NICN - JUDGMENT
IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
BEFORE HIS LORDSHIP:
HON. JUSTICE M. N. ESOWE
DATE: JULY 19, 2023
SUIT NO.: NICN/LA/03/2023
BETWEEN
MR AKINTOLA OLUSEGUN ADEKUNLE CLAIMANT/APPLICANT
AND
1. GMUNU LIMITED
2. MR NSIKAN UFOT UDOH DEFENDANTS/RESPONDENTS
REPRESENTATION
Chinomso Eze, Esq for the Claimant
Uwadiale A. Otokwene, Esq for the Defendant
RULING
1. INTRODUCTION
2. This is the ruling of the Court on the Claimant/Applicant’s application brought pursuant to relevant laws and rules of Court and under the inherent jurisdiction of the Honourable Court seeking the following:
a) AN ORDER OF MAREVA INJUNCTION restraining the Defendants/Respondents, their agents, officers, and assigns from operating the account(s) maintained with the Banks listed in the Schedule hereto including issuance of cheques, bank drafts, cash withdrawals or anything howsoever that would cause any sum of money amounting to N6,417,065.93 be removed from the said accounts, pending the hearing and determination of the substantive matter before this Honourable Court for the resolution of the dispute between parties.
b) AN ORDER OF MAREVA INJUNCTION restraining the Defendants/Respondents jointly and severally by themselves, officers, agents, servants, privies, trustees, nominees, proxies or otherwise any other person natural or artificial howsoever called from tampering with, drawing down, withdrawing, transferring, dealing with, depleting and or otherwise dissipating the judgment sum of N6,417,065.93 paid into or about to be paid into the Registry of this Honourable Court in favour of the Defendants/Respondents pending the final determination of this suit.
c) AN ORDER directing the Banks listed in the Schedule herein to disclose before this Honourable Court the balance in their respective accounts maintained by the Defendants/Respondents to the tune of the sum of N6,417,065.93.
3. The last prayer is the omnibus prayer, the grounds upon which the application is brought are as contained on the face of the motion paper. In support of the application is a forty-seven (47) paragraph affidavit deposed to by the Claimant/Applicant himself, attached thereto are several documents marked as exhibits J & G1 to J & G6 respectively. In his written address, the Claimant/Applicant formulated a sole issue for determination, to wit:
4. Whether having regards to the circumstances of this case the Claimant/Applicant has shown sufficient interest and right as to be entitled to an order of mareva injunction.
5. Canvassing arguments on the said issue, Learned Claimant’s Counsel submitted that an application of this nature calls for the exercise of the Court’s discretion which must be exercised judicially and judiciously. Applications of this nature can be made in cases of extreme urgency – UTB Ltd v Dolmetsch Pharm (Nig) Ltd (2007) 16 NWLR (Pt. 1061) 520. Mareva or freezing injunction is granted when there is evidence that the debtor is acting in a manner likely to frustrate subsequent order of the Court – Akingbola v Chairman, EFCC (2012) 9 NWLR (Pt. 1306) 475. As touching the guiding principles for the grant of a mareva injunction, the Applicant has a justifiable cause of action; has raised in his supporting affidavit the fact that there is real and imminent risk that the Defendant will remove his assets from the Court’s jurisdiction thereby rendering nugatory any judgment the Claimant may obtain.
6. Counsel proceeded to contend that the Applicant has made full disclosure of all material facts relevant to the application; and has given full particulars of the assets within jurisdiction. That the balance of convenience is on the side of the Applicant and that the Applicant undertakes or is prepared to give an undertaking as to damages. Counsel relied on these authorities amongst others in pressing forward his point: IFC v DSNL Offshore Ltd (2008) 7 NWLR (Pt. 1087) 592 at 602, C-F, Efe Finance Holdings Ltd v Osagie, Okeke, Otegbola & Co (2000) 5 NWLR (Pt. 658) 536, Buhari v Obasanjo (2003) 17 NWLR (Pt. 850) 587, Kotoye v CBN (1989) 1 NWLR (Pt. 89) 419. Counsel urged the Court to grant the reliefs sought by the Claimant/Applicant on the motion paper.
