Sonnar (Nigeria) Limited & Anor V. Partenreederi M.s. Nordwind & Anor (1985)

LawGlobal-Hub Lead Judgment Report

KOLAWOLE, J.C.A.

This is an appeal from the Ruling of Sowemimo, J. of the Federal High Court, Lagos given on July 7, 1981. The cases arises in these circumstances. The plaintiffs claim from the defendants the sum of N417, 524.50k as special and general damages for breach of contract arising out of non-delivery of 15,322 bags of parboiled long grain rice shipped to Lagos from Bangkok, Thailand on board M. V. “Nordwind” which was due in Lagos on 25 November, 1978. The particulars subjoined to the writ of summons are as follows:

(1) Cost of 15,322 bags at $29 or N16.66
per bag C & F – N255,264.52.

(2) Duty paid to Nigerian Customs at N5.25 per bag – N80,440.50

(3) Difference between market price of N22 per bag and C & F price of N 16.66. per bag, N81,819.48

Total N417, 524.50

There were three defendants originally. In accordance with the rules of court an application was brought before the court that the defendants be served in Germany, Liberia and Thailand respectively. In the affidavit in support of that application for leave to serve the writ of summons outside the jurisdiction of the court, learned counsel for the plaintiffs deposed that their chambers had been instructed to appear on behalf of the plaintiffs by Holman, Fenwick and Willan, Solicitors in London. The order was granted on December 6, 1979. On 20 March, 1980 Mr. Jimi Oduba of counsel appeared for the defendants and immediately thereafter before any steps were taken in the proceedings, he filed an application on behalf of the first defendant praying that the action be stayed on the ground that the cause of action as against the first defendant arose out of a contract of affreightment evidenced by a bill of lading dated 26th August 1978, which was subject to a foreign jurisdiction clause. Mr. Oduba, in his affidavit in support of his own application, deposed in paragraph 4 & 5 as follows:

“4 Therein in paragraph 6 of the said affidavit the deponent deposes inter alia that the 1st defendant carries on business as shipowners in Germany and that a bill of lading is relevant to this suit.

“5. I am informed by my said clients that the only bill of lading relevant to this suit is No.1 dated 26 August, 1978 … Therein in clause 3 it is provided as follows:”Jurisdiction. Any dispute arising under this bill of lading shall be decided in the country where the carrier has his principal place of business and the law of such country shall apply except as provided elsewhere herein”.

After some adjournments of the motion, learned counsel for the plaintiffs, Mr. Mbanefo, discontinued the action against the second defendant. Thereafter, Mr. Mbanefo took a preliminary objection to paragraphs 3, 4, 5 & 6 of Mr. Oduba’s affidavit in support of his own motion for stay of the proceedings.

In a considered ruling, the learned judge upheld the preliminary objection of Mr. Mbanefo and paragraphs 4, 5 & 6 of the further affidavit of the defendants were struck out. The stage was then set for the substantive motion.

Learned counsel for the first defendant/applicant who is the respondent to this appeal contended before the learned judge that the Federal High Court had no jurisdiction upon two principal grounds: first, that the respondent was based in Germany and carried on business as ship-owners in Germany; secondly, that the relevant bill of lading which was the basis of the contract contained a provision that any dispute arising under the bill of lading should be decided in the country where the carrier had his principal place of business and that German law should apply except as provided elsewhere in the bill of lading.

On his part, Mr. Mbanefo, learned counsel for the plaintiffs, who are now the appellants, admitted the contents of the bill of lading but he contended that the mere fact that there was a foreign jurisdiction clause in the bill of lading would not oblige the Nigerian Court to stay proceedings and then order the party to go to the jurisdiction provided in the bill of lading. Mr. Mbanefo contended that the learned judge had a discretion in the matter whether to try the action in Nigeria or stay the proceedings. Learned Counsel put forward further arguments why the Nigerian court, in preference to the German Court, should try the case. These are:

(1) When the bulk of the evidence is in Nigeria