CONFLICT 2.3 CHOICE OF JURISDICTION

• Isochukwu
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• Conflict of Laws II

CHOICE OF JURISDICTION.

 

Jurisdiction has several meanings. It could refer to the inherent powers the court can exercise, it can relate to the amenability of the party concerned to trial in a court, it can refer to the scope of a court’s power (whether territorial or substantive) and so on.

In conflict of laws, it refers to the appropriateness of entertaining a matter with foreign element.

The Received English Law and certain Municipal legislations are sources of law on this subject area. Section 10 High Court Laws Lagos directs us to do as the English courts would-Bata Shoe V Malikan. The Sheriffs and Civil Processes Act (especially part 7).

THE WRIT RULE

This is English court’s basis of jurisdiction. It is classified into in personam (against a named defendant) and in rem (against a res). Service of writ and other originating processes on the defendant or the res that is within the English territory is sufficient to confer jurisdiction on the English court- NPA V Panalpina World Transport.

Flowing from the above, the presence of the defendant or res within English territory can confer jurisdiction on the English court. This originates from the scenario of a creditor being able to lay his hands on the collar of his debtor. As the crown is regarded as having sovereignty over persons or things within its territory. In essence, once the English crown can serve the defendant with a writ within its territory, it can assume jurisdiction.

America utilizes what it terms “general” and “special” basis of jurisdiction. The former mandates the presence of the defendant and the latter tries to localize the facts. Thus, in addition to presence of the defendant, the US may additionally require that the facts should have occurred in US, or that the parties are domiciled in the US, or that their principal place of business is in the US and so on. Just have a special connection sha- See Section 1.02 of their Uniform Interstate and International Procedure Act.

EXCEPTIONS TO THE ENGLISH WRIT RULE:

1. Where the Defendant voluntarily submits to jurisdiction, then there would be no need for the writ rule. Defendant may be said to submit to jurisdiction where (for example) he enters unconditional appearance, defends the suit on its merit, fails to timeously challenge the court’s jurisdiction, files a counter claim, or where he had agreed to be sued in the particular court.
2. Where the res is immovable property (like land): In addition to service on the defendant within the jurisdiction, the courts usually require that the land should be located within the jurisdiction of the court-British South Africa Co V Companhia De Mocambique, Hesperides Hotels Limited V Aegean Turkish Holidays Limited. Section 30 of the UK Civil Jurisdiction Act 1982 however makes an exception in relation to damages for trespass. Note the case of Joyce Ifepe V Cecilia Obi.

CRITICISMS OF THE WRIT RULE.

1. Criticised in Fisher Brown and Co V Fielding for disregarding where the facts occurred. D McLean criticised that the English court would have jurisdiction once the defendant or res can be served within its jurisdiction notwithstanding the essential foreignness of the case. It disregards the place where the facts occurred.
2. If a defendant is not within the forum, then there can be no action/suit. Therefore, a cunning defendant may stay away from the forum (England) and frustrate the action by avoiding service.
3. English text writers have described it as closer akin to robbery than justice-Mr Minor, Conflict of Laws. That it encourages forum shopping. A sharp plaintiff may wait for the defendant to enter England (which would usually award greater damages) and serve the writ on him. Notwithstanding that he could (long) have served the writ on him in Nigeria.
4. That the complainant would have to follow the defendant to wherever he can find him.

In response to the Criticisms of the Writ Rule, the following have been used in Defence:

1. The questions of choice of law and choice of jurisdiction are not the same. The mere fact that the English court assumes jurisdiction does not mean that they would apply English law. (Although it may reject the foreign law which is penal, contrary to public policy or revenue motivated. See Newzealand V Ortiz, Kuwait Airways V Iraqi Airways). Just note that what the proponents are saying is that the writ rule is just for determining jurisdiction. After assuming jurisdiction, the court would then look for the proper law to apply and it may end up not being English law that would apply.
2. The English Courts have introduced the Rules of assumed and discretionary jurisdiction either decline or assume jurisdiction in deserving cases notwithstanding that the defendant is present or absent from the forum. These rules shall be discussed in detail later.

THE APPLICATION OF THE WRIT RULE IN NIGERIA.

