Court’s Jurisdiction On Claims For Compensation On Land Acquired For Oil Exploration

In the Supreme Court of Nigeria

Holden at Abuja

On Friday, 1st day of July, 2022

Before Their Lordships

Kudirat Motonmori Olatokunbo Kekere-Ekun

John Inyang Okoro

Abdu Aboki

Ibrahim Mohammed Musa Saulawa

Tijjani Abubakar

Justices, Supreme Court

SC.219/2011

Between

THE SHELL PETROLEUM DEVELOPMENT

COMPANY OF NIGERIA LIMITED APPELLANT

And

CHIEF TRUELOVE ORUAMBO & 10 ORS RESPONDENTS

 (Lead Judgement delivered by Honourable Abdu Aboki, JSC)

Facts

The 1st to 9th Respondent commenced an action against the Appellant and the 10th and 11th Respondent at the High Court of Rivers State, Port Harcourt. They sought inter alia, a declaration that the 1st to 9th Respondent are entitled to be paid compensation by the Appellant, together with other affected persons in respect of the Gas Gathering Associated Pipeline Project Structural Assessment carried out by the Appellant on portions of land in Bakana Town of Degema Local Government Area of Rivers State, to determine lands acquired for the Appellant’s Gas Gathering Project and persons entitled to compensation. They also sought an order of court, mandating the Appellant to pay certain sums as compensation due to each of them in this regard.

It was the case of the 1st to 9th Respondent that despite the identification and assessment of their properties for compensation by the Appellant through the 10th and 11th Respondent like others in the area, and their claims were verified, when the compensation was eventually paid, their names were deliberately removed from the list of persons entitled to compensation. The Appellant filed its Statement of Defence to the action, wherein it categorically denied the allegations in the Statement of Claim. The Appellant averred that it lawfully acquired land in some communities for its gas project and duly paid compensation to all the communities, including Bakana and individuals whose properties were affected by the acquisition.

The 1st to 9th Respondent called a witness and tendered Exhibits A-A8, while the Appellant called two witnesses who testified to the effect that the 1st to 9th Respondent do not have specific right over the property acquired by the Appellant. In its judgement, the trial court upheld the claims of the 1st to 9th Respondent and granted the reliefs sought. Aggrieved, the Appellant filed an appeal to the Court of Appeal, which court dismissed the appeal and affirmed the decision of the trial court. The Appellant filed a further appeal to the Supreme Court.

Issues for Determination

The Supreme Court considered the following issues submitted for determination by the Appellant:

1. Whether the Court of Appeal was right to hold that the trial court had the requisite jurisdiction, to entertain and determine the 1st to 9th Respondent’s suit.
2. Whether the 1st to 9th Respondent’s suit was bad, for misjoinder of parties and/or misjoinder of causes of action.
3. Whether the 1st to 9th Respondent’s suit was properly constituted, as a representative action.
4. Whether the Court of Appeal was right to affirm the decision of the trial court, granting the reliefs sought by the 1st to 9th Respondent. 

Arguments

Arguing the first issue, counsel for the Appellant submitted that the claim of the 1st to 9th Respondent at the trial court was squarely founded on the remedy provided by Section 11(5) of the Oil Pipelines Act, 1956. Counsel posited that since the claim relates to the oil and gas activities of the Appellants, specifically gas gathering, and insofar as their cause of action is a claim for compensation owing to the purported effects of the  Appellant’s gas projects on their properties, the claim is strictly within the purview of the Federal High Court being the only court that has jurisdiction to entertain a cause or matter, ancillary to, relating to, arising from, connected to or pertaining to oil and gas exploration. He placed reliance on Section 251(1)(n) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended); Section 7(1)(n) of the Federal High Court Act, 2004 and SPDC (NIG) LTD v ISAIAH (2001) 11 NWLR (Pt. 723) 168. Counsel submitted that the Court of Appeal was in error to hold that the 1st to 9th Respondent’s action was merely an action for debt, which the trial court rightly exercised jurisdiction over. Responding to the first issue, counsel for the 1st to 9th Respondent argued that the suit was a simple case of failure of the Appellant to pay compensation to the 1st to 9th Respondent, as already assessed and agreed by the Appellant and its agents; and therefore, it does not fall within the ambit of Section 251(1)(n) of the 1999 Constitution (as amended).

On the second issue, counsel submitted on behalf of the Appellant that the suit of the 1st to 9th Respondent was incompetent for misjoinder of parties and/or causes of action and amounted to a nullity. He submitted that the claim is thus, liable to be struck out for this reason. Reacting to the submission on this issue, counsel to the 1st to 9th Respondent referred to Exhibits A-A8 and argued that the Exhibits were prepared at the same time, place, and by persons of common interest with the 1st to 9th Respondent who were cheated out of their right to compensation. Relying on Order 11 Rule 1 of the old High Court of Rivers State (Civil Procedure) Rules 1987, he submitted that constitution of the parties in the suit at the trial court was permissible and in order.

Regarding issue three, it was argued on behalf of the Appellant, that the 1st to 9th Respondent’s action was fundamentally defective because the representative nature of the action was not indicated on the Writ of Summons as required by Order 5 Rule 11(1)(a) of the High Court of Rivers State (Civil Procedure) Rules 1987, nor was leave obtained to sue in a representative capacity as required by Order 11 Rule 8 of the Rules. Counsel relied on ADEDIRAN v INTERLAND TRANSPORT LTD (1991) 9 NWLR (Pt. 214) 155 in support of the submission. He argued further that the 1st to 9th Respondent primarily instituted the suit at the trial court in representative capacity as mere agents of certain persons listed in Exhibits A-A8 as contained in the records of the court, without establishing any common interest and/or grievance they shared with any of those persons. Countering the submission above, counsel argued for the 1st to 9th Respondent that, regardless of whether a Plaintiff did not expressly sue in a representative capacity, where there is evidence to show that he is suing in a representative capacity, the capacity can be amended to bring it in line with the evidence, whether or not an application for such amendment has been applied for and granted. He placed reliance on OSAGUNNA v MILITARY GOVERNOR OF EKITI STATE (2001) 86 LRCN 1106.

