Category Archives: International Commercial Litigation

Sale of Goods and the Nigerian Constitution

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Sale of Goods and the Nigerian Constitution

‘It is hard to imagine a less well-defined boundary than that separating contracts which do from those which do not “affect” interstate commerce.’ (Robert Braucher, 1951)

In the last entry we started examining the extent of applicability of the sale of goods legislation of some of the states of Nigeria in light of the trade and commerce provision of the Nigerian Constitution. The trade and commerce clause confers exclusive legislative powers on the Nigerian federal legislature in respect of trade and commerce between Nigeria and other countries and between the states. It was noted that in Attorney General of Ogun State v Aberuagba (1985) the Nigerian Supreme Court did not confine the operation/application of the provisions to relationships between government entities. Instead the court considered the provisions as applicable in the particular case to the movement of products across the states or between Nigeria and another country. It was also noted that, taking account of the terms of the decision, the sale of goods would also fall within the meaning of trade and commerce.

Considering that, as the Supreme Court decided, international and interstate trade and commerce are within the competence of the federal legislature exclusively, the question then arises whether a state’s sale of goods law can be applied in respect of a sale transaction with connections to another state or country. This would be for example where a seller operating in Lagos State sells goods to a buyer based in another state and/or the goods have to be delivered from one state to another. Another example would be where a buyer resident in Lagos State purchases goods from an overseas seller and subsequently seeks redress from the Lagos courts in the event of a dispute.

The potential constitutional dimension of the applicability of sale of goods legislation is obscured by the fact that the sale of goods legislation of the states that have enacted one virtually all derive from the English Sale of Goods Act 1893. In addition to this, the English 1893 Act is also directly applicable in Nigeria – at least in the states that have not enacted their own legislation. Thus the statutory provisions that courts in different states will apply under Nigerian law to sale of goods contract disputes are virtually identical.

As a matter of doctrine and principle, it does matter that the constitutional dimension to the law of sale of goods is clarified. Secondly, the Nigerian Law Reform Commission is proposing reform of the Sale of Goods Act and its replacement with new legislation. The clarification of the constitutional dimension will help to forestall future constitutional controversy and help prevent or reduce potential waste of time and resources on expensive litigation for clarification. Thirdly, whatever the proposals of the Law Reform Commission, it is possible that one state’s legislature will revise its sale of goods law or introduce one which departs from the standard pattern and contains variant provisions. The current debacle over arbitration legislation demonstrates this possibility starkly.

On a practical level, as long as individual states have or are seen as being entitled to have their own sale of goods legislation, the courts are going to be confronted at some point inevitably with the question of whether a state legislation can be applied to a transaction that is not wholly an “intrastate” sale transaction. The first question that will arise is arguably whether a state has legislative competence to enact any form of sale of goods legislation at all. On one level, this is very easily answered i.e. as intrastate trade and commerce matters are not included in the Constitution’s trade and commerce clause, states are empowered to legislate on them since they will be ‘residual’ matters. Accordingly, a state would be entitled to enact a sale of goods legislation at least as far as intrastate sales are concerned.

An arrangement where state legislation applies to intrastate transactions and federal (or federally applicable) legislation applies to interstate transactions has its own advantages in terms of basic clarity and certainty. The federally applicable Sale of Goods Act 1893 of England would apply to interstate and international sale of goods whereas state sale of goods laws will apply to intrastate sale transactions. At present, it would not matter considerably since both sets of legislation are virtually identical. However, if and when the efforts of the law reform commission germinate the potential for constitutional controversy and even conflict of laws issues may become more apparent.

It appears that the Law Reform Commission is proposing a uniform sale of goods law for the entire country. Of course this is possible especially in respect of interstate and international sale of goods. On the other hand, it is not clear if the proposals intend that the various state sale of goods laws should become redundant. That would raise the question whether the federal legislature has the competence to extend the application of a future sale of goods legislation to intrastate sale transactions.

