Mobil Producing (Nig) Unltd V. Chief M.a. Ajanaku & Ors (2000)

LawGlobal-Hub Lead Judgment Report

C. AGBO, J.C.A.

In this application, the applicant is seeking a stay of proceedings in Suit No. FHC/L/CS/247/2002 pending before the Federal High Court at its Lagos Division.

The Writ of Summons in that suit was taken out on 15th March 2002. The Plaintiffs in the suit, now respondents, had pleaded in paragraphs 1 to 18 of their statement of claim as follows:

“1. The plaintiffs are fishermen and have instituted this action in a representative capacity on behalf of registered fishing co-operative societies and/or 272 communities whose members and peoples inhabit the coastal settlements and villages on the shores of the Atlantic Ocean, and the banks of the lagoons, estuaries, Creeks and rivers of the coastal region of Lagos State

(herein after referred to as the Waters of Life).

2. The defendant is an unlimited liability Company registered under the Laws of the Federal Republic of Nigeria with its head office at Mobile House, No. 1 Lekki Expressway, Victoria Island, Lagos and carries on the business for the purpose of, inter alia, prospecting, exploring and mining of crude oil both onshore and offshore within the territorial boundaries of Nigeria including the areas occupied by the Plaintiffs.
3. The Plaintiffs’ only occupation is fishing and fish farming which they carry out in the waters of Life and from which they earn 99 percent of their income.
4. The Waters of Life is pivotal to the life support systems of the plaintiff and also fundamental to their socio-economic well being.
5. The plaintiffs’ staple food is fish; and they depend on the said fishes and other aquatic mammals harvested from the Waters of Life for the supply of 95% of their protein food needs. The plaintiffs shall at trial rely on a lecture paper of Mr. Paul Caldwell, former Managing Director of the defendant Company published in This Day Newspaper of June 15, 1998 (the lecture) in proof thereof.
6. The plaintiffs wholly depend on the Waters of Life for domestic needs and uses, including but not limited to, cooking, bathing and washing.
7. The defendant had over 27 years ago constructed and placed pipes and mains to hold, keep and carry their oil, with various terminal points particularly at Qua Iboe and at all material times operated the same for the same purposes referred to in paragraph 2 above.
8. On about January 10, 1998, the said pipelines and Mains constructed by the defendant for conveying Crude oil from the defendant’s production platform (offshore) to the defendant’s Qua Iboe Terminal (onshore) in Akwa Ibom State, Nigeria ruptured and burst and resulted in the spillage of over 7.6 million litres of crude oil into the Atlantic Ocean (The spill is hereinafter referred to as the “Idoho Oil Spill”). The plaintiffs shall rely on the report in the Guardian Newspaper of January 24, 1998 in proof hereof.
9. The plaintiffs aver that the crude oil which polluted their environment as aforesaid was from the Idoho Oil Spill and shall rely on the Guardian Newspaper of the 3rd February 1998.PARTICULARS OF SPILLAGE

(a) More than 40,000 barrels of crude oil was spilled

(b) A barrel of crude oil is the equivalent of 190,932 litres of crude oil.

(c) 40,000 barrels of crude oil is the equivalent of 7,637,280 litres of crude oil.

(d) The defendant in a Press Release published in the Guardian Newspaper of 2 February, 1998 acknowledged that the Idoho Oil Spill was a significant spill.

(e) The water environment of the Waters of Life which serves as means of livelihood to the fishes and other aquatic animals is a highly fragile environment, which can be easily and irreparably damaged by oil (crude) pollution. The plaintiff shall rely on the lecture referred to in paragraph 5 of proof hereof.

(f) A spill of significant quantity of crude oil into water inhabited by living organisms as acknowledged by the defendant has destructive effect on the organisms and on the ecosystem of the water.

12. The said Idoho Oil spillage had destructive and deleterious effects on the environment and adversely affected the socio-economic development of the inhabitants of the site of the spillage or areas of impact.
13. The plaintiffs aver that whenever there is oil spillage, it is always accompanied by negative and deleterious effects on nature and particularly on areas it impacts directly.

