Can a Court Assume Jurisdiction Where a Claimant Seeking Compensation Under the Oil Pipelines Act Previously Made Attempts to Demand Same From the License Holder?

CASE TITLE: SPDC (NIG.) LTD. v. OKEH & ORS (2025) LPELR-80874(SC)

JUDGMENT DATE: 14TH MARCH, 2025

PRACTICE AREA: OIL AND GAS

LEAD JUDGMENT: OBANDE FESTUS OGBUINYA, J.S.C.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on civil procedure.

FACTS:

This appeal probes into the rightness of the decision of the Court of Appeal, Port Harcourt Division, coram judice: T. N. Orji-Abadua, I. O. Akeju, and C. I. Jombo-Ofo, JJCA, in Appeal No. CA/PH/60/2015, delivered on the 11th of December, 2017.

​The précis of the material facts of the case, which transformed into the appeal, is incompatible with complexity. The respondents alleged that on or about the 6th of August 2006, there was an oil spillage along the appellant’s Trans Niger Pipeline (TNP) at the 24″ Nkpoku to Bomu Trunkline at Eneka, which destroyed the respondents’ large expanse of land, farmlands, and economic trees and crops thereon. The respondents alleged that they suffered severe, extensive damages and untold hardship as a result of the spillage. As a sequel to that, the respondents beseeched the trial Court, via a writ of summons filed on the 13th of November, 2006, wherein they tabled against the appellant the following reliefs:

“Whereof the plaintiffs aver that they have, by reason of the defendant’s action, suffered severe, extensive damages and untold hardship and claim special and general damages as follows:

(a) Loss occasioned to the plaintiffs on their damaged/destroyed economic crops on the farms (reference the valuer’s report dated 21/9/06). = N1,689,690.00

(b) Injuries inflicted on the plaintiff by = N5,536,000.00

(c) General inconveniences caused by the spill = N7,850,000.00

(d) Cost of making demand letters to the defendant and prosecuting this case against defendant = N525,000.00

= N15,600,000.00

2. General Damages = N 4,400,000.00

Total = N 20,000,000.00

3. Interest at the rate of 20% per annum on the total sum claimed as may be determined by the Honourable Court from 6/8/2006 till the date judgment is satisfied.”

As expected, the appellant, upon service of the process on it, joined issues with the respondents by filing a statement of defence wherein it raised the defence of sabotage against the respondents’ action.

Following the discordant claims, the trial Court had a full-dress determination of the suit. In proof of the case, the respondents fielded two witnesses, PW1 and PW2, and tendered documentary evidence: exhibits P1-P4. In disproof of the case, the appellant called three witnesses, DW1-DW3, and tendered documentary evidence: exhibits P5-P9. At the closure of evidence, the parties, through their respective counsel, addressed the trial Court in a manner allowed by law. In a considered judgment, delivered on the 8th of June 2012, reflected between pages 77 and 103 of the record, the trial Court granted the claims in part.

The appellant was dissatisfied with the decision and appealed to the Court of Appeal which allowed the same in part; hence, this appeal to the Supreme Court.

ISSUES FOR DETERMINATION:

The issues considered were:

1. Whether the respondents’ claim for damages arising from the alleged subject oil spillage from the Appellant’s oil installation or facility complied with the compensation regime prescribed by the Oil Pipelines Act, Cap. 07, Laws of the Federation, 2004, or the provisions of the Oil Pipelines Act, Cap. 07, Laws of the Federation, 2004, regarding the nature of the claim the respondents can seek from Court and the procedure to be followed to seek relief, and if the answer is in the negative, whether the Court lacks jurisdiction to entertain this suit and the same ought to be struck out.

2. Whether the Court below lacked jurisdiction to entertain this suit subject of this appeal as the said suit was not properly constituted as a representative suit and was incompetent and ought to have been struck out.

3. Whether the Court below was right in affirming the decision of the trial Court which found the Appellant liable and in affirming a part of the award of damages against the appellant in this matter in the face of overwhelming/unchallenged evidence that the spill subject of this action was a result of the malicious acts/unlawful interference with the appellant’s facility by a third party, i.e., sabotage, for which the appellant should not be held liable.

4. Whether the Court of Appeal evaluated or properly evaluated the evidence on record relating to the award of special damages claimed in favour of the Respondents by the trial Court and/or considered/resolved issues no. 2 and 3 postulated and argued by the appellant in the lower Court properly or at all when it affirmed the award of certain heads of the special damages claimed by the respondents.

DECISION/HELD:

The appeal was dismissed.

RATIOS:         

• ACTION- REPRESENTATIVE ACTION: Principles governing representative actions/suits
• CONSTITUTIONAL LAW- FUNDAMENTAL OBJECTIVES AND DIRECTIVE PRINCIPLES OF STATE POLICY: Importance of socio-economic rights
• COURT- JURISDICTION: Meaning of jurisdiction; conditions precedent to exercise of jurisdiction and whether they must co-exist
• COURT- JURISDICTION: When a Court is said to have jurisdiction
• DAMAGES- CLAIM FOR DAMAGES: Meaning of damages and compensation; whether both are synonymous and can be used interchangeably under Section 11 (5) and (6) of the Oil Pipelines Act
• DAMAGES- SPECIAL DAMAGES: Principles guiding the award of special damages
• EVIDENCE- BURDEN OF PROOF/ONUS OF PROOF: Principles of law with respect to burden of proof and evidential burden
• EVIDENCE- BURDEN OF PROOF/STANDARD OF PROOF: Burden/standard of proof where there is a defence of malicious act of third party
• EVIDENCE- DOCUMENTARY EVIDENCE: Whether the evidence of a servant of a company is admissible to prove any transaction entered into by that company
• EVIDENCE- EVALUATION OF EVIDENCE: Whether an Appellate Court is in a position as a trial court to evaluate documentary evidence
• EVIDENCE- UNCHALLENGED/UNCONTROVERTED EVIDENCE: Effect of an unchallenged/uncontroverted evidence
• LAND LAW- FAMILY PROPERTY/LAND: Whether a member of a family is competent to institute an action to protect the interest of the family in respect of a family land
• OIL AND GAS- PETROLEUM MINING OPERATION: Requirement of the law as regards claim for/payment of compensation/damages under Section 11 (5) and (6) of the Oil Pipelines Act
• PRACTICE AND PROCEDURE- ISSUE OF JURISDICTION: Fundamental nature of the issue of jurisdiction; whether the issue of jurisdiction must first be determined by the Court once it is raised

To read the full judgment or similar judgments, subscribe to Prime or Primsol