The appellant is a customer of the respondent. In 2003, the appellant applied for an import finance facility in the sum of N336,000,000.00 (Three Hundred and Thirty Six Million Naira) from the respondent for the importation of 10,000 metric tonnes of Automative Gas Oil (AGO). Part of the terms of the contract was that the 10,000 metric tonnes of AGO would be bought by a company, Jumlar Ltd, a nominee and customer of the respondent. It was also agreed that the AGO would be sold at N37.50 (Thirty Seven Naira, Fifty Kobo) per litre and that the entire cargo would be delivered into a tank nominated by Jumlar Ltd. In furtherance of the contract, the respondent opened a letter of credit on behalf of the appellant in favour of Vitol, an oil trading outfit to execute the contract. A bank guarantee was also issued by the respondent on behalf of Jumlar Ltd. and the bank was to have a lien on the cargo on arrival. The respondent made an undertaking to put in place another vessel, M/T Real Peace to pick the product from the mother vessel on arrival at the Lagos Port. The respondent took charge of procuring the vessels to lift the cargo and it gave the appellant assurance to that effect. Consequent upon the assurance, the appellant proceeded to pay the port charges and other approval fees before the arrival of the cargo.
The appellant alleged that when the product eventually arrived in Lagos, a notice of readiness was sent by the port authorities to it to pick up the cargo and that at that point, the respondent could not make available the vessel, M/T Real Peace. This situation, it was alleged, created anxiety and tension and that the appellant had to make provision for an alternative vessel to convey the cargo. The appellant filed a suit against the respondent at the High Court of Lagos alleging that in the course of transporting the product from one ship to another and to the tank farm, about 1,065, 863 (One Million, Sixty Five Thousand and Eight Hundred and Sixty Three) litres of the AGO went missing and could not be accounted for. The appellant further alleged that the respondent, after distributing the AGO to various buyers who were its customers, and receiving payment, the respondent failed to credit its account with the correct amount received from the sales. The appellant claimed several damages against respondent.
After being served with the originating process, the respondent filed an application in which it challenged the jurisdiction of the court to hear and determine the matter on the ground that the specific details of the transaction between the parties border on maritime and as such, the Federal High Court has the exclusive jurisdiction to hear and determine the matter under its admiralty jurisdiction. The appellant filed a counter affidavit and an address challenging the application. After hearing the parties on the application, the trial judge ruled in favour of the respondent and declined jurisdiction. The appellant was aggrieved and filed a notice of appeal at the Court of Appeal, Lagos Division. The sole issue for determination is whether or not the lower court was right in declining jurisdiction to adjudicate over the appellant’s suit on the ground that same constitutes an admiralty action.
Held: (Unanimously dismissing the appeal)