Advanced Coating Technology Nigeria Ltd & Ors. V. First Bank of Nigeria Plc. (2008)

LawGlobal-Hub Lead Judgment Report

HUSSEIN MUKHTAR, J.C.A.

The six appellants/applicants (hereinafter referred to as “the applicants”) have by two separate applications filed on the 14th June 2006 and 24th November 2006 sought for stay of execution of the ruling of the High Court of Lagos State (Coram Honourable Justice O. O. Oke) delivered on the 24th November 2005 and for stay of further proceedings in suit No. ID/594/2004 pending determination of the appeal against the said ruling respectively.

The court below in its interlocutory decision delivered on the 24th November 2005, which is the subject of the appeal and this present application for stay of execution and stay of proceedings, made the following orders:

1. “An order of interlocutory injunction restraining the 1st and 3rd defendants either by themselves, or their directors, servants, agents, employees and privies from withdrawing, tampering with, transferring or howsoever dealing with the funds representing proceeds of Oil and Gas Contract Finance contracts in the 1st defendant’s (domiciliary) accounts with Nigerian International Bank Limited (especially account No. 0111787026) and for any of its bankers pending the final determination of the substantive suit.
2. An order of interlocutory injunction restraining the 2nd and 3rd defendants either by themselves, their respective agents and privies from withdrawing, tampering with, transferring or howsoever dealing with funds in the 2nd defendant’s domiciliary account No. 1412900018407 and current account No. 4202010008599 (both with the claimant and any other account that the 2nd defendant may have with the claimant) pending the final determination of the substantive suit.
3. An order freezing the accounts of the 1st and 3rd defendants with (their respective banks, especially) Nigeria International Bank Limited for up to the sum of N399,000,000 and in consequence an order of interlocutory injunction restraining the 1st and 3rd defendant either by themselves or their agents, servants, directors, employees, or privies from dealing with funds of up to the sum of N399,000,000 in their respective banks especially Nigeria International Bank Limited pending the final determination of the substantive suit.
4. The applicant shall enter into an undertaking as to damages in favour of the respondents should it be found that this order should not have been granted.”

The applicants in their written submission adopted at the consolidated hearing of the two motions on the 30th April, 2008 raised two issues that were germane to the 1st and 2nd applications respectively, i.e.

1. Whether a stay of execution should be granted in the circumstances of this case.
2. Is it in the interest of justice to stay further proceedings pending the outcome of the substantive appeal.

The learned counsel for the respondent blended the two issues above a singular issue for determination thus:

“whether or not this Honourable Court should, considering the circumstances of this case, grant either or both of an order staying execution of the order of mareva injunction and an order staying further proceeding, pending hearing of the appellants’ appeal dated 29th November, 2005.”

For the purpose of considering, and determining each application distinctively and separately I shall adopt and proceed to consider the two issues raised by the applicants’ counsel siriatm.

On stay of execution, the learned counsel for the applicants submitted that the guiding principles for the grant of an order for stay of execution have been established in a plethora of authorities depending on the peculiar circumstances of each case. Examples cited by the learned counsel for the applicants include C.B.N. VS AHMED (2002) 5 S.C. (Pt. 1) 146; F.I.B. PLC VS CITY EXPRESS BANK LTD (2004) 6 NWLR (pt. 869) 236; VINCENT STANDARD VS XTODEUS (1993) 5 NWLR (pt.296) 675 at 688; JOSIEN HOLDINGS LTD VS LORNAMEAD LTD (1995)1 NWLR (P.371) 254 at 264; VASWANI VS SAVALLAKH (1972) 1 All N.L.R. (pt. 1) 483; KIGO VS HOLMAN BROS (NIG) LTD (1980) NSCC 204; JADESINMI VS OKOTIE-EBOH (1986) 1 WLR (Pt. 16) 2004.

The applicants’ counsel noted that the appeal seeks to reverse the interlocutory order of mareva injunction that pre-determined the appellants’ liability at an interlocutory stage. He referred to the notice of appeal dated and filed on the 29th November 2005 exhibit JN 3 for the further and better affidavit whereby all the three grounds of appeal have challenged the propriety of the order of mareva injunction granted by the court below. He further contended that the second notice of appeal exhibit JN5 to the further and better affidavit also dated and filed on 29th November 2005 also raised the propriety of lifting the corporate veil of the 2nd appellant suo motu by the court and submitted further that the grounds of appeal in both notices are very weighty. The learned counsel for the applicants however proceeded to argue on extraneous issues like admission of indebtedness by the defendant, etc touching on merits of the appeal and therefore irrelevant to an application for stay. Arguments on substantive issues to be determined on the merits of the appeal advanced at an interlocutory stage stand to be and are hereby discountenanced. It will be worthless exercise to consider any issue (s) other than those touching directly on the merit of the application for stay.

The applicants’ counsel further argued that the mareva injunction sought to be stayed is only grantable when the defendant:

1. Is foreign based with assets within jurisdiction and is about to flee therefrom;
2. Has assets within jurisdiction but is dissipating such assets.

The applicants’ counsel further submitted that, the applicant was admittedly in “active business,” and that the mareva injunction ought not have been granted in the circumstances of this case. He further contended that the grounds of appeal are not only arguable but also substantive enough to justify stay of execution. He relied on the authorities in E.S. & E.S. LTD VS N.M.B. LTD (2005) 7 NWLR (Pt 924) 215 at 266 – 267; See also NALSA & TEAM ASSOCIATES VS N.N.P.C. (1996) 3 NWLR (Pt. 439) 621 at 632; VASWANI VS SAVALAKH (supra).

The applicants’ Counsel drew the court’s attention to the peculiar circumstance of this case whereby the respondent after obtaining the mareva orders employed a dilatory approach in the prosecution of the case at the lower court, for example, the respondent applied for trial dates which were fixed on the 16th May 2005, 31st May 2006, 6th July 2007, 11th October 2006 but were either unable to present any witness or were not in court at all. The respondent subsequently applied for an adjournment sine die on the 15th February 2007 to await the outcome of its application to the Chief Judge of Lagos State for consolidation. The appellant’s counsel therefore submitted that the balance of convenience in the circumstances is in the applicants’ favour.

It was further submitted for the applicants that where the request for stay of execution and the subject matter of the appeal have the same substratum, so that the grant of one would dispose of the other, stay should be granted. Learned counsel for the applicants called the aid of the authority in DEDUWA VS OKORODUDU (1974) 1 All NLR (Pt. 272 at 275.

The learned counsel for the applicants adopted his arguments on the show of on the special circumstances and the need to preserve the res in respect of the second issue of stay of proceedings.