reimburse the Swiss Bank, and debit the Appellant.

THE FOURTH CONTRACT

A fourth contract (which does not strictly arise in this case) is between the Confirming Bank and the Seller that is between the Swiss Bank and the Swiss Company. The obligation of the Swiss Bank to the Seller (Swiss Company) is as contained in Ex.C. And that exhibit will be the basis of the liability of the Swiss Bank to the Swiss Company. Important again is the fact that the Swiss Company and the Swiss Bank deal in documents and not in goods.Once on the face of it, the documents presented to the Swiss Bank by the Swiss Company, conform with the requirements of the credit, as notified to the Swiss Company, by the Respondent, the Swiss Bank is under contractual G obligation to the Seller to honour the credit, “notwithstanding that the Swiss Bank has knowledge that the Seller, at the time of presentation of the confirming documents, is alleged by the Buyer to have, or, in fact, has already, committed a breach of his contract with the Buyer for the sale of the goods to which the documents appear on their face to relate, that would have in an ordinary contractual relationship entitled the Appellant to treat the contract of sale as rescinded, the goods rejected, and the Appellant would have refused to pay the seller.

– see the pronouncement of Lord Diplock in U.C.M. v. Royal Bank of Canada (H.L. (E)) (1983) A.C. 196 at p.183.

Again, this is important in this fourth contract. For the contract between the Swiss Bank and the Swiss Company does not stand exclusively for the other three contracts forming the transaction. Indeed, the four contracts are interwoven. Once the Swiss Bank is not liable, or in other words once it is shown that the Swiss Bank has conformed to the documents (in this fourth contract) and has paid out the necessary funds to the Seller (the Swiss Company in this case) even when the Swiss Bank has knowledge that the Swiss Company has committed a breach of contract with the Buyer (the Appellant), the Swiss Bank as in the third contract has to be reimbursed by the Respondent, who in turn would rightly debit the Appellant. As Lord Diplock said in U.C.M. v. Royal Bank of Canada (supra) case.

“the whole commercial purpose for which the system of confirmed irrevocable documentary credits has been developed in international trade is to give to the seller an assured right to be paid before he parts with the control of the goods that does not permit of any dispute with the buyer as to the performance of the contract of sale being used as a ground for non-payment or reduction or deferment of payment.”

(Italics mine)

It is clear then, that the whole commercial credit transaction is concerned with documents and not goods. Lord Diplock went on in the judgment under reference –

“It has, so far as I know, never been disputed that as between confirming bank and issuing bank and as between issuing bank and the buyer [sic like the contract involved in the instant appeal] the contractual duty of each bank under a confirmed irrevocable credit is to examine with reasonable care all documents presented in order to ascertain that they appear on their face, to be in accordance with the terms and conditions of these credits, and if they do so appear, to pay to the seller/beneficiary by whom the documents have been presented the sum stipulated by the credit, or to accept or negotiate without recourse to drawer drafts drawn by the seller/beneficiary if the credit so provides.”

I am not excluding vitiation by fraud completely. For, if the action had been between the seller and the paying bank, and the seller had perpetrated fraud in the documents so prescribed and so presented, then, on the principle of ex turpi causa oritu non actio, the action would not be permitted by the court to be used by the dishonest persons, that is, the perpetrator of the fraud, to avail himself of the credit.

We now have sufficient material to return to the issue of the jurisdiction of the Court. And the question to ask is whether, from the facts of the case as stated above, could this be said to be an Admiralty matter, the jurisdiction for which lies only in the Federal High Court Uthman Mohammed and Kutigi, JJ .C.A. came to the conclusion that the action involves a claim arising out of an agreement relating to the carriage of goods by sea within the meaning of section 1(i)(h) of the Administration of Justice Act 1956 [English Legislation]. I have earlier on, in this judgment referred to the judgment of this Court in American International Insurance Co. v. Ceekay Traders Ltd. 1981. All N.L.R. Vol. 1 Part 1 p.581. There Uwais, J.S.C. delivering the lead judgment of the Court carefully, and in full, traced the history of Admiralty Jurisdiction in this country, right from 1890, when the Colonial Courts of Admiralty Act was passed by the British Imperial Parliament as having effect in colonial Nigeria. The history went up to 1973 when the Revenue Court Act 1973 was enacted. He held that up till that time, the High court Act 1973 was enacted. He held that up till that time, the High Court of Lagos had-

“all such jurisdiction whether derived from a Statute of general application as at 1st January 1900 or the Colonial Courts of Admiralty Act 1890 or the Common Law as it existed in 1973or indeed any Statute (such as the Administration of Justice Act 1956) which by 23rd September 1963, when the Admiralty Jurisdiction Act 1962 came into operation) gave the High Court of Justice in England jurisdiction in Admiralty.”

He then dealt with the 1973 Act and held –

“It seems to me that the intention and overall effect of all these provisions of the 1973 Act is to oust the High Courts of the States (including the High Court of Lagos) of their Admiralty jurisdiction after the same jurisdiction had been vested in the Federal High Court,”

He referred with approval to the case of The St. Elefterio (1957) p.179 that the provisions of section 1(i)(h) of the Act (English) were wide enough to cover claims whether in contract or tort arising out of any agreement relating to the carriage of goods in a ship. The provision of our 1973 Act is as follows”

“The Admiralty jurisdiction of the High Court shall be as follows:-

that is to say jurisdiction to hear and determine any of the following questions or claims –

(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship.”

Chief Williams has asked that we re-examine our approach to the interpretation of this provision of the Act. With respect, I think the important question is, whether or not the judgment of this Court in American International Insurance Co. v. Ceekay Traders Ltd. (Supra) applies at all. Are the facts and the nature of this case, as have been stated above, wide enough to amount to an agreement resting to the carriage of goods by sea Uthman Mohammed J.C.A. took the approach by listing the claims upon which the Admiralty Jurisdiction of the English High Court could be invited as contained in Volume 3 of the Atkins’ Court Forms. There were eighteen in all. He then referred to the instructions contained at the back of Ex. C. particularly the instruction relating to shipment being made by Conference or non Conference Line vessel and that Bills of Lading must state that the carrying vessel if not registered in Nigeria should not be more than fifteen years from date of First registration. The learned Justice of the Court of Appeal then held that the contents of the documents form the vital issue.

