United Cement Company of Nigeria V. Dangote Industries Ltd. & Anor. (2006)
LawGlobal-Hub Lead Judgment Report
ADEKEYE, J.C.A.
In the application filed on 23/11/05, the appellant/applicant United Cement Company Nigeria Limited prayed this court for:
“An order suspending the restraining order in suit No. FHC/ABJ/CS/140/2005 dated the 27th of October, 2005. (Per Hon. Justice S. T. Adah in this appeal pending the hearing and determination of the appeal.)”
In the scenario leading to this application, the 1st respondent, Dangote Industries Limited by a writ of summons and statement of claim filed on the 11th of March, 2005, at the Federal High Court Abuja claimed against the appellant/applicant United Cement Companies Ltd. and the 2nd respondent Hon. Minister of Solid Minerals Development amidst other reliefs as follows:
“A declaration that the 2nd defendant by its purported approval of EAL LWS 17410 and 17411 in the 1st defendant’s favour, exercised its powers and discretions under the Minerals and Mining Act 1999 without good faith and legal justification, improperly, unfairly and in a way discriminatory against the plaintiff.”
The 1st respondent simultaneously filed an interlocutory injunction before the same court against them. The appellant/applicant filed a notice of preliminary objection challenging the jurisdiction of the court. The court dismissed the objection and claimed that it had jurisdiction.
The appellant/applicant filed an appeal against the decision of the Federal High Court delivered on the 28th June, 2005.
The appellant filed an application for a stay of further proceedings pending the determination of this appeal. The 1st respondent filed another application praying for an order of interim injunction against the appellant.
In the ruling delivered on the 27th of October, 2005 the learned trial Judge granted the appellant’s motion for stay of further proceedings but in addition imposed the specific condition that “the parties to the action are, while the matter pends in court restrained from engaging in any activity over the area in dispute.”
The appellant had filed notice of appeal against that decision, the notice was attached to the application as exhibit B.
Meanwhile, the learned appellants counsel Mr. Okunloye SAN argued and submitted in favour of granting the application for discharging this order of restraint by raising salient points as:
1. There was no application for injunction before the lower court as at the time the order was made.
2. An order of injunction is not an ancillary order to an order for stay of proceeding, and cannot be made as a consequential order in the circumstance.
3. Parties were not called upon to address the court on whether the grant of injunction was necessary.
4. Issue of conditional stay is not known to law.
5. The appellant/applicant has been in actual possession and has been exercising control over the area in dispute pursuant to the licence granted. The order made had the effect of idling away and destroying the asset, machinery and investment of the appellant already put on the land.
6. That the count did not extract any undertaking in damages from the 1st respondent.
7. That the appellant cannot be compensated in damages in terms of the loss of investment opportunities it would suffer if the order is not suspended whereas the respondent could be compensated in damages. The appellant’s counsel cited the cases of – 1. Shodeinde v. Registered Trustees of The Ahmadiyya Movement in Islam (1980) 1-2SC 163; 2. Central Bank of Nigeria v. Ahmed (2001) 11 NWLR (Pt. 724) p. 369; 3. Progress Bank of Nigeria Plc. v. O. K. Contract Point Holdings Ltd. (2001) 9 NWLR (Pt. 717) p. 80; 4. T.S.A Industries Limited v. Kema Investments Ltd. (2006) 2 NWLR (Pt. 964) p. 300; 5. Vaswani v. Savalakh (1972) 12 SC 77; 6. Shell Petroleum Development Co. Nigeria Limited v. Omu (1998) 9 NWLR (Pt. 567) 672, Ajomale v. Yaduat (No.2) (1991) 5 NWLR (pt. 191) p. 266, 8; Awumi v. Alaghe (Unreported) Appeal No. CNKJ 139/89 delivered on 11th April 1990. Dr. Afe Babalola Injunctions and Enforcement of Orders.
1. Dr. Babalakin SAN for the 1st respondent in defence of the order of restriction made by the trial court on the 27/10/05 submitted and directed the attention of this court to the two appeals filed in this matter to this court demonstrating a deliberate intention to abuse the process of this court.
2. That the relief sought in this application is the subject matter of the appeal going by the notice of appeal. It is trite that you cannot seek and obtain at an interlocutory stage the relief that you seek in the substantive appeal.
3. Conditional stay of proceedings is provided for in the Rule of Court vide Rules of the Federal High Court Order 50 Rules (1) and (2).
While arguing the application before the court the appellant’s counsel asked for stay of proceedings in the suit unconditionally until hearing of the appeal while the 1st respondent’s counsel urged the lower court to preserve the res if the order for stay should be granted as by the end of the litigation there would be no res. Dr. Babalakin identified the contradictions in the affidavit evidence of the appellant as regards the location of the site in relation to the land in dispute, while on the other hand in this appeal the appellant is claiming occupation of the site and commencement of business activities there.
