NU METRO RETAIL NIGERIA LIMITED V. TRADEX S.R.L. & BELL FLOWER EQUITY CORP. (2017)

Background

This appeal arose from proceedings before the High Court of Lagos State in Suit No. LD/1007/2008, in which Tradex S.R.L. and Bell Flower Equity Corp. claimed payment from Nu Metro Retail Nigeria Limited for books, magazines and periodicals supplied to it. The respondents claimed an outstanding balance of €17,368.79, together with interest. They alleged that the appellant had received the goods but failed or neglected to pay despite repeated demands.

Nu Metro filed a statement of defence and challenged the competence of the action. It contended that the respondents, being foreign companies, were not juristic persons capable of suing in Nigeria. It also objected to the respondents’ certificates of incorporation, the witness statement on oath and the power of attorney relied upon by the respondents. In addition, the appellant disputed the delivery of some of the goods and denied that the parties had agreed to payment of interest or to payment in foreign currency.

The respondents subsequently applied for summary judgment under Order 11 of the Lagos State High Court (Civil Procedure) Rules 2004. The High Court dismissed the appellant’s preliminary objections and entered summary judgment in favour of the respondents in respect of the uncontested portion of the claim. The appellant appealed against both the dismissal of its objections and the summary judgment.

Issues

1. Whether foreign companies duly incorporated under the laws of their countries could sue in Nigerian courts without being incorporated or registered in Nigeria.
2. Whether the respondents’ incorporation documents, power of attorney and witness statement on oath were legally incompetent or inadmissible.
3. Whether the appellant disclosed a genuine defence on the merits or a triable issue sufficient to prevent summary judgment.
4. Whether the respondents were entitled to pre-judgment interest on the amount awarded.

Ratio Decidendi

The Court of Appeal held that section 60(b) of the Companies and Allied Matters Act 2004 preserved the right and liability of a foreign company to sue or be sued in Nigeria in its own name or in the name of its agent. Nigerian courts recognise corporations created under foreign law as juristic persons by virtue of international comity, provided that credible evidence is produced showing their incorporation. A foreign company does not have to be registered in Nigeria merely to bring or defend an action. Registration under the Act is relevant where the company intends to carry on business in Nigeria, not as a universal precondition to litigation.

The burden of proving the alleged incapacity of the respondents rested on the appellant because it was the party asserting that fact. The respondents produced certificates of incorporation and translated versions of those documents. The appellant did not produce credible evidence contradicting their authenticity or legal existence. Bare allegations and general objections could not discharge the evidential burden imposed by sections 132–135 of the Evidence Act 2011.

The court further held that admissibility depends primarily on relevance and the purpose for which evidence is tendered, rather than on the manner in which it was obtained or its alleged custody. Documentary evidence is generally the best evidence for testing the accuracy of oral or affidavit evidence. The challenge to the respondents’ witness statement on oath was also immaterial at the summary judgment stage because the relevant processes were the statement of claim, the affidavit supporting summary judgment, the statement of defence, the counter-affidavit and accompanying documents. Witness statements intended for plenary trial were not the basis for determining whether summary judgment should be entered.

Court Findings

Summary judgment is intended for claims that are straightforward, substantially uncontested and capable of being determined without a full trial. It is not designed to deprive a defendant with a genuine defence of the opportunity to be heard, but neither should it be defeated by a sham or evasive defence. A defendant seeking leave to defend must disclose the nature of the defence and the material facts supporting it. Merely filing a statement of defence, affidavit or preliminary objection does not automatically create a right to defend.

The court must examine the pleadings, affidavits and documentary exhibits to determine whether a real defence or triable issue exists. At that stage, the defendant is not required to prove the defence conclusively; it is enough to disclose facts which, if established, could constitute a defence. However, the defence must be genuine and particularised. In this case, Nu Metro admitted the underlying supply transactions and did not effectively controvert the documentary evidence showing receipt of the goods for which judgment was entered. Its objections concerning the foreign status of the respondents and the competence of their documents did not amount to a substantive defence.

The High Court had properly separated the disputed items from those in respect of which no credible dispute existed. It granted leave to defend the claims concerning goods alleged not to have been supplied, returned or missing, but entered summary judgment for the undisputed balance. The Court of Appeal found that this approach complied with the purpose of Order 11. It also reiterated that parties who voluntarily enter into contracts are bound by their terms, absent fraud, duress, misrepresentation or another recognised vitiating factor. A party that has accepted and benefited from contractual performance cannot in good conscience later contend that the contract is unenforceable simply because the supplier is foreign.

Although the principal conclusions of the High Court were upheld, the Court of Appeal disagreed with the award of pre-judgment interest. The evidence did not establish an agreement or applicable mercantile custom entitling the respondents to interest from the date of filing. The award of pre-judgment interest was therefore set aside and replaced with post-judgment interest at 10% per annum from the date of the High Court’s judgment until full liquidation.

Conclusion

The appeal was dismissed on the principal issues. The High Court’s dismissal of the preliminary objections and its summary judgment for the uncontested portion of the respondents’ claim were affirmed. Only the award of pre-judgment interest was set aside. The Court of Appeal ordered post-judgment interest at 10% per annum and awarded costs of N200,000 against Nu Metro in favour of the respondents.

Significance

The decision confirms that foreign-incorporated companies may sue and be sued in Nigeria without first registering locally, where their corporate existence is established by credible evidence. It also provides useful guidance on summary judgment: a defendant must reveal a real and specific defence or triable issue, rather than rely on technical objections or bare assertions. The judgment further illustrates the importance of documentary evidence in commercial disputes and the principle that a party cannot retain the benefit of a contract while denying its enforceability. Finally, it distinguishes contractual or otherwise established pre-judgment interest from post-judgment interest awarded under the rules of court.