African Reinsurance Corporation V D.p. Construction Nig. Ltd (2007)

LAWGLOBAL HUB Lead Judgment Report

JUDGMENT S.A. AKINTAN, JSC

The present respondent, as plaintiff, instituted this action at Lagos High Court as Suit No. LD/2342/2000 against the present appellant as the defendant. The plaintiff s claim is as follows: “(1) The sum of US $2, 755,618.85 being the sum due and payable to the plaintiff on a building contract between the parties. (2) Interest on the said sum of US $2,755,618.85 at the rate of 12% per annum from the 22nd June, 2000 until judgment and thereafter at the same rate until total liquidation. (3) The cost of this action.” The writ of summons was filed along with the statement of claim. When the appellant was served, it entered appearance under protest and then filed a notice of preliminary objection in which it claimed that the trial High Court lacked jurisdiction to entertain the claim. The reason for the objection is given as follows: “The appellant by virtue of the Diplomatic Immunities Privileges (African Reinsurance Corporation) Order 1985 has diplomatic immunity.” The matter then went for hearing before Shitta-Bey, J. After hearing the parties on the objection, he delivered the court’s ruling on 26/10/2000 in which the objection was overruled. The appellant was dissatisfied with the ruling and an appeal filed against the ruling at the court below was dismissed. In the lead judgment of the court below written by Oguntade, JCA (as he then was) to which Galadima and Chukwuma-Eneh, JJ.CA agreed, the learned Justice said thus in the concluding portion of the judgment: “The answer I return to appellant’s questions for determination is that I agree with the decision of the Supreme Court in the Fantaye case that a waiver by a corporate body, like the appellant, of itsdiplomatic immunity must be supported by a resolution of its board of directors; and the waiver can only be effectively raised before the court at the time when the body is brought before the court. I however, do not think that such claim to diplomatic immunity was available to the appellant in the circumstances of this case. In the final conclusion, this appeal fails and is dismissed with N7,500 costs in favour of the respondent.” The appellant was again not satisfied with the judgment and has therefore appealed against it to this court. The respondent was also not satisfied with some portions of the judgment. A cross-appeal was also filed. The parties filed their respective briefs of argument in this court. The appellant formulated the following two issues as arising for determination in the appeal: “1. Having: (i) ruled after formal objection and argument that the two issues formulated by the plaintiff/respondent did not arise for determination in the appeal (ii) ruled further that it was only the three issues formulated by the defendant/appellant which arose for determination and (iii) resolved the said three issues in favour of the defendant/appellant was the Court of Appeal entitled to turn round thereafter to consider the plaintiff/respondent’s rejected two issues and resolve them in the plaintiff/respondent’s favour and then dismiss the appellant’s appeal? 2. Having resolved all of the three issues arising before it for determination, in favour of the appellant, was the Court of Appeal entitled to dismiss the appellant’s appeal on the ground that it would be immoral and unjust to allow it. The respondent, on the other hand, formulated two issues as arising for determination in the appeal and three issues as arising for determination in the cross-appeal. The two issues formulated by the respondent in respect of the appeal are as follows: “1. Whether or not the additional grounds of appeal filed and argued herein, without the leave of Court specifically prayed for and granted to appeal on a consent judgment, are competent in the circumstances herein. (2) Whether or not the Court of Appeal not enjoined in the circumstances herein to have considered and determined all the issues appropriately arising for determination before it.” The three issues formulated in respect of the cross-appeal are as follows: 1. “What is the legal consequence of the Diplomatic Immunities and Privileges (African Reinsurance Corporation) Order 1985 which was issued, based on the Headquarters Agreement in total disregard to and without compliance with section 12(1) of the 1979 Constitution which was then extant. 2. Whether or not by producing the 1985 Order, albeit as an appendix to the appellant’s brief in the Court of Appeal, the appellant had not removed the lis from the appeal on the issue of judicial notice of the 1985 Order before the Court of Appeal. 3. Did the defendant/appellant properly raise a special defence before the High Court of Lagos State in the circumstance therein.” The brief facts of the case are that the appellant is a corporation carrying on re-insurance business in Nigeria while the respondent is a civil engineering company incorporated in Nigeria. By a written contract between the parties, the respondent agreed with the appellant to construct the appellant’s head office building at Victoria Island, Lagos for a tentative sum of US $6,234,989.66. One of the clauses in the agreement provides that the parties agreed to subject themselves to the jurisdiction of the High Court of Lagos in the resolution of any dispute arising from the contract. The respondent pleaded that it completed the construction work and delivered possession of it to the appellant. The amount now claimed by the respondent is what was outstanding to it from the appellant out of the cost incurred in constructing the building. When the appellant failed to pay the said sum, the respondent filed the action at Lagos High Court. Upon service of the writ on the appellant, it entered an appearance