Barnax Engineering Company Nigeria Limited v. Government of Rivers State & Anor

This is an appeal against the judgment of the Court of Appeal, Abuja Division delivered on 18th February, 2010 coram: Abba-Aji, Aboki and Lokulo-Spdipe, JJCA wherein the Court below allowed the Respondents’ appeal and set aside the judgment of the trial Court delivered on 25th October, 2005.

By the judgment of the learned trial Court, coram Husseini Mukhtar J., the Respondents were ordered to pay the Appellant the sum of N186,365,852.99 as per the Appellant’s claim filed under the Undefended List.

The facts that led to this appeal are as follows:
The Appellant entered into a contract of supply with the 1st Respondent. The subject of the contract of supply was that the Appellant would supply to the said 1st Respondent four (4) Princess Cruise Boats. According to paragraph 8 of the claim, “most of the negotiations of the contract” between the parties, took place in Abuja. Eventually, negotiations were concluded and the contract came into being as a result of which, the Appellant, in performance of his own part, placed orders overseas and eventually supplied the four

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Princess Cruise Boats to the Respondents. Thereafter, the Appellant, on the request of the Respondents, forwarded the documents pertaining to the purchase to the Respondent and expected his payment, having fulfilled his part of the contract. Having waited without success for his payment, the Appellant petitioned to the Presidency to intervene in the matter. The verification and conclusion of the contract was made by a Committee set up by the Respondents in Port Harcourt, including several letters the Appellant wrote to the Respondents demanding payment. The Respondents paid the sum of N9,853,610.90 (Nine Million, Eight Hundred and Fifty Three Thousand, Six Hundred and Ten Naira, Ninety Kobo) as part-payment of the originally owed sum. The Appellant issued a writ, not in the Rivers State High Court, but in the Federal Capital Territory High Court, Abuja, under the undefended list procedure claiming the balance of the debt.

The claim is set out below:
a. The sum of N185,688,938.92, being the principal outstanding balance for the supply of four(4) units of Princess 330 cruise boats to the Defendants.
b. The sum of N676,914.07, being the

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balance for the supply of generating plants to the Defendants.
c. The total sum of N186,365,852.99 (One Hundred and Eighty-Six Million, Three Hundred and Sixty-Five Thousand, Eight Hundred and Fifty-Two Naira, Ninety-Nine Kobo) only.

The Writ of Summons and the Affidavit in Support were duly served on the Respondents. The matter was adjourned to 25th October, 2005 for hearing. On the return date i.e. 25 October, 2005, the Respondents despite being served with processes neither entered any appearance nor filed any Notice of Intention to defend as enjoined by the Rules of the trial Court. In the absence of a Notice of Intention to defend, the learned trial Court was urged to comply with the provisions of Order 21 Rule 4 and to enter judgment for the Appellant.

Judgment was accordingly entered for the Appellant as per her claims under the Undefended List. The Respondents appealed.

Before the Court below, the Respondents vigorously contended that the learned trial Court had no jurisdiction to entertain the suit.

The major issue in the matter at the Court of Appeal was that of want of jurisdiction of the trial Court to entertain the

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matter in the face of the fact that the parties reside in Port Harcourt, the contract was entered in Port Harcourt and to be executed in Port Harcourt and not necessarily on the merits or demerits of the contractual relationship between the parties.

The head office of the Appellant is at No.172A Aba road, Port Harcourt Rivers State, as the Appellant has no office in Abuja. The Appellant’s affidavit in support of the suit bears this out as the Appellant stated therein that it entered into an agreement with the 1st Respondent for the supply of four (4) nos. Princess cruise boats.

Based on this reasoning, the Court below applied Order 9, Rule 3 of the Federal Capital Territory, Abuja High Court Rules, which states that actions for breach of contract shall be commenced where the contract ought to have been performed or where the Defendant resides. The Court held that the trial Court lacked jurisdiction as documents concerning the contract showed, undoubtedly, that the contract was executed in Port Harcourt and that the Respondents, the Rivers State Government, also reside in Port Harcourt. The Court also held that Section 255 of the Constitution of the Federal Republic of Nigeria

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which created the FCT High Court applied to the effect that the FCT High Court has no jurisdiction as the matter has nothing to do with Abuja but Port Harcourt, Rivers State. The Court, accordingly, allowed the appeal and dismissed the suit in a unanimous decision on 18/2/2010.