The court did not grant the order out of its own volition contrary to the submission of the appellant. The order for conditional stay was properly made as any order to the contrary would have the effect of destroying the res. The respondents’ counsel cited cases in support of the argument as follows: (i) NV Scheep v. MV “S.araz” (2000) 15 NWLR (Pt. 691) p. 622; (ii) Agwasim v. Ojichie (2004) 10 NWLR (Pt. 882) p. 613 SC; (iii) Obeya Memorial Hospital v A.-G., Federation (1987) 3 NWLR (Pt. 60) p. 325; (iv) Kotoye v. C.B.N. (1989) 1 NWLR (Pt. 98) p. 419; Buhari v. Obasanjo (2003) 17 NWLR (Pt.850) p. 423.
After due consideration of the various submissions of counsels for and against the application the under mentioned facts of common interest emerged:
1. That the appellant had set in motion activities in furtherance of its business investment on the disputed land following the licence granted by the 2nd respondent.
2. The 1st respondent filed a suit before the learned trial Judge challenging the issuance of the licence to the appellant.
3. The 1st respondent’s claim about the licence granted to the appellant is yet to be determined by the lower court.
4. The appellant challenged the jurisdiction of the lower court to hear the suit. The ruling of the trial court maintaining jurisdiction went on appeal to this court.
5. The lower court ruled in favour of the application for stay of further proceedings pending the determination of the appeal and inter alia in the penultimate paragraph of the ruling made order as follows:
“I believe that when a matter is pending before the court, it is tandem with the norms of our adjudication and the interest of justice that parties to the suit should not under any guise do things or take steps to compromise the proceedings before the court or to afflict the res in the case. Staying of proceedings is never a licence to any of the parties to engage in doing anything capable of destroying either the tangible or intangible “res” in the matter. The court therefore has an inherent power to make a preservative order touching the tangible or intangible res in the suit. From the foregoing consideration and the circumstances of this case the court will act in accordance with Order 50 rules 1 and 2 of the Rules of the Court. The court from the foregoing therefore hereby grant this application for stay subject to this condition that the parties to the action are while the matter pends in court restrained from engaging in any activity over the area in dispute. This application is accordingly granted with this specified condition.”
The appellant’s contention is that this order is wide, destructive and disruptive of the business and consequently culminating in a loss of investment opportunities for the Company. The appellant/applicant enumerated a host of other reasons why the order of restraint cannot stand and should be discharged as an order of injunction cannot be granted hand in hand with an order for stay of proceedings in the same matter. The other reasons have been out lined at the onset of this ruling. I shall not belabour the issue by going over them for the avoidance of repetition.
Obviously the order of restraint made is an interlocutory and an injunctive order as it was meant to be obeyed pending the determination of the suit before the trial court. It is meant to operate as a stay of the parties activities on the disputed land.
It is an order not ordinarily made as a matter of course but lies in the exercise of the court’s discretion and inherent powers to grant or refuse. The court will look into the circumstances surrounding the case in view of the order, and consider the competing rights of the parties to justice and maintain a balance in their positions. The demand for justice dictates that when a party intends to exercise his constitutional right of an appeal in a matter between parties, the order of stay must be made to enable the preservation of the res the subject matter of dispute.
A preservative order is incidental to an order for stay of proceedings as the underlying factor for granting a stay is the preservation of the res. Hence it is the observation in a plethora of cases that:
“All courts of record, whether trial or appellate possess inherent powers to grant a stay of further proceedings pending the determination of an appeal filed in a case so as to preserve the subject matter of litigation. Where an appeal is filed against the decision of a court, the court from which the appeal lies as well as the court to which the appeal lies have a duty to preserve the res so as to ensure that the appeal, if successful is not rendered nugatory.
This power of the preservation of the res so as to ensure that the appeal if successful is not rendered nugatory.
The power of preservation of the res pending the determination of the appeal is applicable not only to cases where the res is tangible but also to cases in which the res is intangible.
Kigo v. Holman Brothers (Nig.) Ltd. (1980) 5-7 SC 60; Shodeinde v. Registered Trustees of The Ahmadiyya Movement-in-Islam (1980) 1-2 SC 163; Kabo Air Ltd. v. INCO Beverages Ltd. (2003) 6 NWLR (Pt. 816) p. 323; Nigerian Breweries Plc. v. Osho (2001) 8 NWLR (Pt. 716) p. 746.