under protest and then filed a notice of preliminary objection. The ground of objection filed is as follows: “The applicant by virtue of the Diplomatic Immunities and Privileges (African Reinsurance Corporation) Order 1985 has diplomatic immunity.” The matter thereafter came up for hearing before Shitta-Bey, J. sitting at Lagos High Court. After hearing submissions from counsel for the parties, the learned trial judge delivered a considered ruling in which he over-ruled the objection. The appellant was dissatisfied with the ruling of the trial High Court and an appeal was filed against it to the court below. The appeal was dismissed by the Court below and the present appeal is from the judgment of the court below delivered on 20/5/2002. The contention of the appellant, as canvassed in the appellant’s brief and in the oral presentation at the hearing, is that the court below, in its judgment now on appeal, although resolved all the issues canvassed before it in favour of the appellant, yet the court did not enter judgment in favour of the appellant. This is said to be wrong. The court below is said to have based its reason for dismissing the appeal before it by re-opening the issue as to whether the appellant was in fact entitled to claim diplomatic immunity in the circumstances of this case. Reference is made to a portion of the lead judgment written by Oguntade, JCA (as he then was) where he said as follows: PAGE| 6 “The correct position is that the diplomatic immunities and privileges which a foreign sovereign enjoys in Nigeria is largely determined by the common law. In other words, a foreign sovereign cannot claim immunity when he is engaged in trade, commerce or ordinary business activities.” It is submitted that the learned Justice was wrong in that that contention had earlier been rejected by this court in the case of African Reinsurance Corporation v. Fantaye (1986) 2 NSCC 884 which is binding on the court below. It is submitted in reply in the respondent’s brief that the status of Diplomatic Immunity is a special defence to an otherwise right of the citizens to seek for redress in a court of law. Reference is made to Order 17 Rule 11 of the High Court of Lagos State Civil. Procedure Rules (1994) which provides, inter alia, that the defendant or plaintiff must raise by his pleading all matters which show the action or counter-claim not to be maintainable or that the transaction is either void or voidable in point of law. The appellant is said to have breached that Order by not raising the objection in its statement of defence. The reliance by the appellant on the provisions of the Diplomatic Immunity in respect of purely commercial transaction is also said to be immoral having regards to the facts of this case. The main question raised in this appeal is whether the appellant was covered by the diplomatic immunity raised in its objection to the court’s jurisdiction in this case. It may be mentioned that the idea of diplomatic immunity was developed from one of the consequences of State equality rule which is expressed in the Latin maxim: par inparem non habet imperium – meaning: no State can claim jurisdiction over another. In practice, therefore, although States can sue in foreign courts, they cannot as a rule be sued there unless they voluntarily submit to the jurisdiction of the court concerned: See Oppenheim, International Law, a Treatise, Vol. 1 Peace, 8th edition, pages 264. The practice of granting diplomatic immunity to States has, in practice, been extended to government naval-ships, properties and government servants acting in their officialcapacities. But such immunity is no longer granted to a foreign State in respect of acts which are not governmental, which means in most cases, the acts of a foreign State as a trader: See Oppenheim, supra, page 265. In the instant case, the appellant is an international corporation jointly set up by some African States. It was to carry on the re-insurance business in many African States. The host States confer on it certain immunities usually enjoyed by States. But the immunity granted to it by the Nigerian government specifically excludes its commercial activities. In the African Re-insurance Corporation v. Fantaye (1986) 2 NSCC 884, the appellant was able to successfully raise the immunity granted to it in Nigeria. The action was instituted against the company by one of its employees. It was a claim for wrongful termination of the employee’s appointment and damages. One of the reasons for the appellant’s success in that case is that there was no proper proof of waiver of the immunity. In the instant case, the facts are that the transaction was commercial in nature. It was a contract given out by the appellant to the respondent to build its headquarters in Lagos, Nigeria. It was specifically provided in the written contract that any dispute arising from the contract could be litigated upon in a Lagos High Court. I believe that the appellant’s Board of Directors approved the agreement and had implemented its provisions by releasing funds to the respondent for the execution of the building. Also on the completion of the job, the Board took possession of the completed building from the respondent. It is, in my view, very ridiculous and unethical for the appellant to now claim that it had not waived its diplomatic immunity in the instant case by agreeing that it could be sued in the written contract. Again, I believe that, having regard to the fact that the activities covered in this case are commercial in nature, the appellant in fact was not covered by the provisions of the Diplomatic Immunity arrangement it now relied on as a defence. In the result, I hold that there is totally no merit in the appeal. I accordingly dismiss the appeal with N10,000 costs in favour of the respondent.

SC. 259/2002