I find the reasoning of the learned Justice difficult to follow, and with respect, if as the learned Justice himself had held, it is clear that the whole transaction is documentary credit, and that the Bill of Lading is not itself the contract of carriage between the shipper and the ship owner or the shipper and the charterer, but, is merely evidence of its terms, then, again with respect. I do not see how a purely documentary contract where the Confirming Bank (the Swiss Bank) will only be interested in the ex-facie confirmation of Ex. D with the terms in Ex. C could turn metamophoral into a carriage by sea contract between the buyer of the goods, the Appellant, and the Issuing Bank, the Respondent, especially when the Swiss Bank’s prima facie satisfaction with the documents is the satisfaction by an Agent that it is, on behalf of its principal, the Respondents.

The learned Justice is therefore in serious misconception of the law of documentary credit to have concluded that the contract is concerned with the contents, which would lead the court to engage itself in bothering “on how the cement was carried in a ship to Apapa” or whether “Thomas Mann” was in fact Conference Line Vessel or ‘not. [See U.C.M. v. Royal Bank of Canada (supra)].

This Court in Bronik Motors Ltd. v. Wema Bank Ltd. (1983) 6 S.C. has stated categorically the primary reason behind the setting up of the Federal High Court. The Court was set up for the purpose of dealing expeditiously with matters pertaining to the revenue of the Government of the Federation which it was felt at the time were not being so handled by the State High Court. The Federal High Court has come to stay, and, without any doubt, has justified its existence, but it is not for this Court to impinge upon the jurisdiction of the State High Court, conferred by section 236 of the Constitution, for the purpose of “fleshing” up the jurisdiction of the Federal High Court. To add to the jurisdiction of that court must be by legislation.

From the facts of this case, which comply with the principles of law in International Documentary Credits, [see U.C.M. v. Royal Bank of Canada (supra)], that all parties to a documentary credit transaction deal in documents only, and not in the goods, what has happened herein, arises from a breach of agreement relating not to the carriage of the goods, that is the cement in this case, but to the conforming or non-conforming of the documents, produced by the Seller, the Swiss Company to the Swiss Bank, acting as agent of the Issuing Bank, the Respondent. What is at issue is whether or not the conditions stipulated in Ex. C have been prima facie conformed with by the Swiss Bank before payment of money to the Seller.

I have dwelt at length on the importance of this ex facie conformation of the documents, presented by the Seller, to the Confirming Bank. I am in complete agreement with Nnaemeka-Agu, J.C.A. when he said-

“In the instant case, the appellant forwarded his claim on the letter of credit which the respondents opened for him on his application. Although one of the documents with which, the credit was negotiated was the Bill of Lading, it did not convert the transaction, into a bill of lading transaction which would have succeeded in admiralty.”

(Italics mine)

After all, the action is between the Buyer (Appellant) and the Issuing Bank, (Respondent). The Issuing Bank whose agent in regard to accepting and viewing the documents in question the Swiss Bank is, not would not ex obligatio be interested in whether the goods were ever shipped or that they ever arrived safely or whether or not the entire transaction was a conspiracy between the Swiss Company and the Appellant to defraud the country or anybody else of foreign exchange of currency. If the action had been between the Buyer and the Seller the terms of their agreement might (and I would not put it higher) probably involve both parties’ interest in the carriage of the goods by sea, depending upon the terms of their agreement that might result in admiralty matter. However, all that would be academic, as the present action is between the buyer and the Issuing Bank. The Lagos High Court has jurisdiction and the submission by Chief Williams, on this point, fails.

THE MERIT

I would now finally come to the merit of this case. I have already set out a good part of the facts. The remaining material facts will be referred to presently. But what is the claim by the Plaintiff/Appellant. His claim is as follows-

1. the sum of N553,493.74 being special and general damages for breach of contract by the Defendant and its agent (The Banque Pour Le Commerce Int. S. A. Basle Switzerland) in respect of payments wrongfully made out [on] Letter of credit No. LCB 0380/78/1432 of 31/7/78 issued by the Defendants on the instructions of the Plaintiff, and contrary to the terms and conditions of the said Letter of Credit.
2. Alternatively, the Plaintiff claims the sum of N553,493. 74 being special and general damages for negligence on the part of the Defendant and its said agents, the Banque Pour Le Commerce Int. S. A. Basle Switzerland, for accepting and making payments against a forged bill of Lading issued by Bryanston. Italiana S.R.L. Pescara Italy, contrary to the aforesaid instructions of the Plaintiff.
3. A declaration that as the payment of 570,000.00 U.S. Dollars made by the Defendants Bank to ASDECAMO was made in breach of the terms and conditions of the Letters of Credit mentioned in claim 1 above, the Defendant is not entitled to debit the Plaintiff’s Account No. 9257 with the Lagos Central Branch of the Defendant/Bank with that amount and or with any interest, and commissions on that amount; and an order that the Defendant shall forthwith revert or cancel all debit entries so made.”

From this claim, the complaint was that the Confirming Bank, that is, the Swiss Bank, as agent of the Respondent, wrongfully made out payment on Letter of Credit Ex. C. contrary to the terms and conditions of the said letter of Credit or in the alternative that the Bill of Lading in the name of Bryanston was forged.

I would now proceed to state the case of the Appellant in this court.

1. Though it is not in dispute, between the parties in this Court, and indeed, it has been found by the Trial Court and affirmed by the Court of Appeal that on the Bill of Lading –

“The Shipper’s name was put as Bryanston Italiana S.R.L. Pescaral Italy (hereinafter referred to as Bryanston simpliciter, and not ASDECAMO, the Swiss Company or Sellers of the goods,”

the Appellant has submitted that, even on the principle of law laid down in the judgment of Lord Diplock, in U.C.M. (Investments). Ltd. & Anor. v. Royal Bank of Canada and Anor. (supra), the Respondent ought to have noticed the discrepancy in names, and regarded this as irregularity in the document (Bill of Lading) presented for payment to the Swiss Bank.