Section 10 High Court Laws of Lagos State, Section 8 High Court Laws of Ondo, Osun and other similar High Court provisions enjoin our courts to do as the English courts would.

From the plethora of Nigerian cases, it is apparent that service of writ and other originating process is mandatory and can affect the jurisdiction of the court to hear a matter-Anyoha V Chukwu, Chime V Chime. In Njokanna V Uyana, the court noted that service is important and makes the party aware of a proceeding against him thereby fulfilling the requirement of fair hearing guaranteed in Section 36 of the 1999 Constitution. A similar stand was made in Madukolu V Nkemdilim

Thus we can say that our courts have followed and accepted the first leg of the writ rule. However, the Nigerian courts have erroneously departed from the second leg (that service can confer jurisdiction in cases with foreign element). Because in practice once the case has a foreign element, they usually erroneously tell the plaintiff to go and sue where the facts occurred. In making this error, the Nigerian courts wrongly utilize the following concepts:

• Local venue rules.
• Territorial Limit of jurisdiction.
• Localization factors.
• Eastern Nigeria Additional Minimum Contact Provisions.

 

LOCAL VENUE RULES: Ordinarily, local venue rules are used to determine appropriate judicial divisions or magisterial district to institute an action. This would usually be the judicial division where the facts occurred or where the defendant resides. But if it is land it is where the land is situated-Order 2 High Court Laws Lagos.

The rules of courts usually admonish that where a case is instituted in the wrong venue/division, the court may transfer it to an appropriate venue instead of setting it aside-Egbe V Belgore. Alternatively, the court could even try the case without transferring it (if it has jurisdiction) except the Chief Judge of the High Court directs otherwise-Order 2 Rule 5.

The problem here is that although local venue rules do NOT apply to international or interstate matters, the Nigerian courts have been wrongly applying local venue rules to interstate and international matters. This error was committed in Resolution Trust Corporation V FOB Investment and Properties ltd and another. Also, in Krans Thompson Organizations Ltd V University of Calabar, where the Supreme Court held that a suit relating to a contract performed in Calabar can only be instituted in the High Court of Cross Rivers (Calabar).

This Error has been justified by the Nigerian courts using the argument of TERRITORIAL LIMIT OF JURISDICTION: In Dairo V UBN, the Lagos State High Court held that it had no jurisdiction to entertain a defamatory auction notice published in Ogun State. That the plaintiff should go and sue in Ogun State. The counsel tried to rely on Benson V Ashiru but the court noted that Benson V Ashiru was decided during the military era when power was concentrated. It then noted that currently, each state has its own judiciary and legislature. Thereby having a territorial limit of jurisdiction.

It is important to note that where the matter is international, then the English common law position should apply and where it is inter-state, the Sheriffs and Civil Processes Act should apply- Zabuski V Israeli Aircraft.

Some of our courts have made us proud though. For example, in Panalpina World Transport V NPA the court rightly noted that an action for an accident that occurred in Western Nigeria can be instituted in Lagos. Same good news was professed by the courts in Ogunsola V APP and Bata Shoe V Malikan. This is a welcome development which Nigeria should follow.

LOCALIZATION FACTORS: (Localization factors otherwise known as connecting factors was taught in first semester and has been discussed in the First Semester version of this note. Localisation factors simply seek to localise the facts of dispute in determining the appropriate law). The Nigerian courts have been applying localization factors to decline jurisdiction in cases like Olayiwola V Nwadike and Stabilini V Akintola. This shows that Nigerian courts have failed to recognize that localization factors are applied in determining choice of law RATHER than choice of jurisdiction.

EASTERN NIGERIA ADDITIONAL MINIMUM CONTACT PROVISIONS: require that in addition to proper service of writ within the jurisdiction, the cause of action (or the defendant) should have some minimum contact with the territorial jurisdiction of the State (Eastern States). Under Section 22 of their High Court Laws, this minimum contact may be fulfilled in the following circumstances:

• For commercial transactions: If the defendant resides within the territory, OR the contract is breached or ought to have been performed within the jurisdiction-Section 22 High Court Laws of Anambra, Enugu…
• In other cases: If the defendant resides or carries on business within the jurisdiction-Ibezue V In Joyce Ifepe V Cecilia Obi, the court noted that since the defendant resides within the jurisdiction of the Onitsha High Court, it had jurisdiction. Provided there has been proper service of writ and originating processes on the defendant.

