SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LTD. V E.N.NWAWKA (judgement summary)

SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LTD. V E.N.NWAWKA (judgement summary)


READ FULL JUDGEMENT


IN THE SUPREME COURT OF NIGERIA

ON FRIDAY, THE 24TH DAY OF JANUARY, 2003


APPEAL NO: SC.285/2000

CITATION: (2003) 1 LLER 1

Alternative Citations:

(2003) 6 NWLR (Pt.815)184

Before Their Lordships

 

SALIHU MODIBBO ALFA BELGORE, J.S.C.

ANTHONY IKECHUKWU IGUH, J.S.C.

SAMSON ODEMWINGIE UWAIFO, J.S.C.

AKINTOLA OLUFEMI EJIWUNMI, J.S.C.

EMMANUEL OLAYINKA AYOOLA, J.S.C.

 

BETWEEN

1. SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LTD.

2. MR. R. VANDEN BERG

3. MR. EGBERT U. IMOMOH

4. MR. JOSHUA R. UDOFIA

5. MR. JOHN BARRY

6. STEVE RATCLIFFE

7. THE DIRECTOR OF PETROLEUM RESOURCES, MINISTRY OF PETROLEUM RESOURCES

(Appellants)

AND

E.N.NWAWKA

(Respondents)

RATIO/PRONOUNCEMENTS

 

A. PRACTICE AND PROCEDURE

1. Pleadings—On the effect of facts not pleaded

The rule in civil cases is that a matter not pleaded goes to no issue. Per BELGORE, J.S.C. read in context

B. COMPANY LAW

2. Scope of the rule in Foss v Harbottle—Can the rule apply to deny a personal action founded on breach of contract of employment

The rule in Foss v. Harbottle relates to internal management of a company and is based on the futility of the court setting aside or interfering with an irregular act of the company at the suit of a minority of members when such act can be ratified by a majority who have the power to do so. Whether a company’s directors or management has power or not to enter into a contract may be a matter of internal management of the company. However, performance of a contract validly entered into with a third party is not. A breach of a contract of employment, like any other contract of the company, cannot be ratified and justified merely by an act of a majority of members of a company so as to deprive the aggrieved party of a right of action. Per Ayoola, J.S.C. read in context

 

C. JURISDICTION: COMPANY LAW

3. Scope of the jurisdiction of the Federal High Court in relation to company matters—Does the exclusive jurisdiction of the Federal High Court extend to contractual employment relationship?

 

Although section 7(1)(b) of the Federal High Court Act (as amended of Decree No. 1991 No. 60) gave exclusive original jurisdiction to the Federal High Court to try civil cases and matters connected with provision pertaining to the operation of the Companies Act, Federal enactment and any other common law action regulating the operation of companies or the promotion of Nigerian enterprise, an action founded on a contractual employment relationship between a company and its employee is not a matter connected with or pertaining to the operation of the companies or the regulation of the operation of a company incorporated under the Companies Act. Per Ayoola, J.S.C. read in context

4. Domestic Affairs of a company—On if a court has jurisdiction to interfere in the domestic affairs of the management of a company

For the court to assume jurisdiction to review the decision of a company to re-deploy an employee within its organisation in the absence of a contractual term to guide it, will not only be an unwarranted interference with the freedom of contract and in the affairs of the company but also an exercise for which the court is ill-suited. Per Ayoola, J.S.C. read in context

 

C. CONTRACT

4. Enforcement of legal right arising from contract—the position of the law thereof;

In private law, the jurisdiction of the court to grant declaration of right is predicated on the existence of a right. Legal right in private law, generally, attaches to property and to the person. A third broad category is the right that arises by and from the agreement of the parties. When parties make a contract, they make their own law to which they are subject and which creates the rights and obligation which bind them to which the general law only gives recognition and force. The common law we practice recognizes the freedom of contract. Per. Ayoola J.S.C. read in context

 


AYOOLA, J.S.C. (Delivering the Leading Judgment):


The respondent in this appeal, Mr. E. N. Nwawka, claimed against the six appellants by a writ issued in the High Court of Rivers State several reliefs, some only of which are now relevant and will be quoted later in this judgment.

By a motion on notice dated 14th February, 2000 the appellants prayed the High Court:

1. That the action be struck out or dismissed for lack of jurisdiction to entertain the claim set out to the statement of claim.

2. That claims 1 – 5 be struck out on the ground that each of them falls outside the scope of the judicial powers exercisable by the court of law in Nigeria.

Further and in the alternative:

3. That claims 6, 7, 9, 10 and 11 be struck out on the ground that each of them disclosed no reasonable cause of action and is frivolous, vexatious and an abuse of judicial process.

The trial Judge held that the procedure adopted by the appellants was not in compliance with Or 4, r. 2 of the High Court (Civil Procedure) Rules, 1987 in that the appellants should have raised the points of law by their statement of defence. Nevertheless, he considered the application on its merit and struck out claims 4 and 9 as disclosing no cause of action. In regard to the rest of the claims, he dismissed the application.

