International Finance Corporation V. Dsnl Offshore Limited & Ors. (2007)
LawGlobal-Hub Lead Judgment Report
RHODES-VIVOUR, J.C.A.
By way of motion ex-parte brought under Order 1 rule 19 of the Court of Appeal Rules, 2002 and under the inherent jurisdiction of the court, the appellant/applicant seeks the following:
- An Order by Mareva injunction restraining.
- Mobil Producing Nigeria Unlimited of Mobil House, Lekki Expressway, Victoria Island, Lagos; and
- Chevron Nigeria Limited of Chevron Drive, Lekki Expressway, Lagos restraining each and everyone of them, their servants, agents and privies from transferring or dealing with or paying over or disposing of howsoever, any money standing to the credit or which may … For the benefit or to any of the defendants or all the defendants or removing such money from jurisdiction pending the determination of the appeal in this court.
- For such further or other order or orders as this Honourable Court may deem fit to make in the circumstance.
In support of the application is a 5 paragraph affidavit deposed to by Waheed Kasali, Esq., a Legal Practitioner in the Law Firm of Messrs A. Adesanya & Co, counsel to the appellant/applicant. Annexed to the affidavit are the following documents.
(a) Exhibit WK1 -Loan and Guarantee Agreement (L.G.A.)
(b) Exhibit WK2 – Certified true copy of judgment (Queens Bench Division High Court London, England)
(c) Exhibit WK3 – Freezing Injunction (Queen’s Bench Division, High Court London, England)
(d) Exhibit WK4 – Certified true copy of ruling in suit No. FHC/PH/CP/5/2005.
(e) Exhibit WK5 – Certified true copy of notice of appeal
(f) Exhibit WK6 – Ruling on contempt proceedings (Queen’s Bench Division High Court London, England)
The Facts
The appellant/applicant is an International Financial Organization situate in the United States of America. The 1st and 2nd respondents are Nigerian Companies situate in Port Harcourt, Rivers State of Nigeria. The 3rd respondent is the Chief Executive Officer and alter ego of the 1st and 2nd respondents; he resides in Rivers State of Nigeria. He was one of the guarantors of the 1st respondent.
The appellant/applicant and the respondents executed a loan guarantee agreement. The appellant/applicant was to provide money to the respondents to enable them finance Engineering procurement and installation contracts. The sums provided were on a revolving basis. The parties agreed that the courts in England would have jurisdiction to determine any legal actions, suits that may arise between them. They also agreed that final judgment against the borrower or guarantor in any court in England shall be conclusive and may be enforced in any jurisdiction and this includes Nigeria.
The appellant/applicant financed the borrowings of the respondent in connection with the “OGGS contract” between it, Stolt Services SA and Shell Petroleum Development Company Ltd (“SPDC”). The respondent breached several terms and conditions of the loan guarantee agreement and defaulted in paying interest due in January 2005 on the due date.
Frustrated, the appellant/applicant filed a suit in London, England with a view to recovering the outstanding sums due.
The case was heard in the Queen’s Bench Division of the High Court London, England.
On 21st March, 2005, judgment was entered in favour of the appellant/applicant in the sum of $19,357,548.94 (Nineteen Million, Three Hundred and Fifty Seven Thousand, Five Hundred and Forty Eight Dollars, Ninety Four Cents). See exhibit WK2.
On the 9th of February, 2005, another High Court in the Queens Bench Division made a worldwide freezing order against the respondents. See exhibit WK3.
On 10th May, 2005, the appellant/applicant applied for the registration of the said foreign judgment (exhibit WK2), and on 31st May, 2005, the Federal High Court granted leave to the appellant/applicant to register the said foreign judgment.
By a motion on notice dated 16th June, 2005, the respondents applied to set aside the order which granted leave to register the judgment. They were successful. In a ruling delivered on 2nd December, 2005 in suit No. FHC/PH/CP/5/2005 Justice A. O. Faji of the Federal High Court Port Harcourt set aside the leave to register the foreign judgment granted on 31st May, 2005 (see exhibit WK4).
Dissatisfied and alarmed by His Lordship’s order, the appellant/applicant filed a notice of appeal on 19th December, 2005.
By this application ex-parte, the appellant/applicant seeks a mareva injunction pending the determination of the appeal which is already before us. Infact, the appellant/applicant has filed his brief of argument and is ready for the appeal. The respondents have not filed their brief of argument. I must at this stage explain mareva injunctions.
In Durojaiye v. Continental Feeders (Nig.) Ltd. (2001) 10 NWLR (Pt. 722) page 657 @ 659, Aderemi, JCA (as he then was) stated that:
“A mareva injunction would be granted where it is likely that the plaintiff would obtain judgment against the defendant for a certain sum and there is a reason on the part of the plaintiff to believe that the defendant has assets within the jurisdiction to meet the judgment wholly or in part and that the defendant may likely dispose of or dissipate the assets such that when judgment is delivered against him, there will be no assets to satisfy the judgment debt.”
And in Efe Finance Holdings Ltd. v. Osagie, Okeke, Otegbola and Co. (2000) 5 NWLR (Pt. 658) p. 536, Galadima, JCA stated the principles guiding the grant of mareva injunction as follows:
“(a) There must be a justifiable cause of action against the defendant.
