Olabode Olanipekun & Adebayo Majekolagbe Wole Olanipekun & Co.
The physical and capital-intensive nature of intra- and trans-border trade and commerce in Nigeria and the prevalence of disputes for many obvious reasons, necessitate the availability of interim reprieve, particularly the need to protect the object(s) of dispute − which in legal parlance is referred to as the ‘res’.
The res in most commercial disputes are usually valuable assets which can be dissipated by a party in the course of litigation or dispute resolution proceedings. The reality that presents itself when commercial disputes arise is the possibility that before the determination, settlement or conclusion of dispute resolution proceedings, the res might have been dealt with in such a manner that it would be impossible for a successful party to obtain tangible (or indeed any) benefit from positive judgment as it relates to the res. In the course of litigation, events that can happen to the res are limitless and open-ended, including moving the asset out of jurisdiction, sale and transfer of title in the res, dissipation and utilisation of the res where it is money, etc.
When such events occur, complex and hydra-headed legal issues arise, particularly with regards to enforcement of judgment/award. For instance, if the asset is sold to a 3rd party who did not have notice of the litigation, the 3rd party acquires valid title that is protectable in law, and the successful litigant can only access and exercise rights conferred on him by the decision in his favour in respect of the res by commencing further dispute resolution proceedings to determine superiority of title. Articulating the jurisprudential underpinning and logic for the grant of preservative reliefs, Niki Tobi JCA (as he then was, having eventually retired as a Justice of the Supreme Court) in Lijadu v. Lijadu (1991) 1 NWLR (Pt. 169) 627 at 644 succinctly captured the essence thus:
“the court has a primary duty to protect the res from being destroyed, annihilated or demolished. The court has a duty to ensure that the res is intact, not necessarily for posterity but for immediate benefit and pleasure of the party who is finally in victory in the litigation process. This is necessary because if the res is destroyed, …… the victor has on his hands a barren victory, a victory without a difference, an empty victory… in real fact, he leaves the court in “victory” without victory”.
Ordinarily, commencement of litigation should caution parties from any action that may alter the nature of the res in deference to the legal doctrine of lis pendens; it is however safer to obtain specific pronouncements from an adjudicatory body restraining interference with the res. This chapter will consider the requirements for the grant of some types of preservative orders, particularly injunctions by courts in Nigeria, and also court support for arbitration in making injunctive orders during the pendency of arbitration.
The Nigerian legal system has its roots in English law. While still retaining some vestiges of her colonial past, Nigeria’s legal system has undergone considerable evolution since independence in 1960. The peculiarities of the country, in terms of the sociological construct/preferences of its people, as well as the increasing sophistication of business interactions, evolution and development of the economy, have led to novel and recondite statutory and judicial innovations, which have an immense effect on commercial relations.
With a judicial structure comprising the Supreme Court, Court of Appeal, Federal High Court, State High Courts, National Industrial Court, and a considerable number of specialised tribunals as crucial components, litigants in Nigeria have a wide range of options as to the venue to litigate. The availability of different courts might present a problem, however, as there is the need for utmost circumspection in deciding the appropriate court to litigate. This is because most courts have specific and exclusive jurisdiction, with the resultant effect that when a claim is instituted in the wrong court, such court would lack the jurisdiction to adjudicate thereon, thus rendering the claim incompetent. It is also the law in Nigeria that a court bereft of jurisdiction cannot grant injunctive or preservative reliefs. This position of the law justifies the space for consideration of jurisdiction in this chapter.
The 1999 Constitution of Nigeria is the determinant of the jurisdictional scope of courts listed in and recognised by section 6(5) therein. The courts so listed are identifiable as superior courts of record. Important for the purpose of this discourse are the Federal High Court, the State High Courts and the National Industrial Court, which are trial and courts of first recourse upon occurrence of disputes. The jurisdictions of the Federal High Court, State High Court and National Industrial Court are prescribed in Sections 251, 272 and 254c respectively of the Nigerian Constitution. The Federal High Court has exclusive jurisdiction in matters that relate to admiralty, aviation, banking, copyrights, operation and taxation of companies, mines and minerals, amongst others. The National Industrial Court has exclusive jurisdiction over labour, employment, trade union, industrial relations and other such matters. The State High Court exercises jurisdiction on other matters where the Federal High Court and National Industrial Court do not have exclusive jurisdiction.
