Okem Enterprises Nigeria Limited & Anor V. Nigeria Deposit Insurance Corporation (Liquidator of Allied Bank of Nigeria Plc.) (2002)

LawGlobal-Hub Lead Judgment Report

GALADIMA, J.C.A.

By their application dated and filed on 8/612001, the appellants/applicants pray for the following orders:

“1. AN EXTENSION OF TIME within which the appellants/applicants may apply for an order staying further proceeding in Suit No. PHC/L/FBC/138/99, before Abutu, J. of the Federal High Court AI, Lagos.

2. AN ORDER staying further proceedings in suit No.FHC/L/FBC/138/99 before Abutu, J. of the Federal High Court A1, Lagos pending the hearing and determination of the appeal lodged in this Honourable Court against the ruling of the said lower court delivered on the 18th day of December, 2000.
3. AND FOR SUCH FURTHER ORDER OR OTHER ORDERS as this Honourable Court may deem fit to make in the circumstances.”

The applicants filed an affidavit in support of the application made up of 14 paragraphs. To this affidavit the notice of appeal and the revenue receipts were attached as exhibits A and A1 respectively.

On 5/10/2001 they filed a further affidavit in support of the application; the purpose of which was to bring before us exh. ‘B’, a certified true copy of the ruling of the learned trial Judge delivered

on 8/12/2000 dismissing the applicants’ objection; and Exh. ‘C’ a certified true copy of the ruling of the learned trial Judge delivered on 22/5/2001 dismissing the application for stay of further proceedings.

Paragraphs 4 – 12 of the affidavit in support of the application read:

4. That by a notice of objection dated 15th February, 2000, the appellants/applicants challenged the jurisdiction of the Federal High Court to entertain the suit herein on the contention that the subject-matter of the suit is not within the jurisdiction conferred on the court by the Constitution of the Federal Republic of Nigeria, 1999.

5.That on the 18th day of December, 2000, the learned trial Judge, Abutu, J, delivered a ruling by which the said notice of objection was dismissed.

6.That being dissatisfied with the said dismissal, the appellants/applicants prayed leave to appeal against same to this Honourable Court. Attached herewith and marked exhibits A and Al respectively are copies of the notice of appeal and the Revenue Collectors Receipt issued upon filing of same at the court below.

7.That the appellants/applicants did apply for a stay of further proceedings in the suit before the lower court, but same was similarly dismissed on 22nd May, 2001.

8.That Certified True Copies of the ruling appealed against as well as the ruling dismissing the application for stay of further proceedings shall be produced before this Honourable court immediately they are obtained by the appellants/applicants from the court below.

9.That I am informed by I. C. Eke, Esq., counsel in our firm and I verily believe him as follows:

(i) That this application could not be filed before now due to the absence from the Country of Chief Robert Clarke, leading counsel to the appellants/applicants in this matter, whose instruction and direction was necessary as to how the matter would proceed upon the refusal of the application for stay of proceedings by the court below.

(ii) The said Chief Robert Clarke was at the relevant time away in London in respect of arbitral proceedings being conducted by the firm on behalf of an agency of the Federal Republic of Nigeria.

(iii) Upon his return, the matter was immediately brought to his attention, whereupon he undertook the preparation of the instant application at which period the appellants/applicants were out of time by barely forty-eight hours.

10. That in the premises, the interest of justice will be served if this Honourable Court grants an extension of time within which the appellants/applicants may apply for an order staying further proceedings in the suit below.

11.That unless proceedings are stayed in the suit pending the hearing and determination of the appeal herein, it would proceed steadily unto judgment and possibly levying of execution while the appeal is still pending.

12. That I am informed by Chief Robert Clarke of counsel, and I verily believe him, as follows:

(i) That the appeal herein raises serious and substantial issues of law for the determination of the Court of Appeal in an area where the law is to some extent recondite.

(ii) That the appeal relates to the question whether the court below is vested with jurisdiction to entertain the suit before it.

(iii) That the issues raised in the appeal are inclusive of fundamental questions relating to the interpretation of relevant sections of the Constitution of the Federal Republic of Nigeria, 1999, several decisions of this Honourable Court and the Supreme Court which have been mentioned in the notice of appeal as well as salient provisions of the Tribunals (Certain Consequential Amendments etc.) Decree No. 62 of 1999 and Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) which have not been pronounced upon by this Honourable Court.

