Nigeria National Petroleum Corporation V. Famfa Oil Ltd & Anor (2009)
LAWGLOBAL HUB Lead Judgment Report
A. FABIYI, J.S.C.
C.: (Delivering the Leading Judgment): The 1st respondent felt unhappy with the manner in which the 2nd respondent acquired 50% of its interest in Oil Mining lease (OML) 127. After serving the appropriate notice of intention to commence legal proceedings on the 2nd respondent, the 1st respondent filed an Originating Summon at the Federal High Court in which it sought for the determination of the following questions:-
“1. A declaration that the President, Vice-President or Officers in the Public Service of the Federation CANNOT grant any Oil Prospecting Licence (OPL) or any interest whatsoever in respect of any ‘mineral oils and natural gas in, under or upon the territorial waters and Executive Economic Zone of Nigeria’ to any person or persons except under and in accordance with the provisions of the Petroleum Act CAP P. 10 of the laws of the Federal Republic of Nigeria, more especially 2 section 2 (1) (a) (b) and (c ) as well as section 2 (3).
- A declaration that by virtue of paragraph 8 of the First Schedule to the Petroleum Act, the first respondent cannot grant an Oil Mining Lease to any other person or persons. EXCEPT THE HOLDER OF AN OIL PROSPECTING LICENSE.
- A declaration that the President, Vice President or Officers in the Public Service of the Federation CANNOT acquire any interest in an Oil Prospecting Licence (OPL) or Oil Mining Lease (OML) except under and in accordance with the provisions of:-
(a) Paragraph 35 of the first schedule to the Petroleum Act;
(b) Section 44 (1) of the Constitution of the Federal Republic of Nigeria.
- A declaration that the purported acquisition of 50% of the applicant’s interest or any interest whatsoever in OML 127 in as much as it was not done in compliance with the provisions of the law and the constitution as stated above is illegal, unconstitutional, null and void and cannot confer any interest whatsoever in OML 127 in the second respondent (that is due process of the law must be followed).
- A perpetual injunction restraining the second respondent, its assigns, servants privies, subsidiaries, whomsoever, howsoever, whensoever, from exercising any right in the said OML 127 or any part or portion thereof.”
The learned trial judge heard the matter and in his reserved judgment handed out on 31st May, 2006, the suit was dismissed. The 1st respondent herein felt irked with the poise of the learned trial judge. It appealed to the Court of Appeal, herein referred to as the Court below.
The Court below heard the appeal and in its own reserved judgment, handed out on 10th December, 2007 the trial court’s decision was set aside. Consequently, the following orders were made:-
“1. The compulsory and arbitrary acquisition of the interest of the appellant by the 2nd respondent as outlined in letters or acquisition dated 27th January, 2005 and 19th April, 2005 is hereby declared illegal, unlawful, wrongful, unconstitutional and thus null and void.
- It is hereby declared that the purported acquisition of 50% of the appellant’s interest in OML 127 in as much as it was not done in compliance with the provisions of the law, paragraph 35 of Cap 10 of the LFN 2004 and the Constitution is illegal, unconstitutional, null and void and cannot confer any interest whatsoever in OML 127 in the 2nd respondent, without due process of the law.
- An order is hereby made directing the 2nd respondent to return to the appellant all his interest in OML illegally acquired.
- An injunction is hereby granted restraining the 2nd respondent, its assigns, servants, privies, subsidiaries, whomsoever from interfering with the rights of the appellant in the said OML 127.
The appellant is awarded costs in the sum of =N=50,000.00 against the two respondents.”
In a ding-dong fashion, the 2nd defendant at the trial court-Nigeria National Petroleum Corporation, appealed against the decision of the court below. Since the appeal has been entered in this court and no further proceedings could be entertained by the court below, the appellant filed a motion on notice dated 10th September, 2008 on 17th September, 2008 praying for the following:-
“1. An order granting stay of execution of judgment of the Court of Appeal delivered on 10th December, 2007 in appeal No. CA/A/173/2006 pending the determination of the appeal filed by the appellant/applicant before this Honourable Court.
- And for such further order or other orders as this Honourable Court may deem fit to make in the circumstances of this case.”
Let me stress the point here, for avoidance of doubt, that this ruling is only sequel to arguments canvassed in respect of this application for stay of execution and not more than that. The issues to be determined in the main appeal should not be considered, even remotely. For if same is done, nothing will be left for consideration at the end of the day.
The application for stay of execution was supported by an affidavit of 37 paragraphs. A host of exhibits were attached. As well, a further affidavit of 44 paragraphs was filed. On behalf of the 1st respondent, a counter affidavit which contains 15 paragraphs was filed in opposing the application.
