AJAOKUTA STEEL COMPANY LTD V. GREENBAY INVESTMENT & SECURITIES LTD (2019)

Background

This appeal arose from a long-running judgment-debt dispute between Ajaokuta Steel Company Ltd and Greenbay Investment & Securities Ltd. In an earlier action before the Federal High Court, Greenbay obtained judgment against Ajaokuta for US$1,672,351.50, or its naira equivalent at the Central Bank of Nigeria exchange rate applicable on 23 February 1994, together with interest at 21% from 24 April 1994 until payment.

Greenbay later received N142 million through an agent who had been authorised to negotiate and receive the judgment debt. The payment was treated by the trial court as full and final settlement, and the sum was secured through the Debt Management Office. Despite the payment, Greenbay commenced garnishee proceedings in the Federal High Court, Abuja, seeking to recover what it claimed was the remaining principal and accrued interest from Ajaokuta and the relevant garnishees, including the Central Bank of Nigeria and the Debt Management Office.

The trial court upheld preliminary objections, discharged the garnishees, set aside the garnishee orders nisi and dismissed the proceedings. On appeal, the Court of Appeal set aside that ruling and remitted the matter for determination of whether the order nisi should be made absolute. Ajaokuta appealed to the Supreme Court. Greenbay filed a preliminary objection to the competence of the appeal and also filed a cross-appeal. Ajaokuta and another cross-respondent objected to the cross-appeal.

Issues

1. Whether Ajaokuta’s grounds of appeal, which challenged the Court of Appeal’s treatment of the exchange rate, judgment debt and interest, were competent despite having been filed without leave.
2. Whether the cross-appeal was competent where Greenbay was simultaneously pursuing garnishee proceedings seeking substantially the same reliefs before the trial court.

Ratio Decidendi

The Supreme Court held that, under section 233(2) and (3) of the Constitution of the Federal Republic of Nigeria, 1999, an appeal lies as of right only where the ground raises a question of law alone. A ground founded on fact or mixed law and fact requires the prior leave of the Court of Appeal or the Supreme Court. Without such leave, the ground is incompetent, cannot support a competent issue for determination and cannot sustain an appeal.

The Court further emphasised that a ground of appeal and the issue distilled from it must arise from the decision actually appealed against. A ground must contain a clear, precise and direct complaint identifying the error, misdirection or wrong decision alleged. A party cannot use an appeal to challenge an earlier judgment that was not the subject of the decision under appeal.

The Court also held that a court must determine disputes on the issues presented by the parties. Although a judge may draw legitimate inferences from facts already in evidence, the court must not formulate a new case for the parties or decide matters that were not in controversy without giving the parties an opportunity to be heard.

Court Findings

The Supreme Court found that the appellant’s two grounds were directed principally at the interpretation of the original 2001 judgment, particularly the applicable exchange rate and the period during which interest accrued. However, the decision appealed from concerned the later garnishee proceedings and the effect of the alleged full and final settlement through the N142 million payment. No appeal had been brought against the original judgment itself.

The Court also observed that the extent of Ajaokuta’s alleged indebtedness and the computation of accrued interest had not been issues determined by the trial court in the garnishee proceedings. The Court of Appeal had introduced those matters suo motu while resolving the issues before it. Since the parties had not litigated those questions, the Court of Appeal’s findings on them could not properly generate competent grounds of appeal before the Supreme Court.

On the cross-appeal, the Court found that Greenbay was pursuing the same garnishee relief simultaneously at the trial court and in the Supreme Court. Such deployment of parallel processes to obtain the same remedy amounted to an abuse of court process. Abuse of process is a fundamental defect and the appropriate consequence is dismissal of the abusive proceeding.

Conclusion

The Supreme Court upheld Greenbay’s preliminary objection and struck out Ajaokuta’s appeal as incompetent. It also upheld the objections to the cross-appeal and dismissed the cross-appeal for abuse of court process. The parties were ordered to bear their respective costs.

Significance

The decision reinforces strict appellate practice in Nigeria. It confirms that the classification and validity of a ground of appeal depend on its substance, not merely on the label chosen by counsel. It also warns litigants that an appeal must be tied to the judgment under challenge and that courts cannot properly determine issues introduced outside the parties’ pleadings or arguments. Finally, the case illustrates that simultaneously pursuing substantially identical reliefs in different stages or courts may constitute an abuse of process capable of terminating the later proceeding.