Mobil Producing Nigeria Unlimited V. His Royal Highness Oba Yinusa a. Ayeni & Ors (2007)
LawGlobal-Hub Lead Judgment Report
HUSSEIN MUKHTAR, J.C.A.
The appellant/applicant has, by a motion on notice dated 16th May, 2005 and filed on 28th May, 2005 pursuant to Order 3 rule 3(4) and sections 16 and 18 of the Court of Appeal Rules and Act, 2002 respectively.
Sought for an order for stay of proceedings in suit No. FHC/L/CS/1344/2003 before the Federal High Court Lagos pending the determination of the appeal against the ruling of the lower court delivered on the 28th July, 2004. The application is supported by an affidavit of 17 paragraphs dated 18th May, 2005, a further affidavit dated and filed 25th January, 2006 of 6 paragraphs and a second further affidavit of 5 paragraphs dated and filed on 8th June, 2006 on which the applicant relied.
The brief facts of the case as can be gathered from the record are that the plaintiffs/respondents are allegedly amongst several claimants claiming to have been adversely affected by the oil spill incident that occurred on the 12th January, 1998 from a rupture in the oil pipe line rig platform known as the “doho” some 14km (at sea) from the South-Eastern Coast of Nigeria where the Qua Iboe Terminal (QIT) is located at the coast – “beno” in Akwa Ibom State, Nigeria. The respondents as plaintiffs took out a writ of summons against the appellant/applicant as defendant dated and filed on the 23rd December, 2003, and also filed a statement of claim on the same date in which the endorsed amount claimed is:-
- N663,858,075.00 (Six hundred and sixty three million, eight hundred and fifty eight thousand seventy five naira) as special damages for the loss suffered by the plaintiff as a result of the oil spill from the defendant’s pipeline at Eket in Akwa Ibom State.
- The same of N186,141,925.00 (One hundred and eighty six million one hundred and forty one thousand nine hundred and twenty five naira) as general damages.
- Cost.
The defendant filed a memorandum of conditional appearance on the 1st March, 2004, and then filed a motion on notice dated 2nd March, 2004 seeking an order striking out the suit on the ground that the court lacks jurisdiction to entertain same.
A summary of the three (3) grounds upon which the application was brought are as follows:-
- The plaintiffs’ claim against the defendant is in respect of compensation for damages allegedly caused as a result of oil pollution.
- The source of the oil pollution was the defendant/applicant’s Idoho production platform in interstate and/or territorial water of Nigeria.
- By virtue of section 18 of the Admiralty Jurisdiction Act, 1991, the plaintiffs’ claim being a maritime or admiralty claims is statute-barred.
The plaintiff/respondent filed a Counter-affidavit dated the 22nd March 2004 stating that their action was based on the tort of negligence and that the statutory limitation period for an action in the tort of negligence was six years, therefore by their cause of action which arose on the 21st January, 1998 and their statement of claim filed on the 28th December 2003, they were within the time limit and their action was not statute-barred.
Written arguments were submitted by Counsel to both parties on points of law. On the 28th July, 2004, the Federal High Court delivered its ruling on the appellants/applicant’s application dated the 2nd March, 2004 seeking to dismiss the suit for want of jurisdiction. The Court dismissed the application and declared that it has the jurisdiction to hear the suit.
The appellant/applicant being dissatisfied with that ruling appealed to this court as per the notice of appeal exhibit A annexed to the supporting affidavit dated and filed on 18th May, 2005.
The appellant/applicant then applied for stay of proceedings before the lower court pending the determination of the appeal before this court. In its ruling delivered on the 12th of May, 2005 the court below refused to stay proceeding before it as per exhibit AG 2 attached to the further affidavit of Adekoya Olubusayo sworn to on 25th January, 2006.
The appellant/applicant now brings this application for stay of proceedings pending the determination of the appeal.
The learned Counsel to the appellant/applicant raised the following three issues for determination:-
(a) What are the guiding principles for the grant of a stay of proceedings?
(b) What is the duty of a court faced with such an application?