On 23rd of March, 2009 when the application for stay of execution was taken, O. Soyebo, SAN on behalf of the applicant relied on facts deposed in the main affidavit as well as the further affidavit to fortify the application.
Learned Senior Counsel observed that the court has laid down conditions for a grant of an application of this nature. She cited the cases of Vaswani Trading Co. v. Savalakh & Co. (1972) All NLR 922 at 926, Martins v. Nicannar (1988) 1 NSCC (Vol. 19) 613. She observed that special circumstances have been depicted in the affidavit and further affidavit stated above and that the 1st respondent did not make any investment in OML 127. Senior Counsel asserted that the 1st respondent is not viable as it only has 10.000 shares at N1.00 (One Naira) per share. She felt that the 1st respondent may not be able to compensate the appellant if the appeal succeeds. Learned Senior Counsel expressed the obvious that if the application is granted, the 1st respondent will still continue to have stake in the management of OML 127. She further observed that in the unlikely event that the appeal fails, the appellant can compensate the 1st respondent.
Senior Counsel submitted that the appeal is arguable as the grounds of appeal are substantial. She felt that an order for stay of execution is warranted in the interest of all the parties and that balance of justice weighs on the side of the applicant. She urged that the application be granted.
On behalf of the 1st respondent, BAM Fashanu, SAN relied on the counter affidavit filed on 13th October, 2008. He observed that the applicant has to show special circumstances why stay order should be granted. He maintained that the fact that the applicant is a Federal Government Agency does not give it a special status. He cited the case of Gairy v. Attorney-General of Grenada (2002) 1 AC 167 at 180 – 181. Senior Counsel pointed it out that the res in the matter is a depleting one and the applicant is asking the court to tie the hands of the 1st respondent and allow it to continue to draw on same. He observed that the 1st respondent is the judgment creditor and that none or the party has the capacity for exploitation of OML 127. He referred to paragraph 13.1 of the counter affidavit and pointed it out that the applicant is not viable and urged the court to find that the applicant is bankrupt. He maintained that the applicant did not attach its audited account and that no special circumstance has been shown. Senior Counsel cited the case of Okafor v. Nnaife (1987) Vol. 18 NSCC 1195 at 1198-1199.
Senior Counsel stressed the point that both parties are entitled to justice. He submitted that even if recondite point is raised, it is not enough as special circumstance and recondity must co-exist. He cited Ajomale v. Yaduat (1991) 5 NWLR (Pt. 191) 266 at 290H. He urged that the application be refused.
Mrs. A. O. Mbamali, Learned D.C.L who appeared for the 2nd respondent, aligned herself with the stand taken by the senior counsel for the applicant. On maintenance of status quo, she cited Saraki v. Kotoye (1994) 4 NWLR (Pt. 4J 3) J 44, Globe Fishing Industries Ltd. v. Coker (1910) NWLR (Pt. 162) 265; Olunloyo v. Adediran (2001) 8 M.J.S.C. 120. She urged that the application be granted as prayed.
The principles that should guide courts in application for a stay of execution have been reiterated in many decisions of this court. Basically, a judgment creditor is entitled to have the benefits of the fruits of his judgment. And so, a Court of Appeal should not grant a stay of execution unless there are special or strong circumstances for doing so. There must be some collateral circumstances and in some cases, inherent matters which may, unless the order of stay is granted, destroy the subject matter of the proceedings, or foist upon the court, especially the Court of Appeal, a situation of complete helplessness or render nugatory, the order of the Court of Appeal or paralyse, in one way or the other, the exercise by the litigant of his constitutional right of appeal or generally provide a situation in which whatever happens to the case and in particular, even if the appellant succeeds in the Court of Appeal, there could be no return to the status quo. See Vaswani Trading Co. v. Savalakh & Co. (supra) at page 926.
When a judgment or order of a lower court is not manifestly illegal or wrong, it is right for a Court of Appeal to presume that the order or judgment appealed against is correct or rightly made until the contrary be proved or established. For this reason, the Court of Appeal and indeed any court, will not make a practice of depriving a successful litigant, the fruits of his success unless under very special circumstances as observed by Brown, L. J in The Annot Lyle (1986) 11 P. D. at p.116.
The Courts have an unimpeded discretion to grant or refuse a stay. Like in all other instances of discretion, the court is bound to exercise same both judicially as well as judiciously and not erratically and even capriciously. See University of Lagos v. Aigoro (1985) 1 SC 265, 271: University of Lagos v. Olaniyan (1985) 1 SC 259: Eronini & Ors V lheuko (1989) 1 N.S.C.C. (Vol. 20) 503 at p. 513. In this respect, ‘judicious’ means (1) proceeding from or showing sound judgment; (2) having or exercising sound judgment; and (3) marked by discretion, wisdom and good sense.