Section 22 has been criticised for failing to accommodate in-rem cases. (i.e. the common law rule that confers jurisdiction once the res (like ship) is within territory). It has also been criticised for contravening the Mocambique’s case by allowing the plaintiff to sue the resident defendant in respect of foreign immovable… because all that is required is that the defendant be resident and served within the jurisdiction. Prof Agbede posits that the eastern courts in such situation should deny jurisdiction on the basis of forum non-convenienes (This term shall be discussed later). The Nigerian courts are hereby advised to do as the English courts would-Section 10 High Court Laws Lagos.

Note that this eastern law no longer operates for the interstate level since service has been put on the exclusive legislative list. However, it can govern at the international level.

A defendant who wishes to challenge jurisdiction for improper service should do so at the preliminary stage: before he does any act that may amount to waiver or submission- Order 5 Rule 1 and 2 of the New High Court Civil Procedure Rules. Maybe where the plaintiff (though not properly served) appears to defend the matter-Niger Progress Ltd V North East Line Corporation.

Another departure from the Writ Rule is that in relation to Matrimonial Proceedings, the courts usually require the parties to be domiciled within the jurisdiction (Nigeria is a single domicile for the purpose of matrimonial causes-Section 2 Matrimonial Causes Act). Mere presence and service would not suffice-Le Mesurier V Le Mesurier. Although the court has the power to transfer the matter to a more convenient court-Section 9 Matrimonial Causes Act of Nigeria.

The second response to the criticism of the Writ rule comes in the notions of ASSUMED AND DISCRETIONARY JURISDICTION.

ASSUMED JURISDICTION: here the court can order the service of a writ on a defendant notwithstanding that he is abroad. This is done in justified circumstances (Especially where the crucial facts occurred within the forum). The English Courts were empowered to do this by the Common Law Procedure Act. In Nigeria, Rule 13 High Court Laws FCT allows service of writ outside the forum if the facts occurred within the forum… notwithstanding that the defendant is abroad-Call V Oppenheim. See also Rule 1 Order 8 of the High Court Laws Civil Procedure Rules.

The plaintiff would have to apply to the court to allow him serve the defendant who is abroad-Rule 15, Order 12 High Court Laws Abuja. (Note the Hague Convention which seeks to simplify the “serving process” between countries. Article 2 of the Hague Convention obliges member parties to nominate a central authority for the purpose of effecting service of judicial documents from other member states. They are not to impose taxes for such service). The court should then judiciously consider whether the leave should be granted-Herb V Devimco. Difficulties or ambivalences would be resolved in favour of the defendant-Butts Gas and Co V Hammer.

Order 8 Rule 1 of the High Court Laws of Lagos contains certain grounds for exercising assumed jurisdiction (service out of Nigeria). They include:

1. Where the subject matter of the suit is (immovable) land and is located within the jurisdiction (This buttresses the BSA V Companhia De Mocambique case discussed earlier).
2. In personam actions relating to land situated within the jurisdiction.
3. Where the defendant (natural or juristic) is domiciled or ordinarily resident within the jurisdiction.
4. Where the action is in respect of administration of estates or execution of trusts where the deceased at the time of his death was domiciled within jurisdiction-Ogunro V Ogedengbe, Winter V Winter.
5. Where the action is in respect of a contract made, breached, performed/ought to have been performed within the court’s jurisdiction. OR the parties have agreed that the court shall have jurisdiction-Spiliada Maritime Corp V Cansulex.
6. Where the action is in respect of tort or other civil wrong committed within the jurisdiction… or damage sustained within the jurisdiction (A similar provision can be found in Section 60 CPR UK). See also Koop V Berb: George Monroe Ltd V The American Cynamid and Chemical Corp. Private International Law (Miscellaneous Provisions) Act. Herb V Devimco.
7. Suits seeking injunction to restrain acts within the jurisdiction: like remove nuisance within jurisdiction, restrain infringement of trademark within the forum-Re Burlana’s Trademark.
8. Where a party resident abroad is a necessary and proper party to the Nigerian suit, leave can be sought to join him. In Societe Generale V Dreyfus Brothers, the court noted that such leave should not be granted where it is mala fide and merely seeks to make the foreigner amenable to the jurisdiction of the Nigerian court…
9. Suits relating to mortgage in relation to property situate within jurisdiction.
10. Actions brought under the Civil Aviation Act.
11. Other grounds: where the proceeding relates to a person under legal disability or where it relates to probate matters.