PARTICULARS

(a) Death of vegetation

(b) Total pollution of the water and death of all living organisms in the water namely fishes and aquatic mammals.

(c) Substantial destruction or extinction of the marine plants and plankton which sustain the ecosystem in such waters thereby rendering the water uninhabitable for fishes for several years.

(d) Destruction of fishing nets, fishing traps and other fishing implements.

(e) Rendering the water unwholesome and unfit for consumption, for other domestic uses or for recreational purposes by the inhabitants of the abutting lands or by the communities who live on the water.

14. The defendant did not immediately announce or cause an announcement to be made to inform the coastal dwelling Communities about the Idoho Oil Spill so as to enable the Said communities to amongst others remove their boats, nets and other items from the Waters of Life, consequently, the Plaintiffs had no knowledge of the Spill.
15. Further or in the alternative the defendant did not mitigate its damages.
16. On or about the 26th January 1998, the plaintiffs woke up in the morning to find that crude oil had polluted the Waters of Life and the entire environment of the villages and settlements inhabited by the plaintiffs.
17. The plaintiffs aver that the crude oil which polluted the Waters of Life as aforesaid had a deleterious effect on the ecosystem of the waters and adversely affected the plaintiffs’ fishing and fish farming activities and the plaintiffs suffered severe losses and massive damage.
18. By reason of the aforesaid spillage, the plaintiffs have sustained substantial loss and damage.

PARTICULARS OF LOSS AND DAMAGE

(a) Destruction of marine plants and plankton on which the crayfishes, fishes and aquatic mammals of the Water of Life survive.

(b) Death of the fishes and other aquatic mammals in the Water of Life.

(c) Rendered the Water of Life inhabitable for fishes and aquatic mammals.

(d) The out board engines of some of the plaintiffs who set in their motor boats before dawn to retrieve their nets and fish traps from the waters developed engine problems and broke down, while others suffered degrees of damage as a result of the damaging effect of the crude oil which splashed on the engines in the course of their journey on the waters.

(e) Damaged the plaintiffs’ fishing nets and fish traps beyond repair.

(f) The toxic effects of the spill caused the death of the plaintiffs’ domestic animals which fed on the polluted grass on the banks of the Waters of Life and also drank there from.

(g) Loss of income/fishing rights.

(h) The plaintiffs spent money to remove crude oil deposits from their boats and canoes.” The plaintiffs thereafter prayed the court paragraph 73 of the Statement of Claim as follows:

“73 WHEREOF the plaintiffs claim against the defendant as follows:

i. A declaration that the defendant’s continuing failure, neglect and refusal to undertake post impact remediation measures to restore the ecosystem of the lands and Waters of Life inhabited by the plaintiffs and where they carry on their occupation of fishing and fish farming, is unlawful, unconstitutional and a violation of the plaintiffs’ right to life, and right to live in an environment favourable to their socio-economic development as guaranteed under Section 33 of the Nigerian Constitution 1999, Articles 22 and 24 of the Africa Charter on Human and Peoples’ Rights (Ratification and Enforcement Act (Cap. 10) Laws of the Federation of Nigeria 1990.

ii. A declaration that the plaintiffs whose representatives signed the release forms in favour of the defendant signed same by the undue influence of the defendant and that the document is therefore null and void.

iii. A declaration that the document purporting to release the Defendant from paying due compensation to the plaintiffs who signed the documents and or from effecting post impact remediation programmes to restore the plaintiffs’ environment is null and void on grounds that the document relates to an unconscionable bargain which was signed under economic duress and in breach of statutory provisions.

iv. An order for the delivery and cancellation of all release documents signed by representatives of some of the plaintiffs on the ground that the signatures of some of the representatives of the plaintiffs thereon was obtained by economic duress, undue influence and fraud.

