Union Bank of Nigeria Plc V. Integrated Timber & Plywood Produces Limited (2000)

LawGlobal-Hub Lead Judgment Report

BA’ABA, J.C.A.

This is an appeal against the decision of Abutu, J. of the Federal High Court, sitting at Benin delivered on the 7th day of July, 1997, refusing or dismissing the application brought by the appellant to strike out the respondent’s suit on the ground that the Honourable Court lacked jurisdiction.

The respondent’s claims in the statement of claim dated 17/2/97, filed on 18/2/97 at page 15 of the record reads;

“Wherefore the plaintiff claim against the defendant are as follows:

572. a) Special damages of DM 28,572.70 being the value of the Iroko furniture component exported to Belgium under LC No. K16167/65626 or the Naira equivalent of N1,478,279.80.
573. b) Loss of earnings on investment of DM 28,527.70 at the rate of 15% per annum at the commercial bank savings rate interest of 15% per annum for the period 1st January, 1991 to the day of judgment.
574. c) N60,000.00 as general damage for negligence”.

In the statement of claim the respondent in paragraphs 1, 2, 3, 4, 5, 6, 7, 8 and 9 averred as follows:-

“1. The plaintiff is a company registered under the laws of the Federal Republic of Nigeria which carries on the business of processing Timber and Plywood of various kinds for export and local use. The plaintiff has its registered office in Warri, Delta State of Nigeria.

2. The defendant is a Public Limited Liability Company incorporated under the laws of the Federal Republic of Nigeria to carry on banking business and in furtherance of its business operations opened and runs various branches in different parts of Nigeria, including Warri.
3. As part of defendant’s business structure, defendant has International Banking Department, Export Unit, which renders professional banking advice and export banking services to members of the business public on letters of credit, Export on foreign trade and allied matters on commission basis.
4. Sometime in 1990, the plaintiff received through its bankers, the New Nigeria Bank Plc, a telex of an Irrevocable Documentary Letter of Credit No. 16167/65626 from the defendant which said letter of credit has as its applicant, C.I.E Dubois-Stockmanns of Belgium, the plaintiff as the beneficiary and Krediet Bank N. V. of Belgium as the foreign bank which purportedly issued same. The plaintiff shall found on a copy of the said telex letter for its full terms and effects.
5. By a letter Reference IDC0090/90 dated 12/10/90 addressed to the plaintiff’s said bankers, and a copy to the plaintiff, the defendant advised on and confirmed the authenticity of the telex establishing the letter of credit and requested for the sum of N25.00 as advising commission. The plaintiff upon receipt of a copy of defendant’s letter paid the commission of N25.00 to the defendant with a NNB Limited draft No. 602092 of 19/11/90 and acted on the defendant’s advice and confirmation by exporting Iroko furniture components to C.I.E. Dubois Stockmanns in Belgium between the 30th November, 1990 and 30th December, 1990 (both days inclusive). The plaintiff shall found on NNB letter of 14/11/90, plaintiff’s letter of 21/11/90 addressed to the NNB Limited, Warri, plaintiff’s invoices No. 007, 008 and 009 for the export in the value of DM 28,527.70 delivered to the defendant.
6. By the terms of the letter of credit, the plaintiff’s drafts for the value of the goods were to be paid on presentation of the relevant shipping documents to the defendant which the plaintiff duly submitted to the defendant and up till now the plaintiff has received no draft or payment for the value of the goods exported under the said letter of credit.
7. At the time the defendant forwarded to the plaintiff the said letter of credit and the letter of confirmation dated 12/10/90, the defendant intended and it well knew or ought to have known that the plaintiff would rely on them and would be induced thereby to export its goods upon the terms contained therein. In the premises, the defendant was under a duty to take care in the making of the said representation to the plaintiff so as not to cause plaintiff any financial loss or damage.
8. Acting on the faith of the defendant’s representations and induced thereby, the plaintiff exported Iroko furniture components in the value of DM 28,527.70 to C.I.E. Dubious Stockmanns in Belgium and for which no payment has been received.
9. In breach of the said duty, the defendant was guilty of negligence in making the said representations”.

By a motion dated 24/3/97, filed on 24/3/97, the appellant as the defendant sought for an order of the Honourable Court, dismissing and or striking out the suit on the grounds that it lacks jurisdiction to entertain the suit. The motion was supported by a seven paragraphs affidavit, deposed to by one J. O. Muwhen, a legal practitioner of No. 78, Warri/Sapele Road, Warri. Paragraphs 1-6 of the supporting affidavit reads as follows:

“1. That I am a legal practitioner in the firm of E.L. Akpofure & Co. Counsel to the defendant/applicant by virtue of which I am conversant with the facts of this case.

