Amrit Lal Grover. V. International Ile Industries (Nigeria) Limited) (1976)
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By a written Agreement dated 4th March, 1974, between the plaintiff and the defendant company, the parties agreed inter alia as follows:-
“1 (a) The company shall employ Mr. Grover and Mr. Grover shall serve the company as Garments Manager.
(b) The said appointment shall be deemed to have commenced on the day of Mr. Grover reporting to our above office at Lagos, Nigeria and shall continue subject as hereinafter mentioned for a period of 3 years (three years).
- Mr. Grover shall be paid a consolidated salary inclusive of bonus, etc. of N390 per month from the date of his reporting at our office at Lagos, Nigeria.
- Mr. Grover hereby expressly covenant with the company as follows:-
(a) to devote the whole of his time and attention during business hours to the duties of Garments Manager of the company;
(e) to exercise all reasonable skill, care, diligence in the discharge of his duties as Garments Manger hereby covenanted to be performed by him;
(f) not to do any act or omit anything which may be prejudicial or injurious to the business or interests of the company;
- Mr Grover will be provided with reasonably furnished accommodation at Nigeria;
- If any question shall arise between the parties hereto or between the company and the executors or administrators of Mr. Grover as to the interpretation of this Agreement or as to the rights, duties or liabilities of either party hereunder or as to any act matter or thing arising out of or under this Agreement the same shall be submitted to and decided by the arbitration of two Arbitrators one to be named (whosoever he may be) by each party to the dispute or difference. Such Arbitrators as aforesaid shall have the right to appoint an umpire before taking themselves the burden of the reference and this Agreement shall be deemed to be a submission to arbitration of the said two Arbitrators within the meaning of the Indian Arbitration Act, 1940 or any Act of the legislature passed in substitution thereof and for the time being in force.”
The Agreement was signed by both parties on 6th March, 1974.
Not withstanding the said Agreement, the defendant company, about ten days later, wrote to the plaintiff. This letter dated 15th March, 1974, sent from the defendant company’s headquarters in Lagos, and addressed to the plaintiff in Bombay, reads –
“Mr. Amrit Lal Grover,
We have pleasure in referring to the application and the recent interview had with you regarding the post of DYER & BLEACHER. We are happy to inform you that you have been selected for the post of DYER & BLEACHER on a salary of Naira 390 per month.
Your appointment will be for a period of 3 years from the date of your reporting to our office at Lagos.
You will be provided with reasonably furnished accommodation at Nigeria and also suitable transport will be provided by us. You will be provided with one tourist class return air ticket each for yourself your wife and maximum up to 2 children.
The income-tax will be deducted at source by the company from the monthly salary payable to you.
You will be entitled to 30 days privilege leave per year which will be 3 years and the accumulated leave will be granted to you on the expiry of the contract period.
All medical benefit will be provided to you and your family during the tenure of your services.
During the period of your services with us, you will not take up directly or indirectly any appointment/assignments.
As per discussions, we require your services immediately at Lagos, as such we request you to please complete all travel formalities at the earliest.
I. T. I. (Nigeria) Limited.
It is, we think, pertinent to point out at this juncture that the letter shows that the plaintiff had a “recent interview” with the defendant company for the “post of Dyer and Bleacher” and as a result of the interview he was offered the post of “Dyer and Bleacher on a salary of N390.00 per month”. It also states that he would be provided “with reasonably furnished accommodation in Nigeria.”
The plaintiff must have accepted this new offer because the defendant company wrote to him again on 15th May, 1974. The second letter reads –
“Dear Mr. Grover,
Enclosed please find copy of the Cable dispatched to the Nigerian Embassy, New Delhi on 15th May, 1974 reference Nigerian Entry Permit for you and your family which is self-explanatory.
Please acknowledge receipt and inform us of your departure details.
for I.T.I (Nigeria)
The contents of the cablegram referred to in the above letter are as follows:-
“Nigerian New Delhi
B/5919/159 Stop YR FORM refers Mr. Amrit lal Grover and family entry permit approved Stop Endorse B/5919/159/A Dyer and Bleacher Stop Endorse B/5919/159/B joining Husband/Father International ile Industries Nigeria Limited.