v. An order that the defendant should commence post-impact remediation programmes in respect of the plaintiffs’ lands and waters polluted by the defendant’s Idoho Oil Spill and do all such acts and things to clean up the environment of the plaintiffs and to restore same to its original state.

vi. Special damages of the sum of N8,400.000.000 (Eight Billion, Four Hundred Million Naira Only. Particulars of which are shown in the schedule attached hereto.

vii. Interest on the aforesaid special damages at the rate of 10% per annum from 26th January 1998 until judgment and interest at the same rate until full payment thereof by the defendant.

viii. The plaintiffs claim the sum of N1,400.000.000 (One Billion Four Hundred Million Naira Only) being general damages for the infraction of their constitutional and statutory rights and interest on the judgment sum at the rate of 10% from the date of judgment until full payment.”

Upon being served with these processes that defendant, now applicant filed a preliminary objection challenging the competence of the suit on the ground that the action was time barred, having been brought after three years of the accrual of the cause of action thereby offending the provisions of S.18 of the Admiralty Jurisdiction Act 1991. In a considered ruling, the trial court held that the suit was not founded on the Admiralty Jurisdiction Act 1991 but on the Oil pipeline Act Cap 338 Laws of the Federation of Nigeria 1990, Petroleum Act Cap 350 Laws of the Federation of Nigeria 1990 and S.251 (n) of the constitution of the Federal Republic of Nigeria 1990. She concluded as follows:-

“CONSEQUENTIAL ORDER

1. I hold that this suit is not statute barred.
2. That this application lacks merit and is hereby dismissed.
3. That this case proceeds to hearing on the merit.
4. Case adjourned to May 20th, 2003 Hearing.”

This ruling was delivered on the 10th April 2003.

Not being satisfied with the ruling of the trial judge, the applicant on 16th April 2003 filed a notice of appeal containing one ground of appeal to wit:-

“3. GROUND OF APPEAL

i. The learned Trial Judge erred in law when she came to the conclusion that the plaintiff’s claim” is not statute barred as it did not fall under Section 1 (1) (e) of the Admiralty Jurisdiction Act

1991 and therefore not limited by the provision of Section 18 of the Admiralty Jurisdiction Act 1991″

Particulars of error

a. Section (1) (1) (e) of the Admiralty Jurisdiction Act 1991 provides for the Admiralty Jurisdiction of the Federal High Court to include “any claim for liability incurred for Oil Pollution damage” which is the substratum of the plaintiffs claim.

b. Having reached the conclusion that the plaintiffs claim was on for damages resulting from Oil Pollution the learned trial Judge should have applied the strict provisions of Section 18 of the Admiralty Jurisdiction Act 1991 which provides for a three (3) year Limitation period.

The applicant thereafter applied to the trial court for stay of proceedings. In a considered ruling dated 7th November 2002, the trial court refused the application for stay of proceedings. On 20/11/2003 the applicant filed this application seeking a stay of proceedings at the court below pending the determination of the appeal.

Affidavits were filed and exchanged.

In arguing the application, applicant’s counsel limited himself to the recondity of the lone ground of appeal. In proof thereof he exhibited the ruling of the Federal High Court Uyo in suit no. FHC/UY/CS/37 Chief C.S. Seleba & Anor vs Mobil Producing Nigeria Unlimited which ruling was delivered by the trial judge on 22-10-2003. It relates to the same oil spill against the same defendant but different plaintiffs. In the said case the Federal High Court sitting at the Federal High Court Uyo held that the suit offended S.18 of the Admiralty Jurisdiction Act 1991 and dismissed the suit.

Respondent’s Counsel on the other hand argued that even though the issue of jurisdiction can constitute a special or exceptional circumstance founding the prayer for a stay, there must be a genuine issue of jurisdiction raised in the ground or grounds of appeal and not a sham issue contrived to waste litigation time and frustrate the plaintiffs suit. He urged this court to discountenance the application.

It has become trite law that all superior courts of record have unfettered discretion in the exercise of their equitable jurisdiction to stay their proceedings.

