BD LAW DIGEST WITH CLRN & ALP NG & Co.
TOPHER ZHANG INVESTMENT LTD. & ANOR V. MASTERS ENERGY OIL & GAS LTD
COURT OF APPEAL (NIGERIA)
(Lagos Judicial Division)
(MONICA DONGBAN-MENSEM; OBANDE FESTUS OGBUINYA; ABUBAKAR SADIQ UMAR)
BACKGROUND FACTS
Topher Zhang Investment Ltd (1st Appellant) is an incorporated company engaged in repairing marine vessels. In 2012, there was a service contract agreement between the 1st Appellant and Masters Energy Oil & Gas Ltd (Respondent). By the contractual agreement, the 1st Appellant obligated itself to repair and refurbish the Respondent’s four accidented aluminium boats, at an agreed consideration, within a period of sixteen weeks. The Respondent paid the agreed consideration to the Appellants in tranches/installments, including the variations. However, the Respondent claimed that the Appellants were in breach of the service contract agreement by failing to repair and refurbish the four boats despite the sums of money paid to them. Sequel to that, the Respondent approached the Federal High Court (trial Court) via a Writ of Summons and tabled against the Appellants the following reliefs:
i. The sum of $318,708.85 or its Naira equivalent at the date of payment.
ii. The sum of ₦28,700,00.00 both sums being money paid by the Plaintiff to the Defendants for a wholly failed consideration.
iii. The sum of ₦56,000,000.00 being the additional sum required to repair the 4 boats to the stage of completion contemplated by the Defendants themselves.
In reaction, the Appellant, upon service of the processes on them, filed, a notice of preliminary objection, which prayed the Court for orders striking out the action and/or stay its hearing and direct parties to arbitration, dismiss the action for lack of jurisdiction and striking out the name of the second appellant from the action. In response, the respondent filed the necessary processes opposing the preliminary objection. The trial Court duly heard the preliminary objection and dismissed it.
The Appellants aggrieved by the decision of the trial Court, appealed to the Court of Appeal. One of the issues raised for determination was: Whether the Federal High Court had jurisdiction over maritime contract disputes.
ARGUMENTS
In arguing this issue, the Learned Counsel for the Appellants contended that the Respondent claim is centered on breach of the service Agreement and recovery of sum of money for which it is the High Court that has jurisdiction under Sections 157 and 272 of the Constitution as amended. He asserted that the Federal High Court has no jurisdiction on actions founded on simple contracts and that the provisions of the Admiralty Jurisdiction Act do not trigger the jurisdiction of the trial Court’s jurisdiction in this suit, considering the fact that the action was for a breach of simple contract. He concluded by stating that the trial Court erred in assuming jurisdiction over a matter of simple contract and urged the appeal court to hold.
In response, the learned counsel for the Respondent argued that the trial Court rightly exercised its jurisdiction in adjudicating over the dispute. He stated the meaning of ship as defined by the Admiralty Jurisdiction Act and canvassed the point that the contract was for the repair of ships for which the trial Court has exclusive jurisdiction. He stated further that the contract between the parties was not a simple contract but a contract for repair of boats which fell within the jurisdiction of the trial Court and urged the appeal Court to hold.
DECISION OF THE COURT
In resolving this issue, the Court of Appeal held that:
The contract entered between the 1st Appellant and Respondent was for the repair of the Appellant’s four accidented aluminium boats upon an agreed consideration. Thus, the cause of action that gave rise to this suit is a classic exemplification of a maritime claim which falls squarely within the admiralty jurisdiction of the trial Court. It should be noted in this respect that a boat qualifies as a ship under admiralty law, and the core of the contract was the repair of these boats and therefore constitutes a maritime claim. The Court determined that the dispute indeed fell within the admiralty jurisdiction as defined by sections 251(1)(g) of the Constitution and relevant provisions of the AJA. Ultimately, the Court held that the matter was not simply a contract dispute but a maritime issue within the purview of the Federal High Court’s admiralty jurisdiction.
Issue resolved in favour of the Respondent
No legal representation for the Appellants
I.O. Ajomo Esq., Victor Attah Esq. for the Respondent
This summary is fully reported at (2023) 6 CLRN in association with ALP NG & Co.
See www.clrndirect.com ; www.alp.company
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