Lagos, Nigeria. Migration Lagos
Subsequently, the plaintiff was issued with a Residence Permit by the Chief Federal Immigration Officer, Nigeria. This Permit dated 25th April, 1975, states that:
“Permission is hereby granted to Mr. A. Grover whose particulars are appended below to make any number of journeys into Nigeria during the validity of this permit and to remain in Nigeria until 9/12/76 as a Dyer and Bleacher in the business known as I.T.I (Nigeria) Ltd. and subject to compliance with the provisions of the Immigration Act, 1963 and regulations made thereunder.”
(The underlining is ours).
The plaintiff assumed duty with the defendant company some time in May, 1974. In September, 1975, as a result of some disagreement over the sharing of the three-bedrooms flat allocated to him and members of his family (wife and two children), with another member of the staff of the company, his appointment was terminated by letter dated 22nd September, 1975. The letter reads –
“Dear Mr. Grover,
Termination of Appointment
I hereby inform you that your appointment with this company is hereby terminated with effect from the 30th of September, 1975.
We regret that you wilfully disobeyed and undermined instruction of the undersigned that another staff member of our group of companies be assigned a billet at the first floor of No.9 Oremegie Street, Ilupeju. This is a three-room flat which you have used exclusively for yourself for some time although the company is not obliged to provide you with a flat exclusively for yourself. The company is only obliged to provide reasonably furnished accommodation for yourselves.
You are therefore directed to vacate the premises at 9, Oremegie Street, and leave for India by 30th September, 1975 after handing over everything in your charge to the undersigned.
for I.T.I (Nigeria)
On the receipt of this letter, the plaintiff commenced these proceedings on 16th October, 1975, wherein he claimed against the defendant company the sum of N26,180 as special and general damages for wrongful dismissal.
About a month before the plaintiff filed his Statement of Claim on 26th November, 1975, the defendant company, on 20th October, 1975, applied by motion to the High Court for an order that all proceedings in the action be stayed pursuant to Section 5 of the Arbitration Law, Cap.10, Laws of Lagos State. The reason given for the application is that the plaintiff and the defendant company, by an agreement in writing dated the 4th day of March, 1974, have agreed to refer to arbitration the matters in respect of which this action is brought.
At the hearing of the application, learned counsel for the plaintiff submitted that the only contract between the parties is the one stated in the letter dated 15th March, 1974 and that this letter had superceded the earlier written Agreement dated 4th March, 1974. Learned counsel also submitted that as there is no provision for arbitration in the said letter, the action should be allowed to proceed.
In a reserved ruling, the learned trial Judge granted the application and ordered that the proceedings be stayed pending the submission of the plaintiff’s claim to arbitration. His reasons for this decision are stated in the ruling as follows:-
“It is convenient to start with the point as to what is the Agreement between the parties. The plaintiff in his counter-affidavit says that the Agreement dated March 4, 1974, relied upon by the defendant had been cancelled by the letter dated March 15, 1974. I see nothing in the letter which says that the Agreement was to be deemed cancelled or superceded. It is true that the post to which the plaintiff was appointed by the Agreement differs in name from that to which he was appointed by the letter but as far as I can see the other provisions of the letter would appear to be a precis of like provisions in the Agreement. In those circumstances I do not feel able to hold that the letter did cancel or supercede the Agreement.”
The short point which calls for our decision at the hearing of the appeal by the plaintiff/appellant against this ruling is whether the learned trial Judge was in error or not in holding that the offer made to the plaintiff/appellant in the letter dated 15th March, 1974, and subsequently accepted by him, has not superceded the earlier Agreement to which the parties appended their respective signatures on 6th March, 1974.