Another issue would be whether, if state sale of goods legislation are to continue in existence and operation, parties to an intrastate transaction can exercise freedom of choice and choose to subject their sale transaction to the federal legislation instead. Indeed the question also arises in reverse i.e. whether parties to an international or interstate sale transaction can exercise freedom of choice and choose to apply a state sale of goods legislation. As soon as there is significant disparity between federal sale of goods legislation and the legislation of at least one state, the questions being raised presently will no longer be purely academic as experience with arbitration legislation has now clearly shown.

It is interesting that Commonwealth and other countries with federal constitutions, comparable to Nigeria’s Constitution to an extent, tend to leave the question of sale of goods legislation specifically to their constituent states or provinces; compare for example the structure of sale of goods legislation in the United States, Australia and Canada. This is despite the presence similarly in the respective constitutions of a clause granting legislative power on commerce or trade and commerce to the federal legislature.

One other matter that does not seem to have exercised adequate consideration if any at all is whether Nigeria should adopt a separate regime for international sale of goods different from the regime(s) that may be made applicable to either interstate or intrastate sale of goods. Directly related to this is the question of whether Nigeria should consider ratifying and implementing the United Nations Convention on the International Sale of Goods 1980 (‘CISG’). Whether it be the ratification of the CISG or enactment of a fresh federal legislation specifically focused on international sale, this is one respect in which the government could deliberately and specifically make the legislation applicable mandatorily in respect of the transactions that it applies to – even by invoking the sometimes controversial doctrine of covering the field. In other words, if enacting federal legislation in respect of some international sale of goods transactions, the federal government could deliberately and expressly foreclose the possibility of state legislation on the same matters.

It is nevertheless to be noted that if the federal legislature goes with the option of implementing the CISG, there are some international sale transactions that will fall outside its regime. For example, consumer sale transactions are generally excluded from the purview of the CISG whereas consumer transactions with cross-border elements are a significant feature of the modern electronic and information technology age. Thus, if Nigerian law were to be the applicable law of such a transaction the question will yet arise whether federal or a state legislation would be the appropriate legislation to apply.

Third Party Challenge of Arbitration Agreement in Nigeria

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A recent decision of the Nigerian Court of Appeal on whether a third party can challenge an arbitration agreement in Nigeria, i.e. whether a person who is not a party to an arbitration agreement can bring an action in the courts to challenge the arbitration proceedings based on the agreement, has stirred up some controversy. The judgment of the Court of Appeal in Statoil Nigeria Ltd & Anor v Federal Inland Revenue Service & Anor which was delivered in June 2014 has been reported recently in (2014) LPELR-23144.

In essence, the Court of Appeal held that the Federal High Court was justified to refuse an application to stay its proceedings in which the arbitration agreement and proceedings were challenged by a third party on the basis that the third party had locus standi to bring the challenge before the courts. The key facts of the case are as summarised below.

The Nigerian National Petroleum Corporation (NNPC) entered into a production sharing contract with Statoil (and others); the production sharing contract contained a clause that disputes should be referred to arbitration; following a dispute, the parties commenced arbitration under the Nigerian Arbitration and Conciliation Act.

The Federal Inland Revenue Service (FIRS) which was not a party to either the production sharing contract or arbitral agreement or, for that matter, the arbitral proceedings took the view that the issues/disputes between the parties before the arbitral tribunal were “in essence, issues, and controversies arising from the differing interpretations of the Petroleum Profit Tax Act and other tax Legislations and that these issues/disputes and controversies are within the jurisdiction of the Federal High Court.” Accordingly, the FIRS commenced an action by Originating Summons in the Federal High Court seeking declaratory reliefs including whether the arbitral tribunal had jurisdiction to entertain a matter dealing with taxation – especially as an award might impinge on the right of the FIRS “to assess and collect tax and generate revenue for the Federal Government of Nigeria.”

According to the Report of the case, the challenge by Statoil (and Texaco) to the jurisdiction of the Federal High Court to hear and determine the originating summons was based on the grounds that FIRS was not a party to the arbitration agreement and lacked legal standing to institute the summons; that the Originating Summons constituted an abuse of the court process; that the Originating Summons was filed in violation of the Arbitration and Conciliation Act. It was also contended that the Originating Summons was vexatious, oppressive and an abuse of judicial process based on an allegation of collusion between the NNPC and the FIRS in the filing of the Originating Summons.