It must be noted here that discretion to grant or refuse a stay must take into account the competing rights of the parties to justice. A discretion that is biased in favour of an applicant for stay but docs not adequately take into account the respondent’s equal right to justice is discretion that has not been judicially and judiciously exercised. See Okafor & Ors. V. Nnaife (supra) at p. 1197.
An unsuccessful litigant applying for a stay must show special circumstances seriously pleading and showing that the balance or justice obviously weighs in favour of a stay. The onus is on the party applying for a stay pending appeal to satisfy the court that in the peculiar circumstances of his case, a refusal of stay would be unjust and inequitable. Again, see Okafor & Drs. Nnaife (supra) at p.1198.
Perhaps, I need to state it that the above are only some of the general rules guiding and governing the court in the exercise of its discretion to grant or refuse a stay. The points discussed are not exhaustive. Any art of balancing competing interests must be done with utmost sense of responsibility.
The Senior Counsel for the applicant never maintained that the judgment of the court below is manifestly illegal or wrong. For now, I cannot summarise any aspect of the said judgment that is manifestly illegal or wrong. It is therefore right to presume that the judgment of the court below is correct. The presumption is, however, a reputable one if the contrary is proved or established. For this reason, the 1st respondent who is the successful litigant should not ordinarily be deprived of the fruits of its success unless under very special circumstances. The 1st respondent, for now, is entitled to enjoy the fruits of its success as ordered by the court below.
The applicant harped on the point that the 1st respondent is not viable and that if the appeal succeeds, the applicant may not get compensated by the 1st respondent. In the counter affidavit, it was deposed that a senior official of the applicant made a press statement that the applicant’s finances appear to be in an uncomfortable position. None of the parties attached its current audited account to show that it is buoyant. It is like the pot calling kettle black and vice versa. In this type of situation, when the position is the same, the law should take its normal course.
The applicant desires that an order should be made to stop the 1st respondent from drawing 50% in the operation of OML 127 as ordered by the court below. The applicant wants to continue to take advantage of same. I note that the res in the matter is a depleting one. The applicant wants the court to tie the hands of the 1st respondent and allow it to continue to draw on same. In my considered view, an order for stay will fly against the dictates of reason since the 1st respondent is the judgment creditor. Such a stance will be akin to an adjudged trespasser in a land matter being granted an order for stay of execution to continue his act of trespass. Refer to Okafor & Ors. V Nnaife (supra) at p. 1198-1199.
The applicant, in a rather mundane fashion, tried to say in its affidavit in support that it will be faced with loss of revenue as a Federal Government Agency if the order for stay of execution is refused. Such a ploy points at the realm of sentiment. It must be said pointedly that the fact that the applicant is a Federal Government Agency does not give it any special status. It has equal status with the 1st respondent in the face of the law and before the Court of law. The case of Gairy v. Attorney-General of Grenada (supra) at 180 – 181 is directly in point and has a persuasive authority. A court of law deals with law and should never be carried away by sentiments.
Senior counsel for the applicant felt that the appeal has arguable grounds. She did not contend that the arguable grounds relate to recondite point of law. It is not all arguable grounds that equate to recondite points of law.
Senior counsel for the 1st respondent felt that even if recondite point is raised, it is not enough as special circumstance and recondity must co-exist. That is as stated by this court in Ajomale v. Yaduat (supra) at p. 290.
The adjective ‘recondite’ is defined in the New Webster’s Dictionary, International Edition as ‘obscure, little known, difficult to understand’. In Chambers Dictionary, it is defined as complicated, concealed, dark, deep, difficult, hidden, intricate, involved, mysterious, mystical, obscure, profound, secret, formal abstruse, arcane, esoteric; opposite of simple and straightforward. When a party talks of a recondite point of law, it is not just to be stated in general terms. The party must state the point of law that he feels is recondite. Such a stance cannot and should not be left to guess work or conjecture. And since the applicant did not propose any point of law that is complicated, concealed or intricate, the point should be left at bay for now. Even then, it has been shown above that where recondite point of law is established, it must co-exist with special circumstances. And in this application, no special circumstance has been clearly depicted to warrant a grant of an order for stay of execution pending the determination of the main appeal.
Let me make one point more and I shall be done. This is clearly a matter in which parties should make haste and take necessary action to have the main appeal determined at the earliest opportunity.
In conclusion, it is my considered view that the application, looked at from all angles, is devoid of merit. And it is hereby dismissed. The applicant shall pay N30,000.00 costs to the 1st respondent.
SC.178/2008
