LEGAL PRINCIPLE: CIVIL PROCEDURE — Res Judicata — Effect of Judgment — Limited to Parties and Their Privies
PRINCIPLE STATEMENT
A judgment is limited to the rights of the parties in the case and does not bind parties outside that group, even if the same issues arise; a judgment creates law only as between the parties and their privies.
RATIO DECIDENDI (SOURCE)
Per Karibi-Whyte, JSC, in P.N. Udoh Trading Co. Ltd v. Abere & Anor (2001) NLC-131997(SC) at p. 20; Paras A–C.
"The Supreme Court judgment in Peenok Investment Ltd. v. Hotel Presidential Ltd. (supra) not being legislation is limited to the rights of the parties in the case and the situation in that case and was not concerned with the situation of other parties or facts not before that court. It had no universal effect. It is well settled that although a judgment creates law, such law is only as between the parties to the litigation and their privies. It does not bind any parties outside this group even if the same issues arise."
EXPLANATION / SCOPE
Judgments bind only the parties to the litigation and their privies. They do not have universal effect like legislation. Even if the same issues arise, non-parties are not bound. The principle is based on natural justice—no person should be bound by a judgment without being heard. The court cannot extend the binding effect to strangers. The rule applies even to Supreme Court judgments. The only exception is where the judgment establishes a precedent that lower courts must follow (stare decisis), but that does not bind non-parties as parties to the dispute. The principle ensures fairness and protects persons from being affected by litigation they did not participate in.