(iv) That the decision of this Honourable Court in the appeal before it, if successful, would finally dispose of the substantive suit before the Federal High Court, Lagos.

(v) That a continuation of the proceedings in the suit at the court below during the pendency of this appeal would foist on this Honourable Court a fiat accompli in the event that the appeal succeeds at the end of the day.

The respondent filed a counter-affidavit paragraphs 4 -14 read as follows”:

4. That the facts deposed to in the said affidavit in support are false and misrepresented.
5. That contrary to paragraph 5 of the affidavit in support, the notice and grounds of appeal does not disclose a strong arguable issues of the law.

6.That the mere raising of an issue of jurisdiction is not an automatic ground for stay of proceedings for the purpose of appeal.

7. That the issue of jurisdiction as raised by the appellant is not genuine but wholly designed to deceive or confuse the court.
8. That the appellants have not shown any special and exceptional circumstances to warrant the court exercising its discretion in their favour in this instance.
9. That the appellants did not raise any serious and genuine legal issue in the said ground of appeal.
10. That the appellants have nothing to lose if at the end of the day the Court of Appeal Rules that this Honourable Court lacks jurisdiction in this suit.
11. That the res will not be destroyed in the course of litigation.
12. That the balance of convenience is on the side of the respondents who in this suit is claiming for an outstanding balance on the loan/overdraft facilities granted by the Bank to the respondents.
13. That the appellant’s application is only a ploy to delay the just and expeditious determination of this suit as the appellants have no defence whatsoever to the respondent s claim.
14. That an order of stay of proceedings in this suit will seriously jeopardize the justice of the case.

We heard the application on 28/2/2002, Mr. I. C. Eke, Esq. of counsel for the applicants moved the application. Referring to the two affidavits in support of the application, learned counsel submitted that the grounds of appeal are quite substantial as they are bordered on the question of jurisdiction of the Federal High Court to entertain the suit before it. He also contended that the appeal raises serious issues of law for the determination of this court in an area where the law is to some extent recondite, more so that there have been conflicting decisions of this court on the matter. He placed reliance on the cases of: Nigerian Airports Authority v. Aja Enyi (2001) 15 NWLR (Pt. 735) 173 at 181 – 189; NDLEA v. Okorodudu (1997) 3 NWLR (Pt. 492) 221 at 241 and Kotoye v. Saraki (1993) 5 NWLR (Pt. 296) 710.

Mr. Rickey Tarfa, SAN of counsel for the respondent, in opposing the application and relying on paragraphs 4 – 10 of the counter-affidavit; contended that these paragraphs offend S.86 of the evidence law and they must be expunged. He submitted that the issues of jurisdiction has not been seriously raised in the grounds of appeal. He placed reliance on the following cases: Hallmark Bank v. Akaluso (1995) 5 NW (Pt. 395) 306; Klifco Ltd. v. Philipp Helzmann & Anor. (1996) 3 NWLR (Pt. 436) p. 276. On the question of substantiality of the grounds of appeal, learned Senior Advocate referred to Lijadu v. Lijadu (1991) 1 NWLR (Pt. 169) page 627. He further submitted that in considering an application for a stay of proceedings of the lower court conflicting rights of the parties must be taken into account. He submitted that the appellants’ application was only filed as a ploy to delay the just and expeditious determination of the suit at the lower court, as the appellants have no defence whatsoever to the respondents’ claim. He therefore urged us to refuse this application.

The notice of objection at the lower court in respect of which the learned trial Judge refused to uphold, and against which an appeal has been lodged before this court, set out the grounds of objection as follows:

“(a) The proviso to S. 251 (1) (d) of the Constitution of the Federal Republic of Nigeria, 1999 repeats the terms of s. 230(1) (d) of the 1979 Constitution (as amended by Decree 107 of 1993) and did not vest in this Honourable Court the jurisdiction to determine causes and matters relating to transactions between an individual customer and his bank.

(b) In the premises, therefore the reliefs sought in this suit are matters within the exclusive jurisdiction of the State High Court.

(c) All claims made or intended to be made by the plaintiff/respondent herein are a nullity since they are all claims and matters over which this court1 has no jurisdiction.

(d) Accordingly, this court is devoid of jurisdiction to entertain this suit and the same should therefore be struck out.”