7. RESOLUTION
8. Upon careful review and consideration of the facts and circumstances of this suit, the Claimant’s originating processes, the Claimant/Applicant’s depositions and the submissions of Learned Counsel in support of the grant of this application, this Court distils the issue below for determination, namely:
9. Has the Claimant/Applicant placed sufficient material before the Court to exercise its discretion to grant this application in the interest of justice.
10. Learned Claimant/Applicant’s Counsel has rightly argued that an application of this nature calls for the exercise of the Court’s discretion, which discretion must be exercised judicially and judiciously – UBN Plc v Pam (2016) 14 NWLR (Pt. 1533) 400 at 420, E-F. The doctrine of mareva injunction operates to stop or as it were to restrain a Defendant against whom a Claimant has a good arguable claim from disposing of or dissipating his assets pending the determination of the case or pending payment to the Claimant. The injunction can also be granted against anybody who is in possession of the Defendant’s assets. See A.I.C Ltd v NNPC (2005) LPELR -6(SC), Sotuminu v Ocean Steamship Nig Ltd (1992) 5 SCNJ 17-22.
11. In the instant case, the Claimant/Applicant is seeking this mareva or freezing injunction to restrain the Defendants/Respondents or anyone acting for or through them from operating by withdrawal or howsoever the account(s) maintained by the Defendants in the eighteen banks listed in the schedule of the motion paper that would cause the sum of N6,417,065.93 to be removed from the said account(s) pending the hearing and determination of this suit. He also seeks an order that the said sum the Defendants should be restrained from dissipating or tampering with be paid into the Registry of this Court pending final determination of this suit. The Applicant also seeks a disclosure order directed at the eighteen (18) banks listed on the schedule of his motion paper to state before the Court the account balance of the Defendants for account(s) maintained by the Defendants/Respondents.
12. The Court in the case of Compact Manifold & Energy Services Ltd v West Africa Supply Vessels Services Ltd (2017) LPELR – 43537 (CA) stated the conditions or guiding principles a Court should consider in granting or refusing an application for mareva injunction when it held inter alia: “In an application for mareva injunction, the Applicant has the burden to establish by relevant and cogent facts in the supporting affidavit all of the following, to wit: (a) He has an action against the Defendant within jurisdiction. (b) He has a good arguable case. (c) The Defendant has assets within jurisdiction and must give the particulars of such assets. (d) There is a real and imminent danger that the Defendant will remove the assets from jurisdiction and thereby render nugatory any judgment which the Plaintiff may obtain. (e) He must give a full and frank disclosure of all material facts relevant to the application. (f) He must show that the balance of convenience is on his side. (g) He must be prepared to give an undertaking as damages. See Third Chandris Shipping Corp v Unimarine S.A. (1979) 2 All ER 972.
13. Taking into consideration the true purport and essence of mareva injunction, which is in the nature of a ‘quatimet’ action, the law does not require that an Applicant, in an action commenced in personam, who applies for such an order, intended to secure primarily assets of the Defendant within the jurisdiction of the Court from being fritted away or dissipated before judgment, should establish a cause of action against the object or asset, the subject of the order of mareva injunction...”
14. The Claimant’s grievance against the Defendants going through his Complaint and Statement of Facts appears to be failure of the Defendants to pay his complete emoluments or entitlements and remit deductions made there from to appropriate authorities. This to this Court is an arguable case or justifiable good cause of action; the strength of which or the likelihood of its succeeding is not in issue at this stage of the proceedings. What the Court considers at this stage is whether or not there is a suit within the Court’s jurisdiction and the said suit is an arguable case or has a reasonable cause of action. In other words, a good arguable case is simply one that states a factual situation which if substantiated will entitle the aggrieved party to judicial relief. On meaning of cause of action see: Maza v Awuna (2023) 2 NWLR (Pt. 1868) 207, Fidelity Bank Plc v M.C. Ind. Ltd (2022) 7 NWLR (Pt. 1829) 351, Frozen Foods (Nig) Ltd v Ojomo (2022) 14 NWLR (Pt. 1850) 299.