2. The Appellant also challenged the Respondents reliance on Article 8 of the Uniform Customs, and applying that Article as a shield, without recourse to the additional instructions contained at the back of Ex. C. in regard to use of Conference or Non Conference Line Vessel and the age of the vessel, if not a Nigerian Vessel. Further, that the words “Conference Med.” should have been authenticated but that they were not. It was also contended that Ex. D., being a forgery, the Respondent would have discovered the irregularity if they had checked the Lloyds Register which they were in possession of.
3. The Court of Appeal’s rejection of the Appellant’s contention that Ex. C (the Letter of Credit) was used as a transferable credit and also that Ex. D (Bill of Lading). Ex. E. (Packing List bearing Bryanston), Ex. F. (Certificate of Value signed by Bryanston) and Ex. G. are ex facie irregular and inconsistent.
4. (i) The interpretation placed by the Court of Appeal upon the Exclusion Clause in Ex. B., which clause provides-

“It is understood that our engagement (Appellant’s) to pay shall continue in force notwithstanding any charge in our and/or your [Respondent’s] Constitution and that no responsibility is to attach to yourselves or your correspondents [Swiss Bank] as to the documents, beyond seeing that they purport to be in order.”

that the Respondent could not as a result of this clause be held liable, even if negligence has been established against it, could not be a correct interpretation.

(ii) That Articles 9 and 12 of the Uniform Customs could not save the Respondents, if they were negligent in regard to the forged Ex. E, having regard to Article 7 of the Uniform Customs.

In regard to the appearance of the name “Bryanston” on the Exhibit “D”, Chief Williams for the Respondent, contended that credit in this case, had not been transferred to Bryanston, as a credit is transferable only when the overseas seller of the goods assigns his obligations under the contract of sale to a third party, so that the third bears the benefit or even the detriment of the original credit.

In this case, under Exhibit D, the Swiss Company, ASDECAMO, is the original beneficiary of the Credit. On Exhibit D, Bryanston were merely the shippers. All the documents that had to be presented to the Swiss Bank were presented by the Swiss Company and not by Bryanston. More importantly is the fact that it was the Swiss Company, ASDECAMO that was paid. The Appellant himself said so in his amended Statement of Claim.

Para. 6(a) of that Statement of Claim reads-

“The Defendant [the Respondent – the Issuing Bank] and its agents [sic the Swiss Bank] …. wrongly paid out the amount covered by the letter of credit…….to ASDECAMO”

In their Statement of Defence the Respondent averred –

4(1) The Defendants aver that on the 12th September 1978, the agent Banque Pour Le Commerce Int. S. A. Basle Switzerland …. paid the sum of $570,000.00 to the beneficiary of the credit (ASDECAMO) upon presentation to it of the documents.

As Chief Williams rightly pointed out, it was the original beneficiary of the Credit (ASDECAMO) and not the shippers, Bryanston, who were paid the purchase price. It is true Ex. D. named Bryanston as “Shippers” but then the Port of Lading is “BARI” and it does not take much imagination to know that goods from Switzerland, by boat, which Chief Williams described

rightly, as land locked, for it is geographically and so notoriously land locked, could not be loaded or shipped from a port in Switzerland which has no port, and that the Swiss company could employ shippers (except they themselves are shippers) to ship them to the country of its destination. Though this type of contract deals with documents and not facts yet, documentary credit are not fictional but real. This certainly cannot answer the theme of Transferable Credit as provided for by Article 46(a) & (d) of the Uniform Credits which provides –

(a) “A transferable credit is a credit under which the beneficiary has the right to give instructions to the bank called upon to effect payment of acceptance or to any bank entitled to effect negotiation to make the credit available in whole or in part to one or more third parties (second beneficiaries) …………………

(d) A credit can be transferred only if it is expressly designated as “transferable” by the issuing bank………..”

This credit is not a transferable credit and indeed has not been transferred more especially as it was the Swiss Company and not Bryanston that applied for and got benefit of the credit. I am in agreement with and adopt the views of Nnaemeka-Agu, J.C.A. when he said –

“Also that where the seller is not the manufacturer of the goods he may not himself complete the Certificate of Value and of origin which is, by the way, designed to be completed by the Manufacturers, Suppliers or Exporters of the goods. It therefore appears to me to be reasonable and in accordance with the practice of the trade that the name of Bryanston …. appears on Exhibit D, E, and F. It is agreed by both counsel that the invoice is also in the name of ASDECAMO and it is common ground that it was they and not Bryanston that was paid therefor.”

With regard to the question whether or not “Thomas Mann” belongs to Conference Line, all the Swiss Bank has to demand and insist upon, and the Swiss Company must present before payment is made is “reasonable documentary proof” that the ship belonged to Conference Lines and that the carrying vessel, “Thomas Mann” is not more than fifteen years from date of first registration. Ex. D has the words CONFERENCE MED J” typed upon it. The words were not printed. Also typed upon Ex. D are the words

“We hereby certify that the carrying vessel is not more than 15 years from date of First Registration”

This Exhibit was signed by the Ship owners, though the words “CONFERHENCE MED J” were not separately authenticated, but the whole Exhibit was signed by “BLACK STAR LINE LTD. WEST AFRICA SERVICE!”

If forgery of this document is relied upon, surely there was no proof, as there is no evidence to suggest that the signature of the Ship owners was obtained before the words in question were added. However what is of special impression on my mind is that there is concurrent finding of two courts on the point that there was no alteration in Ex. D. and no leave of this court has been sought or obtained to upset these finding. Indeed even if leave is sought, no special circumstance has been advanced, to set aside that finding.

Reference has been made to Banque Indochine v. J. H. Rayner Ltd. (1983) 1 Q. B. 717 at page 719 per Parker J. and on appeal as per Sir John Donaldson M. R. who had the following to say- “The letter of credit called for the presentation of documents covering shipment of 2,000 metric tons of sugar and were subject to the special condition “shipment to be effected on vessel belonging to shipping company that is a member of an International Shipping Conference. ”

This is an unfortunate condition to include in a documentary credit, because it breaks the first rule of such a transaction, namely, that the parties are dealing in documents, not facts. The condition required a state of fact to exist. What the letter of credit should have done was to call for a specific document which was acceptable to the buyer and his bank evidencing the fact that the vessel was owned by a member of a conference. It did nor do so and as, accordingly, the confirming bank had to be satisfied of the fact, it was entitled to call for any evidence establishing that fact. All sorts of interesting questions could have arisen as to what evidence could have been called for and what would have been the position if, contrary to that evidence, the vessel was not owned by a conference member. In fact it was so owned and merchants produced the evidence required by the bank before the expiry of the credit. Accordingly no such questions arise …

(Italics mine)

Professor Kasunmu, in relying on this authority submitted that the “special condition” endorsed on the credit must be established as a fact, thus impressing a duty on the Respondent over and above the provisions of Article 8 of the Uniform Customs.

