The Shell Petroleum Development Company Of Nigeria Limited V. Abel Isaiah & Ors (2001) LLJR-SC
The Shell Petroleum Development Company Of Nigeria Limited V. Abel Isaiah & Ors (2001)
LAWGLOBAL HUB Lead Judgment Report
MOHAMMED, J.S.C.
This is an appeal from the decision of the Court of Appeal Port Harcourt Division, in which it affirmed the judgment of the High Court. River State, sitting at Isiokpo. The plaintiffs, who are respondents in this appeal, claimed from the defendant (appellant in this appeal) for the following reliefs:
“(a) The sum of N22 million being fair and reasonable compensation due and payable to the plaintiffs by the defendant for the permanent damage and loss to the plaintiffs’ plant. marine and domestic life which was caused by the defendant’s oil exploration activities whereby the defendant’s oil pipes were caused by the defendant to open up in 1988 and caused extensive oil spillage and pollution which said pollution has remained continuous at the plaintiffs’ “Miniabia” land and water forest swampland at Omuoda, Aluu, within the jurisdiction of the Honourable Court OR in the alternative.
(b) The sum of N22 million being damages for negligence committed by the defendant through its servants or agents when they negligently allowed crude oil to spill and pollute extensively the plaintiffs’ “Miniabia” land and swampland at Omuoda Aluu aforesaid OR in the alternative.
(c) The sum of N22 million being damages sustained by the plaintiffs through the acts or omissions of the defendant under the Rule in Rylands v. Fletcher:”
The facts of this case as given by the respondents is narrated as follows: In July, 1988 an old tree fell on the appellant’s oil pipeline and indented it, thereby obstructing the free flow of crude oil. The oil pipeline was owned and controlled by the appellant and ran across the respondents swamp land and surrounding farmlands. The appellant engaged the services of a contractor to repair the dented pipeline. In the cause of the repairs, crude oil freely spilled onto the respondents’ swampland. The spillage quickly spread over the respondents’ communally owned “Miniabia” swampland and polluted the surrounding farmlands, streams and fishponds.
Pleadings were called and delivered. Evidence was given by both sides and at the end of the hearing the learned trial Judge in a considered judgment, awarded N22 million being the respondents’ claim for the damage and loss caused to the respondents by the appellant’s oil exploration activities.
Dissatisfied with the decision of the High Court the appellant appealed Unsuccessfully to the Court of Appeal. The appellant has now come before the Supreme Court contesting the decision of the court below. The appellant identified the following issues for the determination of the appeal.
“(1) Was the court below right in holding that the trial court had jurisdiction to try the case
(2) Was the court below right in upholding the finding of the trial court that the appellant did not construct an oil trap before replacing the dented portion of the pipeline
(3) Was the court below right in upholding the finding of the trial court that there was in fact a massive spillage of crude oil onto the respondents farmlands, swamps, streams and fish ponds from the appellant’s pipeline
(4) Were the damages confirmed by the court below a proper estimate of the losses suffered by the respondents if there was in fact pollution as alleged by them
(5) Was the court below right in its decision that there was no misjoinder of parties and/or causes of action”
Although some issues which the respondents formulated are similar to those identified by the appellant 1 will reproduce the respondents’ issues for ease of reference to them. The respondents formulated the following issues for the determination of the appeal.
“(1) Whether the Court below was right in holding that the trial court had jurisdiction to try this case.
(2) Whether the court below was right in affirming the finding of the trial court invoking the presumption in section 149 (d) of the Evidence Act against the appellant for failure of the appellant to produce and tender in evidence the reports of the spillage produced by its own employees DW1 and DW2.
(3) Whether the court below was right in upholding the finding of the trial court that the appellant did not construct an “oil trap” before repairing its oil pipes.
(4) Whether the court below was right and justified in upholding the damages awarded by the trial court based on the unchallenged expert evidence of the respondents.
(5) Whether the court below was right in affirming the finding of the trial court that the respondents properly litigated this suit in a representative capacity and whether the appellant challenged the judgment of the trial court under the Rule in Rylands v. Fletcher”.
The main issue in this appeal is whether the court below was right in holding that the trial court had jurisdiction to try this case. This issue was raised by both the appellant and the respondents at the court below. The issue of jurisdiction can be raised at any stage of the proceedings even in an appeal in the Supreme Court and once an objection is raised it must be borne in mind that the challenge touches the competence and legality of the trial court to try the case. Ike v. Nzekwe (1975) 2 SC 1. It is important to consider the issue of jurisdiction first because where a court takes upon itself to exercise a jurisdiction which it does not posses, its decision amounts to a nullity. Peenok Investments Ltd. v. Hotel Presidential Ltd. (1983) 4 NCLR 122, (1982) 12 SC 1. For the above reasons I will first consider the issue of jurisdiction because if it succeeds that decision will determine the fate of this appeal.
Mr. Anyamene SAN, arguing strongly on this issue, submitted that the appellant raised the issue of jurisdiction of the trial court in paragraphs 12 and 13 of its brief in the court below. The argument of the learned Senior Advocate is that by the provisions of section 7(b), 7(3) and 7(5) of the Federal High Court (Amendment) Decree No. 60 of 1991 the jurisdiction of the State High Court has been ousted in claims pertaining to mines and minerals, including oil fields, oil mining, geological surveys and natural gas. Decree No. 60 of 1991 was suspended by Decree No. 16 of 1992. But in 1993 the Constitution (Suspension and modification) Decree No. 107 section 230 (1) (0) of the Decree restored the jurisdiction of the Federal High Court pertaining to mines and minerals which was suspended by Decree No. 16 of 1992. Section 230 (1) (0) provides as follows:
“Notwithstanding anything to the contrary contained in this constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from (O) mines and minerals (including oil fields, mining, geological surveys and natural gas)”.
