First Bank Of Nigeria PLC & Ors V. Udobong Ntia & Ors (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

MOHAMMED MUSTAPHA, J.C.A. (Delivering the Leading Judgment)

IN BRIEF:

The 1st to 4th respondents (Plaintiffs at the lower court) filed an action in a representative capacity for themselves, and on behalf of all the subscribers to the First Bank of Nigeria Plc hybrid offer of May, 2007, claiming pre and post allotment interest in respect of the retention of the respondents’ application for monies during and after the allotment process.

The appellants filed a preliminary objection to the action of the respondents at the Federal High Court, contending among other things that the lower court has no jurisdiction, and that the suit did not disclose any reasonable cause of action.

The preliminary objection was struck out in a ruling by the lower court delivered on the 27th of March, 2009; this is an appeal against that ruling by the Federal High Court, Abuja, presided by the Honourable Justice A.I. Chikere.

The notice of appeal contained seven grounds, from which the following issues for determination were formulated in the appellants’ brief of argument, settled by Kola Awodein, SAN.

1. Whether the learned trial judge was right in holding that the action pertains to Banking, Banks and other financial institutions, arises from the operation of Companies and Allied Matters Act and/or also relates to the validity of the executive and administrative action of the agency of the Federal Government, thus giving the Federal High Court jurisdiction.
2. Whether the learned trial judge was right to hold the plaintiffs to have a reasonable cause of action and/or locus standi to institute the action.
3. Whether the learned trial judge was right to hold that failure to obtain the authority of the represented parties to sue in a representative capacity does not vitiate the action as constituted.
4. Whether the learned trial judge was right in all the circumstances to assume jurisdiction to entertain the action.

The respondents’ brief of argument settled by Etigwe Uwa, SAN adopted the issues as formulated by the appellants; this court will resolve the issues as they are.

ISSUE ONE:

Whether the trial judge was right in holding that the action pertains to Banking, Banks and other financial institutions, arises from the operation of Companies and Allied Matters Act and/or also relates to the validity of the executive and administrative action of the agency of the Federal Government, thus giving the Federal High Court jurisdiction.

It is submitted for the appellants that the jurisdiction of the Federal High Court is not unlimited, as it is confined to those issues in Section 251 of the Constitution; and therefore the Federal High Court is not the competent court for the plaintiff/respondents to ventilate their grievances.

That the plaintiff/respondents claim is only as to interest on monies deposited for shares applied for, before and after allotment and nothing more; as such it is a claim in the tort of false enrichment, and nothing to do with Banking, Banks and other financial institutions, within the meaning of Section 251 of the Constitution. Learned counsel referred to TRADE BANK PLC V BENILUX NIG. LTD (2003) 9 NWLR part 825, contending that the trial court was wrong in assuming jurisdiction.

That also the claim is not one arising from the operation of the Companies and Allied Matters Act, as the issue of shares by a public company such as the 1st appellant is regulated by the Investment and Securities Act, Sections 67-96.

That the suit does not concern the validity of executive or administrative action of the Securities and Exchange Commission as held by the lower court; as the objector in the suit is not SEC, but the 1st-6th appellants, who are not agencies of the Federal Government. He urged this court to resolve this issue in favour of the appellants.

In response it is submitted for the respondents while referring to Section 251 of the Constitution that the jurisdiction of the Federal High Court is to the “exclusion of all other courts”; and that from the averments in the statement of claim this action falls within the ambit of section 251(1) (d) (p) and (r) of the constitution; learned counsel referred this court S.B.N. LTD V DR. DE LLUCH (2004) 18 NWLR part 905 and paragraphs 13-18 of the statement of claim, at pages 7-8 of the record of appeal.