The Court of Appeal took the view that this decision is contrary to the general principle governing documentary credit as set out by Lord Diplock in the United City Merchant case. Professor Kasunmu took the view that there is no such conflict and relied upon a passage by Lord Diplock in the case of Singh v. Banque de Indochine (1974) 2 All E.R. 754758 to the effect that –

“The instant case differs from the ordinary case in that there was a special requirement that the signature on the certificate should be that of a person called Balwant Singh, and that that person should also be the holder of Malaysian passport No E-13276. This requirement imposed on the bank the additional duty to take reasonable care to see that the signature on the certificate appeared to correspond with the signature on an additional document presented by the beneficiary which, on the face of it, appeared to be a Malaysian passport number E-13276 in the name of Balwant Singh. The evidence is what the notifying bank had done when the certificate was presented. The onus of proving lack of reasonable care in failing to detect the forgery of the certificate lies on the customer. In their Lordships view, in agreement with all the members of the Court of appeal, the customer did not succeed in making out any case of negligence against the issuing bank or the notifying bank which acted as its agent, in failing to detect the forgery.”

Chief Williams felt that Article 9 of the Uniform Customs is an answer to the problem created by these judgments. Article 9 provides –

“Banks assume no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document………”

The learned authors of Law of Bankers Commercial Credits H.C. Gutteridge and Maurice Megrah 7th Edn. said that there is some doubt as to the meaning of the interpretation –

“(the) unfortunate condition to include in a credit because it breaks the first rule of (Documentary Credit) that the parties are dealing with documents not facts…….”

in the Banque Indochine v. J. H. Rayner (supra) case.

Article 9 of the Uniform Customs was not referred to by the Court in England in the Banque Indochine v. Rayner Ltd. case nor by Lord Diplock in the Singh v. Banque de Indochine (supra) case. I am however inclined to the view that having regard to Article 9 of the Uniform Customs, and the clean statement of the law by Lord Diplock in U.C.M. v. Royal Bank of Canada (supra) a confirming Bank, that is, the Swiss Bank, in this case, would only be limited to the examination of the documents required to be, and are, presented to it and obligation is limited to an ex facie conformation of the conformation of the documents presented with the documents required to be presented before payment is made.

It is now pertinent to deal with the exclusion clause in Exhibit B – the application of the Appellant for the letter of Credit – Let me state it again.

“It is understood that our engagement to pay shall continue in force notwithstanding any changes in our and/or your constitution and that no responsibility is to attach to yourselves or your correspondents as to the documents beyond seeing that they purport to be in order. We agree to hold you and your correspondents harmless and indemnified in respect of any loss or damage that may arise in consequence of error or delay in transmission of your correspondents’ messages, or misinterpretation thereof or from any cause beyond you or their control. ”

The question posed by Professor Kasunmu, was whether the Respondent could rely upon this clause, if it is established that they are negligent In Photo Production Ltd. v. Securitor Transport Ltd. (1980) A.C. 827 it has been held that in so far as an exclusion clause is concerned, all that has to be done is now construction of the clause, that is, following the Interpretation Theory, as against the Rule of Law theory, which was developed as far back as 1956. See Spurling Ltd. v. Bradshgw(1956) 1W.L.R. 461 at 465. Yeoman Credit Ltd. v. Apps (1962) 2 Q.B. 508. Chitty: On Contracts 25 Edn. Vol. 1 p. 472 at para. 884 put the Rule of Law Theory as follows-

“The rule was predicated that there were certain breaches of contract (fundamental breaches) which were so totally destructive of the obligations of the party in default that liability for such a breach could in no circumstances be excluded or restricted by means of an exemption clause”

However in U.G.S. Finance Ltd. v. National Mortgage Bank of Greece (1964) 1 Lloyds Rep. 446 Peason L.J. referred to an exemption clause as a rule of construction see also Glynn v. Margetson & Co. (1893) A.C. 351 and the 1967 case of Suisse Atlantique Societe d’Armendent Maritime S. A. v. N. V. Rottendamsale Kolar Centrale (1967) A.C. 361. However the rule of construction theory was finally confirmed by the House of Lords in Photo Production Ltd. v. Securitor (supra). In the Sussie Atlantique Case (supra) I think, the pronouncement of Lord Wilberforce is important. he said-

“One may safely say that the parties cannot in a contract, have contemplated that the clause should have so wide an ambit as in effect to deprive one’s party’s stipulations of all contractual force, to do so would reduce the contract to a mere declaration of interest. ”

In construing the instant contract it seems to me that the parties intended, by the clause aforesaid in Ex. B, to relieve the Respondents of liability once the Respondents see that the documents purport to be in order, and or where the error or delay in transmission of the Swiss Bank’s “messages or misinterpretation thereof arise from any cause beyond the Respondents’ or their agents’ (the Swiss Bank’s) control.

And finally, I will now refer to the Appellant’s failure to reject the documents and his signature on Ex. J. “accepting” the documents. Nnaemeka-Agu, J.C.A. arrived at a decision that-

“even if Ex. J was received by putting pressure on the Appellant, that would make it voidable and not void. So it would be treated as valid until it is set aside.”

The Appellant had explained how he came to sign Ex. J. Even if the explanation is accepted, I do not think a decision on this point is necessary, any more, having regard to all my findings I have earlier made in this case for the determination of this appeal. The Respondent does not need this point to succeed.

The Appellant having failed in all the grounds of appeal already discussed, and the Respondent having failed in his appeal on jurisdiction, both appeals fail, and they must be, and they are hereby dismissed. There will be no order as to Costs.

BELLO, J.S.C.: I had the opportunity to read in draft the very comprehensive judgment just delivered by my learned brother, Eso, J.S.C. I agree with his reasoning and conclusions. I would only add some comments on the decision of this Court in Omonuwa v. Oshodin (1985) 2 N.W.L.R. 924 on the issue of “final” and “interlocutory” decisions.

Now, the judgment of the Court of Appeal from which the appeal has been brought was delivered on 21st November, 1984. The notice of appeal was filed on 14th January 1985. Section 31(2) of the Supreme Court Act 1960 requires the notice of appeal in a civil case in an appeal against an interlocutory decision to be filed within fourteen days and in the case of an appeal against final decision within three months. The time to appeal is reckoned from the date of the judgment appealed against. The question for determination in the application of Chief Williams, SAN, as to whether the decision of the Court of Appeal that the High Court of Lagos State has no jurisdiction to try the suit was an “interlocutory” or a “final” decision. If the decision was an “interlocutory decision,” then there is no proper appeal before this Court since the notice of appeal was filed out of time. So Chief Williams applied for extension of time within which to appeal and to deem the notice already filed as having been filed within time. However, if the decision is “final”, then there is a proper appeal before the Court because the notice of appeal was filed within three months.

