Marine Management Associates Inc. & Anor V. National Maritime Authority (2012)

LAWGLOBAL HUB Lead Judgment Report

SULEIMAN GALADIMA, J.S.C. 

This is an appeal against the decision of the Court of Appeal Lagos Division delivered on the 18th of July, 2008. In setting aside the award of US4,298,066 to the Appellants, representing Special Damages for breach of contract, the court held that the documentary evidence or loss of profit was wrongly admitted not having been specifically pleaded and particularized.

The Appellants who were the plaintiffs commenced the suit against the Respondent by writ of summons issued out on 24th December 1999. They have claimed particularly as per paragraphs 3, 5, 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18 and 19 in their Amended Statement of Claim filed on 3rd March 2005 as follows:

“3. Sometime in 1995, the Plaintiffs carrying on business (respectively in the U.S.A. and Nigeria) of inspection and vetting of Marine vessels to ascertain the degree of compliance of such vessels with “International Maritime Industry recommendations and operational procedures” and their compliance in general with International Maritime Regulations entered into negotiations with the Nigeria “NATIONAL MARITIME AUTHORITY” the “N.M.A.” with a view to having the plaintiffs in the transportation of chemical, petroleum and or petroleum products” within Nigeria waters as “Exclusive Manager(s)” and “Sole Agents(s)”.

4. These negotiations culminated on an agreement being reached such that on the 31st January, 1996, the Defendant, by letter, notified the Plaintiffs of their appointment as “Exclusive Manager” and “sole Agent” as set out above to commence on the 1st March, 1996 with a directive therein for the Plaintiffs to “conclude all organization and arrangements” to commence the services contracted for.
5. Predicated on this, and particularly since the scope of the Contract involved the inspection of ships all over the world at the Plaintiffs expenses the Plaintiffs incurred considerable expenses to set up inspection points at inter alia, Europe, the Americas (North and South), Canada, Japor, Singapore and even in Nigeria.
6. To achieve this, the plaintiffs had to, inter alia, employ One Hundred and Forty-Seven (147) qualified and approved Marine Inspectors assigning Eighteen (18) of the same permanently to cover Nigerian Petroleum Terminals and “establish” and have “certified” Forty-nine (49) Inspection Agencies at the “major” loading/discharging Petroleum Terminals around the World, all at great expense. These facts are established by the report accepted by the N.M.A. from the Plaintiffs for the year 1996 – 7 and 1998.
7. The terms of the Agreement reached were duly engrossed and executed as a deed by all parties thereto.
8. By the terms of the said Contract the Plaintiffs were to bear all the expenses of the inspections but were to remit forty percent (40%) of all fees received on account of the same to the N.M.A. which same conditions the plaintiffs have faithfully adhered to such that by the conclusion of the accounts for 1998, the Plaintiffs had remitted sums in excess of two (2) million United States Dollars to the N.M.A. as contained in the reports for the years 1996 – 1998.
9. Under the terms and conditions of the aforesaid contract, it was also agreed that:

(a) The Plaintiffs were to be the exclusive manager and sole agent for World Wide Management of the Inspection and Vetting of all vessels engaged in the transportation of chemicals, petroleum and or petroleum products that trade within Nigeria territorial waters.

(b) The purpose of the inspection and vetting is to ascertain that each and every vessel complies with the regulations of International Maritime organisation. Therefore, each and every vessel calling Nigeria’s territorial waters shall be classed by a recognized marine classification society and that all statutory certificates are valid.

(c) That the agreement shall remain in force for an initial period of ten (10) years commencing on the signing of the agreement.

(d) Clause 5 of the Agreement states that as consideration for the performance of the duties, services, obligations, responsibilities and covenants therein contained on the part of the Plaintiffs, the Defendant appoints the plaintiffs to collect from vessel owners on behalf of the Defendants predetermined fees plus Inspectors Incidental expenses per vessel for full certification, or temporary certificate fee. The plaintiff shall upon receipt of payments transfer to the Defendant’s bank account’s 40% of the predetermined fees per vessel for full or temporary certification quarterly.

10. The plaintiffs aver that they have at all times performed their responsibilities under the terms of the said Agreement.
11. This state of affairs continued without any demur by the N.M.A. until suddenly without any reason adduced therefore, the plaintiffs sometime in December 1999 received a letter purportedly emanating from N.M.A. by which they were informed of the “Suspension” of the “Vetting/Inspection Services” – apparently referring to the Inspection/Vetting Agreement.
12. Upon receipt of the above, in extreme distress, given the magnitude of their investments in order to ensure the prompt and satisfactory discharge of their duties under the aforesaid Agreement, Plaintiffs promptly attempted to contact any responsible officer of the N.M.A. to elicit an explanation for the said letter but without any success. The N.M.A. chose to remain incommunicado but rather caused threatening phone calls to be made to the plaintiffs, its customers and associates both within and outside Nigeria threatening all manner of dire consequences if the plaintiffs did not desist forthwith from continuing with the contract.
13. Nowhere in the contract is any such “right” to “suspend” the “contract” or “service” thereunder granted to the N.M.A. and the plaintiff avers that the act of “suspending” the contract not being provided for therein, is in breach of the contract itself.
14. The plaintiffs aver that the contract constitutes the only valid, binding and effectual documentary of the terms agreed on by the parties and cannot he unilaterally varied or discharged by any party thereto and in any event, no “right” for “suspension” having been “reserved” for the Director’ General of the N.M.A, the “D-G” at whose behest the said letter of “suspension” was purportedly issued any such “suspension” is in breach of contract.
15. The Plaintiffs further aver that the tenor of the contract having been expressed in paragraph 9a thereof as Ten (10) years cannot be unilaterally varied prior to the effluxion of this time and therefore in the premises the aforesaid letter of “suspension” is in breach of the contracts.
16. This “Suspension” which is even at present being used to harass and threaten the Plaintiffs and its associates is causing enormous unjustifiable harm to the Plaintiffs reputation, goodwill and business interests worldwide.
17. The Plaintiffs have accepted the Defendants breach as being repudiatory of the contracts.
18. The Plaintiffs aver that defendants have by the said breach caused great financial loss and damage to the Plaintiffs. The Plaintiffs would at the trial rely on the report of computation of financial loss prepared by the Actuarial firm of Ajibola Ogunsola & Co.
19. Whereof the Plaintiffs claim against the Defendant for:

a. A DECLARATION that the

“INSPECTION/VETTING AGREEMENT” made between the Nigerian “NATIONAL MARITIME AUTHORITY” and the plaintiff with effect from 1st of March 1990 for a period of Ten(10) years remains valid, binding and enforceable as between the parties thereto.

b. A DECLARATION that the purported “SUSPENSION” of the contract for Vetting/Inspection service by the Defendants herein-the Nigeria “NATIONAL MARITIME AUTHORITY” by letter dated 10th December, 1999 is ultra vires the said contract and the National Maritime Authority itself, and is thereby invalid, null, void and of no legal effect whatsoever.

c. The sum of U.S $4,875,333.15 (Four Million, eight hundred and Seventy five thousand, three hundred and thirty-three dollars, fifteen cents) or its Naira equivalent at the prevailing rate) being the financial loss and damage accruing by reason of the Defendant’s breach of the Inspection/Vetting Agreement, particulars of which are specified in the Report of Ajibola Ogunsola & Co.

d. COSTS, EXPENSES AND LEGAL FEES for the prosecution of this cause in the sum of $500,000.00 (Five Hundred Thousand United States Dollars) only.

f. EXEMPLARY AND AGGRAVATED GENERAL DAMAGES in the sum of five Million United States Dollars (US$5,000,000)”.