WD
IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
BEFORE
HIS LORDSHIP HON. JUSTICE JOYCE A. O. DAMACHI
DATE: December 16, 2024
SUIT NO. NICN/LA/39/2024
BETWEEN
HALOGEN SECURITY COMPANY LIMITED - CLAIMANT
AND
MR
NNAMDI MELI - DEFENDANT
REPRESENTATION
B.G.Thia-Yakua
Esq…. CLAIMANT COUNSEL
Itua
Imahnze Esq
Emeka
Opara Esq
Olusegun
Akeju ESQ …. DEFENDANT COUNSEL
JUDGEMENT
1.INTRODUCTION
The Claimant by way of a General Form of Complaint
filed this suit on 29th
February 2024 and is seeking the following reliefs:
(i)
A DECLARATION that the Defendant is in breach of Clause 3 of its
contract of employment with the Claimant dated 9th April, 2018.
(ii)
N50,000,000
(Fifty Million Naira) only being
general damages for breach of contract.
(iii)
N2,000,000.00
costs.
2. CLAIMANT’S CASE
HALOGEN SECURITY COMPANY LIMITED is a popular security service company in Nigeria
and its services and products include the following:
(i)
Emergency
security response.
(ii)
Development
and deployment of security and safety solutions for corporate organizations and
private individuals.
(iii)
Development and deployment of security and safety networks and
infrastructures including security monitors, software, security awareness
services, and protocols.
(iv)
Provision
of security guards.
2. The Defendant is a former employee of the
Claimant, he joined the service of the Claimant as Head, Corporate Strategy, by
virtue of a contract of employment dated the 9th April, 2018 and
worked as the Head, Corporate Strategy (Associate Director) of HALOGEN SECURITY COMPANY LIMITED until
his resignation in November 2021. It is the Claimant’s case that NNAMDI MELI in his position as HCS was the Chief custodian of
the Claimant’s business strategies, trade secrets and tools of competitive
advantage in the industry which constitutes the Claimant’s most important
and most valued trade secrets. His job roles were contained in his contract of
employment which were incidental to his role as GHCS.
3. These (trade
secrets) in the custody of the Defendant include the following:
(a)
the
Claimant’s 7-year strategic business plan (2020 – 2027)
(b)
the
Claimant’s customers database including customers emails, and contact phone
numbers.
(c)
the
Claimant’s strategic and cutting edge methods, plans, market survey reports,
pricing methods, and operational modules.
(d)
the
Claimant’s local and international technical partners and their contact phone
numbers and emails.
4. The job roles
of the Defendant while in the service of the Claimant were:
(a)
coordinate
the strategic development of the Claimant’s business.
(b)
development
and implementation of the company’s strategic business plans.
(c)
Interface
with the company’s top customers and promote strategic business growth and
development.
(d)
corporate
planning and project management.
(e)
enterprise
security risk management.
5. Due to the
sensitive nature of the job roles and being the custodian of the company’s most
sensitive and valued trade secrets, Clause 3 of the Defendant’s contract of
employment provides that the Defendant shall not, within 24 months of leaving
the service of the Claimant, engage in or take part in any business enterprise
which has the same business or objectives with that of the Claimant or any
company or business which may be a competitor of the claimant.
6. The said Clause 3 of the Claimant’s contract of employment
provides as follows:
“You
shall and maintain all classified information relating to the activities of the
company in strictest confidence and for the sole and exclusive benefit of
the Halogen Group.
Also,
during the term of your employment and for a period of 24 months after
determination of the employment, you shall not engage in any business in the
industry which has the same objectives as that of the Halogen Group or with
any other business or company that may in any way be deemed as competitor of
the Halogen Group”.
7.
In
April 2022, the Defendant actually left the service of HALOGEN SECURITY COMPANY LIMITED to
join and become the Chief Executive Officer (CEO) of a competitor, a
security services company known as “Sety”. The Claimant is of the stance that the
Defendant met SETY Ltd in the course of discussing strategic alliance
engagement, and crossed carpet along with the very value it was planning to
deliver to SETY for valuable consideration.
8.
The
Claimant avers that the act and conduct of the Defendant in joining the service
of Sety Ltd as its CEO is not only a
grave breach of his non-compete obligations to the Claimant as per Clause 3 of
its contract of employment, the conduct is also most unethical, dishonest and a
grave act of disloyalty, because a few months before the Defendant’s
resignation, he was part of the team
representing HALOGEN SECURITY COMPANY
LIMITED in some major strategic business alliance discussions with Sety Ltd and in which engagement the
same Defendant led the team as a co driver of the Claimant’s corporate
processes, these roles he carried out using official files, records and
documentations domiciled in the corporate archives.
9.
It
is the position of the Claimant that its valued trade secrets which includes
the Claimant’s strategic business plans, customers database, market
survey reports, pricing methods, operational modules, confidential business
information and other Claimant’s critical tools of competitive advantage in the
security services industry are at grave jeopardy and at the disposal
and benefit of Sety.
10. That SETY is not only into information &
software development, ICT & Technology, it has diversified into security
services including emergency security response management, development of
security and safety networks & Solutions as evidenced in its brochure.
11. The Claimant, through its Solicitors (Hybrid
Solicitors) wrote to the Defendant drawing his attention to the breach but all
to no avail.
12.
The Claimant tendered the following documents which
were admitted in evidence and marked as Exh C1- Exh C6
a)
A copy of its brochure Exhibit C1
b)
copy of the contract of employment Exhibit C2
c)
“Sety” business brochure containing its services
Exhibit C3
d)
the Defendant’s email dated the 19th
January, 2022 which is an electronically generated evidence Exhibit C4
e)
bundle of email correspondences between the
management of the Claimant (Defendant inclusive) and the management of the said
SETY spanning between June and October, 2021. Exhibit C5
f)
Hybrid Solicitors letter dated 26th
April, 2022 Exhibit C6.
DEFENDANT'S CASE
13. Nnamdi
Melie admits he was a
former employee of the Claimant and was employed as the Head, Corporate
Strategy of the Claimant until his resignation in November 2021. His case is
that he was never the custodian of
the Claimant’s alleged business strategies and tools of competitive advantage
in the industry.
14. He stated that by the Claimant’s tiered corporate
structure, the custodian of the Claimant’s business strategies, plans, etc was
the office of the Chief Executive Officer (CEO) and the Project
Management Office (PMO), and these 2 offices are chaired by the Group
Chief Executive Officer (GCEO).
As for the corporate “knowledge” of the Claimant’s
business and strategies he stated that it resides in the digital archives of
the Company. Therefore the custodian of the Claimant’s business strategies
and tools of competitive advantage and trade secrets, is the GROUP CEO.
