Supreme Court Rules Against Sifax Nig. Ltd. on Statutes of Limitation

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Mike Igbokwe, SAN
Mr. Mike Igbokwe, SAN
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Supreme Court Rules Against Sifax Nig. Ltd. on Statutes of Limitation

Hon. Justice Amina Adamu Augie, Justice of the Supreme Court in her ruling on the 16th Feb., 2018 in the case between APPELLANTS: (1) Sifax Nigeria Limited, (2) Dr, Taiwo Afolabi, (3) Mr. Babatunde Olanrewaju Afolabi (4) Otunba Michael Olatunde Olowu and (5) Ports and Cargo Handling Services Company Limited, and RESPONDENTS: (1) Migfo Nigeria Limited, (Denca Service Ltd, which should serve as a locus classicus on the application of statutes of limitation.

Mike Igbokwe, SAN
Lead Counsel to Respondents, Mike Igbokwe, SAN

Justice Augie said it is the second time the parties are coming before the court over a dispute involving Memorandum of Understanding (MOU) dated 27/07/2005, which they put up to jointly bid for the concession and the joint management of Terminal ‘C’, Tin Can Island Port, Apapa, Lagos, which was being concessioned by the Federal Government of Nigeria through the Bureau of Public Enterprises (BPE) and Nigerian Ports Authority (NPA)

Between the Appellants and the Respondents, it was agreed that if the bid is successful, a joint venture company would be incorporated by the joint venture partners to manage operations of the Port, and they did emerge as the preferred bidders.

However, the Respondents later discovered that the first, third and fourth Appellants had secretly incorporated the fifth Appellant company without them, and that the Port had been handed over to the fifth Appellant by the BPE and NPA.

A search was conducted at the CAC Abuja and a certified true copies of the incorporated documents retrieved on the 20th of July, 2006, which showed that only the first and third Appellants were shareholders and directors of the fifth Appellant company, contrary to the terms of the said MOU.

After all efforts to resolve the issue failed, the Respondents filed Suit No. FHC/L/CS/664/2006 at the Federal High Court, Lagos, and they got Judgment in their favour as the FHC granted all the reliefs sought by them.

The court of Appeal affirmed same in its Judgment delivered on the 17th of Dec., 2008.

However, on further appeal of the Appellants, the court, in its Judgment delivered on the 8th of June, 2012 struck out the suit on the ground that the FHC lacked jurisdiction. – See the earlier Judgment of this court in Ports & Cargo Handling Services Co. Ltd. & 3 Ors. v. Migfo Nig. Ltd. & Anor (2012) 18 NWLR (Pt. 1333) 555.

The Respondents then commenced the action that led to this Appeal at the Lagos State High Court vide a Writ of Summons dated and 18/07/2012, wherein they claimed declaratory and injunctive reliefs against the Appellants.

The Appellants, by an Application filed on 20/12/2012, prayed the trial court to strike out the suit for being statue-barred, and for being improperly constituted.

The learned trial Judge, Justice Lawal Akapo. J., in his Ruling delivered on the 5th of July, 2013, held that the claim was not founded on simple contract as envisaged by Section 8 of the Lagos State Limitation Law; therefore, the said Section did not apply.

The Appellants appealed to the Court below, which affirmed the decision of the trial Court that the Suit was not statute-barred, and dismissed the Appeal.

The Appellants now Appealed to the Supreme Court with a Notice of Appeal containing ten Grounds of Appeal. 36 pages of the Brief of Arguments were duly filed, while the Respondents filed a Brief with 66 pages.

On the issue of ‘Necessary Party’, “The court concluded that a necessary party is someone, whose presence is essential, for the effectual and complete determination of the issues before the court.”

“It is a party, in the absence of whom, the claim cannot be effectually and completely determined.”

“Computing the limitation period of six years from the 20th of July, 2006 to 18th of July, 2012 when the Respondents commenced this action, no doubt shows that they are still within the ambit of the six years period of limitation as prescribed by Section 8 (1) (a) of the Limitation Law of Lagos State, granted that the transaction falls within the realm of a simple contract.”

“In other words, the statutory provision of 6 years for the accrual of the cause of action would not apply in the circumstances existing in the case at hand which brought the action in the line for the extenuating application of Sections 13, 23 (4) and 58 of the same Limitation Law taking into consideration the Memorandum of Understanding (MOU) which is a deed pleaded in the statement of claim and underscoring the fact that what is at play is too complex taking alongside other legal and equitable reliefs that cannot be swept aside as unimportant or even excisable to enable the contract within to stand alone and to have the Section 8 (1) (a) of the Limitation Law apply to the cause of action.”