The consequence of instituting an action in the wrong court is less dire at the Federal High Court and National Industrial Court. This is because, while section 22 of the Federal High Court Act (CAP F12, Laws of the Federation of Nigeria, 2004 (LFN)), Order 49(5) of the Federal High Court (Civil Procedure) Rules, 2009 and Section 24 of the National Industrial Court Act (CAP N155 LFN) provide for the transfer of suits wrongly instituted at those courts to the appropriate court, the enabling statutes of High Courts of States do not have such provisions. Therefore, suits wrongfully instituted before the States’ High Courts will be struck out. Since most commercial/trade-based litigations are instituted at either the State High Courts or the Federal High Court, these courts will be the focus. In view of the fact that Lagos State of Nigeria is the country’s commercial nerve centre, its State High Court Rules and those of the Federal High Court would be considered as models herein. Furthermore, procedural rules of other courts are not too dissimilar from those of these two courts.
Courts and injunctive reliefs in Nigeria
Upon establishing that a court has jurisdiction and the satisfaction of any other condition precedent as may be required by statute in respect of a cause of action and parties, an aggrieved litigant may apply for preservative orders to last until a particular time, the occurrence of an event and/or the determination of the suit. The different types of injunctive reliefs in Nigeria, especially as they relate to commerce, will be considered under the following broad subheads: (i) Time-boundinjunctions. (ii) Action-basedinjunctions.
(iii) Specific (subject-matter) injunctions. (iv) Appellate injunctions.
The above categorisation has been formulated for the twin purposes of clarity and explicitness. They are not mutually exclusive and it is usually the case that some injunctions have features and assume the nature of more than one of the classifications as done. Generally, the formal requirements for the grant of injunctive reliefs in Nigerian courts are contained in the Rules of various courts and are applied for by way of a Motion, which can either be ex parte or on notice. The relevant provisions of civil procedure rules of the Federal High Court and Lagos State High Court are reproduced below:
Federal High Court Rules (Civil Procedure) 2009
(A) Motions Generally
No motion shall be made without previous notice to the parties affected thereby.
requirements of rule 3 of this order, shall state sufficient grounds why delay in granting the order sought would entail irreparable damage or serious mischief to the party moving. (2) In an application for Anton Piller order, the applicant shall in addition show:
(a) That he has a strong prima facie case. (b) That he may suffer serious damages. (c) That the defendant has incriminating documents and there is a real possibility that the defendant may destroy such material before the discovery process.
or rules, every motion shall be on notice to the other party. (2) No application for an injunction shall be made ex parte unless the applicant files with it, a motion on notice in respect of the application. (3) An order of injunction made upon an application ex parte shall abate after seven (7) days. (4) A Judge may upon application extend the effective period of an order made ex parte if he is satisfied that the motion on notice has been served and that such extension is necessary in the interest of justice or to prevent an irreparable or serious mischief. The application for such an extension shall be made before abatement of the order and the extension shall not be for a period exceeding seven (7) days from the day the extension is granted.”
The above requirements of the Federal High Court and Lagos State High Court Rules are self-explanatory and provide a step-by-step guide on the formal requirements for the grant of injunctions, as well as the options open to parties against which injunctive orders have been made. This current treatise now proceeds to consider types of injunctions as earlier categorised.
By their nature, injunctions are generally situated within a period. Such time may be short (such as an ex parte application), medium (pending the determination of the substantive suit) or perpetual. Injunctions which fall under this category, and which are commonly available in Nigerian courts, are interim, interlocutory and perpetual injunctions.
The Supreme Court of Nigeria in the case of Kotoye v Central Bank of Nigeria (1989) 1 NWLR (pt. 98) 419, a case which involved a shareholders’ dispute in respect of a commercial bank in Nigeria, explained the nature of this type of injunction at 447 thus:
“Interim injunctions…while often showing the trammels of orders of injunction made ex parte are not necessarily coterminous with them. Their main feature which distinguishes them from interlocutory injunctions is that they are made to preserve the status quo until a named date or until further order or until an application on notice can be heard… But, unlike ex parte orders for injunction, they can be made during the hearing of a motion on notice for interlocutory injunction when, because of the length of the hearing, it is shown that an irretrievable mischief or damage may be occasioned before the completion of hearing. Also it can be made to avoid such an irretrievable mischief or damage when due to the pressure of business of the court or through no fault of the applicant it is impossible to hear and determine the application on notice for interlocutory injunction….”