The Federal High Court dismissed the objections to its jurisdiction and the request to stay its proceedings and it was this dismissal that went on appeal to the Court of Appeal. In reaching its decision that the Federal High Court was justified to dismiss the objections to its jurisdiction, the Court of Appeal seemed to focus mainly on the question whether the FIRS had locus standi to commence the Originating Summons before the Federal High Court in the extant circumstances. The Court said that considering that a party to an arbitration agreement can challenge the jurisdiction of the tribunal or claim that the arbitration agreement was void, then a person or authority (e.g. FIRS) who was not a party to the arbitration agreement should not be debarred from seeking declaratory remedies from the court, if he complains that the arbitral proceedings or an award made under the arbitral agreement would “constitute an infringement of some provisions of the Constitution or the laws of the land or impede her constitutional and statutory functions, or powers.”

The Court of Appeal also held that the appellant oil companies had made a tacit admission that FIRS had locus standi to commence the Originating Summons by accepting in their affidavit that an arbitral award favourable to them would direct that tax returns prepared by them (rather than NNPC) should be filed with the respondent (FIRS) and had conceded that the FIRS had a statutory duty (inter alia) to assess and collect tax.

The Court of Appeal also noted that in Nigerian Ports Authority vs Panalpina World Transport (Nig) Ltd (1973) 1 All NLR (Pt.1) 486, the Supreme Court held that an arbitral award made by a body called the Arbitration Board was given in excess or lack of jurisdiction and was thus illegal and null; that having so held, the Supreme Court also granted consequent declaratory reliefs in respect of assets including immovable property situated outside the jurisdiction of the trial court. The Court of Appeal thus took the view that the importance of the Supreme Court decision was “to show that an arbitral agreement could be challenged and declared a nullity by a competent Court in a substantive action or originating summons on grounds of excess or lack of jurisdiction on the Arbitral Tribunal, or that the agreement was ab initio, null and void, having no effect in law or in fact.”

The Court of Appeal also relied on Order 3 rules 6 and 7 of the Federal High Court (Civil Procedure) Rules, 2009, to the effect that any person who claims “to be interested under a deed, will enactment or other written instrument” or who claims “any legal or equitable right in a case where the determination of the question whether such a person is entitled to the right depends upon a question of construction of an enactment” is entitled to seek declaratory reliefs by Originating Summons.

Finally, the Court of Appeal dismissed the allegation of collusion between the NNPC and the FIRS; it held that a person, body or authority that instituted an action in a Court of Justice to protect or secure statutory or constitutional rights, privileges, or immunity, etc, could not be said to be acting in collusion.

On the face of it, there is logical internal consistency to the decision of the Court of Appeal. On the other hand, the problems with the decision seem to stem more from what it overlooks than what it actually decided. It is true, for example, that Order 3 Rule 6 of the Federal High Court Rules allows a person to commence action by Originating Summons if he claims “to be interested under a deed, will enactment or other written instrument”. It would have been more helpful, however, if the court had undertaken a more detailed examination to conclude that “other written instrument” in that language encompasses an arbitration agreement or to decide whether it is to be interpreted more restrictively.

The predication on Order 3 Rule 7 of the same provision, that a person is entitled to commence action by Originating Summons if the interpretation of an enactment is in issue, appears stronger. Nevertheless, a consideration of other factors which the court seemed not to take into account would suggest that even that is not really as strong as it appears in the circumstances of a third party challenge to an arbitration agreement.

Arguably, the most critical factor that was overlooked or at least insufficiently considered is in terms of the provisions of the Nigerian Arbitration and Conciliation Act. In the first place, section 34 of that Act provides that a court shall not intervene in any matter governed by the Act except where so provided in the Act itself. The Preamble to the Act says that its purpose is “to provide a unified legal frame work for the fair and efficient settlement of commercial disputes by arbitration and conciliation” and also to make the New York Convention on the Recognition and Enforcement of Arbitral Awards applicable in Nigeria. Following on from the Preamble and considering its specific provisions, it is fairly clear that matters governed by the Act include arbitration agreements, arbitral proceedings as well as the recognition and enforcement of arbitral awards.