By virtue of Order 3 rule 23(2) and (3) of the Court of Appeal Rules 2002 and section 16 of the Court of appeal Act, the Court of Appeal has jurisdiction and discretion to vary an earlier order of the trial court for a stay of proceedings under certain circumstances at the instance of the applicant who initially applied for an order of stay at the trial court, such discretion must be exercised judicially and judiciously. Okafor v. Nnaife (1987) 4 NWLR (Pt. 64) p.129; C.B.N. v. Beckiti Construction Limited (2004) 14 NWLR (Pt. 893) p. 293.
An appellant who has been granted a conditional stay by the trial court has a heavy burden of proving that the conditions or terms imposed by the court are onerous and they deserve to be varied. This would be done by deposing to facts in an affidavit spelling out the reasons why the condition are onerous, harsh and unfair to him and why they should be varied. Fawehinmi v. Akilu (1990) 1 NWLR (Pt.127) p. 450; LSDPC v. Citymark (W.A.) Limited (1998) 8 NWLR (Pt.563) p. 681; Lingo (Nig.) Ltd. v. Nwodo (2004) 8 NWLR (Pt.874) p. 30.
It is trite also that an interlocutory power of court affects all applications incidental to the principal action namely the judgment or ruling and same include all steps taken for the purposes of assisting either party in the prosecution of his case, before final judgment or of protecting or otherwise dealing with the subject matter of the action before the right of the parties are determined. I shall now examine the powers of court to make consequential, incidental or ancillary relief. A court must never come to a decision on any ground in respect of which it has neither received evidence in support nor received arguments on behalf of the parties except by way of consequential or incidental reliefs.
Consequential or incidental orders are granted by way of inherent power to the court to make orders and they must flow directly and naturally from the decision or order of court made on the issues in litigation and invariably consequent upon it. Such orders are incidental to the prayers sought particularly the expression “And any such order or orders as this Honourable Court may deem fit to make.” The order granted for the prevention of the res to my mind is incidental to the primary relief that is the stay of the proceedings before the court. Though there is an indication that the counsel to the 1st respondent mentioned that he would not be opposing the order for stay of proceeding unless it is granted with the condition restraining both parties from performing any activities on the land in dispute. Akinbobola v. Plisson Fisko (Nig.) Ltd. (1991) 1 NWLR (pt.167) p. 270; 2. Ige v. Olunloyo (1984) 1 SC 258, (1984) 1 SCNLR 158; 3. Akapo v. Haeem-Habeeb (1992) 6 NWLR (Pt. 247) p. 266; 4. Gabari v. Ilori (2002) 14 NWLR (Pt. 786) p. 78; 5. Oduwole v. Aina (2001) 17 NWLR (Pt. 741) p. 1; 6. N.B.C. v. Kumbo Furniture Co. (Nig.) Ltd. (2004) 17 NWLR (Pt. 903) p. 572.
The court can invoke any law it finds relevant to the determination of the suit before it whether or not such law is cited by the parties because the court is entitled to take judicial notice of any law or judicial decisions. The need to preserve property subject matter of litigation is provided for in the Rules of Court for instance Order 50 rule 2(2) of the Federal High Court Rules 2000 states that:
“An order for stay may be made subject to such conditions as shall appear just, including the deposit in court of any money adjudged due to any party in the judgment appealed from.”
The lower court lightly relied on the foregoing rule to make its order, which is consequential in nature as it gives effect to the orders of stay of proceedings which it follows: It has not detracted from the order for stay, neither does it contain extraneous matters. Finnih v. Imade (1992) 1 NWLR (pt. 219) p. 511.
It was a relief sought by the 1st respondent while the appellant prayed for stay of proceedings. It is noteworthy that both orders are designed to protect the subject matter of litigation. An order made for the preservation of property is not meant to be draconian in nature hence whenever it appears that if such order is granted considerable damage will be done to the defendant by the stoppage of his business which cannot be compensated, the order of injunction would be stayed or suspended in terms.
The claim of the appellant/applicant is that the order will destroy and disrupt his business and investment opportunities and asked that the order be discharged pending the hearing of the appeal. Shell Petroleum Development Co. (Nig.) Ltd. v. Omu (1998) 9 NWLR (Pt. 567) p. 672 at 683; Voltie Nigeria Limited v. Groupe Denone (2003) 8 NWLR (Pt. 821) p. 58; Josien Holdings Limited v. Lornamead Ltd. (1995) 1 NWLR (Pt. 371) p. 254.