2. That the plaintiff/respondent filed this suit on the 9th day of October, 1996. Herein attached and marked Exhibit “A” is the plaintiff/respondent’s claim.
3. That I know as a fact that by virtue of Exhibit “A” i.e. plaintiff/respondent’s statement of claim, this Honourable Court lacks jurisdiction to entertain this suit.
4. That such claim as per Exhibit “A” does not fall within the purview of this Honourable Court’s power to determine.
5. That this Honourable Court should dismiss and or strike out this suit.
6. That the plaintiff/respondent will not be prejudiced”.

No counter-affidavit was filed in opposition to the motion. After argument by both Counsel, the learned trial Judge in his ruling on 7th July, 1997 held,

“In the result, I hold that the suit is one within the admiralty jurisdiction of this Court. The Court therefore has jurisdiction to entertain the suit. The objection is overruled and the motion is hereby dismissed”.

Being dissatisfied with the ruling the appellant filed his notice and grounds of appeal on 11/7/97 containing one ground of appeal and with the leave of this Honourable Court, filed one additional ground of appeal incorporated in his brief of argument. From his two grounds of appeal, the appellant formulated two issues for the determination of this Court as follows:

“1. Whether the learned trial Judge was right in law when he held that he had jurisdiction to entertain this suit by virtue of section 1(1)(h) of the Admirably Jurisdiction Decree No. 59 of 1991.

2. Whether the learned trial Judge was right in law when he held that S.230(1)(d) of the 1979 Constitution as amended by Decree 107 of 1993 does not apply to the suit because the transaction is not one between a bank and its customer”.

The respondent in the respondent’s brief formulated one issue for the determination of this Honourable Court which reads,

“1. Whether the learned trial Judge was wrong in holding that he had jurisdiction to entertain the claim of the plaintiff?”.

When the appeal came up before this Honourable Court on 6/6/2000 for hearing, both counsel adopted and relied on their respective briefs.

Chief E. L. Akpofure, the learned Senior Advocate of Nigeria, for the appellant submitted in the appellant’s brief of argument that this transaction that gave rise to this appeal is between a bank and customer. He stated that the complaint of the respondent can be found at page 7 lines 25-40 and page 8 lines 1 – 28 and pointed out that a close look at the complaint would reveal that the dispute has arisen out of bank/customer relationship. The learned Senior Advocate of Nigeria further submitted that by the proviso of Section 230(1)(d) of the 1979 Constitution as modified by Decree 107 of 1993, the jurisdiction of the Federal High Court was ousted. He stressed that the issue involved in this appeal can better be appreciated when one takes a close look at the proviso of Section 230(1) of the 1979 Constitution. Learned Counsel referred to Section 230(1) of the 1979 Constitution as well as the proviso of Section 230(1)(d) of the 1979 Constitution as modified by Decree 107 of 1993 and contended that it is immaterial whether the transaction arose from letter of credit or any other form of banking or duty as the main issue for consideration is whether the dispute is between an individual customer and a bank. It is the submission of the learned Senior Advocate of Nigeria that Decree 107 of 1993 being later in time takes precedence over and above the provisions of Section 1(1)(h) of the Admiralty Jurisdiction Decree 1991 consequently the provision of Section 1(1)(h) of the Admiralty Decree ceases to have effect as a result of the amendment to Section 230(1) of the 1979 Constitution by Decree 107 of 1993. Relying on the authority of Lipede v. Sonekan (1995) 1 NWLR (Pt. 374) 668, 690, learned Counsel for the appellant concluded his argument on his issue No. 1 by submitting that the learned trial Judge was wrong in relying on Section 1(1)(h) of Admiralty Jurisdiction Decree 59 of 1991 in conferring jurisdiction on the trial court.

On his issue No. 2, learned Senior Advocate of Nigeria for the appellant submitted that the learned trial Judge erred in law when he held that Section 230 (1)(h) of the 1979 Constitution as modified by Decree 107 of 1993 does not apply to this suit on the ground that the transaction is not one between a bank and its customer when the averments in paragraphs 4-9 of the statement of claim show beyond question that the dispute between the parties is in connection with a letter of credit transaction for exportation of goods out of Nigeria, citing NNB v. Odiase (1993) 8 NWLR (Pt. 310) 235. 243, in support of his submission. In conclusion, the learned Senior Advocate of Nigeria for the appellant urged us to allow the appeal.

