Watanmal (Singapore) Pte Ltd V. Liz Olofin and Company Plc. (1997)
LawGlobal-Hub Lead Judgment Report
MUSDAPHER, J.C.A.
In the High Court of Lagos State in the Lagos Judicial Division and in Suit No. LD/1902/91, the plaintiff Watanmal (Singapore) PTE Ltd which is a foreign company incorporated under the Laws of Singapore claimed against the Defendant Liz Olofin and Company PLC, a company registered in Nigeria, the sum of US Dollars 1,096,493.31 plus interest being the value of goods sold and delivered to the defendant at the defendant’s request. The writ was accompanied with a Statement of claim. The defendant entered a conditional appearance. It protested the jurisdiction of the court to entertain the matter on the grounds that the plaintiff is a foreign company resident and carrying on business outside the territorial jurisdiction of the court.
Subsequently and pursuant to Order 22 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules 1972 and on the inherent jurisdiction of the Court, the defendant brought an application praying the Court for the following prayers:-
“1. Striking out or dismissing this suit herein on the ground of lack of jurisdiction of this Honourable Court as the plaintiff herein is a foreign company resident and carrying on business in Singapore (in China?) Sic outside the territorial jurisdiction of Nigerian Courts; and consequently, it has no locus standi to institute this action;
AND
- Such further or other order or orders as this Honourable Court may deem fit to make in the circumstances.”
The affidavit in support averred that the plaintiff a foreign company was not registered with Corporate Affairs Commission and nor was it given any Certificate of Exemption by the appropriate authority. It is further averred that the Court has no jurisdiction to entertain the claims brought by the Plaintiff. Arguments for counsel were heard by Olugbani J., who on the 8th day of December, 1993, delivered his Ruling whereby he ruled at the tail end of his judgment thus:-
“I hold that the claim of the plaintiff is incompetent. I hold that there is no reasonable cause of action before the Court as the Plaintiff herein is non-existent.
The defendant/applicant is entitled to bring this application under Order 22 Rules 3 and 4 of the High Court of Lagos State (Civil Procedure) Rules, 1972 and the claim herein is accordingly dismissed as there is no reasonable cause of action before the Court.”
“I hereby award the sum of N3, 000.00k in favour of the defendant/applicant in this application.”
The plaintiff naturally felt unhappy with the turn of events and has appealed to this Court. The Notice of appeal contains three grounds of appeal and they read thus:
- The learned trial Judge erred in law in his interpretation of Section 54(1) of CAMA 1990 when he held the plaintiff, a foreign company registered abroad, is a non juristic person unknown to the Nigerian law and incompetent to sue in Nigeria.
Particulars of Error
(a) Section 54(1) of CAMA 1990 do not determine or erode the juristic personality of a foreign company registered abroad nor provides for companies which can sue or be sued in their corporate names.
(b) Section 54(1) of CAMA 1990 prescribes without more the conditions that must be fulfilled by a foreign company seeking to do business in Nigeria.
(c) The learned trial Judge fails to appreciate purport of private international law which permits a foreign company registered abroad to sue in another jurisdiction, creating a basis for reciprocity in international relations.
(d) The pleadings before the learned trial Judge showed that the plaintiff is a company registered abroad and carries on its business in Singapore.
(II) The learned trial Judge erred in law and on the facts when
he held that the plaintiff has no reasonable cause of action
against the defendant.
Particulars of Error
(a) The Writ of Summons and the Statement of claim showed, prima facie, a valid and sustainable claim in law against the defendant.
(b) The learned trial Judge wrongly held that since the plaintiff was a non-juristic person there was no reasonable cause of action against the defendant.
(III) The learned trial Judge misdirected himself in law in dismissing the plaintiff’s suit on the ground that the plaintiff is non existent in law.
Particulars of Error
(a) There was no trial on the merits.
(b) The dismissal of the suit presupposes a trial on the merits which puts end to the dispute between the parties.”