(c) What is/are the consequences of a stay of proceedings based on an appeal questioning the jurisdiction of the trial court?
The issues of stay of proceedings follow an interlocutory ruling of the trial court which has been appealed against. In every application for stay of proceedings the court must consider whether from the facts and circumstances of the Case such special and exceptional circumstances have been shown by the applicant compelling enough to justify stay of the lower court’s proceedings pending the hearing and determination of the appeal.
The learned Counsel to the appellant referred to some pronouncements of this court on what constitutes special and exceptional circumstances for purposes of staying judicial proceedings. In the case of Eze v. Okolonji (1997) 7 NWLR (Pt. 513) 515 at 519. A special and exceptional circumstance was defined as:-
“A peculiar or unique circumstance which is additional to the ordinary state of affairs. The application is not granted as a matter of routine as it is not a mechanical relief slavishly following the filing of an appeal. It is a matter of law and facts, and very hard one in their combined content.”
In the case of Almaroof v. Awoyemi (1999) 10 NWLR (Pt. 623) 444 at 446, para. 3, special or exceptional circumstance was defined as including a challenge to the jurisdiction of a court.
It is the law that if a genuine issue of jurisdiction is raised by an appellant, he has satisfied a special or exceptional circumstance to warrant the grant of stay of further proceedings pending the determination of his appeal as stated in NDLEA v. Okorodudu (1997) 3 NWLR (Pt. 492) 221 at p. 230 paras. B-C.
Another underlying factor for the grant of an application for stay of proceedings is the consequential hardship on any of the parties. As held in the case of Eze v. Okolonji (supra) at para. 9 where it was stated that,
“A court of law will be most reluctant to grant an application for stay of proceedings if it will cause greater hardship than if the application is refused.”
The appellant/applicant’s Counsel observed that the plaintiffs’ suit at the lower court is for damages (both general and special) for losses allegedly suffered as a result of the oil spill from the defendant’s oil pipeline in Eket, Akwa-Ibom State.
In defending a claim of this nature, the defendant/applicant will need to call in evidence the testimony of several witnesses. A number of them would be experts from various fields of science. He said several of these witnesses would have to take time away from their jobs, allowances would have to be paid, transportation and lodging will have to be provided by the defendant/applicant amongst many other things and most of them would be foreigners. In other words, a considerable financial expenses as well as manpower will be expended in defending this suit.
It was submitted for the appellants/applicant that should its appeal be heard and granted, the continuation of proceedings at the trial Court would not only negate the decision of the Court of Appeal, but also such expenses would have been incurred that even a victory at the trial court may not be worth it, especially considering that the ground of appeal could save both parties and the Court a lengthy trial and litigation expenses.
It was further submitted by the learned Counsel to the appellant/applicant that the grounds of appeal reveal that the ruling of the trial Court being appealed against is on the question of jurisdiction, which as stated above amounts to a special and exceptional circumstance warranting the grant of an application for stay of proceedings. Therefore the appellant/applicant urged this Court to grant the application for stay of proceedings.
On the second ground, the learned Counsel to the appellant/applicant further submitted that the duty of a court before which an application for stay of proceedings lies must determine whether the grounds of appeal are arguable. See Eze v. Okolonji (supra).
The learned Counsel to the appellant/applicant further contended that where the issue of jurisdiction is raised as a ground of appeal in an application for stay of proceedings, the application should be granted. See the cases of NDLEA v. Okorodudu (supra), Eze v. Okolonji (supra), and Okem Enterprises (Nig.) Ltd. v. NDIC (2003) 5 NWLR (Pt. 814) at pg. 492. He said the only qualification on this position is that the question of jurisdiction raised should be genuine and not frivolous. See the case of Eze v. Okolol1ji (supra) at para. 12, where this court, per Niki Tobi, JCA (as he then was) held thus:-
“Where the issue of jurisdiction is involved in a pending appeal, the court should grant an application for stay of proceedings. But it is important to draw a distinction between the mere raising of jurisdiction on the appeal and the real involvement of jurisdiction in the appeal… him (the applicant) must show that a genuine issue of jurisdiction is involved…”
It was submitted for the appellant/applicant that if a genuine issue of jurisdiction is raised by an applicant, he has satisfied the requirement of special or exceptional circumstance to warrant the grant of a slay of proceedings pending the determination of his appeal.