The question which should be answered, in this appeal, is whether the facts of this case fall within the definition of matters connected with or pertaining to mines and minerals, including oil fields, oil mining, geological surveys and natural gas. The State High Court would have no jurisdiction to adjudicate in the matter. The picture of what happened which led to the institution of this case has been given by the respondents in their Statement of Claim read:
“6. Sometimes about July 1986 an old tree from the swampland fell on the oil pipelines indenting or bending the said pipes. Apart from indenting or bending the said pipes, there was no other damage to the pipes by reason of the falling of the tree. However, the said indentation hindered the free flow of crude oil through the said pipes and it became necessary for the defendant to maintain the indented section of the pipeline by cutting off the said section and installing a new section.
- In the course of the said repairs, which was carried out by the Engineering Department of the defendant’s the defendant neglected to construct what technically is termed an oil trap. An oil trap is a device constructed in the soil which is supposed to trap crude oil in the course of such repairs so that crude oil will not spill and pollute the surrounding environment.
- Because of the defendant’s neglect to construct an oil trap, as they disconnected the damaged section of the said oil pipes for replacement, noxious crude oil commenced massive spillage onto the plaintiffs’ swampland. The defendant’s employees could not immediately control the spillage and crude oil continued to spill for several hours until they were able to fix the new section of the oil pipes”.
In establishing whether the construction and maintenance of an oil pipeline is pan of mining operations, it is relevant to refer to the practice of the oil prospecting licence holders during mining operations. These have been described in the Petroleum Act 1960 and Oil Pipelines Act 1956. If petroleum is discovered through the approved mining operations arrangement is made by the oil prospecting licence holder, which struck the oil, to evacuate the oil from the oil well to an oil terminal. This is done either through a pipeline or a tanker. The pipeline is constructed and maintained by the Oil Company which transports the oil from the B oil-well to the oil terminal. Thus the most important aspect of oil mining operation is the construction of oil pipeline for the evacuation of the crude oil to the oil terminal through an oil pipeline. The holder of an oil pipeline licence has been made responsible under the law to pay compensation to any person whose land or interest in land or who suffers any damage in connection with the operation of the pipeline.
For the foregoing reasons the construction, operation and maintenance of an oil pipeline by a holder of oil prospecting licence is an act pertaining to mining operations.
It is clear from the pleadings that the spillage and pollution occurred when the appellant was trying to repair the indented pipeline by cutting off the said section and installing a new section. I think it cannot be disputed if I say that installation of pipelines, producing, treating and transmitting of crude oil to the storage tanks is part of Petroleum Mining Operations. Therefore if an incident happens during the transmission of petroleum to the storage tanks it can be explained as having arisen from or connected with or pertaining to mines, and minerals, including oil fields, and oil mining. I therefore agree that the subject matter of the respondents’ claim falls within the exclusive jurisdiction of the Federal High Court as is provided under section 230 (1) (a) of Constitution (Suspension and Modification) Decree No. 107. Similar opinions concerning claims pertaining to oil spillage have been held by the Court of Appeal in Barry and 2 Ors. v. Obi A. Eric and 3 Ors. (1998) 8 NWLR (pt. 562) 404 at 416 and The Shell Petroleum Development Company of Nigeria Limited v. Otelemaba Maxon and Ors. Maxon’s (2001) 9 NWLR (pt.719) 541.
Learned counsel for the respondents argued that the ouster Decree could not affect the claim before the court for the simple reason that the cause of action arose before the Decrees were promulgated. He submitted that the Supreme Court had made several decisions that the law applicable to an action is the law existing when the cause of action arose. He referred to the case of Adesina v. Kola (1993) 6 NWLR (Pt.298) 182 at 185. While it is correct that the cause of action arose before the promulgation of the Decrees mentioned above, the trial of the action was in progress when Decree 107 of 1993 was signed into law. From that moment when the Decree was signed into Law the jurisdiction of the State High Court to determine any matter connected with or pertaining to mining and minerals, including oil fields, oil mining, geological surveys and natural gas has been ousted. Once the jurisdiction of a court to determine a matter has been ousted any further hearing in the matter is indeed null and void because any decision it makes amounts to nothing. By jurisdiction is meant the authority which a court has to decide matters that are litigated before it, or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter or commission under which the court is constituted and may be extended or restricted by similar means. If no restriction is imposed, the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognizance or as to area over which the jurisdiction extends or it may partake of both these characteristics ” see Vol. 10 Halsbury’s Laws of England 4th Edition, paragraph 715, page 323. There is no pending case where a court is incompetent to determine a matter. Any judgment delivered by a court in a matter which it has no jurisdiction to decide is of no consequence and is a nullity.
In the result, I agree that the State High Court has no jurisdiction to determine the suit filed by the respondents against the appellant. The first issue is therefore resolved in favour of the appellant. This issue has therefore determined this appeal. I do not have to consider other issues because doing so will amount to an academic exercise.
The appeal is therefore allowed. The judgments of the Court of Appeal and the High Court are set aside. The claim of the respondents before the High Court is struck out. I award N10,000.00 costs in favour of the appellant, N500 in the High Court and N3,000 at the Court of Appeal.
SC.75/1997