The Appellant has appealed to this Court. In the amended appellant brief settled by I.E. Uzuegbu, Esq, two issues were distilled for determination as follows:
i. Did the Court below correctly resolve the issues before it? (Grounds 1 and 2)
ii. Was the Court below right in its determination that the learned trial Court has no jurisdiction to entertain this suit filed under the Undefended List? (Grounds 3, 4, 5, 6, 7 and 8).

In the Respondents’ brief settled by Uzor Ikenga, Esq, Learned Respondents’ counsel on his part identified a sole issue for determination which is:
Whether the High Court of the Federal Capital Territory Abuja, has jurisdiction to entertain a suit bordering on contract, where the parties to the contract reside in Port Harcourt and the contract entered and to be executed in Port Harcourt. (Gleaned from

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grounds 1, 2, 3, 4, 5, 6, 7 and 8 of the Appellant’s grounds of appeal).

I have read the facts and the judgments of the two Courts below. There is no doubt that the bald and simple legal issue before this Court is as ably distilled by learned Respondents’ counsel and that is what I will use to determine this appeal.

Learned Appellant’s counsel submitted that the cardinal question in this appeal is whether the Court below adverted its mind to the point that jurisdiction in cases of breach of contract is to be determined by reference to “where the contract was made” and that the position of the law is firmly entrenched from a host of judicial authorities that in a case of breach of contract, the jurisdiction of the Court is dependent on one of three alternatives including where the contract was made. Counsel cited ARJAY LIMITED v. AIRLINE MANAGEMENT SUPPORT LTD (2003) 7 NWLR (Pt. 820) 557; RIVERS STATE GOVT OF NIGERIA & ANOR v. SPECIALIST KONSULT (Swedish Group) (2005) 7 NWLR (Pt. 923).

Counsel argued that in the instant case, it is common ground that the Appellant’s claim in the undefended list was instituted before the High Court of the

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Federal Capital Territory, Abuja because “the negotiation (which culminated in the contract between the parties) most of which took place in Abuja was between the Managing Director of the Plaintiff and the Executive Head of State of the Defendant.”

Counsel argued that if the negotiations which formed the contract, the breach of which gave rise to the present suit took place in Abuja, then in law, the said contract will rightly be described as having been made or entered into in Abuja.

The Appellant submitted that in this case filed under the Undefended List procedure, the Respondents neither filed any defence nor made any attempt to challenge the facts as stated by the Appellant before the learned trial Court. Remarkably, the Court below recognized that the Respondents in this appeal who were the Appellants in the Court below “have not filed anything before the lower Court.”

Counsel also submitted it is trite law that an unchallenged piece of evidence and or unchallenged affidavit evidence ought to be accepted by the Court as proof of the facts or issue in respect of which the evidence was given. Counsel cited OTUEDON v. OLUGHOR (1997) 9 NWLR

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(Pt. 521) 355 at 376; ADEJUMO 7 ORS v. AYANTEGBE (1989) 3 NWLR (Pt. 110) 417 at 435 PARA D-E; NWABUEZE v. NIPOST (2006) 8 NWLR (Pt. 983) 480 at 525 PARA H; AG PLATEAU STATE v. AG NASARAWA STATE (2005) 9 NWLR (Pt. 930) 421 at 431 PARA F, Per OGUNTADE, JSC.

Learned Appellant’s counsel argued that the facts of the case are unchallenged and that the Court below came to the erroneous conclusion that the Appellant’s claim relates to contract entered into and executed in Port Harcourt when the facts are to the contrary. Counsel submitted that the conclusion of the Court below not borne out by the evidence is perverse and must be set aside.

Counsel cited UDO v. CROSS RIVERS STATE NEWSPAPER CORP (2001) 22 WRN 53 at 86; INCAR LTD v. ADEGBOYE (1985) 1 NWLR (Pt.8) 453 and RAMONU ATOLAGBE 4 SC (Pt.1) 250 at 282.