See the case of NDLEA v. Okorodudu (supra) at page 241 G-H.
The learned Counsel to the appellant/applicant further submitted that assuming without conceding that the plaintiffs’ claim is based on tort, the Federal High Court would still be the wrong venue considering the scope of its jurisdiction as provided by section 251 Constitution of the Federal Republic of Nigeria. 1999.
Furthermore, he added, an applicant for stay of proceedings based on the question of jurisdiction need not prove that the court lacks jurisdiction but only need show that a genuine issue of jurisdiction is involved. It is submitted for the appellants/applicant that it has been shown that the question of jurisdiction raised by the appellant is genuine by basing arguments thereon on provisions of the Constitution, relevant statute and judicial pronouncements and therefore not frivolous in nature. The learned Counsel to the appellant/applicant finally urged this Court to grant the application and stay the proceedings in the trial court pending the determination of the appeal.
Relying on a thirteen paragraph Counter affidavit the learned Counsel to the respondents submitted that the grant or refusal of application for stay of proceedings is purely discretionary. He cited Almaroof v. Awoyemi (1999) 10 NWLR (Pt. 623) 444 at 450 para. 13. He added that the court must consider the degree or extent of hardship to which either the applicant or the respondent will stand to suffer in the event of grant or refusal of the application for stay of proceedings. He cited the authorities in Arojoye v. UBA Ltd. (1986) 2 NWLR (Pt. 20) 101 and Ikabala v. Ojosipe (1970) 4 S.C. 86 at 92.
He submitted for the respondents that their means of livelihood were destroyed and many of them were advanced in age. The respondents’ complaint was that a trial would cost it considerable expenses to bring its witnesses (most of them alleged to be foreigners) to the Court. It is submitted for the respondents that their health, means of livelihood and bleak future are at stake and are more important than mere monetary consideration of the appellant.
It was also submitted for the respondents that the mere fact that the appellant filed a notice of appeal raising an issue of jurisdiction does not automatically warrant granting an order for stay. Rather the court will grant a stay only where a genuine issue of jurisdiction is involved Owena Bank (Nig.) Plc v. Olatunji (1999) 13 NWLR (Pt. 634) 218 at p. 230 para. A.
In an application for stay of proceedings, the burden is on the applicant to show compelling reasons why the proceedings must be stayed pending the determination of the appeal. This burden includes that of establishing that the applicant has a valid appeal, pending before the court. See Owena Bank v. Olatunji (supra) page 230 paras. C-D. It was submitted for the respondents that the appellant/applicant has failed woefully’ to discharge this burden.
It was further submitted that a Court of law will be most reluctant to grant an application for stay of proceedings pending appeal if it will cause greater hardship than if the application is refused. This can be deduced from the competing affidavits filed in the application under consideration. See Owena v. Olatunji (supra) p. 229 paras. F-G; Eze v. Okolonji (1997) 7 NWLR (Pt. 513) 515; Holman Bros (Nig.) Ltd. v. Kigo (Nig.) Ltd. (1980) 8-11 SC 43; and Arojoye v. Uba (supra).
The respondents in paragraphs 9, 10 and 11 of their Counter-affidavit deposed thus:
“9. That the plaintiffs’ claims before the lower Court are based on oil spillage from the defendant’s oil pipe which in turn destroyed the plaintiffs’ aquatic lives, vegetation, minerals and natural resources, farmland, poultry farms and piggery among others.
- That the plaintiffs’ means of livelihoods is affected by the defendant’s neglect or refusal to pay compensation on the ecological claims of the plaintiffs.
- That the plaintiffs who are advanced in age would be adversely affected if the stay of proceedings is granted”.
