NU METRO RETAIL NIGERIA LIMITED V. TRADEX S.R.L. & ANOR

Legalpedia Citation: (2017-03) Legalpedia 93162 (CA)

In the Court of Appeal

Holden at Lagos

Fri Mar 10, 2017

Suit Number: CA/L/862/2010

CORAM

Mohammed Lawal Garba Justice of the Court of Appeal

Biobele Abraham Georgewill Justice of the Court of Appeal

Ugochukwu Anthony Ogakwu Justice of the Court of Appeal

PARTIES

NU METRO RETAIL NIGERIA LIMITED

APPELLANTS

TRADEX S.R.L.
BELL FLOWER EQUITY CORP.

RESPONDENTS

AREA(S) OF LAW

FOREIGN COMPANIES, JURISDICTION, PRACTICE AND PROCEDURE, SUMMARY JUDGMENT, EVIDENCE, CONTRACTS, DEBT RECOVERY, COMMERCIAL LAW, INTERNATIONAL TRADE, CIVIL PROCEDURE, PROOF

SUMMARY OF FACTS

This case revolves around a debt recovery action instituted by Tradex S.R.L. and Bell Flower Equity Corp. (the Respondents) against Nu Metro Retail Nigeria Limited (the Appellant) for an outstanding payment of €17,368.79 (Euros) for various books, magazines, and periodicals supplied to the Appellant. The Respondents claimed interest at the rate of 21% per annum from April 2007 until final liquidation of the debt.

Upon being served with the suit, the Appellant filed a memo of conditional appearance and a Statement of Defense challenging the legal standing of the Respondents to sue in Nigerian courts, alleging they were not juristic or legal persons under Nigerian law. The Appellant also challenged the competence of the Respondents’ sole Witness Statement on Oath and Power of Attorney, further disputing that some goods were either not delivered or that there was any agreement to pay interest at commercial rates or in foreign currency.

The Respondents filed a motion for summary judgment pursuant to Order 11 of the 2004 Rules of the Lagos State High Court. In response, the Appellant filed a motion to discharge the mareva injunction obtained against it and to strike out the Respondents’ suit based on lack of legal personality of the Respondents under Nigerian law.

The High Court dismissed the Appellant’s objections and entered summary judgment in favor of the Respondents for part of their claims. The Appellant, dissatisfied with the decision, filed an appeal.

HELD

The appeal was dismissed, save for the setting aside of the pre-judgment interest awarded by the trial court.
The Court of Appeal affirmed the High Court’s decision dismissing the Appellant’s preliminary objections regarding the legal capacity of the Respondents to sue in Nigerian courts.
The Court upheld the summary judgment entered in favor of the Respondents on the uncontested part of their claims against the Appellant.
The pre-judgment interest on the judgment sum awarded by the High Court was set aside as unwarranted. Instead, the Court ordered post-judgment interest at the rate of 10% per annum on the judgment sum from the date of the High Court judgment until final liquidation.
The Appellant was ordered to pay costs of N200,000.00 to the Respondents.

ISSUES

Whether a Nigerian Court of Law can assume jurisdiction and enter Summary Judgment in favor of two foreign incorporated companies whose certificates of incorporation, witness statements on oath, and powers of attorney are not in compliance with the relevant Nigerian Laws?

RATIONES DECIDENDI

LEGAL STANDING OF FOREIGN COMPANIES – RIGHT TO SUE IN NIGERIAN COURTS

My lords, it is true that in law parties to an illegal contact cannot seek any remedy over such illegal contract in Court, (See Ukejianya V Uchendu (1950) 13 WACA 45; Ekpenyong v. Nyong (1975) 2 sc 71; Abubakri v. Smith (1975) 6 SC 31) and thus in a contract entered into by a foreign company, generally or should I say ordinarily, a foreign company not registered in Nigeria cannot sue or be sued in Nigerian Courts on such a contract (See NBCI V. Europa Trader Co. Ltd (1990) 6 NWLR (Pt.154) 36; Edicomsa International Inc. & Associates V. Citec International Estates Ltd. (2006) 4 NWLR (Pt.969) 114 @ p.118; Unipetrol Nig. Ltd. v. Agip Nig Plc (2002) 14 NWLR (Pt.787) 312; Procter & Gamble Co. v. G. S. & D. Industries Ltd. (2013) NWLR (Pt.1336) 406), but by Section 60(b) of CAMA 2004, the position of the law as regards foreign companies was laid to rest when it provided that nothing in the Act shall be construed as affecting the right or liability of a Foreign Company to sue or be sued in its own name or in the name of its agent. See Ritz & Co KG. V. Techno Ltd. (1999) 4 NWLR (pt.598) 298. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