Counsel submitted that by that finding, the Court below made a different case for the parties and that the finding should be set aside. Counsel cited ADENIJI v. ADENIJI (1972) 4SC 10; OVERSEAS CONSTRUCTION CO. LTD v. CREEK ENTERPRISES NIG. LTD (1985) 3 NWLR (Pt. 13) 407; SKYE BANK PLC v. AKINPELU (2010) 8 NWLR (Pt. 1198) 179.

Counsel

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submitted that the Court below ignored the provisions of Section 257(1) of the (1999) Constitution, Section 9 of the High Court Act of the FCT to conclude that contract being entered into and executed in Abuja, the FCT High Court had no jurisdiction to adjudicate on same. Counsel urged this Court to set aside the decisions of the Court below when the finding is not supported by the evidence on record and has led to a miscarriage of justice. Counsel cited ADIMORA v. AJUFO (1988) NWLR (Pt. 80)1; NWADIKE v. IBEKWE (1987) 4 NWLR (Pt. 67) 718; FINNIH v. IMADE (1992) 1 NSCC (VOL. 23) 56 at 67; OLUFOSOYE v. FAKOREDE (1993) 1 NWLR (Pt. 272) 747 at 764; SHYLLON v. ASEIN (1994) 6 NWLR (Pt. 3530, 670 at 701).

The learned Respondents’ counsel in reply argued that in order to decide whether or not a Court has territorial jurisdiction to entertain a suit, the Court is bound to look at the evidence adduced before it. Counsel cited OKAFOR v. EZENWA (2002) 13 NWLR (Pt. 784) 319. To this end, verification and conclusion of the contract was made by a committee set up by the Respondents in Port Harcourt. Nowhere in the entire 42-paragraph affidavit of the appellant at the

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trial Court, in support of the suit under the undefended list, did it state that the contract was entered into in Abuja.

Counsel argued that all the Appellant deposed to in its claim was that “most” of the negotiation took place in Abuja and that there is no deposition to the effect that the contract was entered into and fully executed in Abuja or that the parties reside in Abuja or that they have places of business in Abuja. Counsel argued that negotiations only lead to a contract and not the contract itself. Counsel argued that the invoice from the Atlanta Company in Surrey, UK, that supplied the boats to the Appellant is contained in page 8 of the Records. It clearly shows the address of the Appellant to be Port Harcourt. The Appellant’s letter of demand emanated from their office in Port Harcourt and they served them on the Respondents’ offices in Port Harcourt.

Counsel argued that according to the Blacks Law Dictionary, 7th Edition by Ryan A. Garner, ‘Negotiation’ is a consensual bargaining process in which the parties attempt to reach agreement on a disputed or potentially disputed matter. The same dictionary defined what it means to

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negotiate. To negotiate means to communicate with another party for the purpose of reaching an understanding. It also means to bring about by discussion or bargaining. See Blacks Law Dictionary, 7th Edition at page 1059. Counsel also submitted that the Appellant’s head office is situated at No. 172A Aba Road, Port Harcourt, Rivers State, the Appellant has no office in Abuja. (See Exhibit I at pages 20 and 21 of the records). The execution of the contract was in Port Harcourt and the Respondents are situate in Port Harcourt.

Respondents’ counsel further submitted that the Appellant is a corporate legal personality with its office in Port Harcourt. The argument of the Appellant to the effect that most of the negotiations were conducted in Abuja, would not detract from the fact that the contract was entered in Port Harcourt where the parties reside and where the contract was executed. It thus follows, that the requirement for place of trial is in favour of the Respondents and the Respondents urged this Court to so hold. No litigant can confer jurisdiction on a Court where the breach is one that has arisen from the violation of the Constitution or a statute.

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See OBIUWEUBI v. CENTRAL BANK OF NIGERIA (2011) 7 NWLR (Pt. 1247) 465; NDAYAKO v. DANTORO (2004) 13 NWLR (pt. 889) Pg.187 and MOBIL PRODUCING NIGERIA UNLIMITED v. LAGOS STATE ENVIRONMENTAL PROTECTION AGENCY (2002) 18 NWLR (Pt. 798) Pg 10.