The plaintiff shall hereinafter be referred to as the appellant while the defendant as the respondent. The Notice of Appeal was served on the respondent through counsel, similarly, all the other processes were so served. The appellant’s brief was served on the respondent on 27th of June 1995. On the 8/11/1995, the appellant filed an application for leave to hear the appeal inspite of the absence and the failure of the respondent to file the respondent’s brief. Leave was given. At the hearing of the appeal, when we satisfied ourselves that the respondent had been served with all the necessary papers including the hearing notice, and has failed to appear or file brief, this court invoked its powers under Order 6 Rule 10 of the Court of Appeal Rules 1981 as amended and decided to hear the appeal on the basis of the appellant’s brief only.
Before the consideration of the issues arising for the determination of the appeal, it is appropriate to place the background facts. The appellant is a foreign company registered under the Laws of Singapore. Sometime in 1981, the respondent, a company registered in Nigeria, bought and took delivery of various goods from the appellant. The total price of the goods was 396,600 US Dollars.
In the purported settlement of the cost price of the items, the respondent accepted 16 bills of exchange for payment when due through its bank in Lagos. Each of the bills was dishonoured when due. The parties met to sort out the respondent’s difficulties as a result of which the respondent made a part payment of 10,360 US dollars. It was also a term of the contract that any unpaid bill upon maturity will incur an interest of 18% per annum until payment. The total amount due plus interest at the time of the writ was 1,096,493.31 US dollars. As mentioned above, the respondent entered appearance under protest and filed an application to strike out the claims of the appellant on the grounds that the appellant is a foreign company and has no capacity to sue in the Nigerian Courts.
Now, in his brief for the appellant, the learned counsel has formulated and identified four issues arising for the determination of the appeal. These issues read:-
“(a) Whether a foreign company incorporated abroad can sue in Nigeria for services rendered or goods supplied to a Nigerian.
(b) Whether the Writ of Summons and the Statement of claim disclosed a reasonable cause of action against the respondent.
(c) Whether the appellant by instituting this action, without more, is in contravention of Section 54(1) of the Act and its action becomes void under Section 54(2) of the Act.
(d) What is the proper order to make where a court holds that it lacks the jurisdiction to entertain a suit.”
The learned counsel took issues (a) and (c) together. It is argued that the appellant’s company can sue and be sued in Nigeria without being registered when it has no intention for carrying on any business in Nigeria. It is submitted that Section 54(1) of CAMA merely stipulates the conditions that a foreign company must satisfy before it is competent to engage in any business in Nigeria; and does not determine the legal personality of Foreign Companies. Since the appellant is merely attempting to collect its dues from the respondent, the action it took could not be said to be void by Section 54(2) of CAMA. In support of these propositions the learned counsel referred to Olaogun Enterprises Ltd v. Saeby Jernstoberi and Maskinfabrik (1992) 4 NWLR (Pt. 235) 361; Staines Catering Equipment International Ltd. v. Kitchen Equip West Africa (1982) FHLR 59; Bank for Commerce and Industry Ltd v. Europa Traders UK Ltd. (1990) 6 NWLR (Pt. 154) 36.
Now the learned trial Judge had held that Section 54 (1) of CAMA makes the appellant a non existent juristic person. I am of the view that the decision of the learned trial Judge is not an exercise of a proper interpretation of Section 54(1) which reads:-
“Subject to sections 56 to 59 of this Act, every foreign company which, before or after the commencement of this Act, was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carryon business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents as matters preliminary to incorporation under this Act..”
(2) Any act of the company in contravention of subsection (1) of this section shall be void.
(3)…
Subsection exempts certain companies of these provisions.
It seems to me that the learned trial Judge construed Section 54(1) very widely.