On the 4th issue, counsel argued that the 1st to 9th Respondent failed to specifically plead or lead evidence of any form of ownership, whether joint or exclusive, of any property of theirs affected by the Appellant’s Gas Project, as to entitle them to the grant of the declaratory reliefs sought in their claim. He contended that they failed to call any admissible evidence to explain the purport of Exhibits A-A8, and there was no basis for the Court of Appeal to affirm the decision of the trial court that the Exhibits operate as an admission against the interest of the Appellant. Responding to the submission of the Appellant, counsel for the 1st to 9th Respondent made references to the pleadings and evidence led at trial, and argued that the sums of money claimed by the 1st to 9th Respondent as evinced by Exhibits A-A8 are liquidated money demand, and not a case of special damages requiring pleadings and strict proof. He submitted that the Appellant having failed to controvert the contents of Exhibits A-A8, or deny the commissioning of the 10th and 11th Respondents as its agents further to which Exhibits A-A8 were drawn up, it is estopped from arguing that it is not bound by their contents.

Court’s Judgement and Rationale

In resolving the first issue, the Supreme Court reiterated the settled position of law that in order to determine the court’s jurisdiction to entertain a case; the court will have recourse to the averments contained in the Statement of Claim. The court held that it was evident from the averments in the Statement of Claim, that the reliefs sought by the 1st to 9th Respondent were in relation to compensation as agreed and assessed by the Appellant for their land acquired by the Appellant for its Associated Gas Gathering Project. Their Lordships held that the 1st to 9th Respondent’s claim is a simple case of breach of the promise to pay compensation for land acquired, and does not come within the purview of oil and gas exploration or any matter connected with, pertaining to, or relating to oil and gas exploration, over which the Federal High Court has exclusive jurisdiction to entertain – NKUMA v ODILI (2006) 6 NWLR (Pt. 977) 587. The jurisdiction of the State High Court is not ousted, in a claim for agreed compensation for land acquired for oil and gas exploration. Given the foregoing, the court held that the 1st to 9th Respondent’s action cannot come under Section 251(1)(n) of the 1999 Constitution and Section 7 of the Federal High Court Act, as to oust the jurisdiction of the State High Court.

On the second issue, the Apex Court agreed with the finding of the Court of Appeal that Order 11 Rule 1 of the High Court of Rivers State (Civil Procedure) Rules 1987, permits all persons to whom any right to relief, in respect of or arising out of the same transaction is alleged to exist either jointly or severally, or in the alternative to be joined in one action as Plaintiffs. The important thing for the operation of Order 11 Rule 1, is for any common question of law or fact to arise in the suit by such joint Plaintiffs. In the instant case, a common question that arose was that whether the 1st to 9th Respondent, as beneficiaries of the assessment, were entitled to be paid the assessed compensation. They have the same cause of action, arising from the same transaction against the Appellant. The court held that the 1st to 9th Respondent’s suit at the trial court was thus, properly constituted and no question of misjoinder arose.

Deciding the third issue, the their Lordships, relying on its decision in OFIA v EJEM (2006) 5 SC (Pt. III) 41, held that the essential requirement for an action to be properly instituted or initiated in a representative capacity, is that there are numerous persons with the same or common interest or right of action; that the action is for the benefit of all the persons; and the action is taken by some of the persons for and on behalf of all the others. The issue of whether a suit or action was properly and competently commenced in a representative capacity is to be determined from the pleadings and evidence eventually placed before the court which must establish these essential requirements. The court held further that even where the writ does not reflect the capacity in which the suit is brought, or where the Claimants neglect or fail to seek leave to sue in a representative capacity, that factor alone would not be sufficient to defeat the claim so long as the pleadings disclose an intention to sue in that capacity – OTAPO v SUNMONU (1987) LPELR-2822 (SC) @ 20 C AND 27 E-F. In this case, there was ample evidence that there exists a common interest and common grievance as to how Exhibits A-A8 would be fulfilled. The 1st Respondent in his testimony as PW1 also stated that the suit was for himself, and others as listed in the said Exhibits. The court reasoned that all the preconditions to bring the case within the ambit of a representative action had thus, been met.

On the fourth issue, it was decided that where there is sufficient evidence to support concurrent findings of fact by the lower courts, such concurrent findings should not be disturbed. Without any clear evidence of errors in law or fact occasioning miscarriage of justice, the Supreme Court will not interfere with concurrent findings of the lower courts – ENANG v ADU (1981) 11-12 SC 25. Having painstakingly gone through the concurrent findings of the two lower courts, the Apex Court held that it was clear that the concurrent findings of the two courts below, to the effect that the 1st to 9th Respondent had demonstrated their entitlement to the declaratory reliefs sought at the trial court, were in line with the pleadings and evidence adduced at the trial court and therefore did not occasion any miscarriage of justice.

Appeal Dismissed.

Representation

O. Akoni, SAN with O. Awonuga, Esq; H.K. Salami, Esq; and A.Q. Abbass, Esq. for the Appellant.

Prof. A. Amuda Kannike, SAN with Chuks Uguru, Esq; and A.O. Yusuf, Esq. for the 1st to 9th Respondent.

Israel Obameji, Esq. for the 10th and 11th Respondents.