Lead Merchant Bank Limited V. Petroleum (Special) Trust Fund (2005)
LawGlobal-Hub Lead Judgment Report
T. MUHAMMAD, J.C.A.
The respondent herein was the Plaintiff at the High Court of Justice of the F.C.T. Abuja (the court below). The respondent on 30/10/2002 filed a Motion Ex-parte before the court below pursuant to Orders Bond 23 of the High Court of the F.C.T, (Civil Procedure) Rules, praying for the following reliefs:
“Leave to issue and place the suit of the Plaintiff/Appellant on the undefended list and same to be marked as such.
- Another orders as the Court may deem fit to make the circumstance.”
After the Motion Ex-parte was proved, the learned trial Judge granted the leave sought. The appellant alleged that the court’s order granting leave to the respondent was served on tehm together with the Motion ex-parte and the affidavit in support and exhibit. The appellant then filed a Motion on Notice challenging the jurisdiction of the lower court on a number of grounds. In a ruling delivered on 27/5/03, the learned trial Judge discountenanced the objections and entered judgment in favour of the respondent for the sum of N14,729,000.00 plus 10% that sum as counsel’s legal fees.
Being dissatisfied with the Ruling, the appellant ahs now appealed to this court on eight grounds of appeal.
I consider the salient facts giving rise to this appeal very crucial and I give them below in summary.
”the Plaintiff/Respondent is an agency of the Federal Government of Nigeria that was set up under the Petroleum (Special) Trust Fund Decree (now Act) 1994 for the purpose of collecting part of the Revenue of the Federal Government of Nigeria occurring from the sale of refined petroleum products and to apply the said funds towards developmental projects.
The Respondent, in the course of its management and administration and in the execution of its duties under the said Petroleum (Special) Trust Fund Act, entered into a contract with Sono International Nigeria Limited for the supply of motorcycles as part of the Federal Government’s mass transit programme of a cost of N18,411,250.
The Plaintiff/Respondent appointed Boulos Enterprises Limited, a company based in Lagos as the sole source for the motorcycles ordered by the plaintiff.
Sona International Limited obtained an advance payment grantee in the sum of N14,729,000.00 from the Appellant to the Plaintiff/Respondent. When it came to execution of the contract, Boulos Enterprises refused to oblige Sona International Nigeria Limited with the motorcycles for subsequent supply to the Plaintiff/Respondent.
Sona International (Nigeria) Limited wrote several letters, including one dated 26th January, 2000 complaining about inability to perform the contract.”
On the 14th day of December 2004, this court granted leave to the appellant for the appeal to be heard and determined on its brief alone due to the failure of the respondent to file a brief of argument. The appeal was heard on 17/3/05. No brief up to that date was filed by the respondent. Accordingly, this appeal must be determined on the appellant’s brief alone.
In the appellant’s brief, the following seven issues were formulated:
- WHETHER, having regards to section 251 of the 1999 Constitution of the Federal Republic of Nigeria, the High Court of the Federal Capital Territory lacked jurisdiction to entertain the Plaintiff/Respondent’s claim.
- WHETHER there was any case of property commenced (sic) before the High Court of the Federal High Capital Territory so as to give the Court jurisdiction when the Plaintiff/Respondent did not file any writ of summons subsequent to the granting of leave to it to commence a case on the undefended list and did not pay any filing fees for the filing of the claim.
- WHETHER judgment could validly have been entered for the Respondent for an unascertained sum and also for legal fees of its solicitors on the undefended list.
- WHETHER there was any affidavit evidence on the basis of which the claim on what was said to be the Plaintiff/Respondent’s writ of summons could be granted.
- WHETHER it was proper for the learned trial Judge to have formulated a case of money had and received and decided it when the case of the Plaintiff/Respondent was not one for money had and received.
- WHETHER it was proper for the learned trial Judge to have entered judgment for the Plaintiff/Respondent for a sum higher than what the Plaintiff/Respondent said was due to it.
- WHETHER, even if what the Appellant filed not a notice of intention to defend, the lower court sought not to have considered the defence on the merit raised in the affidavit filed by the Appellant.”