15. With regards to the operational strategies, he
stated that they were embedded and domiciled with the operating Companies and
subsidiaries of the Claimant, such as Avant Halogen, Avert Halogen, Academy
Halogen and PSM Halogen. It is his defense that these subsidiaries were
responsible for the execution and implementation of all the business and
strategic plans of the Claimant, which were harboured and devolved from the
Group Chief Executive Officer (GCEO) through the office of the Chief
Executive Officer (CEO) and the Project Management Office (PMO).
16. Furthermore, by the tiered structure of the
Claimant company he did not occupy or head any of those offices throughout his
employment with the Claimant. And he was
not the custodian of the Claimant’s alleged strategic business plan (2020 –
2027), customers’ database, strategic cutting-edge methods, plans, market
survey reports, pricing methods, and operational modules as well as the
database of the Claimant’s alleged local and international partners.
17. In addition, defendant stated that the Claimant’s
official files, documentation, plans, policies and strategies were/are
domiciled in the corporate archives of the Claimant, which were housed
within the Claimant’s CEO’s offices.
The archives are a
repository of all initiatives, plans, and objectives executed in the past,
present, and future across the Claimant’s tiered corporate organizational
structure, the essence of which was to ensure continuity and widespread
knowledge of such policies, strategies, business plans and to avoid and
mitigate dependency risk on persons.
18. The Defendant avers he was responsible for the
introduction of innovative and transformative best practice operating systems/mechanisms
in the Claimant, one of which was the de-personalization and
institutionalization of best practices in the Claimant’s operations.
19. With regards to the breach of clause 3 he averred
that since he was not the custodian of the Claimant’s alleged most sensitive
and valued trade secrets he did not breach Clause 3 of the employment letter of
April 9, 2018. However, for all classified information relating to the
activities of the Claimant, he held it in the strictest confidence and for the
sole and exclusive benefit of the Claimant.
20. He stated that he did not engage in any business
enterprise which has the same business or objectives with that of the Claimant
within 24 months of leaving Halogen SCL. That the objects and business
of SETY Limited (formerly called Front -TSL Limited (FTSL) is an
Information Technology and Software Development Company, which are set out in
its Memorandum and Articles of Association, as follows:
a.
Information
Technology and Software Development;
b.
Computer
ICT and Technology;
c.
Other
incidental including (but not limited to) entering into legal contracts,
production, transportation, logistics, acquisition, transfer, and ownership of
fixed and movable assets (locally and internationally) all other such legal
acts necessary to the attainment of its objectives;
d.
Develop
a Digital Market places bringing together supply and demand players using intelligent
platforms for efficient transactions;
e.
Develop
platforms, ecosystems, and social interaction tools for relevant stakeholders
and the public;
f.
Carry
out digital transformation projects;
g.
Provide
AI-powered analytics and technology advisory services;
h.
Provide
technology project management services;
i.
Develop
and deploy hardware and software infrastructure;
j.
Engage
in M&A, JV and other endeavours to fulfil capability-building engagements;
k.
To
do all such other things as may be considered incidental or conducive to the
attainment of the objects or any of them.
21. That he did not breach the restrictive non-compete
obligations, under Clause 3 of his Employment as
·
Sety
Limited is neither a competitor nor a Security Services Company/provider,
Sety Limited is an ICT/ Software Development Company.
·
Its
main objects being Information Technology and Software Development, Computer
ICT and Technology, Providing AI-powered analytics and technology advisory
services amongst others are not in the same line of business nor a
competitor to Halogen SCL.
·
Besides
he averred that Sety Limited, does not have the operational license,
personnel, and competence to operate as an alleged security service
provider/Company.
·
that
the incorporation and business objectives of Sety Limited are distinct
from those of the Claimant. Whilst the Claimant is a Security Company with
trained personnel that provide security services to individuals, Sety is a
social impact company, amongst others, which connects providers of various
services and relies on their expertise and know-how to offer those services to
the public and each of these arrangements is based on a collaboration framework
and not competition.
22. That even after tendering his three (3) months
resignation notice in August 2021, he sought and obtained the approval of the
Claimant’s CEO to focus and complete key projects well ahead of
his terminal date. In satisfaction, the CEO approved and consented to his early
exit before the expiration of his notice period, having been impressed and
satisfied with delivery within record time.
23. That the corroborative discussions held between the
Halogen and Sety Limited for “potential business alliance” were prompted
due to its fully developed product and service architecture moreover since they
were not in same line of business or competitors, as both companies have and
operate distinct business functions and objectives.
24. That he could not have exposed information to Sety Limited because he was never
the custodian of the Claimant’s alleged business strategies and tools of
competitive advantage in the security services industry and due to the tiered
company structure he could not have access let alone expose confidential
information. That as a result of the role he played in the discussions, any
confidential information or alleged trade/business secrets of the Claimant
within his knowledge, remains confidential and undisclosed by virtue of the Confidentiality and Non-disclosure Clause embedded in the
Memorandum of Understanding duly executed between Front-TSL Limited (now
known as Sety Limited) and the Claimant.
25. That even after resignation he continued
negotiations on behalf of and for the benefit of the Claimant and with the full
knowledge and approval of the Claimant, who were also in regular communication
with him with the full knowledge of his role at Sety Limited, overseeing the
strategic initiatives carried out by Sety Limited in favour of the Claimant.
26. That the collaborative discussions were cordial,
transparent and concessions were made available to the Claimant, the Source
Code deployed by Sety Limited, its Digital Solution Architecture
as well as User Testing were used by the Claimant unsupervised by
Sety Limited, it was proposed and adopted in the discussions that Sety
Limited would utilize ONLY the Claimant for the security aspect of its platform
and equity shares were assigned as a sign and gesture of its intended
collaborative business good faith with the Claimant.
27. The Defendant
tendered 8 no documents as exhibits which were admitted in evidence and
marked as Exh D1-Exh D8
a)
Certificate
of Incorporation of Sety Limited (previously called Front -TSL Limited) dated
April 6, 2022, Exh
D1
b)
Memorandum
and Articles of Association of Sety Limited dated January 20, 2022 respectively
are hereby annexed and marked as EXH D2
c)
Resignation
Handover Notes on Compendium of Strategic Projects issued to the Director,
Strategies of Halogen Group Exh D3
d)
Sety
Limited’s Proposal Deck to the Claimant Exh D4
e)
Report
of the Committee set up by the Claimant’s CEO Exh D 5
f)
Memorandum
of Understanding between Halogen Security Company Limited and Front-TSL Limited
(now Sety Limited) executed in August 2021 Exh D 6
g)
Claimant’s
letter dated March 24, 2022, titled “Re: Business Alliance Engagement: Response
Solutions” Exh D7
h)
Certificate
of compliance 23/4/24 & 9/6/24 Exh D8
28.DEFENDANT’S FINAL WRITTEN ADDRESS
30 .ISSUE 1: WHETHER FROM THE FACTS OF THIS CASE
AND THE EVIDENCE LED, THE CLAIMANT HAS ESTABLISHED THAT THE DEFENDANT BREACHED
CLAUSE 3 OF THE CONTRACT OF EMPLOYMENT DATED APRIL 9, 2018
The LDC submitted that throughout the Claimant
allegation that the Defendant breached Clause 3 of the employment contract
dated April 9, 2018, which includes confidentiality and non-compete provisions.