Section 4 of the Arbitration and Conciliation Act provides that if an action which is the subject of an arbitration agreement is brought before a court the court shall stay its proceedings if so requested by a party who makes the request not later than when filing his statement on the substance of the dispute. An interesting observation about the language of section 4 is that its focus seems to be on the parties before the court and not necessarily the parties to the relevant arbitration agreement; compare for example section 5 of the same Act which clearly focuses on circumstances when the parties before the court are also the parties to the arbitration agreement. Nevertheless, the terms of section 4 give us an indication of how the Court of Appeal might have approached the instant case differently.

As alluded to earlier, the focus of the Court of Appeal was principally on whether the FIRS had locus standi to bring the Originating Summons before the court. In fairness, it also seems that this was the first line of argument pursued on behalf of the oil companies. However, the fact that a party before a court might have locus standi and might be properly before the court is not of itself sufficient to deprive the court of its ability to exercise its jurisdiction to stay the proceedings. The terms of section 4 of the Arbitration and Conciliation Act contemplate that the parties in the action before the court might be properly before the court; hence it says that the party seeking a stay of proceedings must do so no later than when it submits its first statement on the substance of the dispute. It is also important to bear in mind the use of the imperative “shall” in section 4 i.e. the court “shall” stay its proceedings which suggests, at least prima facie, that the court must stay its proceedings following a prompt request.

Beyond section 4, the Arbitration and Conciliation Act also provides in section 12 that an arbitral tribunal shall be competent to rule on matters pertaining to its own jurisdiction. Ordinarily, this suggests that it is for the tribunal to decide on its own jurisdiction; however, it may be argued that this is not a total preclusion in all circumstances of the ability of courts to rule on the jurisdiction of an arbitral tribunal. The Court of Appeal pointed to the example of the Panalpina case where the Supreme Court held that the Arbitration Board lacked or exceeded jurisdiction. Another argument that may be raised along this line might depend on section 35 of the Act (also mentioned by the Court of Appeal) which provides that the Act’s provisions do not affect any other law by which certain disputes are not arbitrable or are only arbitrable on stated conditions. On the other hand, there is one important distinction from the Panalpina case which the Court of Appeal did not seem to address directly. The Panalpina case concerned a situation where an award had already been made whereas the present case is to prevent the holding of arbitral proceedings at all.

In light of the foregoing, while the Court of Appeal’s decision that the FIRS had locus standi in respect of the Originating Summons before the Federal High Court has a consistent logic to it, the decision’s main shortcoming is in terms of inadequate consideration of directly relevant provisions of the Arbitration and Conciliation Act. Specifically, the court should have paid attention to the provisions that require the lower court to stay its own proceedings, irrespective of whether the parties have locus standi and are properly before the court, at the request of a party who acts promptly when the matter before the court is the subject of arbitral proceedings.

The Court of Appeal’s decision might also have better reflected awareness of sensitivities about supporting and promoting international commercial arbitration and Nigeria’s perception as an arbitration friendly centre. It is in this respect that some of the critical commentaries on the Court of Appeal’s decision have been focused. Some of the already extant commentary suggest that the decision reverses the positive impressions that had been generated by recent decisions including especially Nigerian Agip Exploration Limited (NAE) v Nigerian National Petroleum Corporation (NNPC) & Anor CA/A/628/2011 of February 2014; and, Statoil Nigeria Ltd & Anor v NNPC & 2 Ors 2014 NWLR (Pt 1373) 1; (2013) 7 CLRN 72.

It may be that the Court of Appeal’s decision in Statoil v NNPC under consideration here is not as damaging as it might first appear. The decision should not be read as an open cheque for third party challenge of arbitration agreements in Nigeria. Rather the decision should be read as simply to the effect that in some circumstances a third party to an arbitration agreement has locus standi to file an action before the courts challenging the arbitration agreement. The decision is not per se to the effect that the court cannot stay its jurisdiction in such an action. It is thought that commentary highlighting this distinction and stressing the importance and need to exercise the courts’ jurisdiction to stay proceedings is more likely to be beneficial to the courts in appreciating the fine distinctions that often need to be made and the important sensitivities about arbitration friendliness. In any event, an authoritative decision on the matter by the Nigerian Supreme Court would be most welcome.