It is trite that clear and unambiguous words contained in a Statute should be given their natural and ordinary meaning. The fundamental issue is that a company registered abroad that intends to do business in Nigeria must be registered in Nigeria and any action done by that company is void except under the situations mentioned in subsection 3. The appellants merely sued to recover the cost of the goods, the respondent took delivery from them. The court should give effect to the clear words used in a statute and must not import any extraneous or add to words used in the Statute. See Egbe v. Alhaji (1990) 1 NWLR (pt. 128) 546. The intent and meaning of the provisions of Section 54 of CAMA is clear precise and unambiguous. It is only to prohibit a foreign company from running business in Nigeria without first going through the process of registration or after obtaining an exemption certificate. The section did not deal with the question of the legal personality of a foreign company. The learned trial Judge was obviously in error to hold that a foreign company not registered in Nigeria lacks juristic personality to sue or be sued. See Section 60 (b) of CAMA which provides:-
“60. For the avoidance of doubt, it is hereby declared that-
(a)…
(b) nothing in this Chapter shall be construed as affecting the rights or liability of a foreign company to sue or to be sued in its name or in the name of its agent.”
It is accordingly manifestly clear that the appellant as a foreign company has the statutory authority to sue or be sued in our courts. The appellant is accordingly a legal person and has the capacity to sue or be sued in Nigerian Courts.
So, without much ado, I resolve both issues (a) and (c) in favour of the applicant.
I now turn to issue (b). This is to do with the Question whether the Statement of Claim reveals any cause of action. As mentioned above, the respondent did not file any pleading in which as a defendant he raised the issue of law suggesting that the Statement of claim ought to be struck out for failure to reveal a reasonable cause of action. On an examination of Order 22 of the High Court of Lagos State (Civil Procedure) Rules 1972 demurrer shall not be allowed.
A defendant who wishes to rely on a point of law must first raise it in his Statement of Defence and the Judge may allow the issue taken as a preliminary point. Where no Statement of Defence has been filed, a defendant is not entitled to proceed under Order 22. See Nigeria Always Ltd v. Lapite (1990) 7 NWLR (Pt. 163) 392.
The issues that can be raised under Order 22 rules (3) and (4) had been exhaustively discussed in the case of Dada v. Ogunsanya (1992) 3 NWLR (Pt 232) 754. The issue of locus standi – the juristic personality of the appellant is not issues that can be proceeded upon under Order 22.
Be that as it may, does the Statement reveal any reasonable cause of action? The learned trial Judge failed to examine the cause of action itself but reached his decision that there was no reasonable cause of action because the appellant is not a juristic personality, it is non existent. Having held above that by virtue of Section 60 of CAMA, the appellant is competent to sue and therefore recognised under our laws as a legal entity, I shall have to consider whether a reasonable cause was revealed by the Statement of claim. A cause of action is an entire set of circumstances giving rise to a legally enforceable claim, it is any act or conduct of a defendant giving rise to a justiciable claim. It is a matter or state of affairs, consisting of facts or combination of facts conferring on a party a right to judicial relief. The facts averred here clearly suggested, that the respondent at his own request took delivery of goods with a promise to pay. He failed to pay, it is a mystery to me that the appellant cannot go to Court to assert his right or obtain judicial relief. I am of the firm view that the Statement of Claim in the instant case reveals a prima facie cause of action. See Sodipo v. Lemminkainen (1992) 8 NWLR (Pt.258) 229. See also Dada v. Ogunsanya (supra). I accordingly find issue (b) in favour of the appellant.
Issue (c) now complained on the dismissal of the appellant’s case rather than striking it out. It is a straight forward matter and need not detain us. The learned trial Judge held that the appellant was incompetent to sue, it had no locus standi, he did not hear the matter on the merits, in my view, he cannot dismiss it. He held that he had no jurisdiction to entertain the matter consequently he had no right to terminate the matter in limine he could only strike it out. Accordingly, I resolve the issue also in favour of the appellant.
In the result this appeal succeeds in toto and I hereby allow it. I set aside the Ruling of Olugbani J. delivered in this matter on the 8/12/1993 and in its place, I strike out the respondent’s application. I order that the matter be tried de novo before another Judge. I set aside the order for costs and I order that the appellant be entitled to costs both in the Court below and in this Court assessed at N2,000.00k and N3,500.00k respectively.
Other Citations: (1997)LCN/0313(CA)