The allegation is without an iota of evidence to substantiate the breach of
confidentiality and non-solicitation agreement, after his employment ended.
The burden of proof of breach lies on the Claimant who alleged the breach he
cited Mbogu v Shadrack (2007) LPELR 8368 (CA). In the case of Coco v.
AN Clark (Engineers) Ltd (1969) RPC 41 (1968) FSR 415, it was held that
proving a breach of confidentiality requires showing that the confidential
information which existed, was in the Defendant's custody, and was
used to harm the Claimant.
On the requirement of proving breach of
confidentiality, the Courts have held that the duty of confidentiality
must be owed by the Defendant and must be proved to have
been disclosed without the consent of the Claimant.
31. From the evidence of the Claimant, it has not been
able to establish through evidence/document that the alleged information stated
in Para 7 of the SOF are confidential information and do not reside with the
Defendant but in the corporate archives of HSCL.
Neither was the Claimant able to establish or show
that the information in para 7 of the SOF was imparted by the Defendant since
there is no proof the Defendant was the custodian of the information. The
Claimant was not able to show any unauthorized disclosure/use of the alleged
information to its detriment. Having shown at trial that SETY Ltd is not in
same line of business as Halogen SCL, therefore the evidential burden placed on
the Claimant has not been discharged and shifted. See FRN v Mamu (2020)
15 NWLR (Pt. 1747) 303.
32. LDC submitted
that although Defendant was the HCS, there is no document, neither is there a
term of the contract, nor was it shown by any evidence before the Court that
Defendant was the custodian of the alleged confidential information as alleged.
33. The
Defendant was obliged to report his work/activities to management, who was the custodian
of the confidential information domiciled in the corporate archives of the GCEO
& Management. His job description did not place him in direct custody of
the confidential information also DW1 acknowledged that the sensitive
information is either in the custody of the CEO or the SERVER where company
information, sensitive files & document is domiciled. The essence was to
ensure continuity and wide spread knowledge to avoid dependency risk on
persons.
34. LDC
submitted that the custodians would be the subsidiaries who are the primary
stakeholders & sole revenue drivers of Halogen SCL and directly under the
offices of the CEO & PMO of the company. Besides, DW1 acknowledged the
subsidiaries execute & implement the business strategic plans of the Claimant.
35. The LDC
submitted that pleadings do not constitute evidence, Halogen SCL has not shown
any evidence that the mere fact of the Defendant joining SETY Ltd disclosed
confidential information to SETY Ltd. The Court cannot be left to speculate. CW1
also during trial, told the Court he had no documentary evidence before the
Court to support his statement in para 19 and 20 of his WSOO that the Defendant
revealed confidential information to SETY Ltd.
36. LDC
submitted that Claimant had failed to adduce evidence showing the breach of the
non-compete agreement by joining SETY Ltd. It maintained that SETY Ltd was not
in same line of business as Halogen SCL, otherwise why did Halogen SCL not
tender its MEMO of Association to enable the Court deduce and not speculate on
the object clause of the Claimant in relation to the question if SETY was in same line of business with
Halogen SCL.
Additionally,
Sety’s Memorandum of Association shows its focus on ICT solutions, not security
services, underscoring that it does not compete with the Claimant. Therefore
Halogen’s brochure cannot take the place of its Memo of Association.
37. LDC
submitted that Halogen and SETY Ltd are not competitors, the brochure does not
disclose the 2 companies have same business objectives.
SETY Ltd is a
social impact company and its core is ICT, it provides ICT solutions by
creating tools and infrastructure different from what Claimant provided for in
para 6 of its SOF.
Therefore, SETY
Ltd provides services which Claimant as a security company cannot provide. The
MOU entered shows they were set to enter a strategic business partnership based
on collaboration. If both companies were in same industry, he submitted it
would not have been possible to enter a MOU. He therefore submitted that the
Claimant failed to prove that the Defendant has exposed confidential
information and thereby breached the non compete clause.
38. ISSUE 2:
WHETHER FROM THE FACTS AND EVIDENCE LED, THE CLAIMANT IS ENTITLED TO THE
RELIEFS SOUGHT IN THIS SUIT
39. The Claimant
seeks a Court declaration and general damages against the Defendant for
allegedly breaching the confidentiality and non-compete obligations in their
employment contract (Clause 3 of Exhibit C2). The Claimant argues that the
Defendant’s employment with Sety Limited—a presumed competitor—puts the
Claimant's confidential information at the disposal of SETY Ltd.
40. The
Defendant counters that he has adhered to confidentiality and non-solicitation
terms, maintaining there is no conflict of interest with the Claimant’s
business.
41. That no
evidence was presented by the Claimant to prove any disclosure of confidential
information or competitive threat. The evidence submitted (by Sety Limited)
which is its Certificate of Incorporation and Memorandum demonstrates that Sety
Limited operates in a distinct field (IT and software) unrelated to the
Claimant’s security services, eliminating grounds for a non-compete breach.
In the case of Gambo
v. Ikechukwu (2011) 17 NWLR (Pt. 1277) 561, the Court held that; it is
quite plain that the relief of general damages not only requires proof of
alleged acts in breach of the contract between the parties, but credible
evidence is also required to prove the extent of general damages claimed by the
Plaintiff.
CLAIMANT’S FINAL
WRITTEN ADDRESS & ISSUES FOR DETERMINATION
42. ISSUE ONE:
WHETHER THE CLAIMANT IS ENTITLED TO JUDGEMENT IN THE ABSENCE OF A VALID AND
COMPETENT EVIDENCE BY THE DEFENDANT
43. ISSUE TWO:
WHETHER THE DEFENDANT OWED THE CLAIMANT A DUTY OF GOOD FAITH AND LOYALTY IN THE
COURSE OF HIS EMPLOYMENT
44. ISSUE THREE:
WHETHER THE CLAIMANT HAS PROVED HIS CASE TO BE ENTITLED TO THE RELIEFS SOUGHT.
45. ISSUE FOUR:
SPECIFIC RESPONSE TO THE DEFENDANT’S FINAL WRITTEN.
46. The Claimant
argues that the Defendant’s witness statement is legally defective and
therefore inadmissible, as it was signed outside the presence of a Commissioner
for Oaths, violating statutory requirements, therefore, the Defendant has no
evidence on record, effectively making the Claimant’s case unopposed. In Wurbo
& Anor v. Ahmed (2024) LPELR 61855(CA), the Court held that, statements
signed improperly cannot be accepted in Court.
47.
Consequently, without admissible evidence from the Defendant, the Defendant's
pleadings are deemed abandoned, and the Claimant’s claims stand unchallenged.