In summary, in deciding whether to order service out of jurisdiction, the court would ask:

• Does the claim fall under any of the above stated rules?
• Is it just and fair to grant the prayer?

Assumed jurisdiction has been denied on the basis of liz alibi pendes (i.e. that the case is pending elsewhere), forum non-conveniens (i.e. that the case is not best suited for the forum court-Clemessy V Barsoum) and in the interest of justice-The Hagen. Jurisdiction has been assumed in Oppenheim V Louis Rosenthall and Co where it was established that plaintiff owing to political reasons would not receive fair trial abroad. In Mackender V Feldia A.G, lord Denning noted that since the parties had agreed to exclusive jurisdiction in another fourm, the court would discretionarily refuse the leave sought.

In essence, the prayer must come within the spirit and letters of the rules.

In Barsoum V Clemessy International and another, the defendants were resident in France and the commission was payable in Switzerland, the agreement was NOT entered in Nigeria. The court noted that the plaintiff needs to prove that the contract was made within the jurisdiction. doubts should be resolved in the favour of the defendant. In Herb V Devimco (relating to termination of appointment)… a defendant resident outside Nigeria in respect of a tort committed outside Nigeria. The court chose to apply the double liability rule of Phillips V Eyre flowing from Benson V Ashiru (That for an action in tort to lie in Lagos for an act committed in another part of Nigeria, the wrong must be of such a character that it would have been actionable if it had been committed in Lagos and it must not have been justifiable by the law of the part of Nigeria where it was done).

Please don’t be confused. Ask a friend to explain. At best, read it before the class and ask questions on areas you not sure of,

DISCRETIONARY JURISDICTION.

This one occurs where the court has jurisdiction to entertain the matter but the defendant is begging the court to decline jurisdiction to entertain the matter.

Usually on any of the following grounds:

1. Forum non-conveniens.
2. That the parties have exclusively chosen another court to determine their dispute.
3. That the same suit is pending elsewhere (lis alibi pendes).

We take it one by one.

Forum non-conveniens: here, the defendant is begging the court to stay proceedings because (although it may have jurisdiction) it is not the natural or best forum to try the case. Note a natural forum is the forum with the most substantial connection with the case. Usually a forum where the event occurred or parties agreed to litigate the matter.

Morris in his treatise noted that in doing this, the defendant should satisfy the court that it is not the natural forum and that there is another capacitated, competent and more desirable forum (i.e. court) that can try the matter more suitably in the interest of the parties and in the interest of justice. Same point noted in Spiliada Maritime Association V Counsulex. The plaintiff should not just be seeking procedural or financial advantages-In MacShannon V Rockware Glass Ltd, a Scottish resident was injured while working at an English factory in Scotland. He sued in England because England grants higher damages in cases like this. The court stayed the action especially where it was shown that Scotland would be cheaper and more convenient.

The court would refuse stay (i.e. the application of the defendant) and continue to try the matter if the interests of justice dictates so-In The Jalakrishna, although India was the more appropriate forum, stay was refused because the claimant’s interest would be prejudiced by delay in India. In Connely V R.T.Z Corporation Plc, stay refused because, the plaintiff would be denied legal aid in the natural forum. In Mohammed V Bank of Kuwait, stay refused because the natural forum (Kuwait) would discriminate against the plaintiff. In Sonnar Ltd V Partenre Nordwind, stay was refused since the action would be statute barred in the natural forum and the plaintiff would be denied justice. See also Nika V Lavina. In Herb V Devimco, stay refused because Nigeria was the forum conveniens as the contract was made in Nigeria and breached also in Nigeria. In Resolution Trust Corporation V FOB Investment Properties where action was instituted in Lagos high court against a US company being resident and carrying on business in US. The court used local venue rules to wrongly determine the issue. It should have noted that US is the more convenient forum.

