Nika Fishing Co. Ltd. V. Lavina Corporation (2008)

LAWGLOBAL HUB Lead Judgment Report

MOHAMMED, J.S.C

This appeal is against the judgment of the Court of Appeal Lagos Division given on 21st June, 2001, in which it dismissed the Appellant’s appeal against the Ruling of the trial Federal High Court, Lagos of 28th June, 1989, dismissing the Appellant’s application for stay of proceedings in an action for damages on liability or demurrage incurred in a contract of carriage of goods by sea filed by the Respondent as Plaintiff against the Appellant as the Defendant.

The Respondent is the owner of the ship named ‘MV Frio Caribic,’ hereinafter referred to as ‘the ship.’ The ship was chartered to convey a consignment of frozen fish from Mar Del Plata in Argentina, to Apapa Lagos, Nigeria. The ship arrived at the Apapa port on 29th December, 1987 and discharged its cargo. Following the alleged delay in the Appellant taking delivery of the cargo within the time agreed by the parties in the Bill of Lading, the Respondent brought an action against the Appellant at the Federal High Court, Lagos on 21st December 1988, claiming the sum of $119,739.40 United States Dollars as demurrage. Following the order of pleadings by the trial court, the Respondent as the Plaintiff filed its statement of claim to pave the way for the hearing of the case. On being served with the Statement of Claim, the Appellant as Defendant, instead of filing its statement of defence, reacted by filing a motion on notice dated 2nd May, 1989 supported by an affidavit, asking for two specific prayers, namely –

“1. An order dismissing the suit for want of jurisdiction.

2. An order staying proceedings in this suit.”

The respondent did not file any counter affidavit to the Appellant’s motion which was duly heard by the trial court. In its Ruling on 28th June, 1989, the trial court refused the application. Part of this Ruling at page 31 of the record reads –

“Having gone through all these authorities, I think justice is better served by refusing a stay than by granting one. Application is refused.”

Dissatisfied with this Ruling of the trial court, the Appellant, with the leave of the trial court, appealed to the Court of Appeal which in its decision delivered on 21st June, 2001, dismissed the appeal and affirmed the decision of the trial court. It is from that decision of the Court of Appeal that the Appellant has now further appealed to this Court on three grounds of appeal from which two issues for determination were formulated in the Appellant’s brief of argument. The two Issues are –

“1. Whether in all the circumstances of this case the Court of appeal was correct in holding that the learned trial Judge in the exercise of his discretion acted judicially and judiciously.

2. Whether the Courts below were under a duty to ascertain the inconvenience of litigating in accordance with the jurisdiction clause.”

In the brief of argument filed on behalf of the Respondent by its learned Counsel however, only one issue was distilled from the grounds of appeal filed by the Appellant for the determination of the appeal. The issue is

“Whether or not the Court of Appeal in the exercise of its appellate jurisdiction correctly held that the learned trial Judge exercised its discretion correctly and was therefore right to have refused a stay of proceedings or to have refused to dismiss the suit in its entirety.”

The main issue for determination in this appeal as rightly identified by the parties in their respective first issue in the Appellant’s and the only issue in the Respondent’s brief of argument, is whether in all the circumstances of this case, the Court of Appeal was right in holding that the learned trial Judge exercised his discretion judicially and judiciously in refusing the Appellant’s application for stay of proceedings in the action brought against it by the Respondent inspite of the provision of a foreign jurisdiction clause contained in the agreement between the parties.

In his submission, learned Counsel to the Appellant recognized the general attitude of Nigerian Courts to a foreign jurisdiction clause that forms part of a Bill of Lading, had been to guard their jurisdiction and maintain their discretion to grant or refuse any application for stay of proceedings in such cases. A jurisdiction clause, according to learned Counsel, declares the intention of the contracting parties in relation to the forum and law applicable in the event of any dispute arising from the contract; that in the present case, the bill of lading contained such a jurisdiction clause which states; –

“Any dispute arising under this Bill of Lading shall be decided in the country where the carrier has his principal place of business and the law of such country shall apply except as provided elsewhere herein.”

That since the forum and the law have already been determined by the parties in the event of any dispute, its not material to argue that where the event occasioning the dispute occurred, shall be the place for the resolution of the dispute inspite of the clear wording of the jurisdiction clause. The guiding principles in Courts granting or refusing stay of proceedings in such cases, according to the learned Counsel, were laid down by the Supreme Court in the case of Sonnar (Nig.) Ltd. v. Partnereedri M.S. Nordwind (1987) 9 – 11 S.C. 121 at 149 – 154 in which a number of English cases were cited with approval. Learned’ Counsel explained that the object of the Brandon Test laid down in one of the cases, Eleftheria v. Eleftheria (1969) 1 Lloyds L.R. 237 by Brandon 1., was to ensure that there is, in every case, a basis upon which the discretion of the Court is founded, particularly the materials made available to the Court by the parties especially the Plaintiff on whom lies the burden of establishing a strong cause for refusal of stay.