The court set down in plain language that the accrual of the cause of action is the event whereby a cause of action becomes complete so that the aggrieved party can begin to maintain his action.

“Time begins to run when the cause of action crystallizes or becomes complete.”

The cause of action accrues when the plaintiff gets to know that his enforceable claim or right has come into existence or become a present enforceable demand or right or has arisen and to prove as a fact during trial, the time a cause of action accrued or arose in determining whether a cause of action is statute barred or not, the most crucial consideration is when the cause of action arose or accrued.

From the facts that were thrown up, the Respondents were alleging that the Port had been handed over to the 5th Appellant by BPE/NPA and that 1st, 2nd, 3rd and 4th appellants were responsible for the incorporation of the 5th appellant, which propelled the Respondents to do a search and retrieve the certified true copies of the incorporation documents in 2007 which revealed that contrary to the joint venture agreement, the respondents had been excluded from the ownership and management of the 5th appellant and the Port. It was the exposure that brought about the suit No: FHC/LCS/664/2006 against the 5th, 1st, 3rd and 4th appellants on the 9th of Aug., 2006.

“The appellant’s contention is that the claims presented by the Respondents cannot be properly articulated and determined without joining NPA and BPE, therefore, they are necessary parties. But they also stated in their brief that – “In summary, the live wire, object and subject of the claim before the trial court is the incorporation of the 5th Appellant (Ports and Cargo Handling Services Company Limited) vis-à-vis the terms and tenor of the memorandum of Understanding dated 27th of July, 2005.”

But as the court below rightly found, “there is nowhere in the entire statement of the claim where the (NPA/BPE) were accused of any wrong nor shown likely to gain or lose any right or interest in the subject matter of the suit.”

“The mere mention of the NPA and BPE in some averments in the statement of claim does not of necessity create a legal obligation to have them joined as necessary parties when there is no modicum of reason to do so,” it was claimed.

“The court claims that the respondent’s grouse as shown in the pleadings is solely against the appellants, who had conspired to exclude them from the whole transaction despite the joint venture agreement between them and the 1st Appellant (Sifax Nigerian Limited).”

Obviously, it goes without saying that the court below was right to conclude that the NPA and BPE are not necessary parties, and their not being joined as parties to the suit is not fatal to the respondents’ case.

At the end, the five Judges; Justice Amina Augie, Justice Musa Dattijo Muhamad, Justice Mary Ukaego Peter-Odili, Justice Paul Adamu Galinje and Justice Kumai Bayang Aka’ahs, all of the Supreme Court, dismissed the Appeal for lack of merit and affirmed the decision of the court below and the respondents are awarded costs of N300,000.00.

According to the lead Judgment delivered by Hon. Justice Amina Augie, JSC the cause of action arose when the Respondents conducted their search at the CAC and discovered that the 5th Appellant (Ports and Cargo Handling Services Company Limited) had been secretly incorporated and the Respondents were not delayed in bringing the action at the Federal High Court within the 6 years period provided by the Limitation Law of Lagos State.

The Court then held that in view of the fact that the Federal High Court Suit was not statute barred, the Suit at the Lagos State High Court cannot be statute barred because time was frozen or suspended immediately the Federal High Court Suit was filed.

In the ruling of Hon. Justice Paul Adamu Galinje, JSC who had the privilege of reading the judgment delivered by Justice Amina Augie, JSC and the conclusion arrived thereat. For the same reasoning as contained in the lead judgment, he said, “I find no merit in this appeal and I endorse all the consequential orders made therein including order as to costs.

Justice Mary Ukaego Peter-Odili, JSC, who is also at one with Justice Augie JSC in the judgment delivered underscore the support for the reasonings.

“Apart from the fact that in this case, Mr. Mike Igbokwe (SAN), successfully contested the plan of Sifax, Ports and Corgo, etc, to join NPA and BPE as parties to the suit, the judgment is ground-breaking and has become a locus classicus authority for a point that was canvassed from State High Court, to Court of Appeal and Supreme Court and won all the way.”

“The point is whilst litigation is pending or going on between parties, the statute of limitation does not run but it is frozen.”

“It had never been canvassed in Nigeria before now or decided by the Supreme Court before and the Hon. Justice Amina Adamu Augie so stated in her lead judgment.”


The Appellants was represented by Chief Wole Olanipekun (SAN). With him were Gani Adetola-Kazeem (SAN), A. B. Ogunba (SAN), Bolarinwa Awuyoola (Esq), and Adelani Ajibade (Esq), while the Respondents was represented by Mr. Mike I. Igbokwe (SAN) with Chioma Okwuanji (Esq), Adlphus Nwachukwu (Esq) and Winifred Tayo-Oyetibo (Esq).

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