Exclusive jurisdiction Clause: The second ground for discretionary jurisdiction. That the parties have agreed that the court of a particular forum would determine their dispute. Either to the exclusion of other forums (exclusive) or as the more preferred forum (non-exclusive).

At common law, parties cannot (by agreement) oust the jurisdiction of the courts. However, in ***The Eleftheria, lord Brandon formulated certain guiding principles… they include:

1. The court is not bound by the choice of the parties but may consider it.
2. Stay should be granted where the parties have chosen another forum except there is a strong cause for not doing so.
3. Such strong cause should be proved by the plaintiff.
4. We ask whether the applicable foreign law differs substantially from that in England (the forum).
5. The expense of trial should be considered. Would it be cheaper to try it in the forum?
6. Consider the connection of the parties with the countries.
7. Whether the defendants are merely seeking procedural advantage or genuinely desire trial.
8. Whether granting stay would prejudice the plaintiffs. Maybe they would be deprived of security, or fair hearing by reason of political, racial, religious or other consideration-Adesanya V Palm Line.

In Bonny V Society of Llyods, the court noted that such jurisdiction clause would be valid provided it was not procured by fraud, undue influence, contrary to public policy, and the party would not be denied justice if it is enforced.

Note that the cases discussed directly above (under forum non-convenience (like Nika, Sonnar case and so on)) would apply here too. As the courts would look at the justice or otherwise in granting or refusing stay.

America tilts towards respecting party autonomy and freedom to contract… especially where it was freely entered into.

Section 20 of the Admiralty Jurisdiction Act provides that Nigerian courts could assume jurisdiction (notwithstanding an exclusive jurisdiction clause) in Admiralty causes where:

1. Any of the parties reside in Nigeria.
2. The res is within Nigeria.
3. Nigeria is the place of performance, delivery, payment, default…
4. Where the State or federal government is a party
5. Where consideration furnished is derived from, brought into or accruing in Nigeria.
6. In other matters where the courts deem it fit to adjudicate.

The above appears to show that Nigeria is not adhering to the principle of comity and may find itself at loggerheads with other forums-Prof. Olaniyan in Enlightened Self Interest Critique of the Admiralty Jurisdiction Act. as was seen in UBA V Intercontinental Bank. Where the parties expressly agreed that UK Law would govern. The Nigerian court entertained the suit and the same suit was also instituted in UK. The UK issued an injunction to compel UBA to discontinue the case in Nigerian so did the Nigerian courts issue an injunction to stop the UK action. The two courts were at logger-heads.

The Nigerian provision is unfriendly and violates the principle of comity.

LIS ALIBI PENDES: this is the third ground.

Where an action is instituted in more than one forum in respect of the same cause of action. It may be cross (where A sues B in State Y and B sues A in State X in respect of the same matter) or concurrent (where A sues B in State Y and sues B again in State X in respect of the same matter).

At common law, the forum action may be stayed or an anti-suit injunction may be granted to the other party asking him to discontinue the suit in the foreign forum-Herb V Devimco. In Nigeria this is referred to as abuse of court process (which irritates or disrupts the judicial machinery)… what is done in practice is that the second case on the same issue is usually struck out as was done in-Enwonwu V Enwonwu.

We move on to

INTER-STATE SERVICE OF PROCESS.

NB: We are talking of inter-State here in the sense of Lagos and Ogun, Imo and Lagos, etc not Lagos and London or Imo and NY. Please do not confuse it. inter-state refers to service in any of the constituent States of Nigeria.