48. The Claimant
argues that the Defendant breached his duty of loyalty, fidelity, and good
faith by joining SETY as its MD/CEO while still employed as Group Head,
Corporate Strategy at Halogen. In Afolabi v. NNPC (2011) 12 NWLR (Pt.
1265) the Court held, an employee must act in the employer's best interest and
avoid conflicts.
49. The Claimant
states that, the Defendant while as HCS of Halogen, he led strategic business
partnership discussions with SETY Ltd, which continued up until his resignation
in November 2021. During these discussions, the Defendant allegedly
"double-dealt" by preparing to join SETY LTD, a competitor, creating
a conflict of interest. In Agomuo v. Fidelity Bank LTD (2023)
LPELR- 60663 (CA), it was held that any action by an employee that diverges
from the employer's interest constitutes a conflict of interest. The
Defendant's actions, therefore, violated his duty of loyalty, causing significant
detriment to Halogen's interests.
50. The LCC
submits that the Claimant is entitled to the reliefs because it has proven that
the Defendant breached a valid non-compete clause in his employment contract by
joining SETY LTD, a company in the same industry, soon after leaving the
Claimant. Clause 3 of the contract bars the Defendant from joining
competitors within two years, a restriction supported by legal precedents and
the Federal Competition and Consumer Protection Act (FCCPA).
In GILFORD
MOTOR CO. LTD v. HOME (1933) ALL ER 109- the non-compete clause prohibited
the managing director from dealing with any of the company’s customers and
partners and the Court upheld the clause as valid since a managing director
occupied a position of trust which affords him access to the employers trade
secrets.
51. The Claimant
requests N50,000,000 (50Million Naira)
in general damages and N2,000,000
(2Million Naira) in costs, arguing that these sums are reasonable given the
Defendant’s conduct and capacity to pay. The Defendant inaccurately added the
phrase "or evidence" to a question asked during the cross-examination
of the Claimant's witness about documentary evidence of trade secret
disclosure.
52. The
Claimant argues that proving trade secret disclosure often does not rely on
documentary evidence, as it is the natural consequence of breaching a
non-compete clause. In conclusion, the Claimant urges the court to
grant all requested reliefs based on the arguments presented.
53. DEFENDANT’S
REPLY TO THE CLAIMANT’S FINAL WRITTEN ADDRESS DATED SEPTEMBER 17TH, 2024
In response to
Preliminary issue that the WSOO of April 5, 2024, should be dismissed for not
being signed before a Commissioner for Oaths
The Defendant
refuted that the witness statement on Oath was properly signed at the National
Industrial Court Registry before the Commissioner, as confirmed by an Affidavit
of Facts dated July 16, 2024, with court records showing the Defendant’s
presence on April 5. The Defendant attributes his contradictory testimony
during cross-examination to a misunderstanding and asks the Court to consider
the affidavit evidence in resolving the matter fairly.
54. ORAL
TESTIMONY CANNOT CONTRADICT THE CONTENTS OF A DOCUMENT
The Defendant
argues that when oral testimony conflicts with documentary evidence, such as
the Affidavit of Facts dated July 16, 2024, documentary evidence should
prevail, see Ibrahim v. Abdallah (2019) 17 NWLR (Pt. 1701) SC 293 Pp310
Para-F. 59.
The Defendant
asserts that his Witness Statement on Oath was properly sworn before the
Commissioner for Oaths, supported by Court records, and that the Claimant
misapplied the Daniel v. INEC case.
The Defendant
further clarifies that his oral statement during cross-examination, where he
mistakenly referred to signing his statement at his lawyer's office, does not
invalidate the official document.
55. EVIDENCE
(THOUGH ELICITED FROM CROSS-EXAMINATION) NOT PLEADED, GOES TO NO ISSUE
The Defendant
urged the Court to disregard the Claimant's argument about the Defendant's
Witness Statement on Oath, as the issue was not raised in any pleadings. In the
case of Ayih & Ors v Jatau & Ors (2024) LPELR— 61775 (CA) (pp.21-27
Paras D -C), the Court held that cross-examination on unpleaded facts is
inadmissible.
56. ON WHETHER
THE COURT’S RELIANCE IN THE DEFENDANT’S AFFIDAVIT OF FACTS DATED JULY 16, 2024
WOULD AMOUNT TO A BREACH OF THE CLAIMANT’S RIGHT TO A FAIR HEARING.
The Defendant
argued that the Claimant's objection to the Defendant's Affidavit of Facts,
alleging a breach of fair hearing, is invalid as the Claimant did not file a
Counter-Affidavit to challenge the facts presented.
57.
ADMISSIBILITY OF THE DEFENDANT’S WITNESS STATEMENT ON OATH IN THE UNLIKELY
EVENT THAT THIS HONORABLE COURT UPHOLDS THE DISPUTED ARGUMENT THAT THE
DEFENDANT “SIGNED” HIS STATEMENT ON OATH AT HIS LAWYER’S OFFICE AND NOT BEFORE
THE COMMISSIONER FOR OATHS OR NOTARY PUBLIC.
The Defendant
argued that in the unlikely event that the Court finds that the Defendant's
witness statement on oath was signed in the lawyer’s office (which is not
admitted) such circumstance does not render the witness statement on oath
inadmissible.
That neither
section 112 of the Evidence Act nor section 5 and 10 of the Oaths Act mandate
that a despondent must sign before a commissioner for oath and that the
requirement is solely related to swear.
58. In reply to
the claimant’s argument in paragraphs 5.2.1 to 5.2.7 that the defendant
breached his Duty of good faith and loyalty in the Course of his Employment.
The Defendant
denies breaching his duty of good faith and loyalty during or after his
employment and Evidence shows that he continued negotiating a potential
collaboration between the Claimant and Sety after his resignation, with the
Claimant's knowledge and approval.
That the
Claimant has not provided evidence to support the claim of double trading or
breach of loyalty, and the Defendant acted in the Claimant’s interest. The
Defendant's employment with Sety is not a conflict of interest, as SETY Ltd
operates in a different sector. In Celtel (Nig) Ltd. v. Econet wireless Ltd
(2011) 3 NWLR (Pt. 1233) 156 Pp 169 Para-C-E, it was held, a party relying on
such averment in an affidavit must set out the facts constituting the alleged
bad faith. He who alleges proves.
59. ON THE NEED
TO PROVE ASSERTION OF DISCLOSURE OR MISAPPROPRIATION OF TRADE SECRETS.
The Defendant
stated that, Claimant wrongly asserts that it does not need to prove the
Defendant disclosed its trade secrets to Sety Limited, relying on foreign case
law. However, in North Atlantic Instruments, Inc v Fred Herber and Apex
Signal Corp 188 F. 3d 38(1999), it was held that where the Claimant alleged
disclosure, he bears the responsibility of proving such allegations.
The Claimant has
failed to provide evidence of the Defendant’s alleged disclosure, as admitted
during cross-examination.