(b) There must be a real and imminent risk of the defendant removing his assets from jurisdiction and thereby rendering nugatory any judgment which the plaintiff may obtain.
(c) The applicant must make a full disclosure of all materials facts relevant to the application.
(d) The applicant must give full particulars of the assets within the jurisdiction.
(e) The balance of convenience must be on the side of the applicant; and
(f) The applicant must be prepared to give an undertaking as to damages.”
See further Sotuminu v. Ocean Steamship Nig. Ltd. (1992) 5 NWLR (Pt. 239) p. 1; A.I.C. Ltd v. Nigerian National Petroleum Corporation (2005) 11 NWLR (Pt. 937) p. 563.
In Third Chandris Shipping Corporation v. Unimarine SA (1979) QB p. 645 at 671 Lawton, LJ said that:
“Once a writ is issued, a debtor who intends to default will do what he can to avoid having to meet his obligations. The British defaulter will try to dissipate his assets; he may succeed to some extent but retribution in the form of either bankruptcy or liquidation will probably come one day. Until recently, the prospects for the defaulting foreigner were much better. A telephone call or telex message could within seconds of the service of a writ, or knowledge that a writ had been issued, put all liquid assets out of the reach of the creditor … ”
Lord Denning described how mareva injunction works in Z Ltd. v. A-Z and AA – LL (1982) 1 QB p. 558 at p. 573 thus:
“It enables the seizure of assets so as to preserve them for the benefit of the creditor; but not to give a charge in favour of any particular creditor.”
See also Lister & Co v. Stubbs (1890) 45 CH.D p. 1.
On the 22nd of January, 2007, Prof. A. Adesanya, SAN learned counsel for the appellant/applicant moved the application ex-parte. He observed that his client was established to finance projects in developing countries; it gave loan to the 1st respondent wherein the 2nd and 3rd respondents were guarantors. He further observed that the application is necessary to preserve assets so that his client can have something to move against when he eventually gets judgment. He submitted that he is seeking a preservative order, and placed reliance on –
Efe Finance Holdings Ltd. v. Osagie, Okeke and Otegbola (2000) 5 NWLR (Pt. 658) p. 536; Durojaiye v. Continental Feeders (Nig.) Ltd. (2001) 10 NWLR (Pt. 722) p.657; A.I.C. Ltd. v. NNPC (2005) 11 NWLR (Pt. 937) p. 561.
Concluding, learned counsel said that he was ready to give an undertaking in damages.
This application is brought under Order 1 rule 19 of the Court of Appeal Rules, 2002. This order explains the general powers of the Court of Appeal which includes (among other powers) the power to do what the High Court can or ought to do in civil/matters.
The High Court has power to grant the order of mareva injunction being sought in this application.
In all mareva applications, the factors to be borne in mind are:
(a) It should be applied for ex-parte. This is so because secrecy from the defendant is essential; and
(b) Speed. It should be applied for with dispatch.
The purpose being to prevent the injustice of a defendant taking away his assets from the jurisdiction, assets which might otherwise have been available to satisfy a judgment. After the grant of a mareva injunction, a dissatisfied respondent can have it set aside by an application on notice supported by a detailed affidavit to justify the setting aside of the order.
The Mareva procedure was first sanctioned by the Courts in England only in 1975. See Mareva Companies Naviera S.A. v. International Builcarriers S.A. (1975) 1 Lloyds as Rep. p. 509. and the principles enunciated by the court of Appeal in England was given approval by the Supreme Court in the case of Sotuminu v. Ocean Steamship (Nig.) Ltd. (supra).
Now, has the appellant/applicant been able to how the respondents have assets within the jurisdiction of this court. In paragraphs 3(R) of the affidavit in support, the deponent deposed thus:
3(r) of the companies from which the respondents, in particular have contracts include the Mobil Producing Nigeria Unlimited of Mobil House, Lekki Express Way, Victoria Island, Lagos and Chevron Nigeria Limited of Chevron Drive, Lekki Expressway and these two companies are in the process of making further periodic payments to the respondent and if the Mareva order is made, the applicant would not only be paid, the reputation of Nigeria in the financial world would have been retrieved by this court.
The above is crucial to this application.
My Lords, the judgment of High Court, Queen’s Bench Division, London, England as with all judgments of trial courts are inviolate until set aside. There is no appeal from that judgment.
A worldwide freezing order against the respondent assets was given by High Court, London England. It is still in force. The 3rd respondent was convicted and sentenced to 1 year imprisonment by the High Court in London (exhibit WK6) for failure to comply with a disclosure order following the freezing order. This in my respectful view is a classic case for the grant of a mareva injunction. All that the appellant/applicant is asking for by this application is that this court orders a STOP order on payments due to the respondents by Mobil Producing Nigeria Unlimited and Chevron Nigeria Limited until the pending appeal is determined.
The balance of convenience is so clearly on the side of the appellant/applicant.
In the end, I adjudge this application ex-parte as highly meritorious. It succeeds.
I hereby grant the order of mareva injunction in favour of the appellant/applicant, International Finance Cooperation.
The appellant/applicant is hereby ordered to file in the court within one week from today an undertaking in damages to indemnify the respondents in the event it turns out that this order should not have been granted.
Other Citations: (2007)LCN/2190(CA)
