Trade and Commerce and the Nigerian Constitution
In a previous entry we argued that despite the fact that “trade and commerce” is listed as an item on the Exclusive Legislative List of the Nigerian 1999 Constitution, state legislatures also have legislative competence to enact arbitration legislation even in respect of interstate and international commercial transactions.
In this entry, we examine the “trade and commerce” provision in the Exclusive Legislative List from another dimension. In particular, we are going to briefly raise a question concerning the validity of some of the extant state legislation on sale of goods in light of the trade and commerce provision in the Exclusive Legislative List.
Historically, during the colonial era Nigeria adopted the English Sale of Goods Act of 1893 (under the concept of ‘statute of general application’) as the law generally governing sale of goods transactions. Around the time of independence, the then Western Region enacted the provisions of the same statute which it reproduced in the form of its own Sale of Goods Law 1959. When states were later created out of the old regions, some of the states which emerged from the old Western Region also continued the reproduction of the Sale of Goods Act by again enacting it locally as the Sale of Goods Law of the state concerned. Presently, a number of Nigerian states now have a Sale of Goods Law while in the states or parts of Nigeria (e.g. the Federal Capital Territory) which do not have a local sale of goods law, the English Sale of Goods Act will continue to apply under the statute of general application concept.
The issue that arises for the purpose of this entry is that of the scope of the Sale of Goods Law of a state that has enacted one in light of the trade and commerce provision in the Exclusive Legislative List of the 1999 Constitution. The most directly relevant provisions of the 1999 Constitution are items 62 and 62(a) as follows:
62 “Trade and commerce, and in particular —
(a) trade and commerce between Nigeria and other countries including import of commodities into and export of commodities from Nigeria, and trade and commerce between the states”
From these provisions it would appear at first sight that as legislative power in respect of matters of “interstate” and “international” trade and commerce is exclusive to the federal legislature, a state legislation concerning trade and commerce must be confined in its application to trade and commerce with connections solely and entirely with the particular state. Thus it would at first appear that a state’s Sale of Goods Law can only apply in respect of sale transactions with connections solely to that state.
Are the conclusions or suppositions above truly correct or even practical, however?
Let us examine a few possible scenarios arising from the trading activities of an imaginary company – Johnson Cars Ltd which we take to be a company with its registered office and place of business in Lagos.
- The company sells a car to Mr Simpson who is an indigene and resident of Ogun State. Mr Simpson is unhappy with the condition of the car and commences legal action in Lagos.
- The company sells 10 lorries to Kaluka Ltd which is a company with registered office and place of business in Eboyin State. Kaluka Ltd is unhappy with the condition of the lorries and wishes to sue in Lagos.
- The company sells a car to Mrs Donald who is an indigene and resident of the Federal Capital Territory, Abuja. Mrs Donald is unhappy with the car and she wishes to sue in Abuja.
- The company buys some car parts from a UK based and registered company (Northern Parts) and the contract provides that disputes will be referred to the Nigerian courts and that Nigerian law will apply. Johnson Cars Ltd is unhappy with the parts delivered and wishes to sue Northern Parts in Lagos.
The ultimate question to be addressed is whether the Sale of Goods Law of Lagos State can be applied by the court dealing with the dispute in any of these given scenarios.
Each of the scenarios is a sale of goods transaction and each will almost certainly be held to be a matter of “trade and commerce”; (see Attorney General of Ogun State v Aberuagba (1985) 1 NWLR (part 3) 395). On the other hand none of the transactions is connected solely to one state – in particular, Lagos State. However, are scenarios (1)-(3) trade and commerce between the states and is scenario (4) trade and commerce between Nigeria and another country?
In Aberuagba, the Supreme Court did not treat provisions of the 1979 Constitution identical to item 62 of the 1999 Constitution’s Exclusive List as relating only to transactions between government entities. The lead judgment of Bello JSC, with which the majority of the court concurred, considered the movement of products across states as “interstate trade and commerce” and from another country into Nigeria as “international trade and commerce” and it considered that both of these fell within the constitution’s provisions under consideration. Indeed the court held that “international trade and commerce” and “interstate trade and commerce” are reserved for the federal legislature while trade and commerce within a state is left as a residuary matter to the states.
The Supreme Court’s understandable approach as summarised in the immediately preceding paragraph however helps to see in stark relief the conundrum that arises in relation to ascertaining the true scope, purpose and intention behind the “trade and commerce” provisions in the Constitution’s Exclusive Legislative List.
If the court’s decision as so far summarised were taken extremely literally without further careful consideration, the conclusion would have to be reached that the Sales Law of Lagos State cannot be applied to any of the four hypothetical scenarios presented in this essay. More alarmingly, it would mean that the Sale of Goods Law of Lagos State or any other Nigerian State for that matter would have to be declared null and void to the extent that it concerns “interstate trade and commerce” and/or “international trade and commerce”.
The matter of whether the Sale of Goods Law of a state in Nigeria cannot be applied in respect of a sale transaction with connections to another state or indeed another country in light of the allocation of legislative competence in the 1999 Constitution deserves further careful consideration. It is a matter that will be addressed further in a future entry on this blog.