These facts have not been controverted or contradicted by the appellant/applicant and are therefore, deemed admitted pursuant to section 75 of the Evidence Act, Cap. 112, Laws of the Federation of Nigeria, 1990. See Chief Baron Nwizuk & Others v. Chief Waribo Eneyok & Ors. (1953) 14 WACA 354; In Re Beeny (1894) 1 Ch. 499; and Freeman v. Cox (1878) 8 Ch. D. 148.lt is further submitted that the respondents would suffer greater hardship if further proceedings at the lower court is stayed.
It is further submitted, by the learned Counsel to the respondent, on the issue of jurisdiction that this case which is based on tort of negligence, is within the lower court’s jurisdiction, and that it is only where a genuine issue of jurisdiction is involved and not a wholly one designed to deceive or confuse the court, that an application for stay of proceedings would be granted. See Owena Bank v. Olatunji (supra). This issue involving jurisdiction of the lower Court is one to be determined in the main appeal. It suffices, at this interlocutory stage, if an arguable issue of jurisdiction is raised.
It is finally submitted for the respondents that the application should be dismissed with substantial cost.
The singular issue for determination, in this application as raised by learned Counsel on both sides is:-
Whether are the guiding principles for grant or refusal of an order for stay of proceedings pending appeal have been established to warrant granting the relief sought for by the appellant/applicant?
The Supreme Court has enumerated some of the guiding principles for grant of stay of proceedings in the case of Akilu v. Fawehinmi (No.2) (1989) 2 NWLR (Pt. 102) 122 at 198 as follows:-
“In the exercise of the Court’s discretion and inherent power to grant or refuse an application for a stay of proceedings pending the determination of an appeal, the following are the general guiding principles:-
(a) The discretion must be exercised both judicially as well as judiciously;
(b) The competing rights of the parties to justice must be taken into consideration;
(c) The applicant for a stay of proceedings must show special and exceptional circumstances why the successful party, who is entitled to the fruits of his victory, should be deprived of such, even if temporarily and the proceedings should be stayed;
(d) Special and exceptional circumstances that will justify a stay of proceedings will depend on the facts of each case;
(e) Collateral circumstances which may, unless the proceedings are stayed, result in the destruction of the res and thereby render a successful appeal nugatory have always been regarded as such ‘special’ or ‘exceptional’ circumstances;
(f) The onus is on the applicant for a stay to show that in the circumstances of his case, it will be unjust and inequitable to refuse his application. Vaswani Trading Co. v. Savalakh & Co. (1972) 12 S.C. 77; Utilgas v. Pan African Bank Ltd (1974) 1 AII NLR (Pt. 2) 47; Obeya Memorial Specialist Hospital v. A-G of the Federation (1987) 3 NWLR (Pt. 60) 325; Governor of Lagos State v. Ojukwu (1986) 1 NWLR (Pt. 18) 621; Jadesimi v. Okotie-Eboh (1986) 1 NWLR (Pt. 16) 264; NBN v. NET (1986) 3 NWLR (Pt.31) 667 referred to); (P.166, para, H;P.188,para,. E)
(g) The court will consider any bona fide substantial advantages to the plaintiff, and any serious or substantial disadvantage to the defendant, such as whether the continuance of the action will be vexatious or oppressive to him or constitute an abuse of the process of the court (Akihiwu v. Principle Lotteries Officer (1969) 1 AII NLR 426); (P. 167, paras. A-B)
(h) The court will look at all the circumstances surrounding the litigation by the parties;
(i) The court will also consider the conduct of the parties to the case (Jadesimi v, Okorie-Eboh (1986) 1NWLR (Pt.16) 264; Obeya Memorial Hospital v. A-G of the Federation (1987) 3 NWLR (Pt. 60) 325 referred to) (p. 188, paras E-F)
(j) A stay of proceedings may be granted in appropriate places to a avoid unnecessary expenses;
(k) Applicant for stay must establish a right of action and a prima facie claim in law;
(l) An action should not be stayed unless the applicant has established beyond doubt that the action ought not to go on. (Okorodudu v. Okoromadu (1977) 3 S.C. referred to) (p.165, para. D)
(m) In exercising that power to preserve the res, the court must take care to distinguish the interlocutory application from the substantive appeal as it is not the law that the substantive appeal can be disposed of in the interlocutory application:
(n) Where an appeal against a refusal of a stay of proceedings has been entered in the Court of Appeal, it constitutes an abuse of the process of the court to file an application for a stay of proceedings in the court below and it is a wrong exercise of judicial discretion to grant such an application. The proper procedure in such a situation is to appeal for an accelerated healing of the substantive appeal,
(o) Principles governing stay of proceedings are not exhaustive.”