Making his submissions on issue No. 1, learned counsel for the appellant stated that it is not in dispute that the Plaintiff/Respondent is an organ of agency of the Federal Government of Nigeria. By the provisions of section 251(1) of the 1999 Constitution and sections 1(1)(3), 2, 3 of the Petroleum (Special) Trust Fund Act, the lower court completely lacked jurisdiction to entertain the case. The learned trial Judge’s finding on jurisdiction files in the face of binding judicial authorities cited to him.
Submitted further by the appellant’s counsel is that the contract between the Plaintiff/Respondent and Sana International Ltd., as well as the resultant contract between the Plaintiff/Respondent and the Appellant were clearly entered into by the respondent pursuant to Section 3(1)(c)(g) and (d) of the Petroleum (Special) Trust Fund Act. The contracts he argued, were entered into the curse of administration and management of the Plaintiff/Respondent as an agency of the Federal Government and is therefore within the contemplation of section 251(1)(c) of the 1999 Constitution. Learned counsel cited and relied on the cases of AYENI V. UNIVERSITY OF ILORIN (2000) 2 NWLR (Pt.644) 290; NEPA V. EDEGBERO (2002) 18 NWLR (Pt. 789) 79 at 110. He urged us to answer the question comprised on the 1st issue for determination in the affirmative, set aside the judgment and strike out the case.
I consider in pertinent to treat issue No. 1 as it borders on jurisdiction of the lower court.
The determinants of jurisdiction of a court have for long been pronounced upon by the apex court. In the locus classicus case of MADUKOLU V. NKEMDILIM (1962) 2 SCNLR 341; the Supreme Court laid down the ingredients of jurisdiction which guide a court of law to consider whether it has jurisdiction on the case before it or not. There are, whether:
(a) the Court is properly constituted with respect to the number and qualification of its membership:
(b) the subject matter of the action is within its jurisdiction;
(c) the action is initiated by due process of law, and
(d) any condition to the exercise of its jurisdiction has been fulfilled.
Any defect in proceedings would be fatal however well conducted, as the defect is intrinsic to the adjudication. See further UTIH V. ONOYIVWE (1991) 1 NWLR (Pt.166)166; MISCELLANEOUS OFFENCES TRIBUNAL V. OKOROAFOR (2001) 18 NWLR (Pt.745) 295 at pp. 327 B-C and 355 A-D. Appellant’s challenge to the jurisdiction of the lower court is on the subject matter before the lower court and the parties. Issue No. 2 as well, challenged the propriety of the way the suit was commenced, that it was not initiated by due process of law.
The three issues (1) subject matter of the action. (2) parties before the court; and (3) whether the action was initiated by due process of law are what a court of law must cautiously observe before commencing its proceeding. Even if parties have not raised any of them, the court is duty bound to raise it suo motu and ask parties to the suit to address it on same. In the instant appeal, the attention of the lower court was drawn to the fact that the respondent was on agency of the Federal Government which ipso fact, by the provision of Section 251 of the Constitution of the Federal Republic of Nigeria, 1999, the High Court of F.C.T. has been divested of any jurisdiction on the matter. The learned trial Judge, despite this and the plethora of authorities cited to him on this issue, went ahead to determine the matter, stating inter alia.
“While on the issue of jurisdiction on the ground that the Defendant as a Federal agency, it is difficult to agree with this submission of the Respondent because it is the Plaintiff here that appears to be a Federal agency and not administrative or executive decision of the Plaintiff is at stake. It is clearly a demand for payment of money arising from contradicting agreement simply part no Federal agency which is itself suing but that is not even the issue, the most important thing is that no question is being considered in respect of any administrative decision of any Federal agency and I believe the case of NEPA V. ADEGBERO is clear on this position. It is my belief that this Court should have and that it has jurisdiction to entertain the matter.”
Section 251 of the Constitution 1999, provides-
“251(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matter.
(a) relating to the revenue of the Government of the Federation in which the said Government or any organ thereof or a person suing or being sued on behalf of the said Government is a party.
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(b) the administration or management and control of the Federal Government or any of its agencies.”