In reply, Mr. C. A. Ajuyah, the learned counsel for the respondent in the respondent’s brief, commenced his submission by referring to the writ of summons which set out the respondent’s claim which was amplified in paragraphs 4, 5, 6, 7 and 8 of the statement of claim endorsed on the writ of summons and submitted that the learned trial Judge was perfectly right in his finding. Relying on the authorities of Egonu v. Egonu (1978) 11/12 SC 111; Lipede v. Sonekan (1995) 1 NWLR (Pt. 374) 668, 685, learned counsel for the respondent submitted that, this Honourable Court should not disturb the finding of the learned trial Judge. He further submitted that the Admiralty Jurisdiction Decree No. 59 of 1991 has vested on the Federal High Court exclusive jurisdiction to hear and determine any banking or letter of credit transaction involving importation or exportation of goods to and from Nigeria in ship, notwithstanding that the transaction is between a bank and its customer and referred to Sections (1)(h) and 19 of the Decree. He emphasized that the learned trial Judge was not wrong in assuming jurisdiction by virtue of Decree No. 59 of 1991. It is the submission of the learned Counsel for the respondent that Section 230(1)(d) and its proviso are not applicable to this case consequently the learned trial Judge was right in dismissing the appellant’s application. He contended that assuming but without conceding that the Federal High Court does not have jurisdiction, the proper order to be made is of transfer of the suit to the appropriated State High Court by virtue of the provisions of Section 22 of the Federal High Court Act and not striking out or dismissing the action. Learned Counsel for the respondent finally submitted that the appeal lacks merit and ought to be dismissed.

In my humble opinion, the main issue in controversy in this appeal is the issue of jurisdiction of the trial court, the Federal High Court, having regards to the respondent’s claim and the provisions of the Admiralty Decree No. 59 and the 1979 Constitution particularly Section 230(1)(d) as modified by Decree 107 of 1993. It is for this reason that I have opted to determine this appeal on the sole issue, formulated for determination in this appeal by the respondent. It is therefore necessary for a better understanding of the matter to reproduce the provisions of the law relied upon by the parties and the learned trial Judge in reaching his decision.

The learned trial Judge relied on Section 1(1)(h) of the Admiralty Decree No. 59 of 1991, in his decision that, the Federal High Court has jurisdiction to entertain the suit in refusing the order sought for striking out the suit by the appellant and in dismissing the motion. Section 1(1)(h) of the Decree reads:

“1.(1) The admiralty jurisdiction of the Federal High Court (in this Decree referred to as “the Court”) includes the following, that is:- (a) jurisdiction to hear and determine any question relating to a proprietary interest in a ship or aircraft or any maritime claim specified in Section 2 of this Decree;

(b) any other admiralty jurisdiction being exercised by any other court in Nigeria immediately before the commencement of this Decree;

(c) any jurisdiction connected with any ship or aircraft which is vested in any other court in Nigeria immediately before the commencement of this Decree:

(d) any action or application relating to any cause or matter by any ship owner or aircraft operator or any other person under the Merchant Shipping Act or any other enactment relating to a ship or an aircraft for the limitation of the amount of his liability in connection with shipping or operation of aircraft or other property;

(e) any claim for liability incurred for oil pollution damage;

(f) any matter arising from shipping and navigation on any inland waters declared as national waterways;

(g) any matter arising within a Federal port or national airport and its precincts, including claims for loss of or damage to goods occurring between the off-loading of goods across space from a ship or an aircraft and their delivery at the consignee’s premises or during storage or transportation before delivery to the consignee;

(h) any banking or letter of credit transaction involving the importation or exportation of goods to and from Nigeria in a ship or aircraft, whether the importation is carried out or not and notwithstanding that the transaction is between a bank and its customer;

(i) any cause or matter arising from the constitution and powers of all ports authorities, airport authority and National Maritime Authority;

(j) any criminal cause and matter arising out of or concerned with any of the matters in respect of which jurisdiction is conferred by paragraphs (a) to (i) of this subsection”.

Section 230(1) of the 1979 Constitution which spelt out the jurisdiction of the Federal High Court, reads as follows:

“230(1) Subject to the provisions of 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 jurisdiction

(a) in such matters connected with or pertaining to the revenue of the Government of the Federation as may be prescribed by the National Assembly; and

(b) in such other matters as may be prescribed as respects which the National Assembly has power to make laws.

(2) Notwithstanding subsection (1) of this section where by law any court established before the date when this section comes into force is empowered to exercise jurisdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this section comes into force be restyled “Federal High Court”, and shall continue to have all the powers and exercise the jurisdiction conferred upon it by any law”.

The relevant provision of Decree 107 of 1993, referred to and considered in the ruling is section 230(1)(d) of the 1979 Constitution as amended by Decree 107 of 1993 which reads

“230-(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by any Act of the National Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from:-

1. a) 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;

(b) the taxation of companies and other bodies established or carrying on business in Nigeria and all other persons subject to Federal taxation;

(c) Customs and excise duties and export duties, including any claim by or against the Department of Customs and Excise or any member or officers thereof, arising from the performance or purported performance of any duty imposed under any regulation relating to customs and excise duties and export duties;

(d) banking, banks, other financial institutions including any action between one bank and other, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letter of credit, promissory note and other fiscal measures; Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank”.

