American International Insurance V. Ceekay Traders Ltd (1981)

LawGlobal-Hub Lead Judgment Report

L. UWAIS, J.S.C. 

An action was filed in the Federal High Court, Lagos, by Ceekay Traders Limited (Respondents) against the American International Insurance Co. (Appellants) in which the Respondents claimed the sum of ) N2,742,318.00 as indemnity under a marine insurance policy covering a cargo of rice shipped in Bangkok for Lagos. The vessel carrying the rice was the “JAL SEA CONDOR”.

On 6th July, 1978 the ship sank with all its cargoes off the coast of South-West Africa. After the statement of claim filed by the Respondents was served on the Appellants, the latter entered a demurrer under Order 27 rules 1 and 3 of the Federal Revenue Court (Civil Procedure) Rules, 1976 for the suit to be dismissed for want of jurisdiction by the Federal High Court .

The objection raised by the appellants was overruled in a well considered ruling by Karibi-Whyte, J. (as he then was). The appellants then appealed to the Federal Court of Appeal. By a majority judgment of two (Nnaemeka-Agu and Mohammed JJ.C.A.) to one (Coker, J.C.A.), the appeal was dismissed.

It is against that decision that the Appellants appealed before us. In giving his ruling Karibi-Whyte, J. declined to follow the decision of this Court in Jammal Steel Structures Ltd. v. African Continental Bank Ltd.(1973) 1 All N .L. R. (Part 2) 208, which he considered to be obiter. He traced the history of Admiralty jurisdiction in Nigeria and observed that by virtue of the Admiralty Jurisdiction Act, 1962 No. 34 of 1962, the High Courts in Nigeria were vested with the jurisdiction “vested in or capable of being exercised by Her Majesty’s High Court of Justice in England.” According to him since that is the jurisdiction transferred to the Federal Revenue Court (now Federal High Court) by section 7(1) (d) of the Federal Revenue Court Act, 1973, No. 13 of 1973, it followed that by the provisions of S. 1(1) (c) of the English Administration of Justice Act, 1956, he had jurisdiction to entertain the respondents’ action which the parties conceded, was founded on marine insurance.

It is significant to observe that although the majority of the learned justices of the Federal Court of Appeal agreed with Karibi-Whyte J. that the Federal High Court had jurisdiction to hear the action, their reasons for so holding are quite different from his. It is also interesting to note that the dismissal of the appeal by the majority was based on conflicting ratio decidendi.

In his judgment, Nnaemeka-Agu J.C.A. held the view that the history of the Admiralty jurisdiction of the courts, in Nigeria was traceable to the provisions of S.45 of the Law (Miscellaneous Provisions) Act, Cap. 89 which inter alia states that the English law received in Nigeria consists of “the common law of England and the doctrines of equity, together with the statutes of general application that were in force in England on the 1st January, 1900.” Consequent to this provision he remarked that the Admiralty jurisdiction in England by 1900 (which extended to marine insurance) by virtue of the English Admiralty Act, 1861 (a statute of general application) and the “common law of England,” is the jurisdiction conferred on the Federal High Court. He subsequently held that the English Administration of Justice Act 1956 being a post-1900 Act, did not have any relevance to the jurisdiction of the Federal High Court as there was no specific Nigerian Statute which extended its application to Nigeria.

Mohammed J.C.A. on the other hand was of the opinion that Admiralty jurisdiction was conferred on Nigerian Courts by the provisions of Section 2 subsection (2) of the Colonial Courts of Admiralty Act, 1890 (see Chapter 27 in Volume XI of the Laws of the Federation of Nigeria and Lagos 1958). He interpreted the provisions of the said Section 2 (2) to be ambulatory and therefore came to the conclusion that the Federal High Court had the same jurisdiction in Admiralty matters as the High Court of Justice in England. He held that the Administration of Justice Act, 1956 to England has application to Nigeria and thereupon concluded that the Admiralty jurisdiction of the Federal High Court extends to marine insurance by virtue of section 1 subsections (g) and (h) of the 1956 Act.

Although Coker J.C.A. gave a dissenting judgment from the judgments of Nnaemeka-Agu and Mohammed JJ.C.A, and he was in the minority I think it will not be out of place to make cursory reference to his reasons for holding that the Federal High Court lacked jurisdiction. He considered that prior to the Nigerian Independence on 1st October, 1960, the power to legislate for Nigeria on external matters, (such as the Admiralty jurisdiction of Nigerian courts,) rested with British Parliament. Admiralty jurisdiction legislated for Nigeria by the British Parliament is as provided by the Colonial Courts of Admiralty Act, 1890 and the Administration of Justice Act, 1956. However he was unable to agree that the Federal High court has jurisdiction to try the Respondent’s action because in his judgment, firstly, the claim before the Federal High Court did not fall within Section 1 (1) (g) or (h) of the Administration of Justice Act, 1956. Secondly, the facts pleaded in the statement of claim show that the cause of action arose from a breach of contract which was subject to common law jurisdiction and not Admiralty. He therefore held that the jurisdiction to try the action rested with the High Court of Lagos State.

I turn now to the grounds of the appeal before us. These read as follows:

“(1) The majority of the Federal Court of Appeal erred in law in failing to observe that the Admiralty Jurisdiction of Courts in Nigeria is regulated by the Colonial Courts of Admiralty Act 1890 and by the Admiralty Court Acts of 1861 in addition to the Law Merchant administered by the old Courts of Admiralty prior to the Judicature Acts of 1873 to 1875 in England.

(2) The majority of the Federal Court of Appeal misconstrued or misinterpreted the history of admiralty jurisdiction in England by failing to observe that by 1890 all Courts exercising such jurisdiction in England had ceased to do so in respect of Contracts of Marine Insurance.

(3) The courts below erred in law in considering that the scope of Admiralty Jurisdiction in Nigeria is co-extensive with such jurisdiction as exercised by superior courts in the USA.

(4) The majority of the Federal Court of Appeal erred in law in failing to observe that admiralty jurisdiction is confined to the special Jurisdiction of the Federal High Court exercisable over torts, contracts and other claims arising on the high seas or in which the owners or chatterers of ocean going vessels are involved and not to claims based on contracts between parties both of whom are resident in Nigeria. ”