Counsel finally on the facts as it relates to the point in issue submitted that several Exhibits tendered by the Appellant at the trial Court in support of its claim, lay credence to the case of the Respondents to the effect that the contract was entered in Port Harcourt, executed in Port Harcourt and the parties reside in Port Harcourt, thus depriving the trial Court of jurisdiction.

Counsel argued that it is the High Court of Rivers State that has territorial jurisdiction over this dispute and that the position of the Respondents is in consonance with Several judicial authorities. Counsel further submitted that the judgment of the trial FCT High Court bereft of territorial jurisdiction is a nullity. Counsel cited DEDUWA & ORS v. EMMANUEL OKORODUDU & ORS (1976) VOLUME 10 NSCC 499 at 504; INAKOJU & ORS v. ADELEKE & ORS (2007) LPELR-1510 (SC).

OPINION
The issue here really is whether the FCT

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High Court has the requisite territorial jurisdiction to determine a contractual dispute where the parties all reside in Port Harcourt and the contract was executed in Port Harcourt. Granted that the Respondents have not since the trial Court tried to deny the debt, however, our common law system of jurisprudence perforce stipulates that a Court must have jurisdiction to determine any matter before it. It is a threshold issue and cannot be compromised.
My Lords, territorial or geographical jurisdiction refers to the geographical area in which matters brought before the Courts for adjudication arose. Territorial jurisdiction may mean jurisdiction that a Court may exercise over persons residing or carrying on business within a defined area, or in respect of a contract where its terms bring it within the area. See MEGATECH ENGINEERING LIMITED v. SKY VISION GLOBAL NETWORKS LLC (2014) LPELR-22539(CA), or it may be administrative, governing which Court or which of its divisions may exercise jurisdiction over a matter. See MAILANTARKI v. TONGO & ORS (2017) LPELR-42467(SC).
In DARIYE v. FRN (2015) LPELR-24398 (SC) this Court held that territorial

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jurisdiction implies a geographical area within which the authority of the Court may be exercised and outside which the Court has no power to act. Jurisdiction, territorial or otherwise is statutory and is conferred on the Court by the statute creating it.

It is settled that in cases of breach of contract, the territorial jurisdiction to hear the case can be determined by reference to the following: (a) where the contract was made (lex loci contractus); (b) where the contract is to be performed (lex loci solutions); (c) where the defendant resides. See ARJAY LIMITED v. AIRLINE MANAGEMENT SUPPORT LIMITED (2003) 7 NWLR (820) 577, 604-605; KRAUS THOMPSON ORG. LTD v. UNIVERSITY OF CALABAR (2004) 9 NWLR (Pt. 879) 631 at 661; EGBO v. LAGUMA (1998) 3 NWLR (Pt.80) 109 at 126-127; MARTINS (NIG) LTD v. UPL (1992) 1 NWLR (PT. 217) 322 at 331; BAND LANLEYIN v. RUFAI (1959) SCNLR 475; OKAFOR v. EZENWA (2002) 13 NWLR (PT.784) 319; UNIVERSITY PRESS LTD v. IK MARTINS (NIG) LTD (2000) 4 NWLR (PT.654) 584 at 598-599; I.K MARTINS (NIG) LTD v. UPC (1992) 1 NWLR (PT. 217) 322 @ 331.

My Lords, the rules of the High Court of the FCT are clear and straight forward.