Still on the Enforcement of Foreign Judgments in Nigeria

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With rather coincidental timeliness following our recent blog entry (also published elsewhere) on the enforcement of foreign judgments in Nigeria, our friend and Colleague Adewale Olawoyin of the Nigerian law firm Olawoyin & Olawoyin has just published a very instructive article on the same topic in the Journal of Private International Law.

The article agrees with our conclusion in both the recent blog entry and ’Gbenga Bamodu’s earlier similarly analytical article in the Oxford University Commonwealth Law Journal that, contrary to the decisions of the Nigerian Supreme Court, the Foreign Judgment (Reciprocal Enforcement) Act 1960 really should be and continue to be inoperative until relevant orders are made by the Minister of Justice.

’Wale’s article also goes on to make important observations and recommendations. Arguably, the most important of these is that the Nigerian legislature and policy makers should really be looking at enacting a new legislative regime for the enforcement of foreign judgments in Nigeria. The suggested new regime does not necessarily have to be based on reciprocity, it can take account of Nigeria’s commercial and strategic interests especially bearing in mind which countries are Nigeria’s most important trading partners, and it might even take account of non-money judgments . Finally, the new regime would obviate all the potential difficulties of interpretation that may attend both the Reciprocal Enforcement of Judgments Act 1922 and the Foreign Judgments (Reciprocal Enforcements) Act 1960. We heartily recommend this article.

Enforcing Foreign Judgments in Nigeria: ‘Ex Abundanti Cautela’

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In a series of judgments going back to at least 2003 Nigeria’s highest courts, especially the Supreme Court, have provided greater clarity concerning the statutory regimes for enforcing foreign money judgments in Nigeria. Nevertheless, an examination of the decisions of the courts and the practical implications of some of the most recent decisions indicate that an enormous amount of caution is still required when seeking to enforce a foreign judgment in Nigeria.

In one of the most recent cases, Access Bank v Akingbola (2014), the Lagos State High Court advised that the judgment creditor should have acted ex abundanti cautela (‘out of the abundance of caution’) when selecting which Nigerian court to approach for the enforcement of a judgment of the English High Court. It is contended that the necessity for caution, while indeed advisable and recommended, is in part due to uncertainty and confusion arising from very questionable interpretations and decisions of the courts themselves.

There are two statutory regimes under which it may be possible to enforce a foreign judgment in Nigeria. The first is the Reciprocal Enforcement of Judgments Act 1922 (‘the 1922 Act’ which is sometimes confusingly referred to as the 1958 Act) and the Foreign Judgments (Reciprocal Enforcement) Act 1960 (‘the 1960 Act’ which is sometimes referred to, also confusingly, as the 1990 Act). While it had been assumed to some degree that the advent of the 1960 Act had led to the repeal of the 1922 Act, the Supreme Court has decided, rightly, that the 1922 Act was never repealed and remains in force; (see inter alia Macaulay v RZB of Austria [2003] 18 NWLR 282). The 1922 Act continues to be available for the enforcement by registration of judgments of the courts of the United Kingdom and some Commonwealth countries to which its application is extended by proclamation. This is what was always intended and the countries to which the 1922 Act applies include specifically the countries listed in an extant proclamation order (Laws of the Federation of Nigeria and Lagos (1958) vol IX, cl 175, s. 5).

The 1960 Act, by its terms, is intended to apply in respect of judgments from foreign countries on the basis of reciprocity, i.e., on the basis that Nigerian judgments are given reciprocal treatment in the courts of the country concerned. By its terms, the potential application of the 1960 Act is not confined to judgments from only Commonwealth countries. Rather, the Act can apply in respect of the judgment of any country at all – as long as the requirement of reciprocity is satisfied. Ordinarily, the reciprocity requirement is met when the Minister of Justice makes an Order that the 1960 Act shall apply in respect of the judgments of the designated superior courts of a particular country. The courts have now confirmed that no such order has been made under the Act and, ordinarily, the reciprocity requirement under the 1960 Act is not currently satisfied in respect of any country – except in the unlikely event that the courts allow proof of reciprocity by a means other than Ministerial order. Ordinarily also, according to sound principles of statutory interpretation, this should mean that no judgment from any country whatsoever can be enforced under the 1960 Act.

