Where There is Collision Between Jurisdction Clause in Bill of Lading and Jurisdiction of the FHC

  1. NIKA FISHING CO. LTD

                                        V

1.      LAVINA CORPORATION

Facts:

The respondent is the owner of the ship named “MV Frio Caribic” hereinafter referred to as ‘the ship’. The ship was chartered to convey a consignment of frozen fish from Mar Del Plata in Argentina, to Apapa Lagos, Nigeria. The ship arrived at the Apapa port on the 29th December, 1987 and discharged its cargo. Following the alleged delay in the appellant taking delivery of the cargo within the time agreed by the parties in the Bill of lading, te respondent brought an action against the appellant at the Federal High Court, Lagos on the 21st December, 1998, claiming the sum of $119, 739.40 United states Dollars as demurrage. Following the order of pleadings by the trial court, the respondent as the plaintiff filed its statement of claim to pave the way for the hearing of case.

On being served with the statement of claim, the appellant as defendant, instead of filing its statement defence, while relying on the jurisdiction clause in the bill of lading which says “Any dispute arising under this bill of lading shall be decided in the country where the carrier has his principal place of business and the law of such country shall apply except as provided elsewhere herein’’ filed a motion on notice dated 2nd May, 1989 supported by an affidavit, asking for two specific prayers namely

1.     An order dismissing the suit for want of jurisdiction

2.     An order staying proceeding in this suit

The respondent did not file any counter-affidavit to the appellant’s motion which was duly heard by the trial court. In its ruling on 28th June, 1989, the trial court refused the application.

Dissatisfied with this ruling of the trial court, the appellant with the leave of the trial court, appealed to the Court of Appeal which in its decision delivered on 21st June 2001, dismissed the appeal and affirmed the decision of the trial court, the appellant further appealed to the Supreme Court.

Judgment

1.The bill of lading contains the contractual terms between the parties. Parties are bound by the condition and terms in a contract they freely enter into.

2. It is true that in The Eleftheria (1969) 1Lloyd L.R, 237, Brandon J. in his powerful judgment emphasized the essentiality of giving full weight to the prima facie desirability of holding the plaintiffs to their agreement. The test set out by Brandon J. in the Eleftheria are as followed-

Where the plaintiffs sue in England in breach of an agreement to refer disputes to a foreign court, and the defendants apply for stay the English Court assuming the claim to be otherwise within the jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not.

1.     The discretion should be exercised by granting a stay unless strong cause for not doing so is shown

2.     The burden of proving such strong cause is on the plaintiffs

3.     In the exercise of its discretion, the court should take into account all the circumstances of the particular case

4.     In particular, but without prejudice to (4), the following matters where they arise, may be properly regarded

a)     In what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expenses of trial as between the English and foreign courts.

b)    Whether the law of the foreign court applies and, if so, whether it differs from English law in any material respect.

c) With what country either party is connected, and how closely.

d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages.

e)     Whether the plaintiffs would be prejudiced by having to sue in a foreign court because they would

      i. be deprived of security for that claim;

         ii.  be unable to enforce any judgment obtained;

          iii. be faced with a time-bar not applicable in England; or

          iv.  for political, racial, religious or other reasons be unlikely to get a fair trial.

Where the granting of a stay would spell injustice to the plaintiff as   where the action is already time-barred in the foreign court and the grant of stay would amount to permanently denying the plaintiffs any redress.

3.The Brandan test gives the discretionary power to the Judge in the exercise of his power to order a stay of proceedings. Like every discretion, the Judge must exercise it judicially and judiciously, that is discretion based or guided by law or discretion according to sound and well considered reason respectively. Test No. 2 enjoins the court to exercise the discretion in favor of the applicant unless strong cause for not doing so is shown. The respondent did not show any cause not to talk of a strong cause; as no counter-affidavit was filed. Test No. 2 places the burden of proof on the plaintiff. Again the plaintiff who is the respondent did not discharge the burden placed on it as there are no materials before the court to enable it refuse the application for stay of proceedings.

In compliance with Test No. 4 of the Brendan test, I am bound to exercise my discretion in favor of granting the stay of proceedings in the light of the fact that the respondent did not place before the learned trial Judge materials to enable that court to exercise its discretion against the appellant.

4.The clear jurisdiction clause in the bill of lading in the matter surpasses section 7 of the Federal High Court Act.

Jurisdiction is a very hard matter of law and so cannot be subjected to a particular feelings and sentiments of the court. Where a contract specifically provides for the venue of litigation, courts are bound to give teeth to the contract by so construing it, without ado, in this case, issue of difficulty of assemblage of witness, cost of litigation arising from the parties going to Argentina, do not arise because they are mere expression of sentiment and all that.

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