The same unfettered discretion avails the appellate courts to stay not only their own proceedings but the proceedings of the courts from which the appeals pending in the appellate courts arose. This discretion must however be exercised judicially and judiciously. In the exercise of this jurisdiction the courts have over the years established certain principles that act as guide. I shall presently set out my appreciation of these guiding principles. The principal one into which others dovetail is that the applicant for a stay of further proceedings pending appeal must establish that in the circumstances of his case, it would be unjust and inequitable to refuse his application. See Akilu vs Fawehinmi (n02) (1989) 2 N.W.L.R. (pt 102) 122 at 166, Vaswani vs Savalakh (1972) 12 SC 77.

Flowing from this are these other principles

1. In order to grant an application for stay of proceedings, pending appeal, the pending appeal must be arguable and this must be bourn out from the ground or grounds of appeal. Where the pending appeal is frivolous, unmeritorious, oppressive and not arguable in law, an application will be refused. – see Eze vs Okolonji (1997) 7 N.W.L.R. (pt. 513) 515 at 528.
2. For an application for stay of proceedings to succeed, the applicant must of necessity establish, not that the plaintiff might not succeed but that he could not possibly succeed – Akilu vs Fawehinmi Supra at 165.
3. The applicant must establish a special or exceptional circumstance founding the application – Akilu vs Fawehinmi supra, Eze vs Okolonji Supra, General Oil Ltd vs Oduntan (1990) 7 N.W.L.R. (pt. 163) 423, N.D.L.E.A. vs Okorodudu (1997) 3 N.W.L.R. (pt 492)221. Where there is an issue, a real issue of jurisdiction, the courts have always held that as constituting exceptional or special circumstance – see Eze vs Okolonji supra, N.D.L.E.A. vs Okorodudu supra. Where there is a real possibility of the destruction of the rest of the dispute if the application is not granted, that would constitute a special circumstance – see Akilu vs Fawehinmi Supra
4. Where the grant of an application for stay of proceedings will unnecessarily protract the judicial process and therefore waste valuable litigation time, the court will refuse it – Eze vs Okoronji supra.

The above sets out principles are not exhaustive as the courts keep evolving and developing them. The general practice however is that unless an application for stay of proceedings has established beyond doubt that the action ought not to go on, it should not be stayed – Akilu vs Fawehinmi supra p. 165. Okorodudu vs Okoromadu (1977) 3 SC.21

Now applying the above principles to the facts of this case, it is not in doubt that the sole ground of appeal is an arguable ground. Its recondity is not in doubt.

The applicant has shown that another High Court in fact bought its argument and dismissed a similar suit. When an action is statute barred, the plaintiff loses his cause of action. Once the competence of the suit is challenged; Jurisdiction becomes an issue. There is no doubt that jurisdiction is an issue in this matter. But that is not the end of the matter. Can it be said that the applicant has shown that the plaintiff could not possibly succeed? I do not think so. The court below founded its decision that the Admiralty Jurisdiction Act 1991 is not applicable to oil spill from pipelines on the Supreme Court decision in The Shell Petroleum Development Co. Nig. Ltd vs Abel Isaiah & 2 Ors (2001) 11 N.W.L.R. (pt. 723) 168 where the Supreme Court held that matters relating to oil spills are governed by the petroleum Act and the Oil Pipelines Act. That judgment is a rock of Gibraltar the applicant must surmount during the hearing of the substantive appeal.

Further more, the cause of action arose in 1998. The suit at the court below was filed in 2002. The offending ruling was delivered in 2003. As at the moment, the applicant is yet to file its statement of defence. The substantive appeal is yet to be entered in this court. The continuation of the trial at the lower court does not in any way affect the rest of the suit. Granting the application can only unnecessarily protract the judicial process and waste valuable litigation time. It will be unjust and inequitable to grant this application. This application is dismissed with N2,500.00 costs to the respondents.

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Other Citations: (2000)LCN/0699(CA)