THE SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED V. CHIEF JOEL ANARO & ORS. (2015)

Background

This appeal arose from four representative actions commenced in 1983 before the High Court of the then Bendel State at Warri by the Obotobo, Sokebolo, Ofogbene (Ezon Burutu) and Ekeremor Zion (Ezon Ase) communities. The communities claimed compensation from The Shell Petroleum Development Company of Nigeria Limited for oil spillages which allegedly escaped from Shell’s pipelines and damaged farmlands, crops, creeks, fisheries, vegetation and other aspects of the communities’ environment and livelihood. The four suits, numbered W/16/83, W/17/83, W/72/83 and W/80/83, were consolidated by an order made on 21 March 1985.

After trial, the High Court entered judgment for the communities on 27 May 1997 and awarded damages of N4,095,085.00, N13,278,306.00, N7,392,589.00 and N5,522,701.00 respectively. The Court of Appeal, Benin Division, dismissed Shell’s appeal on 22 May 2000. Shell then appealed to the Supreme Court, challenging the competence of the proceedings, the application of the doctrine of res ipsa loquitur, the communities’ fishing rights and the evidential foundation for the damages awarded.

Issues

1. Whether the State High Court retained jurisdiction to determine the consolidated suits after the enactment of the Admiralty Jurisdiction Decree No. 59 of 1991, the Federal High Court (Amendment) Decree No. 60 of 1991, Decree No. 16 of 1992 and the Constitution (Suspension and Modification) Decree No. 107 of 1993.
2. Whether section 3(1) of the Minerals Act, vesting property in minerals, rivers, streams and watercourses in the State, deprived the communities of enforceable fishing rights or barred claims for loss of fisheries.
3. Whether the communities could rely on res ipsa loquitur or the rule in Rylands v. Fletcher despite having particularised negligence in their pleadings.
4. Whether the valuation evidence and other evidence sufficiently supported the damages awarded.

Ratio Decidendi

The Supreme Court unanimously dismissed the appeal. It held that the law applicable to a cause of action is generally the law in force when the cause of action accrued, unless a later statute clearly and expressly provides for retrospective operation. When the suits were instituted in 1983, section 236 of the 1979 Constitution gave State High Courts unlimited jurisdiction, including concurrent jurisdiction with the Federal High Court in admiralty matters. The later decrees conferring exclusive admiralty jurisdiction on the Federal High Court were substantive changes and could not retrospectively divest the State High Court of jurisdiction over pending proceedings.

The Court further held that legislation which tends to oust or restrict the jurisdiction of a superior court must be construed strictly. The relevant enactments contained no sufficiently clear provision requiring these pending suits to abate. In addition, the abatement provision relied upon by Shell had been affected by subsequent constitutional legislation. Section 6(1) of the Interpretation Act preserved the previous operation of the law and rights existing before repeal or alteration.

On fishing rights, the Court preferred the reasoning in Adeshina v. Lemonu and Uyovwukerhi v. Afonughe. Vesting title and control of rivers and creeks in the State under section 3(1) of the Minerals Act did not, without express language, abolish existing public or customary rights of fishing. The communities could therefore claim compensation for temporary loss of fishing and fisheries caused by the oil pollution.

The Court also confirmed that res ipsa loquitur applied. The communities knew that the pipelines had broken, cracked or ruptured, but did not necessarily know the precise cause of that failure. Pipelines under Shell’s management would not ordinarily rupture and release crude oil if properly maintained. The occurrence therefore raised a prima facie inference of negligence, shifting the evidential burden to Shell to provide a satisfactory explanation. Particularising negligence did not prevent reliance on the doctrine, especially where the claim also relied alternatively on the rule in Rylands v. Fletcher.

Court Findings

The Court found that the State High Court had validly assumed jurisdiction before the relevant jurisdictional amendments and was entitled to complete the trial. It rejected Shell’s contention that the suits had abated or ought to have been transferred to the Federal High Court. The Court emphasised that jurisdiction is fundamental and ordinarily must be determined first, but it also stressed that jurisdiction cannot be removed by implication or by giving substantive legislation an unwarranted retrospective effect.

In relation to liability, the Court affirmed that a single escape of oil could support liability both in negligence and under the rule in Rylands v. Fletcher. Shell had brought and maintained a potentially dangerous substance—crude oil—in pipelines under its control. Once the substance escaped and caused foreseeable environmental damage, liability could arise independently of proof of a specific negligent act, subject to the recognised exceptions, none of which was established.

The challenge to damages also failed. Although some aspects of the valuer’s evidence were treated as hearsay or irrelevant, the valuation reports themselves were not wholly discredited. More importantly, the communities had supplied direct and substantial evidence concerning the destruction of fish, crops, vegetation and sources of income. The concurrent factual findings of the trial court and Court of Appeal were not shown to be perverse, baseless or excessive and were therefore entitled to respect.

Conclusion

The Supreme Court held that the appeal lacked merit and dismissed it in its entirety. The judgment of the Court of Appeal affirming the High Court’s awards was upheld. Shell was ordered to pay costs of N500,000.00 to each set of respondents in the consolidated suits.

Significance

This decision is significant in Nigerian environmental and jurisdictional law. It confirms that later legislation conferring exclusive jurisdiction on the Federal High Court will not ordinarily invalidate proceedings properly commenced in a State High Court before the legislative change. It also protects existing community fishing rights from being silently extinguished by general statutory language vesting ownership or control of waterways in the State. In tort law, the case illustrates the continuing relevance of res ipsa loquitur and strict liability under Rylands v. Fletcher in oil-pollution litigation. The decision further demonstrates that a claimant may succeed on multiple, alternative tortious bases and that a damages award may stand where independent direct evidence sufficiently supports it, even if part of an expert’s testimony is inadmissible.