The “finality” test was first established in Salaman v. Warner (1891) 1 Q.B. 734 at 736 where Fry L.J. formulated the test in these terms:

“I think that the true definition is this. I conceive that an order is ‘final’ only where it is made upon an application or other proceeding which must, whether such application or other proceeding fail or succeed, determine the action. Conversely I think that an order is ‘interlocutory’ where it cannot be affirmed that in either event the action will be determined.”

Subsequently, in Bozson v. Altricham U.D.C. (1903) 1 K.B. 547 at 548 Lord Alverstone C.J. advanced another test as follows:-

“It seems to me the real test for determining this question ought to be: Does the judgment or order, as made, finally dispose of the rights of the parties If it does, then I think it ought to be treated as a final order; but if it does not, it is then, in my opinion, an interlocutory order.”

A careful perusal of the decisions of the Court of Appeal of England relating to the applications of the two tests would show that the Court has not shown consistent preference of one test to the other. It has been applying one or the other test indiscriminately. However, in Nigeria in appeals against the decisions of courts of first instance, the appeal courts have been consistent and have adopted unequivocally the test in the Bozson case: Blay v. Solomon (1947) 12 W.A.C.A. 175; Afuwape v. Shodipe (1957) 2 F.S.C. 62; Alaye of Effon v. Fasan (1958) 3 F.S.C. 68; Ude v. Agu (1961) All N.L.R. 65; The Automatic Telephone v. Federal Military Government (1968) 1 All N.L.R. 429.

However, in Omonuwa case this Court appears to state that the tests in Salaman case and Bozson case should be applied jointly in determining whether an order or judgment is interlocutory or final. In his lead judgment, my learned brother, Karibi-Whyte J.S.C., criticised the thus:- Bozson case test

“All the cases cited agree on the proposition that a decision between the parties can only be regarded as final when the determination of the Court disposes of the rights of the parties, (and not merely an issue) in the case. Where only an issue is the subject matter of an order or appeals the determination of that Court which is a final decision on the issue or issues before it which does not finally determine the rights of the parties, is in my respectful opinion interlocutory. The issues before the Court of Appeal in this appeal arose from an interlocutory matter and not lose that character it is an appeal. The (inconvenience) and anomaly in the result of the nature of the order test (i.e. the Bozson case test) is that an otherwise interlocutory application ends up as a final decision of the Court of Appeal. If this is accepted the anomalous effect of an appeal on such a ‘decision’ is to enlarge the right of appeal of the appellant from the High Court to the Court of Appeal and to this Court. This is despite the fact that the rights of the parties have still not been finally determined as was in the Automatic & Electric Co. Ltd. v. F.M.G. (1968) 1 All N.L.R. 429 and Adegbenro v. Akintola & Aderemi (1962) 1 All N.L.R. 442 at p.474. In the Automatic Telephone & Electric Co. Ltd. case was a reference to the High Court from an arbitration. Though the High Court disposed of the issue on reference before it, it did not finally determine the rights of the parties in the arbitration; similarly, the questions on the interpretation of the Constitution to be answered in the Federal Supreme Court in the Adegbenro case. The view that a judgment of the Court on an interlocutory matter on appeal before it is final as was held is clearly inconsistent with the principles enunciated in all the decided cases cited in the judgment and with common sense and experience. As I have said, the test applied in these cases relates to the function of the Court in disposing a matter before it, it was not concerned with the determination of the rights of the parties.” (Italics mine).

My learned brother seems to distinguish D.P.P. v. Chike Obi (1961) All N.L.R. 458 and Adegbenro v. Akintola (1963) A.C. 614 at p. 627 thus:

“In these two cases the Court has applied neither the test of the nature of the order nor of the application in determining the application from which the order was made. With due respect this approach has never been the test applicable and clearly not the laws. The Court relied on its function of determining a reference of it, and was not concerned with the determination of the rights of the parties.”

He then proceeded to advocate the joint application of the two tests in these words at page 939:

“In my opinion, the ideal approach is to consider both the nature of the application, (i.e. the Salaman case test) and the nature of the order made (i.e. the Bozson case test) in determining whether an order or judgment is interlocutory or fina1 in respect of the issues before it as between the parties to the litigation. Thus where the nature of the application does not aim at finally determining the claim or claims in dispute between the parties, but only deals with an issue, both the application and the order or judgment must be interlocutory.

See Isaacs & Sons v. Salbstein & Anor. (supra) at p. 146 Alaye of Effon v. Fasan (1958) 3 FSC. 68. However, where an application has the effect by the order therefore of finally determining the claim, before the court, the order may properly be regarded as final. See Afuwape & Ors. v. Shodipe (1957) 2 FSC. 62 at p.68. This proposition is clearly consistent with the principles as enunciated in the judicial decisions and is logical. It also accords with common sense and the practice of the Courts. The order appealed against in the case before us does not purport and has not finally settled the rights of the parties in the claim before the Court, and is therefore an interlocutory order. The determining factor whether an order or judgment is interlocutory or final is not whether court has finally determined an issue before it. It is whether or not it has finally determined the rights of the parties in the claim before the Court.”

(Italics mine)

In Chief Agbajo v. Attorney-General of the Federation & 2 Ors. (1986) 2 N.W.L.R. 528 the Court of Appeal attempted to apply the two tests but the majority found what Eboh, J.C.A. Christened as “Test No.1” inapplicable to the circumstances of the case.

Chief Williams, SAN, contended that the only issue for determination by this Court in Omonuwa case was whether the judgment of the Court of Appeal was a final or an interlocutory decision: see Omonuwa case at p.931 of the report. He submitted that, having regard to the only issue before this Court, any pronouncement by this Court in that case on the question of whether the decision of the High Court was final or interlocutory was purely obiter and not binding. He contended that it would be retrogressive to resurrect some other test, such as the Salaman case test, which had been considered in the past and deliberately rejected. He urged us to interpret section 31 of the Supreme Court Act that the phrase “an interlocutory decision” or “final decision” where it occurs in the section means “an interlocutory decision of the Court of Appeal or “a final decision of the Court of Appeal.” He referred to Olubadan-in-Council (1949) 12 W.A.C.A. 464, D.P. P. v. Chike Obi (1961) All N.L.R. 548 and Adegbenro v. Akintola (1963) A.C. 614 showing that a decision may be “final” in an appeal court but not necessarily so in the court of first instance.

