Texaco Overseas (Nigeria) & Anor. V. Rangk Limited (2008)

LawGlobal-Hub Lead Judgment Report

HUSSEIN MUKHTAR, J.C.A.

This appeal stems from the judgment of the Federal High Court Lagos (per E. O. Sanyaolu, J) delivered on the 24th June 2003. The respondent, plaintiff, in the court below, had claimed damages for wrongful termination of contract of service against the defendant/appellant and for debt or quantum merit for various sums of money due under the contract for the use by the appellant of the respondent’s ocean going vessel M. V. Clara in connection with the appellant’s offshore drilling and producing operations.

In its amended statement of claim dated 21st and filed on 22nd May 2003 the plaintiff/respondent claimed the following reliefs against the defendant/appellant:

a. US Dollar 436,425 + N2,702,000 (with 5% VAT) being 75% of full vessel hire rate for the period February 1, 1997 to September 8, 1997 (220 days) defendant having previously paid 25% of full rate (full rate being US Dollar 2,645 plus N=16,400 per day).

b. US Dollar 10,580 + N69,608 being payment for 4 unutilized maintenance days at the aforesaid full daily rate (including VAT)

c. US$26,450 + N=205,820 plus 5% VAT being payment for the 10 days defendant wrongly purported to impose a down time/off hire.

d. US$2,643,011 being reimbursement for fuels and oils on On/Off Hire Survey wrongly withheld by the defendant.

e. N20,000,000 being interest accrual caused by the defendant.

f. N100,000,000 general damages.”

The appellant, an oil exploration and producing company entered into a contract with the respondent, a shipping company, for the use of the respondent’s vessel MN Clara for the appellant’s drilling and producing activities offshore. Under the contract, the instrument of which was tendered and admitted as Exhibit A, the respondent was to provide the services of the vessel for two years.

The appellant by a letter dated 31st January 1997 (Exhibit C1) terminated the contract after about seventeen months from the commencement thereof and requested the respondent to remove its vessel from the appellant’s jetty. The appellant, following the premature termination of the contract paid a total sum of USD253,920 plus N1,653,120 as compensation and other entitlements accruing to the respondents made up as follows:

1. “USD5,290 + N=34,440 being terminal compensation fixed by article 39 of the contract.
2. USD227,470 + N=1,480,920 being payment for ten unutilized maintenance days.
3. USD21,160 + N=137,760 being payment for bunkering.”

The respondent, however, dragged the appellant to court by filing a suit seeking special and general damages for wrongful termination of contract.

The appellant filed a defence asserting that the contract was properly terminated and that adequate terminal dues were paid to the respondent under the terms of the contract. The sums paid to the respondent were not denied. However the respondent, at the trial, tendered in evidence

documents relating to computation of the sums it claimed from the appellant vide exhibits F and F1.