A. I. C. Limited V. Nigerian National Petroleum Corporation (2005)

LAWGLOBAL HUB Lead Judgment Report

EDOZIE, J.S.C.

In 1980, the appellant, a Nigerian Company entered into an agreement with a German Company (Mannesmann – Anlagebau A. G.). Under the terms of the agreement, exh. “B” (hereinafter referred to as ‘Commission Contract’) the appellant was to facilitate or assist in the award of construction projects which the German Company (hereinafter referred to as Mannesmann) was bidding for with the respondent. In consideration of the undertaking, the appellant was to be paid a commission of 5% of the contract sum in respect of any contract awarded to Mannesmann by the respondent. The 5% commission was to be calculated on the basis of the amount of the contract sum transferred to a German bank and credited to Mannesmann excluding freight, packing costs and customs.

Sometime in 1984, the respondent awarded to Mannesmann the Escravos – Lagos Pipelines and Compressor Station Project (hereinafter referred to as the ‘Project Contract’). According to the appellant, when Mannesmann started receiving install mental payments due, it failed to pay to the appellant its commission in respect thereof. In consequence, the appellant sued Mannesmann in a court in Germany in respect of the commission due on the amount of the install mental payments made.

The suit was dismissed but while an appeal in Germany was pending, the appellant, as plaintiff by a writ of summons in suit No.LD/264/88 filed on 12/2/88 commenced another action in the Lagos High Court, against Mannesmann and the respondent as pt and 2nd defendants respectively. In the said action apart from two other alternative reliefs, the claim against Mannesmann is:

‘5% of the various sums set out in the schedule to this writ, less the amount claimed by the plaintiff in suit No.390/224/84 now pending before the District Law Court No.9 in Dusseldorf (particulars of which are set out in the statement of claim) being the amount of commission payable to the plaintiff pursuant to an agreement entered into in Lagos and dated 14th March, 1990 for undertaking all necessary efforts in assisting the 1st defendant in securing the contract for (sic) the 2nd defendant Escravos – Lagos Pipeline and Compressor Station.’

The only claim against the respondent was an injunction, ‘restraining the 2nd defendant from paying over to the 1st respondent the amount being claimed in paragraph 1 hereof and an order that the amount be deducted from the contract sum and withheld by the 2nd defendant pending the determination of this action.’

On 22nd February, 1988 the Lagos High Court (coram Ayorinde J,) granted an ex parte order, to wit,

‘That the 2nd defendant (respondent herein) shall withhold pending the hearing of the motion on notice from payments due to the 1stdefendant on the project which is the subject-matter of this litigation an amount not exceeding the following in schedule ‘D’ namely, US$1,220,185.40 ‘a3547,185.00 DM 22,270,922.00 and N2,764,785.40 respectively being the value of commission due to the plaintiff in event of the court’s finding in its favour.’

The motion on notice was made returnable on 16th May, 1988. On this date, Mannesmann filed an application to strike out or dismiss the suit for lack of jurisdiction, res judicata etc. The application was heard and granted and the suit was on 23/3/89 dismissed as against both defendants.

Dissatisfied with the ruling the appellant appealed to the Court of Appeal, Lagos Division and while the appeal was pending, the appellant’s counsel by a letter dated 19/1/91 (exh. M) warned the respondent not to pay over the money to Mannesmann. Subsequently, the Court of Appeal in a unanimous judgment delivered on 14th December, 1993 (coram Sulu Gambari, J.C.A., Kalgo and Uwaifo, J.C.A (as they then were) allowed the appeal on the question of res judicata, being the only issue canvassed and considered. The case was subsequently re-tried by Segun, C.J, of the Lagos State High Court. Mannesmann did not participate at the re-trial nor did it file a statement of defence. The respondent filed a statement of defence and participated at the trial through its counsel although it led no evidence. In a considered judgment delivered on 25th January, 2000 the learned C. J. entered judgment in favour of the appellant against the respondent and Mannesmann jointly and severally for:

“1. $1,220,185.40 (US Dollars)

2. ‘a3547,185.00 (Sterling)
3. DM 22,270,922.00 (Dutch Marks)
4. N2,764,785,40 (Naira)
5. $750,999.00 being 5% commission on contract D.”

The trial court further granted an order of injunction against the respondent on the following terms:

“Again an injunction is granted against the 2nd defendant restraining them from paying over to the 1st defendant the amount claimed herein (sic) until the plaintiff is fully paid the 5% commission enumerated above.”

Against that judgment, the respondent lodged an appeal to the Court of Appeal, Lagos Division. In a bid to execute the judgment, the appellant commenced garnishee proceedings against the respondent and obtained a garnishee order of the respondent’s funds at CBN and DBA on 10/5/2000. In its judgment delivered on 24th May, 2001, the Court of Appeal held that as there was no privity of contract between the appellant and respondent with respect to the project contract, there was no basis for the judgment entered against the respondent jointly and severally with Mannesmann. It further held that since an order of injunction is an ancillary relief which is rarely granted on its own, the trial court was wrong to have granted the injunction against the respondent in respect of whom no allegations were made in the appellant’s pleadings. Since Mannesmann did not appeal against the judgment of the High Court, as it, affected it, that aspect of the judgment was left untouched by the Court of Appeal.