Federal court declines jurisdiction over $187k contract suit against Niger Star 7, transfers case to State High Court

Ogunsakin Mustapha
7 Min Read

A Federal High Court sitting in Lagos has transferred to the Lagos High Court, a suit by Sparrow Global Logistics & Energy Services Ltd seeking to recover a disputed $187, 000 debt from a foreign-owned firm, Niger Star 7 Ltd.

Justice Lewis Alagoa made the order after hearing arguments from Kolawole Uzamot leading Chioma Ndukwu for the Plaintiff/Applicant (Sparrow Global Logistics & Energy Services) and Mrs. Funke Agbor, (SAN) for the Defendant (Niger Star 7 Ltd).

The judge had, on November 1, 2023, granted a Mareva Injunction restraining the Defendant or its agents from transferring or dissipating  her financial assets to the tune of $170,000 or its naira equivalent pending the determination of the Plaintiff/Applicant’s suit marked FHC/L/CD/2189/2023.

The Mareva Injunction restrained the Defendant’s bankers from releasing any part of the $170k determination of the suit. He adjourned till December 6 for report of compliance with the Mareva Order by the Respondent banks.

According to the Plaintiff’s statement of claim, the $1887k comprises $172,000 being the Plaintiff’s “cumulative consultancy fee for negotiating and processing a reduced value of the Cabotage bills on the Defendant’s assets MV “SEVEN INAGHA™, MV “SEVEN ANTARES”, MV “NIGERSTAR 7 ADABA™, CB “CARGO BARGE 32, CB “CARGO BARGE 33, and CB CARGO BARGE 34° respectively.

“The sum of $17,200USD being 10% percent of the Plaintiff’s consultancy fee and compensation claimed as operational costs towards meeting the Plaintiff’s obligation as assigned by the Defendant) as solicitors’ recovery fee. “General damages in the sum of N5 million and costs of action in the sum of N1 million.”

The plaintiff further averred that “Despite the numerous reminders for payments on the Cabotage bills as well as the Plaintiff’s consultancy fees, the Defendant did not yield. The Defendant’s attitude to payments rendered the Plaintiff concerned and the plaintiff vented her concerns in an email dated 14 September, 2023.”

It said it wrote emails to the Defendant expressing concerns “over the Defendant’s repeated attitude of delaying payments, stating the Defendant’s conduct in respect of recent payments made on the exercise (i.e. the Sea Protection Levy (SPL) facilitated for the Defendant by the Plaintiff, and Plaintiff’s fee for the consultancy services rendered yet unpaid.”

At the resumption of proceedings on the adjourned date, Plaintiff’s counsel Uzamot applied that all banks be discharged except Zenith Bank which had deposed to an affidavit stating that the Defendant maintains an account with her, and the sum of $187, 000 had been preserved in compliance with the court order. Justice Allagoa granted the application as prayed.

The judge then heard the Defendant’s Motion dated 21 November, 2023 seeking to set aside the Mareva Order and another order dismissing the suit for lack of jurisdiction.

The Defendant’s counsel Agbor SAN premised the application on the ground that the disputes between the parties emanated from the consultancy agreement between them, and as such being solely contractual in nature, was subject of jurisdiction of the State High Court.

The Silk contended further that the Mareva Order granted by the Court has had the Defendant distressed as all their accounts had been frozen and it could not transact or make due payments hence the need to discharge the Mareva Order.

But the Plaintiff’s Counsel noted that by the discharge order on other banks, the Defendant would be relieved and the distress complained of would be no more.

Uzamot contended that the defendants application was incompetent/overtaken by events as the Defendant already took further step in the suit by filing a Memorandum of appearance and Statement of Defence.

He argued further that the cause of action in the instant suit arose from the Defendant’s need to apply for a bill of sale and consent to sell in respect of its fleet of Vessels and Cargo Barges, towards which the Nigerian Maritime Administration and Regulatory Authority (NIMASA) had declared the Plaintiff liable in the event of default of the Defendant over payments due for regularization of the said Vessels.

Counsel argued further that Bill of Sale and Consent to sell were maritime/admiralty related issues which falls within the exclusive jurisdiction of the Federal High Court (FHC), urging the court to discountenance the Defendant’s application and set the matter down for hearing.

He further contended that the Defendant was a foreign-owned firm and by the application for Bill of Sale and Consent to Sell, the Defendant was seeking to dispose of its fleet and unwind its business and repartiriate its business.

He added that if the order was discharged, the plaintiff would be exposed to liabilities to NIMASA without comfort, hence urging the court not to discharge the order.

Finally, the Plaintiff’s counsel contended that in the event the court found the Defendant’s application meritorious, the proper Order to be made in such circumstances would be to transfer the cause to the High Court of Lagos State, and not to dismiss or strike the matter out as prayed by the Defendant.

In a bench ruling, Justice Allagoa held that from the Plaintiff’s pleadings (Statement of Claim), the cause of action arose from the consultancy agreement between the parties, hence the subject matter was contractual in nature.

He upheld the Plaintiff’s prayer and ordered that the matter be transferred to the Lagos State High Court.

The Court held further that all orders previously made in the suit were therefore vacated as the court lacked jurisdiction to have made them in the first place.

Dear readers, we really need your support to keep on serving you with authoritative, truthful, and juicy stories everyday. For your support, please reach out to the editor @gavelinternational66@gmail.com

Share This Article