RECOGNITION OF FOREIGN COMPANIES – BASIS FOR JURISTIC PERSONALITY

In Bank of Baroda V. Iyalabani Co. Ltd. (2009) 13 NWLR (Pt.785) 551, it was held inter alia thus: ‘Nigerian Courts recognize as juristic persons, corporations established by a foreign law by virtue of the fact of their creation and continuance under and by virtue of that law. Such recognition is said to be by the comity of Nations and such Foreign company is permitted to on such evidence being given of the proper instruments whereby the law of the Foreign country it was effectually created as a Corporation.’- Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

RATIONALE FOR PERMITTING FOREIGN COMPANIES TO SUE IN NIGERIA

Also in Saeby Jernstoberi MFAS V Olaogun Enterprises Ltd. (1999) 14 NWLR (Pt.637) 128 or (1999) LPELR – 2373 (sc) @ pp. 25 – 26, the Supreme Court per Ayoola JSC., had expatiated on the rationale in law for permitting foreign company to sue or be sued in Nigeria Courts thus: ‘The principle of law that a Foreign Corporation, duly created according to the Laws of a Foreign State recognised by Nigeria, may sue or be sued in its Corporate name in our Courts is part of the Common Law. The suggestion that a Foreign Company duly incorporated outside Nigeria should first be registered in Nigeria under the provisions of the Companies Act 1968 (Which was the applicable Statute) dealing with registration of Foreign company as defined by that Act is too preposterous and patently inimical to international trade to merit any prolonged or serious consideration. It suffices to say that the Appellant company…..with its registered office in Copenhagen properly sued in its Corporate name.’ – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

UNCONSCIONABILITY – BENEFITING FROM CONTRACT WHILE DENYING ENFORCEMENT

It would thus, in my view, be unconscionable for a party who had taken benefit of a contract with a Foreign company duly registered under the laws of its country to turn round to contend that such a contract cannot be enforced in Nigerian Courts while keeping to himself the proceed or benefit of the said contract since in law no one can be allowed, in good conscience and in equity, to benefit from his own wrong and resile from a contract after taking the benefit therefrom. See Onyegoke V Irigana (2001) FWLR (Pt. 75) 445 @ p. 451; Ibrahim V Osim (1988) 3 NWLR (Pt.82) 257 @ p. 278; Oilfield Supply Centre Ltd V. Lloyd Johnson (1987) 2 NWLR (Pt.58) 625). – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

ADMISSION AGAINST INTEREST – EVIDENTIAL VALUE

The Appellant clearly by its pleadings did not dispute entering into the subject transactions with the Respondents and had even got the leave of the Court below to defend the claim of the Respondents as it relates to the disputed claims of goods not supplied or missing or returned and having so admitted the existence of these transactions, it amounts to admission of that part of the Respondents’ claim not disputed, which in my finding is an admission against self interest. In law admission against interest by one party is perhaps one of the best form of evidence in favour of the adversary. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

RELEVANCE OF WITNESS STATEMENTS IN SUMMARY JUDGMENT PROCEEDINGS

In proceedings under summary judgment, the relevant processes are the Statement of Claim, the Affidavit in support of the motion for summary judgment together with documentary exhibits of the Claimant if there be any on the one hand and the Statement of defence and affidavit together with any documents of the Defendant if there be any document on the other hand. There is certainly no consideration at that stage of the statement on oath of witnesses to both parties at a time when such witnesses have not been called upon to testify in the suit on oath by adopting their written statements on oath as their evidence in chief and be subjected to cross examination at the plenary trial of the suit. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

