Corporate Ideal Insurance Limited V. Ajaokuta Steel Company Limited & Ors (2014)

LAWGLOBAL HUB Lead Judgment Report

JOHN INYANG OKORO, J.S.C.

The Appellant herein, as Plaintiff at the Federal High Court, sitting at Abuja, by a writ of summons and statement of claim dated 18th December, 2000, claimed against the Respondents as follows:

“i. A Declaration that the Plaintiff is legally entitled to the sum of N226,000,000.00 specifically appropriated, set aside and earmarked for payment to the Plaintiff as arrears of insurance premium in accordance with the provisions of the Appropriation Act, 2000.

ii. An Order of perpetual injunction restraining the Defendants whether by themselves, their agents, servants, and or privies howsoever from transferring, spending for any other purpose, virement of, misapplying, misusing, diverting, wasting, diminishing, lapsing, retiring or causing to lapse the sum of N226,000,000.00 as the said sum has been specifically appropriated in the APPROPRIATION ACT 2000 for payment of arrears of insurance premium owed the Plaintiff by the Defendants.

iii. The sum of N226,000,000.00 to the Plaintiff with interest at the approved prevailing prime bank lending rate being the arrears of insurance premium owed the Plaintiff by the 4th Defendant from the 1st day of December, 2000 until final compliance.

iv. AN order awarding the sum of N50,000,000.00 as special and General Damages against the Defendants jointly and severally in favour of the Plaintiff…”

At the trial court, the Respondents were the 4th, 2nd and 56 Defendants respectively. The 1st and 2nd Respondents filed their respective statements of Defence, while the 3rd Respondent entered a conditional appearance/ filed a Notice of Preliminary Objection and Motion for Extension of Time within which to file its defence. While the said motions were still pending, the Appellant filed a motion for Judgment against the 1st Respondent upon an admission of its claims by the 1st Respondent in its Statement of Defence.

Judgment was entered against the 1st Respondent accordingly by the Learned Trial judge who thereafter adjourned the other motions for “whatever it is worth”.

Dissatisfied with the said judgment, the 1st Respondent as 4th Defendant, filed Notice of Appeal against it to the lower court upon obtaining the requisite leave to do so. Having filed the appeal, the 1st Respondent (as Appellant at the court below) sought for and was granted leave to argue fresh issues relating to the illegality of the insurance contract which were not raised at the trial court.

In its judgment, the Court of Appeal held as follows:-

“In the event, I find that the contracts of insurance between the parties the subject of the Respondent’s Claim before the Lower Court were in breach of Section 50 and 93 of the Insurance Decree No. 2 of 1997 and accordingly illegal. I therefore resolve issue I in favour of the Appellants. This court is duty bound now to refuse to enforce it. Accordingly, I refuse to enforce it…….. Having found the agreement between the parties illegal and void, I hereby set aside the judgment of the Federal High Court, Abuja in Suit No.FHC/ABJ/CS/425/2000 delivered on 14th February, 2001. In its stead dismiss the claim of the plaintiff.”

Aggrieved by the decision of the lower court, the Appellant has now appealed to this court. That is a brief history of the case.

A synopsis of the facts will suffice. On 17th January, 1996, the 1st Respondent requested the Appellant to provide insurance cover for their equipment for the insurance period of 1996 to 2000. It was understood between the parties that the insurance premium would not be paid immediately by the 1st Respondent to the Appellant. In other words, parties agreed that the “no premium, no cover” provision in the Insurance Act would not apply to the contract. It was their agreement that the Insurance Contract would be binding on the parties as if the insurance premium had been fully paid. That the total indebtedness by the 1st Respondent to the Appellant was N226 Million being arrears of Insurance Premium for the provision of Insurance cover from 1996 to the year 2000 to cover a total risk borne by the Appellant for the 1st Respondent in the total sum of N39.85 Billion. That the 1st Respondent was able to cause to be appropriated the sum of N226 Million in the year 2000 Budget of the Government of Nigeria which was enacted into law as Appropriation Act 2000 for the payment of the insurance premium owed by the 1st Respondent to the Appellant.

The Statement of Claim of the Appellant further reveals that when the said sum was released pursuant to the Appropriation Act, the 1st Respondent refused, neglected or failed to pay the said sum despite several demands and reminders. The Appellant took out a Writ of Summons against the Respondents making claims as earlier set out in this judgment.