n Compulaw - 1st Indigenous Digital Law Library
Disable Preloader

CaseLaw

Star Paints Ind V. Ogunlela (2000) CLR 1(f) (CA)

Brief

  • Interlocutory application
  • Preservation of Res
  • Bank Guarantee
  • Stay of execution

Facts

The 2nd plaintiff/appellant and the 3rd defendant/respondent were both directors and shareholders in the 1st plaintiff/appellant company. A dispute arose between them as to the manner in which the 3rd defendant/respondent were in issue. The two of them and their solicitors held a meeting on 24/2/98 with a view to resolving the differences. At the end of it, each had the option to buy the other out. The 3rd defendant/respondent opted to relinquish his 50% shareholding in the 1st plaintiff/appellant. He was to be paid N17 million for the shares. It was however determined that auditors or accountants would be called in to determine the extent of the financial liability in 3rd defendant/respondent's administration of the 1st plaintiff/appellant. Such amount as was ascertained to be the result of the 3rd respondent's mismanagement was to be deducted from the N17 million Naira. The N17 million Naira was paid over to the Embassy of Lebanon (i.e. 4th respondent) which in turn deposited the money with the 2nd defendant/respondent whilst the report of the auditor/accountant was being expected. Two accountants, one of them the 1st defendant/respondent examined the accounts of the 1st plaintiff/appellant in succession. Their findings however were conflicting to some extent. The first of them ABASSJIMOH & CO, was damning to the to the 3rd defendant/respondent. The other by the 1st defendant/respondent would appear exculpatory to some extent. The position resulting was that the N17 million which could have gone to the 3rd respondent could not be paid to him since his putative liability, if any, remained unascertained.

It was in these circumstances that the two plaintiffs/appellants on 22/7/98 issued their writ of summons in suit No. FHC/L/CS/794/98 seeking various reliefs. The parties subsequently filed several applications before the lower court. The application relevant to the matter now before the Court was filed by the 3rd defendant which questioned (amongst other things) the jurisdiction of the court as it relates to the Diplomatic privileges of the 4th defendant.

The lower court on 13/11/98 made its ruling on the application by the 3rd respondent challenging its jurisdiction. It concluded the ruling with these words.

  • "On the 23rd July 1998 this court made interim orders of injunction, at the time of making the order the court was unaware that it lacks jurisdiction in the matter, it has now come to knowledge of the court that it has no jurisdiction in the matter therefore the order of this court made on the 23/7/98 is a nullity as it was made without jurisdiction, the said order is hereby set aside and discharged. On the whole this application succeeds, I hold that this court lack(s) jurisdiction to entertain this action.

    • I hereby order as follows:-

    • 1
      That the interim order of injunction issued by this court on the 23rd July, 1998 is hereby discharged forthwith.
    • 2
      That no writ or process instituted or any summons taken out against the Embassy of Lebanon or the Ambassador of Lebanon in Nigeria shall be accepted for filing in the Registry of this court.

      • The action is accordingly dismissed a cost of N20,000.00 is awarded against the 1st and 2nd plaintiffs to the 3rd defendant."

      The 1st and 2nd plaintiffs before the lower court have appealed against the above ruling of the lower court. They appealed against same and brought an application for stay of execution which in effect meant that the Court of Appeal should order that the N17 million be retained by the 2nd respondent (instead of being paid over to the 3rd respondent) pending the determination of the appeal. On the other hand, the 3rd respondent by his own application, sought the court to order the release of the funds to him in exchange for a bank guarantee from the Universal trust Bank.

      The 4th respondent argued that the application for stay of execution was an abuse of the process of court since it was filed first in the trial court. The applicants in reply pointed out that the trial court specifically ordered that no process should filed against the Embassy of Lebanon (4th respondent) in that court's registry.

Issues

  • 1
    Whether the ruling of the trial court delivered on 13/11/98 dismissing...

Read More