Furthermore, the
doctrine of "inevitable disclosure" does not apply in this case, as
SETY Ltd and Halogen SCL are not competitors, and the Defendant's actions do
not suggest trade secret misappropriation.
60. WHETHER THE
COURT CAN SPECULATE ON AND/OR DETERMINE THE LEGITIMATE ACTIVITIES OF A COMPANY
OUTSIDE OF ITS MEMORANDUM AND ARTICLES OF ASSOCIATION.
The Defendant
stated that the Claimant misinterpreted Section 35(1) of the Companies and
Allied Matters Act 2020 (CAMA), overlooking the full context of Section 35(2),
which requires amendments to a company's objects to be registered.
61. Sections
27(1) and 44(1) of CAMA emphasize that a company’s activities are limited to
its Memorandum of Association, which the Claimant has not provided to the
Court, thus inviting speculation, which the Court should avoid.
62. That the
Claimant's allegation that the Defendant misrepresented Court proceedings is
unfounded, as the Defendant’s cross-examination accurately referenced the lack
of documentary evidence for the Claimant’s trade secret claim.
63. The Defendant
concludes by urging the Court to uphold his right to fair hearing, dismiss the
Claimant's suit for lack of evidence, and reject the reliefs sought, as the
Claimant has failed to prove it
64.
Resolution of preliminary issues
Two issues arose during trial, firstly, the LDefence
Counsel raised objection to the admissibility of two (2) documents, he argued
that they were not frontloaded he was seeing them for the first time and they
should be discountenanced by the Court. Besides, this was contrary to S. 36 of
the Constitution of the FRN 1999 and the Courts frown at trial by ambush. In
response, the Claimant’s Counsel argued that the Evidence Act governs
admissibility of evidence and what is important is that the documents in question
were pleaded. The Court was referred to the list of documents, the documents in
question were listed as No 1 and No 4 respectively. LCC cited paragraph 3 &
13 of the SOF where the two (2) documents were pleaded, he called in aid S.12
of NIC Act 2006 and urged the Court to disregard technicality. In agreement with
Counsel, the documents were admitted and marked as Exh C1 and Exh C4
respectively. The Court then directed Counsel to raise the issue at the Final
Written Address Stage. The Court has noted this issue was not raised by both
Counsel, in the circumstance the Court will regard the objection as
abandoned.
65. On the 2nd issue, during cross examination, the Defendant who
testified for himself was asked:
Claimant Counsel Q--“a few minutes ago you adopted a WSOO and you
signed it?
DW1
A--Yes
Claimant Counsel
Q--Did you sign it in your office or in your lawyer’s office?
DW1 A---in my lawyer’s office.
Claimant Counsel
has argued in his Final Written Address that DW1’s WSOO dated April 5, 2024
ought to be expunged, same having not been allegedly signed before the
Commissioner for Oaths.
The Defendant
submitted in his Reply that the said WSOO deposed to on the 5th day
of April 2024 was indeed deposed to at the registry of the National Industrial
Court Registry and before the Commissioner for Oaths, as evidence from the
certified records of the Court in the Affidavit of facts dated July 16, 2024.
66. DW1 filed an affidavit of Facts, to prove that the
Defendant was at the registry of this Honourable Court on the 5th day
of April 2024 as borne out from the CTC of the attendance records of the Court
Registry, that the deponent who appeared before the Commissioner for Oaths on
April 5, 2024 to depose to his WSOO, is listed as number 9 on the record.
LDC further
argued that the Defendant had never appeared before a Court or in a Court/trial
proceedings he only visited the lawyer’s office to brief and give instructions
on his defence, he therefore became unsettled and misunderstood the question
posed to him, to relate to his being at his Lawyer’s office to brief Counsel on
the matter and provided a contradictory response. During re-examination this
ambiguity could not be cleared due to the objection raised by the Claimant’s
Counsel.
67. In resolving
this issue, the Court notes that the law requires such documents to be
signed/endorsed before the Commissioner for Oath, as a mark of consent and
evidence of actual submission to the Oath or affirmation, which the whole exercise
purports to portray.
Generally, the law
does not allow the form of an oath or affirmation to vitiate the oath or
statement made under the oath or allow the absence of oath or affirmation to
prevent the admissibility of evidence that should be on oath. See Adejugbe v Aduloju (2022) 3 NWLR (Pt. 1816)
131 at 158, para. A.
69. Section 13 of
the Oaths Act requires a deponent to appear physically before a Commissioner of
Oaths or the person authorised to administer the oath. See Ashiru v INEC (2020) 16 NWLR (Pt. 1751) 416 at 442, paras. B-D.
There appear to be divergent view on the nature of a WSOO, some authorities
categorise it as an affidavit, other hold the view that it is part of a party’s
pleadings until it is adopted it becomes evidence. See Ashiru v INEC (supra), Funtua v Tijjani (2011) 7 NWLR (Pt. 1245) 130 at
149, paras. C-E.
69. LCC was by his
question not attacking the capacity of DW1 to tell the truth while in the
witness box. His question though not pleaded was material to ascertain that
DW1’s deposition was administered before a person duly authorised to administer
oaths.
70. DW1 had adopted
his WSOO before he was asked the question of where he signed his deposition.
The law requires objections to supposed defective witness statement on oath to
be raised timeously, before its adopted as it becomes evidence thereafter. The
Court held in Registered Trustees of Roman Catholic Mission of the
Archdiocese of Onitsha & Ors v. Edoziuno (2021) LPELR 56188 CA (pp.
15-18 paras. C) that a witness statement on oath upon adoption becomes the
evidence in chief of the witness. If there is any objection or concern with the
witness statement such objection should be raised at the time the witness seeks
to adopt it. Once it is adopted without objection, it is no longer open to a
party to challenge the competence of the witness statement which has translated
to the witness's evidence in chief. The implication of adopting an irregular
witness statement on oath is that such adoption makes the deposition
admissible. In the instant case, the challenge raised by the appellants against
the competence of the witness statement on is at the FWA stage. "...if counsel has any objection
to the regularity of a witness statement, the proper time to raise it and draw
the attention of the Court to the said irregularity is at the point the witness
seeks to adopt same as his evidence. Once adopted, the witness statement
transforms to the evidence in chief of the witness and every objection to its
regularity becomes of no moment and I will therefore not dwell on it any
further”.
72. “If an
objection is not radical and does not go to the essence, like jurisdiction, as
opposed to mere formal objection, then such an objection must be raised at the
earliest opportunity; otherwise, the party objecting, by failing to do so on
time, may be deemed to have accepted the state of things as it was, and may
otherwise be estopped by his conduct from raising the objection in a future
date." Adopting this holding, I find that this objection not being a
radical one, assuming without conceding that it is valid, the appellants are
estopped from raising them at this late stage of the proceedings”.