On the appellants’ appeal to the Court of Appeal, that court rejected the trial Judge’s conclusion on the irregularity of the proceedings. Pats-Acholonu, JCA, who delivered the leading judgment of the court below, held that: “Non-compliance does not vitiate a preliminary objection based on lack of jurisdiction alone”. On the merits of the application the court below held that in addition to claim nos. 4 and 9 already struck out by the High Court claim nos. 1,2,8 and 10 should be struck out.

The appellants appealed and the respondents cross-appealed. The issues raised by the appellants’ appeal are:

(2) As regards claims 3 and 5, whether (a) the respondent had locus standi to sue for the reliefs claimed, and (b) only the Federal High Court has exclusive jurisdiction over these claims and whether they raise justiciable issues; and,

(3) As regards claims 6, 7 and 11, whether they are not frivolous and vexatious and in abuse of judicial process.

The appellants raised an issue whether Or 24, r 2 was applicable to the proceedings, but that issue is not now of any practical significance in view of the ruling by the court below in favour of the appellants on the issue from which the respondent had not cross-appealed. Arising from the respondent’s cross-appeal are the questions whether claims 8 and 10 were properly struck out. This appeal and the cross appeal are, therefore, now related to claims 3, 5, 6, 7, 8, 10, 11, which are as follows:

“3. A declaration that the plaintiff is not a redundant employee of the 1st defendant by virtue of his length of service, job performance, job availability and his status.

5. A declaration that the 1st, 2nd and 3rd defendants are engaged in dubious expatriate Staff Quota manipulation and are not entitled to deploy the gains of such unpatriotic exercise to render the plaintiff redundant.

6. A declaration that the purported contract of employment dated 12th April, 1997 surreptitiously crafted and forced on Nigerian employees of the 1st defendant by the 1st defendant is null, void and of no effect.

7. A declaration that the only valid contract of employment between the 1st defendant and the plaintiff is the one pre-existing before 30/4/97 (and regulations by the 7th defendant in that behalf).

8. A declaration that the 1st to 4th defendants cannot disengage or declare the plaintiff redundant (Plaintiff being one of the 5 highest-ranking Nigerian citizens in the 1st defendant’s Organization) without a formal permission of the 7th defendant.

10. An order restraining the 1st to 4th defendants from terminating, treating, or in any manner interfering with the employment salaries, emoluments benefits accruing to the plaintiff as an employee of the 1st defendant save and except as the 7th defendant and the National Assembly may sooner or later so approve.

11. An Order setting aside the purported contract dated 12/4/97 unilaterally foisted on the plaintiff by the 1st defendant as the same is not a contract at all.”

The Shell Petroleum Development Company of Nigeria Ltd., (the 1st appellant) is a private limited liability company incorporated in Nigeria and carrying on the business of crude hydrocarbon oil and gas prospecting, development and exploitation in Nigeria. The 2nd and 3rd appellants were, respectively, the Managing Director and Deputy Managing Director of the 1st appellant while 4th appellant was the General Manager of the 1st appellant with whom the respondent worked as Deputy General Manager up to sometime in April, 1999. The 5th and 6th appellants were expatriate employees of the 1st appellants. The respondent was an employee of the 1st appellant. He claimed to be the 5th highest ranking Nigerian in the 1st appellant’s employment and one of the most qualified technocrats in the oil industry in the 1st appellant’s company.

On 19th December, 1999 the respondent was by a letter signed by the 4th appellant on behalf of the 1st appellant “released from the company” as his services were no longer required. Attached to the letter was a cheque being payment in lieu of notice in accordance with the terms of his contract of employment. On 12th January, 2000, the respondent commenced this action claiming several reliefs some of which are quoted above and are the subject of this appeal.

The respondent’s case by his statement of claim was that the 1st appellant by wrongful manipulation of the expatriate quota system brought foreign nationals to work in the company under false descriptions thereby making them to fill posts which could be held by Nigerian nationals and, in particular depriving the respondent through such manipulation opportunity of occupying a higher post for which he was qualified in the 1st appellant’s establishment. He alleged a design to ease Nigerians out of the 1st appellant’s establishment and alleged several expatriate quota malpractices by the 1st appellant which he claimed were detrimental to the Nigerian employees of the company. Of direct relevance to his employment he alleged that on 19th December, 1999 the 4th appellant wrote a letter to him at the behest of the 3rd appellant urging him to leave the 1st appellant’s employment on voluntary severance with what he described as a “financial bait” of about N30 million if he should sign an acceptance that day or his employment would be terminated automatically with three months pay in lieu of notice. The respondent rejected the offer. The respondent alleged that he could not have been redundant, as the 1st appellant had declared him, upon a reorganization of the 1st appellant because of his qualification and his performance as a deputy general manager development.