There is no doubt that the maxim Eodem modo quo oritor eodem modo dissolvitur (what has been created by Agreement may be extinguished by Agreement) applies to the facts of the case in hand. The law is well settled that a later Agreement by the parties to an original contract to extinguish the rights and obligations that the original contract has created is itself a binding contract, provided that the later Agreement is either made under seal or is supported by consideration. Consideration raises no difficulty if the original contract sought to be extinguished is, like the contract of 4th March, 1974, still executory. This is because each party, by the later Agreement, is deemed to have agreed to release his rights under the original contract in consideration of a similar release by the other. Such bilateral discharge may take the form of dissolution plus replacement. Thus, the parties may extinguish the original contract but substitute an entirely new Agreement in its place, as for instance where a contract of employment as Garments Manager is replaced by a contract of employment as Dyer and Bleacher.
In the case in hand, the rights and obligations created by the original contract made by the parties on 4th March, 1974, were extinguished by the later Agreement contained in the letter of 15th March, 1974. This later Agreement is a binding contract in itself, particularly as the original contract was still executory in that it provided that the appointment of the plaintiff/appellant to the post of Garments Manager would not take effect until he (the plaintiff) reported at the defendant/respondent’s office in Lagos. As the facts show, the plaintiff/appellant never did take up that appointment. Instead, he was appointed Dyer and Bleacher by the defendant/respondent, worked for them in Lagos for over one year in that post, and was dismissed from their employment while still holding that post.
Apart from the above, the following points, which the learned trial Judge seemed to have overlooked, appear to us to be crucial to the determination of the main issue which is whether the original Agreement still subsists. Firstly, it is clear from the opening paragraph of the letter of 15th March, 1974, that there was an application for the post of Dyer and Bleacher followed by an interview for the post; it was after this interview that the defendant/respondent was “happy” to inform the plaintiff/appellant that he had been “selected for the post of Dyer and Bleacher on a salary of Naira 390 per month.”
Secondly, this post is obviously different from that of “Garment Manager” in the original Agreement. Thirdly, while the original Agreement contains elaborate provisions which state that the said Agreement is subject (a) to the provisions of “any Industrial Legislation” (clause 9) and (b) to reference, in case of disagreement, to arbitration under the Indian Arbitration Act, 1940 (clause 19), the later offer contains no such provisions. Since both the original Agreement and the letter of 15th March, 1974 containing the offer originated from the defendant/respondent, it must be presumed that these important omissions were intentional.
Finally, as the plaintiff/appellant was only allowed into the country by the immigration authorities to work in the post of Dyer and Bleacher, it must be presumed also that this was the post to which the defendant/respondent appointed him and for which they requested and obtained entry permit from the immigration authorities.
In these circumstances, it is our view that the task of the learned trial Judge, having regard to the facts, was to decide what each of the parties was reasonably entitled to conclude from the acts and attitude of the other. We think that if the learned trial Judge had done this, the only finding which he could have made on the facts is that, on the receipt of the letter dated 15th march, 1974, ten days after he had signed the original Agreement, the plaintiff/appellant was entitled to conclude, and did with justification conclude, that the original Agreement had been replaced by the offer made to him in the said letter and which he eventually accepted by coming to Nigeria at the defendant/respondent’s expense and working for them as Dyer and Bleacher.
The learned trial Judge would have found also that the terms stated in the letter did not contain any provision for the reference of any disagreement between the parties to arbitration. He was therefore in error in finding, as he did, that the letter dated 15th March, 1974, did not “cancel or supercede” the original Agreement. He was also in error in staying the proceedings as a result.
The appeal therefore succeeds and it is allowed. The ruling of the learned trial Judge in Suit No.LD/1110/75 delivered in the High Court of Lagos State on 1st December,1975, in which he ordered that the proceedings be stayed, including the order as to costs, is hereby set aside. It is ordered that the application made in the said High Court for a stay of the proceedings be and is hereby dismissed and this shall be the judgment of the court. The plaintiff/appellant is awarded costs in the court below assessed at N84.00 and in this court at N200.00.
Other Citation: (1976) LCN/2209(SC)