Rather surprisingly, the Nigerian Supreme Court has held that a particular part of the 1960 Act can be invoked to enforce a foreign judgment, even in the absence of a ministerial order. The Nigerian Supreme Court has held that section 10(a) of the 1960 Act can be invoked as an exception to the requirement of a ministerial order. In reaching this conclusion, the court took the view that section 10(a) is an “interim” provision intended to apply before the Minister of Justice makes an order under the Act. It has been argued extensively elsewhere that this approach is not only of dubious accuracy but that it is also self-contradictory; otherwise, it is at best an exercise in judicial pragmatism. (See the article:  ‘The Enforcement of Foreign Money Judgments in Nigeria: A Case of Unnecessary Judicial Pragmatism?’ in (2012) 12(1) Oxford University Commonwealth Law Journal 1)

The reality is that the provisions of section 10(a) of the 1960 Act are not supposed to apply at all before the making of an Order of the Minister; rather they are supposed to apply before the commencement of an order of the Minister. This presupposes that only when an order has been made but before its commencement can the provision of section 10(a) of the 1960 Act be invoked. The drastic reality is that the provisions of the1960 Act are not truly supposed to be invoked at all presently – unless and until (a) relevant ministerial order(s) is/are made!

That the conclusion of the Supreme Court applying section 10(a) of the 1960 Act in the absence of any ministerial order is contradictory is apparent on a careful examination of some of the statements of the court itself. For example Mohammed JSC, who delivered some of the most lucid reasoning on this topic, observed as follows:

‘the entire provisions of Part I of the [1960 Act] containing section 4 of the Act require a positive action on the part of the Minister of Justice of the Federation to bring that part of the Act into force.  Part I…. comprises sections 3, 4, 5, 6, 7, 8, 9, and 10. From the provi­sions of section 3 of the Act . . . it is quite clear that the provisions of Part I of the Act remains (sic) dormant or inactive until life is breathed into them by an order promul­gated by the Minister . . .’ (Marine & General Assurance Co Plc v Overseas Union Insurance Ltd & Ors [2006] 4 NWLR 622,643)

Similar sentiments as above are repeated by Mohammed JSC and his brother justices on the Supreme Court bench in other cases including: Grosvenor Casinos Ltd v Ghassan Halaoui [2009] 10 NWLR 309. According to the statement of Mohammed JSC above, the entire provisions of Part 1 of the 1960 Act require an order promulgated by the Minister of Justice before they can come into force and otherwise they remain dormant. But then section 10(a) which the Supreme Court applies is also within the said Part I whose entire provisions are still dormant until the promulgation of a ministerial order! In a sense, the Supreme Court side-stepped this evident contradiction by claiming that section 10(a) is applicable exceptionally as an interim measure before a ministerial order is made. The critical point, however, is that section 10(a) does not contain any such exception. By its terms, even section 10(a) is not supposed to be applicable or to be applied before a ministerial order is made at all; it is only applicable before the commencement of a ministerial order that has been made.

It is not difficult to identify reasons why it is easy to fall into the temptation to find a way to make the provisions of the 1960 Act invocable for the enforcement of foreign judgments. In the absence of the approach taken by the Supreme Court judgments from several countries, including judgments from important trading partner countries, cannot be enforced by registration though they can still be enforced by action on the judgment debt. The only statutory registration regime that can be invoked, the 1922 Act, is only applicable in respect of the United Kingdom and the Commonwealth countries to which its provisions have been extended. For example, a case like Teleglobe America Inc v 21st Century Technologies Ltd  (2008) 17 NWLR (Pt 1115) 108 would have had to be decided differently since there is no ministerial order extending the 1960 Act to the USA. Consequently, it would mean that American judgments cannot be enforced by registration but rather by action, although it may be possible to expedite the action to some extent by use of the undefended list procedure.