In a considered ruling the learned trial Judge having briefly reviewed how the matter was transferred from the Failed Banks Tribunal to his court pursuant to the provisions of S.2 of the Tribunals (Certain Consequential Amendments etc.) Decree No. 62 of 1999 and S. 29(b) of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 held that his court was vested with jurisdiction to entertain the suit. He held thus:

“The present state of the law is that this court has concurrent jurisdiction with the State High Courts to entertain a dispute between a Bank and its individual customer. See NDIC v. Federal Mortgage Bank of Nigeria Ltd. (1995) 6 NWLR (Pt. 400) and Federal Mortgage Bank of Nigeria Ltd. v. NDIC (supra) at p.226.”

Whilst the applicants have lodged an appeal against this ruling they further filed in this court the present application under consideration. The first leg of this application is for extension of time within which the applicants may apply for an order staying further proceedings in a suit pending before the lower court. The applicants have sufficiently placed before us in paras. 9(i) – (iii) of the affidavit in support of this application, reasons why this application could not be filed on time. The applicants were out of time by barely 48 hours. In view of this I have no cause to refuse the relief sought by the applicant for extension of time within which they may apply for an order staying further proceedings in the suit before the lower court.

However the second leg of the relief sought by the applicants is for A an order staying further proceedings of the said suit. I notice this application was filed almost a year ago. I have once observed in Nigerian Airports Authority v. Aja Enyi (supra) at page 182 – 183 thus:

“The order for a stay of proceedings is an antithesis to the speedy hearing of a case. It connotes a punitive

element when not desirable on the part of the anxious plaintiff, the hearing of whose claim will be unjustifiably delayed. A plethora of cases lean unfavourably against the grant of a stay of proceedings pending the determination of appeal where the grounds of appeal are lacking in substance, frivolous and grossly incompetent …..”

Hence, it is usually regarded as exorbitant judicial exercise in view of the delay that is often associated with such exercise. A stay of proceeding therefore is not granted lightly or on frivolous grounds.

An applicant who only engages in a ploy to waste time and deny the respondent the opportunity to have his case heard would not be granted a stay of proceeding of the trial court.

Again, whether or not to grant a stay of proceedings pending an appeal against an interlocutory order depends on a number of factors, bearing in mind the circumstances of each case. However, the most important consideration where an interlocutory order does not finally dispose of the case, it could be wrong to stay proceedings simply because of an appeal which has been lodged against it by an aggrieved party as such an order could be made the subject of appeal, if it ultimately becomes necessary after the final judgment. On the other hand the interlocutory appeal, if successful will automatically put an end to the proceedings in the trial court, prudence really dictates that a stay of proceedings should be granted. A good example of the latter situation is where the issue of jurisdiction is raised in appeal. The issue of jurisdiction is fundamental and crucial but such issue must be substantial and not raised merely as a ploy to delay, the proceedings. If the trial court pronounces upon the issue of jurisdiction and holds that it has jurisdiction, proceedings must be stayed to enable this court look into the substance of such ground of appeal. This is the law: See Kotoye v. Saraki (1993) 5 NWLR (Pt. 296) 710 at 727.

I have carefully studied the two grounds of appeal. They are substantial and are arguable.

An application to stay further proceedings must disclose first from the affidavit evidence and the exhibited notice of appeal that the grounds are substantial and/or arguable.: See Sodeinde v. Registered Trustees of the Ahmadiyya Movement-in-Islam (1980) 1 – 2 SC 163.

It is also a settled principle that the applicant seeking a stay of proceedings pending appeal must show special or exceptional circumstances. If a genuine issue of jurisdiction is raised by an applicant, then he has satisfied a special or exceptional circumstance to warrant the grant of stay of further proceedings pending the determination of his appeal. As I have said before the applicants in the instant case have shown this special or exceptional circumstance.

They have raised genuine issue of jurisdiction, not merely as a ploy to delay the hearing of the case.

The end result is that this application succeeds, and I make the

following orders:

1. Time within which the appellants/applicants to apply for an order staying further proceedings in suit No. FHM/FBC/138/99 before Abutu, J. of the Federal High Court, Lagos is extended up till today.
2. Stay of further proceedings in the said suit No. FHC/L/FBC/138/99 before Abutu, J. is hereby granted pending the hearing and determination of the appeal lodged in this court against the ruling of the lower court delivered on 18/12/2000.
3. This appeal ought to be heard expeditiously in view of the fact that it has been stalled for one year now due to this instant application.

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Other Citations: 2002)LCN/1148(CA)