The 1st respondent in one of its claims before the lower court had challenged the 2nd respondent over the licences it granted to the appellant/applicant to cover the area in dispute when it has knowledge of its business plan which steps amount to unlawful interference by the 2nd respondent and appellant and calculated to harm, impair, damage or destroy the 1st respondent’s economic interest. Amongst the documents attached to the application as exhibit 005 in the reply affidavit filed 10/2/06 is a letter written on behalf of the Government of Cross River state and signed by the Commissioner for Lands and Housing to the Hon. Minister of Solid Minerals Development Abuja reporting about the activities of Companies prospecting for and mining limestone in an area which have occasioned unrest and disaffection within the communities. An extract from this letter reads:
“Your ministry is therefore kindly requested to suspend further processing of all prospecting mining licence in the area while directing the Companies namely Dangote Group and United Cement Company of Nigeria Ltd. (UNICEM) to suspend activities in the area until further notice.”
Even the host government requested that the appellant and the 1st respondent during the period of this application suspend their activities in the area in the interest of peace in the communities until further notice. This is an information attached to this application and available before this court for the consideration of this current application.
The exercise of every discretion of court depends by and large on the peculiar facts and circumstances of each case, particularly surrounding the litigation by the parties any bona fide substantial advantage to the appellant/applicant and any serious or substantial disadvantage to the respondent. It is this dependence of the exercise of any discretion on peculiar facts and circumstance of each case that no one exercise of a discretion is binding authority for the exercise of the other. The facts in cases like Shell Petroleum Development Nigeria Limited v. Omu (1998) or Voltic Nigeria Limited v. Groupe Danone (2003) 8 NWLR (Pt. 821) p. 58 have to be compared with and contrasted to the instant case. The business in this case in respect of the disputed land is just getting off ground or in the offing whereas in the Voltic case, the Company was in full production and making daily sales and returns. The exercise of the court’s discretion cannot be similar in both cases and they must be definitely different as the circumstances of the cases are different.
While arguing this application Mr. Okunloye SAN for the applicant further submitted that the application is interlocutory and predicated on the appeal CA/A/165/2005. The order is to be suspended as it is working hardship on the business of the applicant pending the determination of this appeal. However, the exhibits attached to this motion filed 28/11/05 include the ruling of the lower court delivered on the 27/10/05 as exhibit A, and a copy of the notice of appeal filed against this ruling as exhibit B. The ruling in the appeal CA/A/165/05 is against the decision of the lower court dismissing the preliminary objection challenging the court’s jurisdiction.
The position is that this court is being urged to take the issue of suspending the order for restraint made on 27/10/05 as an interlocutory application in the appeal CA/A/165/05 while a substantive appeal has been filed against the order in the same court between the same parties. It is trite that a court of law should not unwittingly decide the very same matter which is yet to be dealt with in the substantive case before it at the interlocutory stage. Therefore, at the interlocutory stage issues that would be canvassed at the appeal stage ought not to be heard or argued by counsel and decisively commented upon by the court. The approach will render nugatory the substantive appeal which is yet to be heard. In the instant application the relief sought in the motion paper is exactly the same as those in the grounds of appeal in the notice of appeal attached. Orji v. Zaria Industries Ltd. (1992) 1 NWLR (Pt. 216) p. 124; Egbe v. Onoglln (1972) 1 All NLR 95; Ndoma-Egba v. Government of Cross River State (1991) 4 NWLR (Pt. 188) p. 773; S.C.C (Nig.) Ltd. v. Our Line Ltd. (1995) 5 NWLR (Pt. 395) p. 364; ICON Ltd. v. FBN Ltd. (1995) 6 NWLR (Pt. 401) p. 370.
A Court of Appeal would not generally question the exercise of discretion by the trial court merely because it would have exercised the discretion in a different way if it had been in the position of the lower court. Consequently the Court of Appeal will be wary to interfere with the discretion of a trial court unless it appears that the result of the order will defeat the right of the party’s altogether. In this case the trial court did not exercise its discretion wrongly when it granted the appellants application for stay of proceedings with the specified condition restraining parties from engaging in any activity over the area in dispute while the matter pends in court meaning in the court affected by the order of stay of proceedings. The surrounding circumstances of the case justified the order which this court regards as unimpeachable.
The application is consequently refused and is hereby struck out.
ODILI, J.C.A.: I have the privilege of reading in draft the ruling of my learned brother, O. O. Adekeye, JCA and I agree completely with the decision and the reason upon which she made the decision. I would merely add my voice to hers in saying that the lower court exercised its discretion advisedly so to speak and there is no basis to upset an order so granted. This is all the more as to grant the application would have the implication of deciding the substantive appeal at the interlocutory stage which is not permitted by the relevant laws or practice. See Obeya Memorial Hospital v. Attorney General of Federation (1987) 3 NWLR (Pt. 60) p. 325; Kotoye v. CBN (1989) 1 NWLR (Pt. 98) p. 419 and the recent case of Buhari v. Obasanjo (2003) 17 NWLR (Pt. 850) 423.
I find no merit in this application which I also strike out.
Other Citations: (2006)LCN/1902(CA)