There are additional benefits to the invocability of the 1960 Act, although those are not key presently, including the fact that when it is truly operative a judgment creditor can have up to six years to apply for the registration of the judgment as opposed to just one year under the 1922 Act. From the Supreme Court’s perspective, this was a telling and decisive matter in the recent case of VAB Petroleum v Mike Momah (SC, 2013), for example.

In fact, the issue of the length of availability of time to apply for registration of a foreign judgment contributed to the conclusion of the Supreme Court that has been argued to be erroneous. Under the provisions of section 10(a) of the 1960 Act, a judgment given before the commencement of a ministerial order extending the 1960 Act to its country of origin may be registered within one year from the date of the judgment. It has been argued extensively and in detail that the true purpose of this provision “is to reiterate the operation of the 1922 Act in respect of judgments from the UK and Commonwealth countries to which that Act had been extended until the operation of the 1960 Act is triggered in respect of the UK and any such Commonwealth country by a ministerial order under the latter Act” (OUCLJ Enforcement article referred to earlier). In any event, the terms of section 10(a) are fairly straightforward that the one year period for enforcement allowed under the provision is in respect of a judgment given before the commencement of a ministerial order — and not before the issuance of such an order.

A surprising recent development arose from the judgment of the High Court of Lagos State from which the suggestion to adopt an ex abundanti cautela approach is taken. In Access Bank plc v Akingbola, the Lagos High Court ruled that the court in which the enforcement of the judgment of the English court in the particular case should have been sought was the Federal High Court. The reason for this was, in effect, that if the original action had been tried in Nigeria the court with rightful jurisdiction would have been the Federal High Court because the original (foreign) judgment concerned the statutory duties of the judgment debtor under the Companies and Allied Matters Act 1990 as a director. The court concluded that, in light of that fact, the judgment creditor should have sought enforcement of the foreign judgment in the Federal High Court ex abundanti cautela i.e. out of an abundance of caution. The judgment debtor’s arguments that he did not carry on business in the jurisdiction of the foreign court or that he did not voluntarily appear before that court are not key issues in this particular respect. Compare e.g. Union Petroleum Services Ltd v Petredec Ltd (CA, 2014)

With all due respect, the decision of the Lagos High Court evinces a very questionable understanding of the principles underlying statutory regimes for the enforcement of foreign judgments by registration. The real issue is not to address or determine which court in the enforcing country would have been properly seised of a matter; rather, the issue is to be satisfied that the foreign court indeed had jurisdiction and properly assumed jurisdiction over the cause for which its judgment is sought to be enforced. Assuming for example that the judgment debtor’s action which led to the foreign action had been perpetrated in Ghana, it would have been absurd for the Nigerian courts to delve into the issue of which Ghanaian court would have had jurisdiction rather than examining whether the foreign trial court itself had jurisdiction and properly assumed jurisdiction. The fact that the judgment debtor is Nigerian and perpetrated the relevant actions largely in Nigeria is not of itself determinative of the jurisdiction of the foreign court. The fact that such a matter would have been tried in the Federal High Court if it had been pursued in Nigeria does not of itself undermine the jurisdiction that a foreign court may have in respect of the same or a related matter.

Most crucially, the fact that a similar original action if commenced in Nigeria should have been properly commenced in the Federal High Court does not mean that the enforcement of a foreign judgment must necessarily be sought in the Federal High Court. From a practical perspective, a primary concern is to locate the jurisdictions in which a judgment debtor has assets and then to approach the courts of such a jurisdiction to enforce the relevant foreign judgment. As the judgment debtor in this particular case is alleged to have assets in Lagos State, it is a sound legal manoeuvre to approach the courts with territorial jurisdiction in Lagos State for the enforcement of the relevant judgment. Importantly, the ordinarily ‘unlimited’ subject-matter jurisdiction of the Lagos High Court is not excluded simply because the foreign judgment concerned a matter that under Nigerian law would have been heard, as an original matter, in the Federal High Court.

It would be very surprising if the decision of the Lagos High Court in Access Bank Plc v Akingbola in particular is not challenged further in the Nigerian appellate courts. Nevertheless, the case does confirm that the matter of approaching the Nigerian courts for enforcing foreign judgments in Nigeria is a matter that requires ‘an abundance of caution’; it is truly a case of proceeding ex abundanti cautela.