The common denominator in an application for stay of proceedings is that special and exceptional circumstances must be shown to exist and compelling enough for the Court to grant an order for stay. A special or exceptional circumstance is such an extra ordinary and unique state of affairs dictating that stay will better serve the interest of justice than allowing the proceedings in the trial Court to continue. It does not follow the filing of an interlocutory appeal as a matter of course. As my learned brother Niki Tobi, JCA (as he then was) commented in the case of Eze v. Okolollji (supra) p. 529 where the learned Jurist said:-
“An application for stay of proceedings can only be granted where special and exceptional circumstances exist… A special or exceptional circumstance is a peculiar or unique circumstance which is additional to the ordinary state of affairs. The application is not granted as a matter of routine as it is not a mechanical relief slavishly following the filing of an appeal. It is a matter of law and facts, and a very hard one in their combined content.”
The Court, in considering whether to grant or refuse an application for stay, must consider the competing rights of the parties to justice and equity based on the available affidavit evidence.
Furthermore, the court must consider the probable hardship which either the grant or refusal of the order for stay is likely to cause, and where the greater hardship lies. An order for stay of proceedings is, therefore, granted only if its refusal will likely cause greater hardship than granting same but not otherwise. The question of hardship, just like competing rights, is deducible from the affidavit evidence. It was further held in Eze v. Okolonji (supra) at p. 529 paras. E-F that. –
“One important factor in an application for stay of proceedings is hardship. A Court of law will be most reluctant to grant an application for stay of proceedings if it will cause greater hardship than if the application is refused… The question of hardship is a matter of fact which can be deduced from the competing affidavit evidence. The moment the Court comes to the conclusion that the grant of the application will do more harm than good, it will be refused.”
Stay of proceedings is granted with a view to preventing greater hardship. In other words, it is an equitable choice of the lesser evil which may be caused by an order for stay of proceedings in order to avoid a greater one which the refusal may occasion. Thus, once the court comes to the conclusion that stays of proceedings is likely to cause more hardship, the application must be refused.
Another important factor is the need to ensure that the res of the proceedings are preserved. The res sustain the proceedings and once destroyed the whole proceedings is bereft of life. Thus, if refusal of an order for stay will lead to destruction of the res, the proceedings must be stayed, otherwise if the res will not be destroyed in the course of continuity of the proceedings, an order for stay must be refused.
It is however, important to establish from the on set that there exists a valid pending appeal before an application for stay may be entertained. The averment in paragraph 3 of the supporting affidavit dated 18th May, 2005 clearly shows that the ruling appealed against, was delivered on 28th July, 2004. This was further confirmed by exhibit BBAA6 annexed to the appellant/applicant’s 2nd further affidavit filed on the 8th June, 2006. The appeal against the interlocutory decision was filed barely 5 days thereafter on the 3rd May, 2004. This was also further confirmed by the notice of appeal and the receipt issued in respect thereof exhibits A and B respectively annexed to the supporting affidavit dated and filed on 18th May, 2005. The jurisdictional issue raised in the appeal was premised on the interpretation of section 1 (1) (e) of the Admiralty Jurisdiction Act, 1991.
Where an application raises a genuine issue of jurisdiction the application for stay should be granted. Mere rising of jurisdictional issue is not, however, to be slavishly relied upon in granting stay of proceedings. The issue must be genuine enough based on hard facts and law.