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Or 9 Rule 3 of the FCT High Court Civil Procedure Rules, 2004 applicable when the cause of action arose provides as follows:
“All suits for specific performance or breach of contract shall where the contract ought to have been performed or where the defendants reside or carry on business in the Federal Capital Territory be commenced and determine in the Federal Capital Territory”.
Thus, in the circumstances of this case, the contract was performed in Port Harcourt and the Respondents as Defendants live or were situated in Port Harcourt being the location of the seat of government of Rivers State the suit cannot be instituted in the FCT High Court. In fact, Order 9 Rule 3 envisages that the contract must have been performed within the Federal Capital Territory to clothe the High Court with jurisdiction to determine the suit. In the Appellant’s own view, it is Order 9 Rule 4 of the High Court of the FCT Civil Procedures Rules, 2004 that applies to the circumstances of this case.
Order 9 Rule 4, provides:
“All other suits shall where the defendant resides or carries on business or where the cause of action arose in the Federal Capital

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Territory, Abuja”
Order 9 Rule 4 relates to “all other suits” and not for specific performance or breach of contract as provided for in Order 9 Rule 3. The argument of the Appellant that the cause of action or that most of the negotiation took place in Abuja is misconceived as it is clear that the provisions cannot vest jurisdiction in the circumstances on the High Court of the FCT. However, where the parties to a dispute have, by agreement in writing, chosen a designated forum for resolving their disputes (if any), it would not matter if in the fact that the Court which had been chosen in their agreement does not have the territorial jurisdiction to entertain the dispute, as long as the Court has the jurisdiction to entertain the subject matter of the dispute, that suffices to clothe the Court with jurisdiction. See EGBO v. LAGUMA (1988) 3 NWLR (PT.80) 109 @ 126-127.
My Lords, a close look at the records in this appeal shows that both parties ‘reside’ in Port Harcourt in that the Appellant has its Head office in Port Harcourt; the Respondent’s seat of Government is in Port Harcourt; the execution of the contract and the part-payment,

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verification of the contract and instrument of its payment all took place in Port Harcourt. It will be perverse to say that the contract was entered into in Abuja and not in Port Harcourt especially since the Appellant himself did not say that the contract was entered into in Abuja but that ‘most’ of the negotiation took place in Abuja.
The self serving arguments of Appellant’s counsel that the contract being conceived and negotiations carried out in Abuja endows the FCT High Court with jurisdiction cannot stand in the face of the Constitutional and statutory provisions.

There is no doubt that the three criteria for the determination of territorial jurisdiction of the Court as enunciated in the above cited cases was supported by both the affidavit and exhibits used by the Appellant in support of its case at the trial Court as evidenced by the records of appeal. Where a Respondent had not filed an affidavit or a brief of argument as the case may be, in a suit, the Appellant’s case should be considered in line with the correct legal principles applicable in the circumstances. This was what the Court below did since the trial Court failed to do

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so. It follows, that the Court below was right to have held that the trial Court lacked jurisdiction to hear the suit in the face of compelling facts, law and evidence before the Court. No Court created or established by the 1999 Constitution (as altered), has jurisdiction or powers to grant or make any order or relief that is contrary to the Constitution or any statutes and as may have been determined by extant decisions of the Courts of the land. An appeal must succeed based on the provisions of the Constitution as the foundation of the state or upon such decisions as may have been established by the Court. Without a doubt, a Court must not only have subject matter jurisdiction but also territorial jurisdiction to competently and properly adjudicate on any dispute brought before it. If a Court does not have territorial jurisdiction over the events or persons in respect of whom it seeks to preside, then the Court cannot bind such persons to an obligation or adjudicate any rights involving them.

In the circumstances, the suit should have been filed at the High Court of River State and not the FCT High Court and the Court below was right to have struck out

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the claim.

I cannot conclude this judgment without an admonition to learned counsel. After the judgment of the Court below which was of impeccable reasoning, it was in the interest of the client for the counsel to have gone back to the drawing board. This case has been in this Court for 14 years on a settled point of law. In other climes, counsel who pursued such cases where the law is settled at the detriment of their clients would have faced disciplinary measures. This is one of the cases that gives administration of justice a bad name. There is no pretense by the Respondents that they do not owe the Appellant money. It just refused to pay. Unfortunately, the settled issue of territorial jurisdiction is in favour of the Respondents and the appeal perforce must be resolved in their favour.

This appeal lacks merit and it is hereby dismissed. Judgment of the Court of Appeal delivered on 18/2/2010 in Appeal No. CA/A/159/06 is hereby affirmed. No order as to costs.