73. The issue in
this case is different, as it is the practice of the Registry of this Court to
require the presence of every deponent before the process can be accepted for
filing. LCC’s question sought to disprove this practice but the Defence has
brought evidence through an affidavit that the practice is still in place and
in fact he was number nine (9) on the list of deponents that came to file
processes on the date he deposed to his witness statement on oath.
74. Section 145 of the Evidence (Amendment) Act,
2023 permits the Court to make presumptions which would be regarded as
proved unless the contrary is shown. Section
167 of the Evidence (Amendment) Act, 2023 empowers the Court to presume the
existence of any fact which it deems likely to have happened in the course of
events. In the considered view of this Court, the affidavit accompanied with a
certified true copy of the list of deponents has satisfied the Court that the practice
of the Court Registry requiring the presence of deponents is still in place,
the attempt by the LCC to disprove it notwithstanding.
75. In the light of
the affidavit evidence revealing the true state of affairs as regards before
whom DW1 deposed to his witness statement on oath, I think it is equitable and
in the interest of justice to discountenance the Learned Claimant’s Counsel
arguments on its competence or admissibility. Accordingly, the said objection
is hereby overruled. I so rule.
Court’s Decision
76. Now, as
regards the case at hand, the locus classicus on the principle on restraint
of trade is the case of NORDENFELT. v.
MAXIM NORDENFELT, (1894) A.C 535; (1891-4) ALL ER Rep. 1.111; where it was
held that Restraint
of trade arises when one or both parties agree to limit their individual
freedom to contract, especially their future freedom to freely practice their
skill, trade or profession. The general rule is that all covenants in
restraint of trade are void as being contrary to public policy in the absence
of special circumstances justifying them. A restraint of trade agreement,
whether partial or general is a restraint of trade, and once the object is to
restrict a person’s freedom in trade and competition, it is prima facie void. See
HERBERT MORRIS LTD v SAXELBY [1916] 1 AC
688 and the Nigeria case of KOUMOULIS
v A.G LEVENTIS MOTORS LTD [1971] 1 ALL NLR (PT 2) 144.
77. The crux of
the Claimant's case is that Nnamdi Melie in his position as Head Corporate
Strategy HCS was the Chief custodian of the Claimant’s business
strategies, trade secrets and tools of competitive advantage in the industry.
He therefore breached clause 3 of the contract of
employment when sometime in April 2022, he left the service of Halogen
SCL to join and become the Chief Executive Officer (CEO) of a competitor
company known as “SETY Ltd”.
78. The said
Clause 3 provides as follows:
“You shall and maintain all classified information relating
to the activities of the company in strictest confidence and for the sole
and exclusive benefit of the Halogen Group. Also, during the term of
your employment and for a period of 24 months after determination of the
employment, you shall not engage in any business in the industry which
has the same objectives as that of the
Halogen Group or with any other business or company that may in any way be
deemed as competitor of the Halogen Group”.
79. The Claimant is therefore seeking for a
declaration that the Defendant is in breach of clause 3 of its contract of
employment. Clause 3 has two arms, first arm of clause 3 provides for maintenance
of all classified information relating to the activities of the company in
strictest confidence and for the sole and exclusive benefit of the Halogen
Group. This first arm raises the issue of whether Defendant disclosed
classified information to Sety Ltd. In other words did he hold classified
information in strictest confidence?
80. The second arm of the clause restricts the Defendant during
the term and after determination of your employment and for a period of 24
months from engaging in any business in the industry which has the same
objectives as that of the Halogen Group or deemed as competitor of the Halogen
Group.
81. With regards to the first arm of the clause, a
Court does not grant declaration of right either in default or admission
without taking evidence and being satisfied that the evidence led is
credible." Per TSAMMANI, J.C.A in Skye Bank Plc v. Perone (Nig.) Ltd
(2016) LPELR-41443(CA) (pp. 44-45 paras. B-B).
82. LCC argument in his FWA that proving trade secret disclosure often does not rely on
documentary evidence, rather it is the natural consequence of the breach, a
position the law permits where there is sufficient evidence to establish the
facts asserted by the Claimant. Although, documentary evidence being the hanger
upon which oral evidence stands would have lessen this burden of proof. During
trial, CW1 was asked if he had any documentary evidence before the Court to
proof his statements in paragraph 19 and 20 in his WSOO to the effect that the Defendant
has revealed trade secrets and confidential information to SETY and his answer
was “NO, I DO NOT HAVE.”
83. It is worthy to note
that the Claimant is seeking for a declaratory relief which are not granted as
a matter of course, they must be proven by adducing credible, sufficient
evidence. In Igwebuike v. Ezeonwuka & Ors (2015) LPELR-40675(CA) (pp.
26-27 paras. B-B) it was held that "Indisputably, in an action for a
declaratory relief such as the one herein, the appellant was duty bound to
prove his claim on the strength of his own case. This is essentially so,
because declaratory reliefs are not granted on a platter of gold. They are only
granted as products of credible and cogent evidence proffered at the instance
of the Claimant, such as the appellant herein. Dumez Nig. Ltd v. Peter Nwakhoba
and Ors (2009) All FWLR (pt.461) 842 (SC); Col. Nicholas Ayanru (rtd) v.
Mandilas Ltd (2007) 4 SCNJ 388; (2007) 10 NWLR (Pt.1043) 463 at 477- 478.
85. In a bid to determine
the alleged breach, the Court has evaluated the evidence before it, to identify
the particulars of the breach? What and how were the trade secrets disclosed to
establish a violation of the first arm of clause 3.
The first arm of Clause 3 is on “Confidentiality”. The general law
relating to breach of confidence, prohibits ex-employees from using information
which "can fairly be regarded as a separate part of the employer’s stock
of knowledge, that a man of ordinary honesty and intelligence would recognize
to be the property of his old employer and not his own, to do as he likes
with." See the decision of Udoma, J.S.C in the case of Koumoulis
v. Leventis Motors Ltd [1973] LPELR-1710 (SC) (Pp. 13-14 paras.
F).
86. It
is trite law that, he who asserts must prove and that failure to prove
averments in a pleading means that they are abandoned - Olalomi
Industries Limited v. NIDB Limited [2009]16 NWLR (Pt. 1167) 266 at
303-304 & Idesoh v. Ordiah [1997] 3 NWLR (Pt.491)
P.14. The Non-Disclosure Agreement as contained in clause 3 of Exhibit C.2, the Claimant has failed to point out to the Court the
specific secrets and confidential information,
the particulars of
breach, evidence of disclosure that the
Defendant was alleged to have disclosed, the occasion or date he
disclosed it, by what means or mode he disclosed it, there is no evidence before this Court, the Claimant is speculative and lacking in
proof of material facts, what
is left for the Court to do is to speculate the particulars of disclosure. The Claimant
did not plead and provide evidence to display one incidence where the
disclosure of its secret affected her negatively or how the trade secrets
benefited Sety Ltd. This, the Courts have frown against in a plethora of cases
see Per OGAKWU ,J.C.A in UNITY BANK PLC v. RAYBAM ENGINEERING LTD (2017)
LPELR-41622(CA) (pp. 19 paras. D)
"It does appear to me that the law has been firmly ensconced that a Court
acts on the evidence before it and it is not in the place of a Court to
speculate or make conjectures."