To obtain an interim injunction, the supporting affidavit evidence must show that there is real urgency, the applicant has not been guilty of delay, and a satisfactory undertaking to pay damages. For the grant of an interim injunction ex parte, it must be shown that there is a real risk and imminent threat to the res.
An interlocutory injunction is sought by a motion on notice, usually to last till the final determination of the suit. An applicant is expected to show, by affidavit evidence, amongst others that he has a legal right, there is a serious question/substantial issue to be tried, favourable balance of convenience, undertaking to pay damages, etc. Vocalising the position of Nigerian courts on applications for and grant of an interlocutory injunction, the Supreme Court in Kotoye v. CBN (supra) considered the etymological construct of the word ‘interlocutory’, and held that:
“the word interlocutory comes from two Latin words “inter” (meaning between or among) and “locutus” (meaning spoken) and strictly means an injunction granted after due contest inter partes, yet when used in contradistinction to “interim” in relation to injunctions, it means an injunction not only ordered after a full contest between the parties but also ordered to last “until the determination of the main suit.”
The respondent has a number of options in response to an application for interlocutory injunction. One of such is showing that the applicant can be adequately monetarily compensated. However, in matters of breach of contract, Nigerian courts would not refuse to grant an injunction merely because the adverse party shows that damages can adequately compensate. See Vee gee (Nig) Ltd. V Contract (Overseas) Ltd (1992) 9 NWLR (Pt. 266) 503 at 515. • Perpetual injunction
While this type of injunction is not granted during the pendency of litigious proceedings, rather it is usually given as a final order at the close of proceedings, it is briefly described here for the purposes of completeness. It is an order that inures to the benefit of a party in perpetuity after the rights of litigants have been decisively determined. In respect of the three types of injunctions considered under the current sub-heading, the Nigerian Court of Appeal in Adeniran v. Alao (1992) 2NWLR (Pt. 223) 350 at 372, per Niki Tobi JCA (as he then was) held that:
“While a court of law grants an interim injunction ex-parte in exceptional cases of extreme urgency to preserve the res or status quo, and while a court of law can also grant an interlocutory injunction where the applicant inter alia shows the existence of a legal right and need to protect that right, the relief of perpetual injunction, as the name implies, is the largest of the three reliefs. Putting it in another language, an interim injunction stops where an interlocutory injunction begins and an interlocutory injunction stops where a perpetual injunction begins in perpetuity.”
Two types of injunctions will be considered under this subheading − mandatory and prohibitive injunctions. • Mandatory injunction As the name implies, this type of injunction is employed to command, mandate or compel the performance of an action. It can be employed as a restorative device to return parties to the status quo, or undo what has been wrongly done by a party, for instance, where a party goes ahead to interfere with the res during litigation. In Ezegbu v FATB Ltd. (1992) 1 NWLR (Pt. 220) 699, the Supreme Court ordered the reinstatement of a receiver who was removed in the course of litigation, pending the determination of the appeal before it. In Shining Star Nigeria Ltd. v. AKS Steel Nigeria Ltd. (2011) 1-2 SC (Pt. 10) 1, the Supreme Court outlined the conditions for the grant of mandatory injunctions to include proof that: the applicant is entitled to have obtained a prohibitive injunction before the adverse party altered the res; a change in the state of affairs after litigation commenced; there is a possibility of restoring the earlier position; or there is imminence of irreparable damage and there is a strong case by the applicant.
The nature of this injunction is reflected in its coinage as one which restrains the performance of an ongoing act or one that is anticipated. It is the most common type of injunction sought in and granted by Nigerian courts. The quia timet injunction which, literally interpreted, connotes ‘because he fears’, aptly describes and is a type of prohibitive injunction. It can either be obtained ex parte or by a motion on notice, and the conditions and prerequisites for the granting of these orders are the same as the ones for the granting of interim and interlocutory injunctions.
Specific (subject-matter) injunctions
The injunctions considered under this subheading are those for the protection of specific commercial interests. Those considered here are Anton Piller, Mareva injunctions and injunctions in contractual matters.