15. A cardinal ingredient for the consideration of an application of this nature is that the Applicant must give frank and full disclosure of material facts relevant to the grant of the application which includes giving the particulars of the assets within the jurisdiction. See Order 20 Rule 2 of the National Industrial Court of Nigeria (Civil Procedure) Rules, 2017 which provides: “The application for attachment shall contain details of the property required to be attached, and the estimated value thereof so far as the Claimant can reasonably ascertain, and the Claimant shall, at the time of making the application declare that to the best of the Claimant’s information and belief, the Defendant or Respondent is about to dispose of or remove the property with the intent stated in Rule 1 of this Order.”
16. Going through the Applicant’s supporting affidavit, the Court realizes that allusions were made as touching the 2nd Defendant/Respondent supposed private property somewhere on Banana Island, Ikoyi, Lagos State, the details of the property as regards, its precise location or address, the description of the structure and the estimated value thereof were all left out. The Claimant/Applicant was also silent on who owns the property used as the 1st Defendant’s office at Oniru, Lekki Phase 1, Lagos State, its details, its estimated value. It may be true that any attachable asset of the Defendant can be restrained by mareva order though not subject-matter of the dispute giving rise to the suit, it is also a requirement as stated earlier that the Applicant give full particulars of the assets within the jurisdiction.
17. The approach the Applicant has taken in the instant case, as reflected by its prayer three (3) on the application under consideration is to use the Court’s machinery to embark on investigation of the attachable asset(s) of the Defendants/Respondents in the listed banks. The Court cannot favourably exercise its discretion in favour of the Applicant where there is no sound evidence that the Defendants/Respondents have funds with the listed banks – AIC Ltd v NNPC (2005) 11 NWLR (Pt. 937) 563, Sotuminu v Ocean Steamship Nig Ltd (supra). This Court is not quite satisfied that the Applicant herein has fulfilled the requirement of giving full or adequate particulars of the asset within jurisdiction to warrant the Court exercise its discretion in his favour.
18. On the issue of frank and full disclosure of material facts relevant to the application, the Applicant in his supporting affidavit alluded to the fact that in the course of the Covid-19 pandemic, the Respondents, particularly, the 1st Respondent slashed his salary by certain percentages and was not consistent in paying his entitlements as and when due. Although the 2nd Defendant/Respondent had in 2019 made representation of the financial strength of the 1st Defendant, there were complaints of economic hardships or meltdowns that made it difficult for it to meet up with its financial commitments. The Applicant at paragraph 19 however maintains that the 1st Defendant is a going concern and in the business of executing projects, therefore capable of paying him all his entitlements.
19. This disclosure by the Applicant to this Court could be interpreted that the balance of convenience is not on the side of the Applicant, because if the Applicant as he puts it is aware that the 1st Defendant is a going concern, it implies the 1st Defendant has the financial where without to pay all his entitlements even after judgment is delivered. Also, if as the Applicant puts it, the 1st Defendant is still executing projects and a going concern, it suggests that the 1st Defendant has assets and will still have assets to pay any judgment sum should the Court find in favour of the Applicant on conclusion of trial.
20. At paragraph 22 of his supporting affidavit, the Applicant stated that the Defendants/Respondent created an impression that the 1st Defendant is in a state of crisis, without cogent explanation to the staff. Only to turn around at paragraph 23 to state that he has reasons to believe the 2nd Defendant/Respondent had diverted the 1st Defendant/Respondent’s funds for personal purposes which act is illegal and fraudulent. The Applicant cannot with due respect, in the name of full disclosure, approbate and reprobate in the same breath and expect the Court to pick which depositions to believe. The frank and full disclosure aids the Court is deciding where the balance of convenience lies.
21. Balance of convenience means the disadvantage to one side or the other which damages cannot compensate. See Enunwa v Obianukor (2005) 11 NWLR (Pt. 935) 100. In determining where the balance of convenience lies, the law requires some measurement of the scales of justice to see where the pendulum tilts. While the law does not require mathematical exactness, it is the intention of the law that the pendulum should really tilt in favour of the Applicant – Braithwaite v S.C. B. (Nig) Ltd (2012) 1 NWLR (Pt. 1281) 301. To me, the Applicant by his paragraph 19 has not shown what disadvantage would be occasioned which damages cannot compensate if the injunction is refused.