I am inclined to agree with the submission of Chief Williams that the pronouncements of this Court in Omonuwa case concerning the test applicable in deciding whether or not a decision at first instance was “final” or “interlocutory” are obiter dicta and not binding. I am also of the view that the pronouncements in so far as they tend to show a departure from the previous decisions of this Court or the former Federal Supreme Court or the defunct West African Court of Appeal are also obiter dicta because none of those previous decisions was canvassed for reconsideration before us in the Omonuwa case.

On proper reflection, one may observe that the application of the joint test in effect may be tantamount to the resurrection of the Salaman case test which has been rejected since Blay v. Solomon. It may be appreciated that the application of the Salaman case test involves two considerations. The first consideration is the nature of the application while the second consideration is the nature of the order made, which in effect is the application of the Bozson case test. It follows therefore that the test in Salaman case includes the test in Bozson case. Consequently, joint application of the two tests does not add anything new to Salaman case test since the latter test includes Bozson case test. If that had been the case, then joint application of two tests would have been tantamount to reverting to Salaman case test which was rejected 40 years ago when the Bozson case test was adopted.

It seems to me also on the authority of D.P.P. v. Chike Obi (1961) All N.L.R. 458 and Adegbenro v. Akintola (1963) A.C. 614 at p. 627 that in an appeal before a second tier appeal Court against the decision of a first .tier appeal court on the question as to whether the decision of the first tier appeal Court is “final” or “interlocutory” the second tier appeal Court is only concerned with the decision of the first tier appeal Court and not of the Court of first instance, i.e. the trial Court. Section 213(1) of the Constitution and Section 31(1) and (2)(a) of the Supreme Court Act are germane to the issue.

Section 213(1) reads:

213. (1) The Supreme Court shall have jurisdiction to the exclusion of any other court of law in Nigeria to hear and determine

appeals from the Court of Appeal.”

And, section 31(1) to (2)(a) of the Act provides:

31. (1) Where a person desires to appeal to the Supreme Court he shall give notice of appeal or notice of his application for leave to appeal in such manner as may be directed by rules of court within the period prescribed by subsection (2) of this section that is applicable to the case.

(2) The periods prescribed for the giving of notice of appeal or notices of application for leave to appeal are –

(a) in an appeal in a civil case, fourteen days in an appeal against interlocutory decision and three months in an appeal against a final decision.” (Italics mine)

Since no appeal lies from the decision of any other court than the Court of Appeal to this Court, “an interlocutory decision” and “a final decision” within the scope of section 31 of the Act invariably mean “an interlocutory decision of the Court of Appeal” and “a final decision of the Court of Appeal” and of no other court. I think the issue of “finality” in this respect must be decided from the question as to whether the Court of Appeal has finally disposed of the matter on appeal before it: see Adegbenro v. Akintola (supra) at p.627.

For the avoidance of any doubt, I would like to emphasize that, in my view, the test formulated in Bozson case which has been adopted since Blay v. Solomon (supra) and Ude v. Agu (supra) is still the test to be applied in determining whether a court’s decision is “final” or “interlocutory”. I would apply that test for the resolution of the issue in the case in hand.

Now, in the case in hand the Court of Appeal by majority held the trial court had no jurisdiction to entertain the suit. Notwithstanding the determination by the Court of Appeal of the appeal on the merits which is only a matter of tactical practice for speedy administration of justice in case its decision of jurisdiction turns out to be wrong, the decision on the jurisdiction as far as the Court of Appeal was concerned is final. That Court had finally disposed of the appeal before it and there was nothing left.

For the foregoing reasons, I hold the decision of the Court of Appeal on the issue of jurisdiction to be “final”. Consequently, the appeal is properly before the court and no leave is required.

UWAIS, J.S.C.: I have had the opportunity of reading in draft the judgment read by my learned brother Eso, J.S.C. and I entirely agree with it.

This appeal has three aspects. The first aspect relates to the application by the appellant for extension of time and leave to appeal on the issue of jurisdiction raised for the first time and dealt with by the Court of Appeal. The second aspect concerns the appeal against the majority decision of the Court of Appeal which found that the subject mailer in dispute pertains to admiralty and that the Lagos State High Court had for that reason no jurisdiction to determine the dispute. The final aspect concerns the decision of the Court of Appeal in the substantive appeal which is based on the transaction between the parties for the opening of a letter of credit.

A. The Application.

The appellant was the plaintiff in the Lagos State High Court. Judgment was given against him and he appealed to the Court of Appeal against the decision. The appeal was heard and arguments were concluded on 27th September, 1984. Judgment was reserved by the Court of Appeal. The case came up again before the Court on 14th November, 1984. When counsel were informed by the Court of Appeal.

“we have decided to recall counsel in this appeal to address us on one issue only i.e. whether the Lagos State High Court and not the Federal High Court has jurisdiction to adjudicate in this mailer.”

Both counsel for the parties were heard and they both submitted that the dispute in the case was based on the relationship between banker and customer and did not relate to shipment of goods. Therefore, both counsel argued that it was the Lagos State High Court that had jurisdiction.

In their judgments, which were delivered on 21st November, 1984, Nnaemeka-Agu, J.C.A., who read the lead judgment, held that the dispute between the parties did not concern admiralty and therefore the Lagos State High Court had jurisdiction. The learned justice then went on to consider the merit of the appeal. He finally dismissed it. Both Mohammed and Kutigi J.J.C.A. agreed with the judgment on the merit but disagreed on the question of jurisdiction. They both held that the subject – mailer of the dispute concerned admiralty and as such only the Federal High Court had jurisdiction.

Naturally both parties to the case became aggrieved. The plaintiff filed a notice of appeal on 12th February, 1985 complaining against the decision of the Court of Appeal on both the issue of jurisdiction and the merit of the appeal; while the defendant, who got judgment in both lower courts, filed its notice of appeal in 14th January, 1985 complaining against the decision that the Lagos State High Court had no jurisdiction. It is pertinent to mention that the appeals were filed as of right as provided under section 213 subsection (2)(a) of the Constitution of the Federal Republic of Nigeria, 1979. On the 1st February, 1985, this Court delivered judgment in Omonuwa v. Oshodin, which has since been reported in (1985) 2 NWLR 924. By reason of the decision in Omonuwa’s case, Chief Williams, learned Senior Advocate, for the defendant, felt that it became necessary to apply for the enlargement of time in order to satisfy the provisions of section 31 subsection (2) of the Supreme Court Act, 1960 which provides-

“The period prescribed for the giving of notice of appeal or notice of application for leave to appeal are-

(a) in an appeal in a civil case, fourteen days in an appeal against an interlocutory decision, and three months in an appeal against a final decision.