Nigerian courts apply the rule in Anton Piller Kg v. Manufacturing Processes Ltd. (1976) 1 All E.R. 779, particularly in protecting intellectual property rights (IPRs). Protection of IPRs is a central focus of Nigeria’s economy and to this end, there are various bodies created by statutes for the regulation, development and protection of the different aspects of IPRs. These include, inter alia, Nigerian Copyrights Commission, Registry of Trademarks, Patents & Designs and the National Office for Technology Acquisition and Transfer.
By Section 25 of the Copyrights Act, CAP C8 LFN, an application for an Anton Piller injunction is made ex parte. Since an Anton Piller order allows entry into a location to inspect, remove and bring to court, materials that are suspected to infringe IPRs, an applicant must satisfy by affidavit evidence the requirements in Order 26, Rule 8 (2) of the Federal High Court Rules (herein reproduced earlier).
The English case of Mareva Campania Naveira SA v. International Bulkcarriers (1975) 2 Lloyds Rep 509 forms the bedrock of Nigeria’s jurisprudence on Mareva injunctions. It is a prohibitory injunction which is applied for ex parte. It is simply to restrain another person from moving out of jurisdiction or dissipating the res of litigation. This injunction is popularly employed in admiralty and aviation actions in Nigeria such as arrest of ships or other maritime property under the Admiralty Jurisdiction Act (CAP A5 LFN) and Admitalty Jurisdiction Procedure Rules, 2011 to secure maritime claims. It can also operate in the mould of a freezing order. By sections 49 and 50 of the Assets Management Corporation (AMCON) Act of Nigeria and Part XIII Rule 13.1 (1)(h)(i)(ii) of the AMCON Practice Directions, 2013 (which are statutory interventions in Nigeria for recovery of debt owed to Nigerian banks), Mareva injunctions are put to very instructive use vide freezing orders. The following are some conditions that must be satisfied before a Mareva injunction can be granted:
In contractual disputes, specific performance is the most commonly sought in Nigerian courts as a final order. It is a class of equitable relief different from the concept of injunction. However, in cases of negative covenants, which deal with acts that should not be done, prohibitive or mandatory injunctions (to compel the undoing or restraint from doing what has been covenanted not to be done) are available. The rationale for this allowance is that such injunction would be reaffirming what the parties have voluntarily vouched to refrain from doing.
Appellate injunctions are to preserve the res of a dispute whilst an appeal is pending and are usually applied for by the unsuccessful party at the lower court. Those to be considered herein are stay of proceedings, injunction pending appeal, and stay of execution. • Stay of proceedings
In the course of proceedings at a lower court, a party can make an application to stay proceedings of that court on the basis of an appeal lodged in respect of the proceedings, by asking the lower court to suspend proceedings in deference to the appellate court. The court has absolute discretion in the granting or refusal of this type of application. The Court of Appeal in Mobil Oil (Nig.) Plc. v. Kena Energy Ltd.  8 NWLR (Pt.874)113 stated the principles governing stay of proceedings to include: a pending and valid appeal; arguable grounds of appeal; exceptional circumstance to warrant grant of stay of proceedings; proof of hardship to the applicant; preservation of the res; whether there are issues of abuse of court process; whether the appeal can be dealt with in an appeal against the trial court’s final decision; and the conduct of parties, and it must not be intended to merely stymie the proceedings of the lower court.
They are usually sought after delivery of final judgment by a court. Nigerian courts have been consistent in holding that a victorious party in court should not be deprived of/denied the fruits of victory. Hence, the judgment of a court would not be stayed except in exceptional circumstances. The factors that are instructive in an application for stay of execution and injunction pending appeal were stated in Dortmund Company Ltd. & Anor v. Elias (2013) LPELR-21118 (CA) to include: the nature of the res and interest of justice; denial of appellant of the benefit of the judgment if appeal succeeds; possibility of recovering judgment debt or res if appeal succeeds; competing rights of parties to justice; and exceptional circumstances grounding the application. Where the decision appealed against is declaratory in nature, Nigerian courts usually do not grant stay of execution but can grant injunction pending appeal in deserving cases.
These orders can also be obtained in respect of interlocutory orders on the same basis/ principles as final orders.
Enforcement and efficiency of preservative orders in Nigeria
Preservative orders made by courts in Nigeria carry the full force and support of the law and are capable of being enforced by coercive agents of State because orders of the court mandate compulsory obedience. Disobedience of these orders certainly can attract criminal consequences, including committal to prison for contempt under the Nigerian Sheriffs and Civil Process Act (CAP S6 LFN).