87. All that the
Claimant stated in his pleading is that Nnamdi Melie who was HCS, by becoming
the MD/CEO of Sety, has now put all
the Claimant’s valued trade secrets at the disposal of Sety for its benefit, these include the Claimant’s strategic
business plans, customers database, market survey reports, pricing methods,
operational modules, confidential business information and other Claimant’s
critical tools of competitive advantage in the security services industry.
Reciting this averment in CW1’s WSOO does not necessarily discharge the burden
of proof placed on the Claimant in the light of the fact that the Defendant has
vehemently denied this allegation.
88. The Defendant has denied that he breached his
duty of good faith and loyalty firstly, his position was that the Claimant ran
a tiered corporate structure, the custodian of its business secrets were the
offices of the CEO & PMO, and these offices were chaired by the GCEO, even
the documents, plans and strategies were domiciled in the corporate archives
which were housed in the CEO’s office. Secondly, even after his resignation, he
continued negotiating potential collaboration between Halogen SCL and Sety Ltd.
He maintained that he could not have disclosed business strategies and secrets
because he was not the custodian of the secrets.
89. During trial CW1 was asked if he was aware
of an MOU with Sety Ltd known as Strategic Business Strategy. He replied in the
affirmative that there was an MOU with FTSL (which later metamorphosed to Sety
Ltd) which required FTSL to make substantive investment in equipment,
infrastructure and mobile devices for the operation of the collaboration. CW1
again confirmed that SETY Ltd also gave its soft code to Halogen SCL and the
collaboration was mutual.
90. The Court noted with interest, that the Defendant’s Handover notes
EXH D3 in its conclusion mentioned outstanding projects and gave some details
where some documents were domiciled. Specifically, paragraphs vi and “v ALL
Policy documents rest in the Archives WITHIN the GMD’s offices”.
The Defendant also tendered Exh D4 which is Sety Ltd’s proposal Deck to
the Claimant, under Security Coverage.
It was noted under cross examination, CW1 was asked if certain
information are domiciled in the CEO’s office and his answer was;
“it does not mean that secret documents
domiciled in CEO’s office cannot be replicated elsewhere. We have a server and
you can have access if protocol allows your designation to have access to it.”
91. This testimony is suggestive of multiple officers having access to the Claimant’s server if
protocol grants access to such individuals. Meanwhile, at Para 5 and 8 of the
SOF and CW1 WSOO, it was stated “The
Defendant, as the Group Head of Corporate Strategy of the Claimant, was the custodian
of the Claimant’s business strategies and tools of competitive advantage in the
industry.
92. Black law
dictionary defines a custodian to be a person responsible for safeguarding, a
trustee, a guardian, a person entrusted with care to supervise and manage
property, record or assets. By the above definition and description can the Defendant
be rightly defined as a custodian of the secret records of Halogen SCL? This Court
does not think so, there is no evidence to convince the Court that the Defendant
was the custodian of the secrets of the Claimant. From CW1’s evidence during
cross-examination, it is not for the Court to speculate that the Defendant was
amongst other officials who could access the server to get information if
protocol allowed. Courts do not base their decisions on speculation. This is
the finding of the Court.
The Claimant also
argued that since the Defendant is the custodian of the secret information, by
leaving the Claimant company he has disclosed the trade secrets to SETY Ltd.
This argument does not stand on a solid foundation, the Claimant has failed to
establish that the Defendant did not maintain all classified information
relating to the activities of the company in strictest confidence and for
the sole and exclusive benefit of the Halogen Group and for the reasonings the
court earlier stated. I SO HOLD.
93. FOR the
second arm of clause 3 it provides that the Defendant shall not during the term or after the determination
of employment and for a period of 24 months engage
in any business in the industry which has
the same objectives as that of the Halogen Group or deemed as competitor of
the Halogen Group.
94. What the above clause seeks to
achieve is to restrict DW1 from engaging
in any business with
same objectives as that of the Halogen Group or deemed as a competitor of the
Halogen Group.
Trade restraint
is defined by Sagay- in his book. ''Nigerian Law of Contract'', 2nd Edition at page
427 as: "A contract in restraint
of trade is one in which a party covenants to restrict his future liberty to
exercise his trade, business or profession in such a manner and with such
persons as he chooses. Prima facie such contracts are void. But where it can be
established that such restrictions are justifiable in the circumstance as being
reasonable from the points of view of the parties and the public, they are
valid and binding." See Tanksale v. Rubee Medical Centre
Ltd [2013] LPELR-21445(CA) (Pp. 27-28 paras. F).
95. In Continental
Chemists Ltd v. Ifeakandu (1966) LPELR-25293(SC) (pp. 6 paras. A) the Court held
that "After a company is incorporated, the memorandum becomes the charter
of its activities and at the same time defines its field of operation; apart
from statutory powers, anything done outside the stated objects is ultra vires
the company; it is invalid and cannot be ratified by the members: Ashbury
Railway Carriage and Iron Co. v. Riche (1875) L.R. 7 H.L. 653, in which Lord
Cairns said (at 667) that the rule served the dual purpose of protecting both
investors and creditors. But the rule is applied liberally so that whatever is
fairly incidental to the objects stated in the memorandum (unless expressly
prohibited) is regarded as intra vires: Attorney-General v. Great Eastern
Railway Co. (1880) 5 App. Cas. 473."
Per BAIRAMIAN, J.S.C.
96. In the instant case, the time frame for the RESTRICTION is 24 months.
It is common place that generally all
covenants in restraint of trade are
prima facie unenforceable in common law. They are enforceable only if they are
reasonable with reference to the interest of the parties concerned and of the
public. See Koumoulis v. Leventis Motors Limited [1973] LPELR-1710(SC);
[1973] All N.L.R 789; [1973] 11 SC 100, Overland Airways Ltd v. Captain
Raymond Jam [2015] 62 NLLR (Pt. 219) 525, The Market Research
Consultancy Limited v. Mr Pradipta Kumar Mitra & Anor, (unreported,
Suit No. NICN/LA/532/2014), the judgment of which was delivered on 19th
January, 2017 and MRS Holdings Ltd v. Ibrahim Akar unreported Suit No.
NICN/LA/225/2014, the judgment of which was delivered on 21st June,
2016.
98. What this means is
that covenants in restraint of trade (non-compete clauses) are unenforceable
except it is shown to be reasonable; and it is the party seeking to enforce it
that has the onus of proving that it is reasonable. In the instant case, it is the
Claimant who must show that the non-compete clause in Exhibit C2 is reasonable.