22. While hardship to either side of the contest is not the yardstick for granting or withholding the discretionary equitable remedy of interlocutory injunction, in order to determine where the balance of convenience lies, the Court will consider who will stand to lose more if the status quo is not maintained until the determination of the suit. See Wali v Amaefule (2014) 12 NWLR (Pt. 1421) 299, Okuruket v Nicodemus (2000) 4 NWLR (Pt. 654) 662, Oshiomhole v Salihu (No. 2) (2021) 8 NWLR (Pt. 1778) 380. If as the Applicant says the 1st Defendant is a going concern, will it suffer more inconvenience if the Court grants the mareva injunction? Or, between the Applicant and the Respondent which party will suffer less inconvenience by the grant of the mareva injunction?
23. As a going concern, granting the mareva injunction will on a surface consideration be less inconvenient to the Defendants/Respondents but if there is anything to go by that it is facing financial difficulties, granting the mareva injunction may have the effect of halting or grounding its operations. The Applicant has not placed before the Court the proper position of the 1st Defendant/Respondent, whether or not if his apprehension of the 2nd Defendant/Respondent diverting or dissipating or tampering with the 1st Defendant’s assets for personal purposes is the reason for the 1st Defendant having financial difficulties. It is not the duty of the Court to pick at this stage which is more probable, the onus is on the Applicant to place before the Court that the balance of convenience tilts in his favour. Given that the Applicant has failed to discharge this burden, this issue is resolved against him.
24. The Applicant has stated he has reasons to believe that the 2nd Defendant/Respondent had diverted the assets of the 1st Defendant/Respondent for personal purposes and that there is a real risk of the Defendants/Respondents dissipating or tampering with the judgment sum. Now the requirement of the law as touching this condition is that the Applicant believes that the Respondent has assets within the jurisdiction to meet the judgment wholly or in part, but might deal with them so that they would not be available or traceable when judgment is given against it. See Efe Finance Holdings Ltd v Osagie, Okeke, Otegbola & Co (2000) 5 NWLR (Pt. 658) 536.
25. The Applicant’s deposition at paragraph 23 is categorical that he has reasons to believe that the 2nd Defendant/Respondent had diverted the 1st Defendant/Respondent’s funds for personal purposes which act is illegal and fraudulent. This assertion is on a supposedly completed act, not one that is about to be carried out. If what the Applicant meant by this deposition is that the Respondents are dealing with their funds and assets in such a way that they would not be traceable and available when judgment is given against it, then it can be said that the Applicant has fulfilled the requirement under this heading or set out by this condition.
26. On the issue of undertaking to pay damages, in Haladu v Access Bank Plc (2021) 13 NWLR (Pt. 1794) 434, on the importance of undertaking to pay damages on an application for mareva injunction, it was held inter alia: “The undertaking as to damages by a supplicant for the equitable relief of mareva injunction is not a mere decorative or redundant condition but rather it is of the most crucial condition for the granting of an order of mareva injunction usually granted before the rights and liabilities of the parties are finally determined. It is thus, simply put, the price the Applicant must be willing and ready to pay and must therefore, so undertake to pay, for the granting of the order of mareva injunction in the event that he had obtain it without any just cause…”
27. The Applicant at paragraph 45 of his supporting affidavit stated that he was giving an undertaking to be liable to damages that the Respondents may incur if the orders sought herein by him ought not to have been granted. This Court is satisfied with the said undertaking, although the Applicant did not state his financial capability to make good the said undertaking. However, given the fact that certain of the preconditions for the grant of this application have not being satisfied, this Court is inclined to decline the grant of the mareva injunction. As the law is where an Applicant for mareva injunction fails to satisfy the Court in any of the preconditions for a grant of a mareva injunction, it ought not to be granted. See Haladu v Access Bank (supra).
28. On the whole, the issue for determination is resolved in the negative against the Claimant/Applicant, this Court finds and holds that the Claimant/Applicant has not placed sufficient materials before the Court to warrant it exercise its discretion in his favour to grant this application. The Court having not found merits in the said application, same is accordingly struck out. I so find and so hold.
29. No orders as to costs.
30. Ruling is accordingly entered.
Hon. Justice M. N. Esowe, FCIArb