PURPOSE OF SUMMARY JUDGMENT PROCEDURE – AVOIDING UNNECESSARY LITIGATION

My lords, it is an established principle of law that the Rules of Court providing for summary judgment procedure is deliberately designed to allow for a quick dispensation of justice to avoid unnecessary clogging of the legal system with proceedings which could otherwise have been easily and quickly disposed of and thus a case is not to be transferred to the general cause list for hearing merely at the whims and caprices of a Defendant or on the basis of a sham defence merely put up to hood wink the Court into postponing the day of reckoning just for the mere fun of it and not for doing any real justice to the parties. See Mat Holdings Ltd v U.B.A Plc. (2003) 2 NWLR (Pt. 803) 71 @ p. 90. See also J.O.E. Co. Ltd v. Skye Bank Plc (2009) 6 NWLR (Pt.1138) @ P. 518. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

REQUIREMENTS FOR SUMMARY JUDGMENT – REAL DEFENCE OR TRIABLE ISSUE

Under the summary judgment procedure, what the trial Court look for when determining whether or not to grant leave to defend a suit are facts, which raise a triable issue and not proof of those facts. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

NECESSITY OF TRIABLE ISSUE FOR LEAVE TO DEFEND

The procedure under Order 11 of the High Court of Lagos State (Civil Procedure) Rules is not intended to shut out a defendant who can show on affidavit or statement of defense that there is a triable issue. A complete defence need not be shown. It will suffice if the defense set up shows that there is a fair probability of defense or a triable issue or question or that for some other reasons there ought to be a trial. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

DUTY OF THE COURT IN SUMMARY JUDGMENT – ENTERING JUDGMENT IF NO DEFENCE

At the hearing of the Motion by the Plaintiff seeking summary judgment on his claim against the Defendant, where the Court finds that the Defendant has neither disclosed any defence on the merit nor raised any triable issue, there is no other option left for the Court than to proceed to enter judgment against the Defendant in favour of the Claimant as per his claim as the Court below rightly did on that part of the Respondents’ claim not disputed by the Appellant in the judgment appealed against in this appeal. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

PRIMA FACIE DEFENCE – STANDARD FOR DETERMINING GOOD DEFENCE

In determining whether or not the Appellant had put up a good defence to the action filed against him, it did not behove upon a trial judge to consider at that stage whether the defence had actually been established. At that crucial stage of the trial, what was required was simply to look at the facts deposed in a counter-Affidavit, where applicable and determine prima-facie if it affords a defense to the action. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

PRE-JUDGMENT INTEREST – NECESSITY OF AGREEMENT OR TRADE CUSTOM

In the instant appeal on the pleadings and affidavit evidence of the parties, however, I do not see where the parties had agreed on payment of interest in the supplies and due payments in their transactions and that being so the Respondents are not in law entitled to any pre-judgment interest on the amount claimed since it was neither within the contemplation or shown to be the trade or mercantile custom of their transactions. The Court below therefore ought not to have ordered the payment of pre-judgment interest commencing from the filing of the Respondents’ suit, when all that the Respondents are entitled to by virtue of the Rules of the Court below, regrettably relied upon by the Court below in awarding pre-judgment interest, is post-judgment interest on the judgment sum adjudged in their favor against the Appellant. – Per BIOBELE ABRAHAM GEORGEWILL, J.C.A.

REQUIREMENT FOR DEFENCE TO SUMMARY JUDGMENT – FACTS NOT MERE ALLEGATIONS

The law is that an affidavit which is to support a defence or notice of intention to defend must set out clearly the grounds of the defence and the facts which go to show such a defence. It is not sufficient for an affidavit to allege generally that the defendant has a good defence or that is not liable without clearly and concisely setting out what the defence is and the facts that go to support it which if proved, would constitute a defence. The Appellant’s affidavit did not satisfy these requirements in respect of the claims for which summary judgment was entered by the High Court and so it was right to have done so.- Per MOHAMMED LAWAL GARBA, J.C.A.