Furthermore, sections 1, 2, 3 of the Petroleum (Special) Trust Fund Decree No. 25 of 1994 and now on Act provide as follows:-
“1(1) There is hereby established a fund to be known s the Petroleum (Special) Trust Fund (in the Decree referred to as “the Fund”) into which shall be paid all monies received from the sale price of petroleum products less the marketer’s margin and which fund shall be operated and managed as provided in this Decree.
(3) The Fund shall be located in the Presidency and shall not be subject to the direction, control or supervision of any other anteriority or person in the performance of its functions under this Decree than the Head of State, Commander in Chief of the Armed Forces.
- There is hereby established for the Fund a body to be known as the Petroleum (Special) Trust Fund Management Board (in this Decree referred to as “the Board”) which shall, subject to this Decree, have general control of the Fund.
- The Board shall be responsible for-
(a) Receiving monies accruing to the fund;
(b) Disbursing monies from the fund within the first week of every month to the Federation Account, the Nigerian National Petroleum Corporation and do such other beneficiaries as may be determined from the time by the Head of State, Commander in Chief of the Armed Forces.
(c) Retaining the balance of the money accruing to the fund, offer the disbursement specified in paragraph (6) of this subsection, for the discharge of its functions under this Decree;
(d) Scrutinizing and approving projects in the following sections:
(i) road and transportation including provision of vehicles for mass transit
(ii) entering into contractual agreements for the purpose of executing approved projects.”
Attached to the affidavit in support of the Motion Ex-parte was a proposed writ of summons. The reverse side of the writ contained an endorsement to the effect that-
“1. The Plaintiff is a government owned parastatal established inter alia to corter (sic) for National Rehabilitation and procurement of Mass Transit Vehicles.
- The defendant has refused to execute the contract and has refused to return the money collected despite repeated requests.”
It is clear to me from the above provisions that the following deductions are inescapable.
“(1) All suits relating to the revenue of the Government of the Federation where the Government or any of its organs or agencies is suing or being sued must be at the Federal High Court to the exclusion of any other court.
(2) The Plaintiff/Respondent is not only on organ of the Federal Government of Nigeria but the money that the plaintiff uses for its activities including obviously the money that it paid out to Sona International Nigeria Limited which the appellant guaranteed and which the plaintiff is seeking to recover, forms part of the revenue of the Government of the Federal Republic of Nigeria.
(3) That all actions relating to the administration and management of the Federal government and its agencies must be taken at the Federal High Court.
(4) The contracts that the Plaintiff/Respondent entered into both with Sona International Nigeria Limited, and with the Appellant, which the Plaintiff/Appellant sought to enforce by legal action of the High court of the Federal Capital Territory Abuja, were entered into pursuant to the statutory duties of the Plaintiff/Respondent in the course of its administration and management as an agency of the Federal Government of Nigeria.”
The case that has now settled with finality the issue of Federal Government or its parastatals or agency, involved in litigation, is NEPA v. EDEGBERO (2002) 18 NWLR (Pt.798) 79. The Supreme Court per Ogundare, JSC (as he then was) has this to say:
“From what I have said earlier in this judgment the aim of paragraphs (q), (r) and (s) at sub-section (i) of Section 230 was to vest exclusive jurisdiction in the Federal High Court in matters in which the Federal Government any of its agents was a party. A State High Court would no longer have jurisdiction notwithstanding the nature of the claim in the action.”
Thus, it was wrong of the learned trial judge to have refused to be guided and bound by the above authorities which were equally cited for his consideration.The principle of stare decisis, I think, has imposed an obligation on lower courts to be bound by the decisions of higher courts. Deliberate refusal to so be bound amounts to judicial impertinence which is capable of enthroning judicial rascality and anarchy in the judicial hierarchy. This must be achieved and discouraged by judges.
It is clear that the court below lacked jurisdiction to entertain the matter before it, which is now on appeal. I hereby allow this appeal and set aside the Ruling of the learned trial Judge as it is a nullity. The proper court to entertain the matter is the Federal High Court. There is no need for me to consider the remaining issues formulated by the appellant. I make no order as to costs
Other Citations: (2005)LCN/1721(CA)