The position on the question of the criterium to be followed in determining jurisdiction has long been settled. The position is that it is the plaintiff’s demand or claim that determines the jurisdiction of a court. Therefore, in order to ascertain whether or not a court has jurisdiction to try a case, one only needs to look at the plaintiff’s claim: See Izenkwe v. Nnadozie (1953) 14 WACA 361: Adeyemi & Others v. Opeyori (1976) 9 – 10 SC 31 at 51; Egbuziem v. N.R.C (1994) 3 NWLR (Pt. 330) 23; Tukur v. Government of Gongola State (1989) 4 NWLR (Pt. 117) 517 at 549 and Western Steel Works v. Iron & Steel Workers (1987) 1 NWLR (Pt. 49) 284.

In New Nigeria Bank Limited v. Boardman Odiase (1993) 8 NWLR (Pt. 310) 235 at 243, a bank customer had been defined as follows:

“….Generally, a customer is someone who has an account with a bank, or without having an account the relationship of banker and customer exists. In the latter case, some money transaction must connect banker and customer, but must arise from the nature of a contract” .

The definition of a customer also at page 386 of Black’s Law Dictionary 6th Edition in relation to a bank is as follows:

“In banking, any person having an account with a bank or for whom a bank has agreed to collect items and includes a bank carrying an account with another bank. As to letter of credit, a buyer or other person who causes an issuer to issue credit or a bank which procures issuance or confirmation on behalf of that bank’s customer”.

In my view from a careful examination of the respondent’s claims contained in the respondent’s statement of claim, herein reproduced and taking into consideration the two definitions above, it cannot be disputed that the dispute that gave rise to this action falls within the confines of the relationship between a bank and customer in which case, the jurisdiction of the Federal High Court, has been ousted by the proviso to paragraph (d) of section 230(1) of the 1979 Constitution as amended by Decree 107 of 1993.

With the greatest respects to the learned trial Judge, I disagree with him, that Section 1(1)(h) of the Admiralty Jurisdiction Decree No. 59 of 1991 has conferred jurisdiction on the trial court when the said section ceases to have effect by virtue of the modification of the Constitution by Decree 107 of 1993. See Bi zee Bee Ltd. v. Allied Bank (Nig.) (1996) 8 NWLR (Pt. 465) 176, 181.

The case of Lipede v. Sonekan (1995) 1 NWLR (Pt. 374) 668, called in aid by the respondent, is rather in support of the appellant’s case and against the respondent in that in Lipede (supra) the Supreme Court gave effect to an amendment to the law pertaining to Chieftaincy matters. Issue (c) formulated for determination in the appeal before the Supreme Court in Lipede (supra) was Whether Exhibit “18” (the registered registration) had been revoked by the Western State Legal Notice No 6 of 1976 as to render it inapplicable to Ashipa Egba Chieftaincy. The Supreme Court resolved issue (c) as follows:

“To hold that Exhibit’ 18′ applies to the minor chieftaincy of Ashipa Egba, therefore, is to make a pronouncement that Part 2 of the Chiefs Law applies to minor chieftaincy and thus a negation of the provisions of W.S.L.N. No.6 of 1976 as well as sections 4 and 22(2) of the Chiefs Law, Cap 20 of Ogun State. While Part 2 of the Chiefs law is not a repealed Ordinance, it only became inapplicable to the Ashipa Egba Chieftaincy by operation of law”.

It is trite law that courts guard their jurisdiction zealously and jealously but where in a given case that jurisdiction is expressly ousted by the provisions of the Constitution, Act, Law, Decree and Edict once it is couched in clear and unequivocal terms there must be compliance with such an ouster clause. Agwuna v. A.G. Fed. (1995) 5 NWLR (Pt. 396) 418; A.G. of the Federation v. Sode (1990) 1 NWLR (Pt.128) 500.

My answer to the sole issue is therefore in the affirmative in that the learned trial Judge, in my opinion was wrong to have held that he had jurisdiction to entertain the claim of the plaintiff/respondent.

In the result, in view of the foregoing, the appeal succeeds and is hereby allowed. I hold that the learned trial Judge lacks the jurisdiction to entertain the action having regards to the proviso to paragraph (d) of Section 230(1) of the 1979 Constitution (as amended).

Having held that the Federal High Court lacks Jurisdiction to entertain the matter, I order that Suit No. FHC/B/134/96, pending before the Federal High Court, Benin be transferred to the Delta State High Court, the appropriate court, for hearing and determination, in accordance with Section 22(2) of the Federal High Court Act Cap 134 Laws of the Federation, 1990 and Order 8 of the Federal High Court (Civil Procedure) Rules, 1976

The appellant is entitled to costs assessed at N3,000.00 against the respondent.

---

Other Citations:(2000)LCN/0873(CA)