The hardship that may likely occasion from the grant or refusal of the order for stay is one important factor that cannot be dispensed with in the determination of the motion and other factors as appraised above. From the supporting affidavit the deposition showing the likely hardship that the appellant/applicant may suffer if the application is refused is deposed to paragraph 10 stating as follows:-
“10 That to proceed to trial in the Federal High Court, Lagos without first determining the issue of jurisdiction of that court to hear the suit, would occasion a miscarriage of justice to the defendant/appellant’s ‘applicant and put then to great and unnecessary financial expense in defending a suit which is statute-barred.” (Italics supplied for emphasis)
On the other hand, the hardship envisaged on the respondents’ side if the proceedings are stayed is stated in paragraph 11 of their Counter-affidavit (supra). For the avoidance of doubt I will endeavour to repeat same as follows:-
“11. That the plaintiffs who are advanced in age would be adversely affected if the stay of proceedings is granted.”
There is nothing in the affidavit evidence or address of Counsel to suggest the range of the ages of the respondents. One wonders whether their ages which they, for reasons best known to themselves, have not disclosed are capable of easing hardships on the respondents in the event that the proceedings are stayed and to what extent. It is pertinent to note that the question of hardship is one of hard and clear facts which the party wishing to establish must clearly show by affidavit evidence. It is not for the court to resort to mere speculative guess work in order to ascertain how advanced are their ages and how the advanced ages if visited by an order for stay of proceedings will work out hardship on the respondents.
The appellant’s Counsel has on his part, painstakingly explained the manner and extent of hardship that the appellant/applicant are likely to suffer in the event of refusal of the order for stay. The appellant/applicant will have to call several witnesses to testify, due to the nature of the respondent’s claim, most of whom are experts from various science fields including:-
(1) Cause of the oil spill
(2) Action taken by operators of the oil-rig
(3) Events that follows the oil-spillage
(4) Consequences of the oil-spillage
(5) Measure of damages caused
(6) Environmental and atmospheric impact. etc.
These witnesses most of whom are foreigners will have to take time away from their jobs and the appellant/applicant has to pay their allowances, transportation and lodging. These and more will cause the appellant/applicant considerable financial and manpower expenditure in defending the suit which, in the event of success of the appeal, will turn out to be an exercise in futility.
Moreover, whereas in this case the success of the interlocutory appeal will finally dispose of the case pending before the lower court, a stay of proceedings will be granted. Stay will, however be refused if the application is merely designed and calculated to buy and waste time and unnecessarily protract the proceedings. See Arojoye v. U.B.A. and Anor. (1986) 2 NWLR (Pt. 20) 101, Obinyiriuka v. Aliche and Anor. (1991) 4 NWLR (Pt. 183) 87 where this court per Ogundare, JCA (as he then was) of blessed memory at page 100 paragraphs E-F observed thus:-
“I cannot end this judgment without commenting on the damage to the course of justice occasioned by this interlocutory appeal. The action would have been determined four years ago but for the appeal and the stay of proceedings subsequently granted. In the meantime, the trial Judge has been appointed the Chief Judge of the State. The position then is that the case may have to start de novo before another Judge in the Oguta Judicial Division with further escalation in the costs of litigation. The situation now created is rather unfortunate. A lot of time and expense could have been saved if the point taken on this appeal had been made subject of an appeal if it became necessary following the final judgment. I think stay of proceedings should only be granted where an interlocutory appeal, if successful, will dispose of the entire proceedings.”
Having considered the notice of appeal which is premised on an arguable issue of jurisdiction which constitutes special and exceptional circumstance and which if prosecuted successfully will terminate the life of the proceedings at the trial court, and also the fact that more hardship is likely to be occasioned by the refusal of the application than by granting it as analyzed above. I have a very clear view of my way to granting this application. The application therefore, succeeds and is hereby granted.
It s accordingly ordered that the proceedings in suit No. FHC/L/CS/1344/2003 pending before the Federal High Court, Lagos be and is hereby stayed pending the determination of the appeal.
The appellant/applicant is entitled to cost assessed at N2.500.00 against the respondent.
Other Citations: (2007)LCN/2408(CA)