From the foregoing, it is clear that an appeal against the final decision of the Court of Appeal must be brought within 3 months, while an appeal against its interlocutory decision ought to be filed within 14days. !f the decision of the Court of Appeal in this case, on the issue of jurisdiction, is final, as learned Senior Advocate thought it was, the appeal he filed on 14th January, 1985 would have been filed within time. But if it is an interlocutory appeal, then, he had filed it out of time. This state of uncertainty arose, because of our decision in Omonuwa’s case which Chief Williams, interpreted as saying that the decision of the Court of Appeal in the present case, on the issue of jurisdiction, would be or is an interlocutory decision.

In moving the application, Chief Williams, attacked the lead judgment in Omonuwa’s case by arguing that its ratio decidendi on the test to deter- , mine whether the appeal in the ease was “interlocutory” or “final” is obiter dicta and therefore not binding on us. The argument was advanced on the premise that the sale question to be determined in the case was “whether the decision of the Court of Appeal dismissing the defendant’s appeal to that court was final or interlocutory”. It was, he submitted, therefore unnecessary to determine the question whether the decision of the High Court in the case on appeal was interlocutory or final.

Arguing further, Chief Williams drew attention to the decisions of the West Africa Court of Appeal in Blay v. Solomon, 12 WACA 177 and the Federal Supreme Court in Ude & Ors. v. Agu & Ors., (1961) 1 All NLR. 65 which considered the distinction between final and interlocutory decisions in courts of first instance. Those decisions he submitted were based on the test laid down by Lord Alverstone C.J. in Bozson v. Alrrincham, (1903) 1 KB 547 and nor the test laid down in Salaman v. Warner (1891) 1 Q.B. 734 which was considered and rejected in Ude & Ors. v. Agu & Ors. (supra).

Learned counsel said our decision in Omonuwa’s case, as reported on p.938 lines G – Hand p.939 A-B of(1985) 2NWLR, is to the effect that both the principles in Bozson’s case and Salaman’s case would apply in determining whether an appeal is final or interlocutory. This, he submitted would be retrogressive since only the decision in Bozson’s case had been followed by the Nigerian courts with effect from 1947.

I pause here to examine the principles laid down in the cases of Bozson and Salaman. In the latter Fry L.J said at p.736 as follows

“I think that the true definition is this, I conceive that an order is ‘final’ only where it is made upon an application or other proceeding which must, whether such application or other proceeding fail or succeed, determine the action. Conversely, I think that an order is ‘interlocutory’ where it cannot be affirmed that in either event, the action will be determined.”

In Bozson’s case Lord Alverstone C.J. observed at p.549 – 50 thus –

“It seems to me that the real test for determining this question ought to be this: Does the judgment or order as made, finally dispose of the rights of the parties If it does, then I think it ought to be treated as a final order; but if it does not, it is then, in my opinion, interlocutory order.”

Now it is true that Verity C.J. in the West African Court of Appeal case of Blay v. Solomon (supra) preferred the test laid down by Bozson’s case after referring to the test in Salaman’s case. Again Brett F.J. (as he then was) said in Ude & Ors! case (supra) as follows-

“In Blay v. Solomon (1947) 12 WACA 175 the West African Court of Appeal followed the test which looks at the order made and in my view it is clearly the proper test for this Court to adopt. … : (Italics mine)

The question is: has our decision in Omonuwa’s case departed from the decisions in the cases of Blay and Ude & Ors., as argued by Chief Williams Let us examine what the lead judgment (per my learned brother Karibi-Whyte, J.S.C.) says at pp.938 – 9 thereof which learned Senior Advocate referred to –

“Applying the principles enunciated in both tests, i. e. the nature of the application, and the nature of the orders, to this appeal, it is inescapable that the judgment of the Court of Appeal, appealed against is an appeal on an interlocutory ruling before the High Court. It is also incontestable that the judgment of the Court of Appeal which remitted the casefor trial in the High Court did not finally determine the issues litigated by the parties in the High Court. See Isaac’s & Sons v. Salbestein & Anor., (1916) 2 KB 139 at p.146 To determine finally an issue before the Court which does not finally determine the rights of the parties, does not rank as determining the rights of the parties in the case and in my opinion is not a final appeal inter partes. In my opinion, the ideal approach is to consider both the nature of the application and the nature of the order made in determining whether an order or judgment is interlocutory or final in respect of the issues before it as between the parties to the litigation. Thus where the nature of the application does not aim at finally determining the claim or claims in dispute between the parties, but only deals with an issue both the application and the order or judgment must be interlocutory. See Isaacs & Sons v. Salbestein & Anor. (supra) at p.146; Alaye of Efton v. Fasan (1958) 3 F.S.C. 68.”

It seems to me that although at the outset the quotation above talks of “applying the principles enunciated in both tests” it does not lay down that both tests must apply in determining whether a decision is final or interlocutory. The suggested examination of the application is merely further aid to determining the nature of the order or judgment. The fact that our courts follow the test in Bozson’s case was adverted to in the lead judgment in Omonuwa’s case; see p.934 D thereof, where Karibi-Whyte, J.S.C. observed as follows –

“It seems clear to me from the cases in this jurisdiction, that the tests (sic) in the second class of case (sic) has been adopted and applied.

The test laid down by Low Alverstone in Bozson v. Altrincham U.D.C. supra) has been consistently applied.”

And again on p.937H – .

“Bozson v. Altrincham U.D.C. supra has been approved and applied in our courts. I think this is good reasoning.” Italics mine. I therefore hold that the test in Bozson’s case which had been followed in Blay v. Solomon and Ude & Ors. v. Agu & Ors. is still the test applicable in determining whether a judgment or order is final or interlocutory. The decision in Omonuwa’s case has not departed from the test.