:: The Sheriffs and Civil Processes Act 1958 (especially Sections 95-103) governs inter-state service. Initially, it was governed by Civil Procedure Rules of each States. However, since interstate service has now been placed within the exclusive legislative list (from the 1979 and 1999 constitution) it is in federal jurisdiction-Item 57 of the Exclusive Legislative List. Therefore, a State law regulating inter-state service of writ is null to the extent of its inconsistency. See Oguntade J in Nigerian Merchant Bank V Bay and Jalie 1986 QLRN page 24 at part 25

:: Section 96 disregards the interstate boundaries for the purpose of service of writ. A writ of summons may be served on the defendant in another constituent State as if the defendant is in that State of service… The writ should be served as if the writ was obtained in the place where it is being served. Prof Olaniyan noted that a writ can be obtained in Lagos and served in Maiduguri as if it had been obtained in Maiduguri.

No need to obtain leave of court for inter-state service–The Daily Times V Amaizu this point was also reiterated in Anwuta V NNPC. Although some courts still wrongly require leave to be sought… as was seen in Derby Pools V Ocheme.

Under the SCPAct (above), the following must be fulfilled for valid service inter-state:

1. If the writ is concurrent, it must be marked “concurrent”-Section 98. Note that a concurrent writ is usually used when there are more than one defendant(s).
2. There should be a special endorsement on the writ stating where the writ was issued and the State of service noted-Section 97. E.g. issued in State X to be served in State Y.
3. Section 99 stipulates that the return date on the writ must not be less than 30 days.

What happens when there is non-compliance/improper service?

In UBA Trustees Limited V Nigergrob Ceramic Ltd, the court held that non-compliance may render the proceeding a nullity (see Madukolu V Nkemdilim). However, the defendant must raise objection to improper service at the court of first instance rather than on appeal-Niger Progress Ltd V North East Line Corporation. In Odu’a Investment Co V Talabi, where there was no special endorsement nor was the 30days limitation complied with… but the defendant entered unconditional appearance and later sought to set aside the service. The court held that non-compliance is a procedural irregularity which can be waived by the defendant and even in appropriate circumstances the court may order the plaintiff to go back and do the needful rather than dismissing the case. Same conclusion was reached upon similar facts in Adegoke Motors V Adesanya. It thus appears that the most effective remedy is not to enter appearance… or if you eventually appear, you must timeously raise the objection of improper service-Ezomo V Oyakhire.

What happens where the defendant refuses to appear?

Section 101 Sheriffs and Civil Processes Act Nigeria (The equivalent of the Section 11 of the Service and Execution of Process Act of Australia) provides for instances where the court can entertain a case in default of appearance. Meaning that if the defendant fails to appear in court, the case can still go on based on various grounds set out in Section 101… which include:

1. If the subject matter of the suit concerns land within the forum OR relates to shares/stock of a company having principal place of business within the State/jurisdiction.
2. The suit relates to contract which was made within the State/jurisdiction.
3. The suit relates to contract which was breached within the state notwithstanding that it was made elsewhere.
4. Suits seeking injunction, specific performance or damages for an act that was done or is to be done within the state. OR where the action relates to moveable situated within the state.
5. Where the defendant was present in the State/jurisdiction at the time the liability arose.
6. In matrimonial causes where the defendant is domiciled in the State/forum. Although the Matrimonial Causes Act now makes the whole of Nigeria a single domicile for the purposes of matrimonial causes.
7. Sub (g) and (h) seek to ensure that everything necessary was done to effect personal service and ensure that the defendant has knowledge of the proceeding.

Note that “State” used here is the state where the writ is issued… where the proceeding is instituted. E.g. Lagos, Ogun, Osun, etc.

:: The courts usually require the plaintiff to continue to notify the defendant of the proceeding and adjourned date if any

When would these provisions (of the Sheriffs and Civil Processes Act) be irrelevant?

• Where the defendant has entered unconditional appearance- Dowd V Dowd. i.e. Where he voluntarily honours the writ and appears to defend the case on its merit… where he does not contest the writ/service.
• Where the defendant is sued in his place of residence and served there. As there is nothing “inter-state” in this case.
• Where the matter is within the jurisdiction of the FHC and it has been instituted there.
• Where the court does not even have jurisdiction to entertain the matter in the first place-Section 102. Although in practice it may not really be the case as by Section 272, 251 and 254 of the 1999 Constitution, the High Court has relatively unlimited jurisdiction subject to that of the FHC and NIC-Dowd V Dowd, D.I.C V Okem Enterprises.