99. During
cross examination, the Defendant testified that his educational qualification
was B.Sc Insurance; MBA; Professional Certification at Chartered Institute of
Insurance LONDON, by Exh C2, he is restricted from engaging in a company deemed
to be in competition with Halogen SCL for 24 months, there was however no
geographical coverage specifying whether the restriction is to Lagos-Nigeria, West
Africa or global. This clause therefore restricts Nnamdi Melie from engaging in
any BUSINESS IN THE INDUSTRY WHICH HAS THE SAME OBJECTIVES AS THAT OF HALOGEN
GROUP for a period of 24 month approximately 2 years. Is this a reasonable
restriction?
How is he expected to earn a living, if is he to
exit the industry entirely? Not forgetting the fact that the Claimant is a
private security service company, the clause is silent on whether the Defendant
is restricted only to the private sector or to the public sector as well.
101. In addition, this Court is saddled with
the responsibility of determining whether the Claimant and SETY Ltd are engaged in same business with same objective and therefore competitors? The Court
in other to determine the objective of the Claimant has to place their objectyives side by side to determine whether the 2 companies are
engaged in the same business in the industry.
Parties are in agreement that exhibit C2 is a subsisting contract of
employment between the parties and Claimant is seeking a declaration that
clause 3 was breached by the Defendant. To the Defendant, the Claimant's business
is different from that of the company the Defendant joined after leaving the
employment of the Claimant.
102. This Court noted with dismay the strategy of the Claimant not to
tender its Memorandum of Association since the core of this matter is whether
the Defendant is engaged in a business which has the same
objectives and therefore competitors before making a determination whether the
Claimant and SETY Ltd are engaged in the same business.
The Defendant has argued that the object and
business of SETY Ltd is IT and Software development, Defendant exhibited its
Memo & Articles of Association Exh D2 and the object for which the company
is established are:
a. Information Technology and Software Development;
b.
Computer
ICT and Technology;
c.
Other
incidental including (but not limited to) entering into legal contracts,
production, transportation, logistics, acquisition, transfer, and ownership of
fixed and movable assets (locally and internationally) all other such legal
acts necessary to the attainment of its objectives;
d.
Develop
a Digital Market places bringing together supply and demand players using
intelligent platforms for efficient transactions;
e.
Develop
platforms, ecosystems, and social interaction tools for relevant stakeholders
and the public;
f.
Carry
out digital transformation projects;
g.
Provide
AI-powered analytics and technology advisory services;
h.
Provide
technology project management services;
i.
Develop
and deploy hardware and software infrastructure;
j.
Engage
in M&A, JV and other endeavors to fulfil capability-building engagements;
k.
To
do all such other things as may be considered incidental or conducive to the
attainment of the objects or any of them.
100. The Claimant tendered its brochure Exhibit C1, aka Company
profile, which gives a comprehensive background about the company, who they are
and how the company works through technology & knowledge, its emergency
response framework, its achievements and commitment, its key strength, statutory
compliance status and strategic response to the future of security. The object
of the Claimant is still hazy as there is no MEMO of Association tendered to
help the court in this regard.
101. The Court had to resort to the SOF para 1-3, where the Claimant introduced
and described herself as
a limited liability company registered under the laws of the Federal Republic
of Nigeria and carries on the business of security services. The Claimant avers
that it is a popular security services company in Nigeria and its services and
products include the following:
(i)
Emergency
security response.
(ii)
Development
and deployment of security and safety solutions for corporate organisations and
private individuals.
(iii)
Development
and deployment of security and safety networks and infrastructures including
security monitors, softwares, security awareness services, and protocols.
(iv)
Provision
of security guards.
102.
also in the MOU marked Exh C6, the responsibilities of both parties are spelt
out clearly. For Halogen SCL, it is to
include provision of liason services and engagement with government security
agencies, provision of capacity and capability training for service personnel, provision of valid and
relevant operational permit for response services from NIGERIA SECURITY AND
CIVIL DEFENCE CORPS & other agencies, amongst others, the responsibility of
FTSL (SETY Ltd) is to manage digital ecosystem infrastructure, provision of
unique mobile and web service interfaces
for each distinct stakeholder and intelligence report etc.
103. Whether or not a covenant in
restraint of trade is reasonable is a question of fact and depends on the
circumstances of each case. The Claimant has the burden to proof its
reasonability which is often determined by reference to such factors as the
interest of the parties and the public, the geographical area of coverage, the
economic activity covered and the duration of the applicability of the clause,
see unreported judgment delivered by the President of this Court, Hon. Justice
B.B. Kanyip, Ph.D on July 11, 2018 in Suit No: NICN/LA/170/2014
between Infinity Tyres Ltd. v. Mr. Sanjay Kumar & 3 Ors
104. A non-compete clause is first and foremost a covenant
in restraint of trade and so
unenforceable except if it can be shown to be reasonable. The non-compete
clause in Exhibit C2 is thus prima facie unenforceable. Like I pointed out, it
is the Claimant that must show that it is reasonable and hence enforceable. It
is my finding and holding that from the object clause of Exh D2, the self-
description of the Claimant in the SOF and WSOO, a comprehensive reading of the
MOU Exh C6, the 2 companies are both in the security sector but rendering
different services to their clients. From the MOU tendered, his Court is
convinced that the Claimant is private Security regulated by the Nigerian
Security & Civil Defence Corps NSCDC, the Ministry of Interior certifies it
before it can operate in Nigeria. This is due to the peculiar services it renders in a private
capacity in the security architecture of Nigeria. While the Defendant is an Information Technology Computer ICT and Technology
service provider and into Software
Development;
105. The
strategy of not tendering the MEMO of Association of the Claimant has left the Court
with no option but to speculate the specific objects of the Claimant which the Courts
have frown against. As for the restrictive clause, as earlier mentioned, the
Agreement on restriction of the Defendant is open ended, it will be
unreasonable and permanently against the interest of the Defendant. Therefore,
I further hold that the two arms of the clause are not enforceable, neither are
they binding on the Defendant in this case.
106. In view of the findings above, the DECLARATION that the Defendant is in
breach of Clause 3 of its contract of employment with the Claimant dated 9th
April, 2018 is hereby declined. Relief one fails
107. The Claimant
is also seeking N50,000,000 (Fifty Million Naira) only being general damages for breach of contract.
"General damages are those damages that the law presumes as flowing from
the wrong complained of by the victim. see Mbata & Anor v. Amanze (2017)
LPELR-45212(CA) (pp. 20-21 paras. E). The first relief being the foundation
and having failed, Relief two is
declined and it is dismissed.
108. The Claimant is seeking N2,000,000.00 as costs. Authorities abound that the award of cost is
entirely at the discretion of the Court, and that costs follow the event of
litigation. The award of costs involves a judicial discretion which must be
exercised on fixed principles that accords with rules of reason and justice and
not according to personal opinion or sentiments. In view of the circumstance of the case, I
make no order as to cost.
109. Judgement is entered accordingly
Hon.
Joyce A. O. Damachi
Judge