Applying the test to the present case, the nature of the judgment given by the majority (Mohammed and Kutigi J.J.C.A.) is that the Lagos State High Court had no jurisdiction; and therefore it follows that the appeal before the Court of Appeal was incompetent. That is clearly a final decision in the Court of Appeal. Once the decision is incompetent, there is nothing left in the case to be finally determined in the Court. Consequently, by the nature of the judgment of the majority, the decision that the trial court had no jurisdiction cannot be an interlocutory decision. Appeal therefore lies from that decision to this Court within 3 months. The respondent’s appeal was filed before the expiration of the 3 months. It is for that reason unnecessary for this application to have been brought. Consequently, I agree that the application should be refused and it is hereby dismissed.

B. Jurisdiction

As narrated under A above, Mohammed and Kutigi J.J.C.A. held that the Lagos State High Court had no jurisdiction to try the dispute between the parties, because the contract between them involved the shipment of goods. But Nnaemeka-Agu J.C.A. held a contrary view. As I observed in the case of Nasaralai Enterprises Limited v. Arab Bank Nigeria Limited (unreported) judgment delivered or to be delivered later today, there are four parties to a transaction concerned with the issue of a letter of credit. This gives rise to four contracts in the transaction. First between the buyer and the seller. Secondly, between the buyer and the issuing bank. Thirdly, between the issuing bank and the confirming or correspondent bank. And fourthly, between the confirming or correspondent bank and the seller – see United City (Investments) Limited v. Royal Bank of Canada (1983) A.C. 168 at pp.182-3. The dispute in the present case relates to the first contract which has nothing directly to do with the shipping of goods. The contract is only concerned with documents and not goods, as provided by Article 8 of the uniform Customs and Practice for Documentary Credits, which applies to the transaction between the parties. The majority, with respect, misunderstood the relationship between the parties, because they failed to direct their attention to the Article in question. The only occasion when, perhaps, admiralty jurisdiction may be involved in a letter of credit transaction is when there is a dispute in respect of the first contract between the seller and the buyer relating to the carriage, of the goods sold, by ship.

I therefore hold that the Court of Appeal (per majority) was in error when it held that admiralty jurisdiction was involved and the decision of this Court in American international Co. v. Ceekay Traders Ltd. (1981) 1 All NLR. (part 1) p.58; (1981) 5 S.C. 81 applied.

Chief Williams, argued that the decision in American insurance Co. v. Ceekay Traders Ltd. (supra) “ought to be followed by this Court in so far as it decides that the law relating to admiralty jurisdiction in Nigeria includes the provisions of section 1(1)(h) of the Administration of Justice Act of 1956 in England”. However, counsel submitted that we should overrule the case in so far as it is inconsistent with the decisions of the House of Lords in connection with the interpretation of section 1 (1) (h) of the Administration of Justice Act, 1956. The subsection provides-

1 (1) The Admiralty jurisdiction of the High Court shall be as follows; that is to say, jurisdiction to hear and determine any of the following questions or claims-

(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of ship.”

It is said that the words italicised in the subsection should be given narrow as opposed to wide meaning. This is so, because it was decided in the Scottish case of The Aifanourios, (1980) S.C. 346 that the contract of marine insurance over a ship and its cargo was a claim within admiralty jurisdiction. The decision in the Scottish case was quoted with approval and applied to section 1(1)(h) by the House of Lord in Gatoil Inc. v. Arkwright – Boston Co., (1985) A.C. 25, which similarly involved a contract of marine insurance. The decision in the latter case was referred to by the House of Lords in The Antonis P. Lemons (1985) 1 A.C. 711 at pp.728F – 729C, where it was decided that the words “relating to” in section 1(1)(h) must be given a narrower rather than a wider construction.

It is significant to mention that the provisions of section 1(1)(h) are now contained in section 20(2)(h) of the Supreme Court Act, 1981 in England.

I have already shown that the decision of the Court of Appeal, that the admiralty jurisdiction applied because the dispute between the parties relates to carriage of goods by ship, was misconceived. Since that decision was wrongly based on the ratio decidendi in the case of American International Insurance Co. Ltd. (supra), should this Court now undertake a review of the decision in the case in order to overrule it, in view of the latest judgments of the House of Lords in the cases cited by counsel The principle on which this Court will depart from or overrule its decision has been well stated in a number of cases. The underlying consideration being that the decision has been impeding the proper development of the law or has led to results which were unjust or which are contrary to public policy. See Mrs Bucknor – Maclean& Anor. v. Inlaks Ltd. (1980) 8-11 S.C.1 at pp.23-25; Nofiu Surakatu v. Nigeria Housing Development Society Ltd.; (1981) 4 S.C. 26; Alhaji Raji Oduola & Ors. v. Coker & Ors. (1981) 5 S.C. 197 and Bronik Motors Ltd. v Wema Bank Ltd., (1983) 6 S.C. 158 at p.298; (1983) 1 SCNLR 296 at p.317.

None of the criteria aforementioned has been met in counsel’s submission. Apart from the fact that the House of Lords decisions are merely of persuasive authority, the desire to have the same common law with England though ideal cannot be achieved. The pace at which English law develops is by far faster than that at which ours develops. One only needs to look at the statutes of general application in England as at 1st January, 1900, which are still our laws, to see how far the English law has left ours behind. Any hope of achieving uniformity with England is now illusion. As put by Rupert Cross at p.22 of the 3rd Edition of his book – Precedent in English Law;

“The desirability of having the same common law throughout the Commonwealth is not as self-evident as it is sometimes made to appear. Much depends on the branch of the law concerned. In commercial matters, for example, where members of the different Commonwealth countries are liable to be affected by the same rule, there is much to be said for uniformity; but the demand for uniformity in other spheres may militate against useful developments. For historical reasons, Australian and Canadian Judges may, faute de mieux, have to start their thinking with English law, but there is no obvious merit in their binding themselves to adopt the English solution. The first answer to a legal problem is not necessarily the right one, and each of two answers may be equally meritorious.”

Consequently, I see no reason to depart from our decision in the American International Insurance Co. Ltd. v. Ceekay Traders Ltd. I hold that the jurisdiction to determine the dispute between the parties was vested in Lagos State High Court and not the Federal High Court.

The Substantive Appeal on Merit

The issues for determination here have been set-out in the brief filed by Professor Kasunmu, for the plaintiff. The issues have been well considered by the lead judgment and I have no desire to add anything.

In the result therefore both the appeals by the plaintiff and the defendant have respectively failed. I agree that the appeals should be dismissed and they are hereby dismissed with no order as to costs.

---

SC.95/1985