There are however exceptional cases where non-compliance with such orders might be excused or not punished, such as:
Article 26(3) of the rules in the 1st schedule of the ACA provides that:
“A request for interim measures addressed by any party to court shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.”
The above provisions of the ACA shows that the courts are open and available to make orders in support of arbitration, and so doing will not derogate from the agreement to arbitrate. It is noteworthy that the entirety of Order 52 (with 17 sub rules and 10 sub-sub rules) of the Federal High Court Civil Procedure Rules relate solely to court support for arbitration over a wide range of issues. The 2012 Lagos State High Court (civil procedure) Rules are also very arbitration-friendly and in fact mandate that all Originating Processes filed in that court shall upon acceptance for filing by the Registry be screened for suitability for Alternative Dispute Resolution (ADR); the rules further empower the court to implement any order made during such ADR reference and also make preservative orders in respect of disputes that are the subject of an arbitral reference.
In a landmark judgment recently delivered on 24th April, 2015 by Hon. Justice M.B Idris of the Nigerian Federal High Court, the powers of the Court to make preservative injunctive orders in support of arbitration were fully explored and utilised. The judgment was in Suit No. FHC/L/CS/1414/2014 – Petrolog Oil & Gas Ltd. v. Global Energy Company Ltd., where a dispute arose between the parties in respect of ownership and participatory rights in an Oil Prospecting Licence over an oil block located in the offshore Niger Delta in Nigeria. The agreement between the parties provided for dispute resolution by a three- member arbitration panel. The Claimant referred the dispute to arbitration and appointed a party-nominated arbitrator but the Respondent refused to appoint a second-party-nominated arbitrator and continued to exclude the Claimant from the asset while maintaining full control and ownership of the disputed stake in the res. The court, upon the application of the Claimant, not only appointed a second arbitrator in the dispute, but also made far-reaching prohibitive injunctions restraining the Respondent from selling or alienating the stake in the disputed asset pending the determination of the arbitration, as well as Mandatory injunctions compelling the Respondent to make monthly returns to court by means of affidavit evidence of all monetary accruals on the asset, and also payment of a percentage of the accruals into an interest-yielding account under the court’s supervision pending the determination of the arbitration.
While the courts generally maintain a position of non-interference with ongoing arbitral proceedings, the decision in Petrolog Oil & Gas Ltd. v. Global Energy Company Ltd. typifies the nature of support, in the form of preservative injunctive orders that Nigerian courts are empowered to make.
The preceding paragraphs have attempted to highlight part of the statutory framework for preservative orders in the nature of injunctions in Nigerian courts, and have also demonstrated that the development and evolution of this area of law have been principally a function of the ingenuity and proactive stance of the courts in creating a responsive regime to the time-bound nature of commercial disputes, so that parties to commercial transactions have reprieve in the course of dispute resolution, with the ultimate aim that the res of the dispute retains a valuable condition up until the conclusion of dispute resolution.
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Bode is a managing partner in the law firm of Wole Olanipekun & Co. He holds a Masters degree in Commercial and Maritime Law from the University of Wales, Swansea. He has vast experience in litigation spanning diverse areas of law in trial courts, specialised tribunals and across all appellate courts in Nigeria. Over the years, he has been consistently involved in various high- profile litigation on constitutional, electoral, energy, commercial and criminal matters as well as non-litigation transactional legal practice involving various specialised and complex multiparty commercial transactions. Because of the spread and depth of his experience, he is constantly engaged to offer statutory and regulatory advice to companies and individuals operating in regulated sectors of the economy. He has also been engaged in dispute resolution proceedings by Arbitration as counsel under various rules.
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Bayo is an associate counsel in the dispute resolution practice at Wole Olanipekun & Co. He is a published writer and, having interned and worked with a few law firms in different parts of Nigeria, Bayo has a fine blend of experience in diverse aspects of law. Though, with a bias for Energy and International Security Law, he has qualitative experience in general commercial and constitutional law litigation. He has further gathered experience in corporate commercial practice having been involved in legal advisory roles in some high-profile commercial transactions.
Wole Olanipekun & Co.
God’s Grace House, 94 Norman Williams Street, Ikoyi, Lagos, Nigeria / God’s Grace House, No. 6, Oshakati Close, Off Constantine Street, Wuse Zone 4, Abuja, Nigeria Tel. +234 1 903 5864 / URL: https://www.woleolanipekun.com