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The Honourable Minister of Petroleum Resources & Anor. v. SPDC (2021) – CA

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➥ CASE SUMMARY OF:
The Honourable Minister of Petroleum Resources & Ors. v. SPDC (2021) – CA

by PipAr Chima

➥ COURT:
Court of Appeal – CA/A/824/2019

➥ JUDGEMENT DELIVERED ON:
16 Aug 2021

➥ AREA(S) OF LAW
OML II;
Petroleum License;
Interpretation of statute;
National security;
Discretion of minister;
Jurisdiction;

➥ NOTABLE DICTA

⦿ WHERE NO APPEAL ON A DECISION THE DECISION REMAINS BINDING
Where a party, be it an Appellant or Respondent does not appeal against a finding or an order of Court, by way of a ground of appeal, a cross-appeal or a Respondent’s notice, that order or finding is binding and acceptable to it. The Respondent herein has not appealed against the order made to introduce and argue the two grounds of appeal. Therefore, the order is binding on it. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ ISSUE CANNOT ARISE OUT OF NONEXISTENT GROUND OF APPEAL
The Respondent seeks to attack the ground of appeal as part of its response to issue no (i). The purpose of issues for determination, is to identify what the issues in the grounds of appeal are. An issue cannot be formulated out of a non-existent or invalid ground of appeal. Therefore, all the arguments canvassed by the Respondent attacking the legitimacy of the two grounds of appeal which were not predicated on the grounds of appeal filed in this appeal, are discountenanced and struck out. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ MODE OF COMMENCEMENT OF ACTION OUGHT TO BE FOLLOWED
A person commencing a suit is to employ the process prescribed by statute or rules of Court for making a claim. It is that procedure that ought to be followed. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ PARTY WHO TOOK PART IN AN IRREGULAR PROCEDURE WITHOUT OBJECTION CANNOT COMPLAIN
Even if it can be argued, though wrongly, that the suit ought to have been commenced by means of a judicial review, the Appellants did not raise this at the earliest opportunity at the trial Court. In other words, where an action is commenced by an irregular mode, it is trite law, that a party who took active part in the proceeding without raising a formal complaint or objection to it, cannot later, be heard to complain and pray for the action to be set aside. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ ENDS OF JUSTICE SUPERCEDES MODE OF ACTION COMMENCEMENT
Wrong commencement of action does not vitiate it, if the ends of justice would be compromised. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ EXCEPTIONS TO COUNSEL ADDRESSING ON SUO MOTO ISSUES
To raise an issue suo motu means that a Judge raised the issue which was not raised or which was not in contemplation of the parties. It is the law, that when raising an issue suo motu, the Judge should afford counsel or parties, an opportunity to address on it, before he can decide on it, especially the party that would be adversely affected by the issue. This is because, issue of fair hearing is thus involved – KUTI v. BALOGUN (1989) 1 NWLR (PT. 99) 566. However, there are exceptions to this law. Where (a) the issue relates to the jurisdiction of the Court, then it is not mandatory for the Judge to hear the parties on it; (b) when both parties ignored or were unaware of a statute which has a bearing on the case; (c) when the record ex facie, shows or discloses serious questions of the fairness of the proceedings. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ CONSTRUCTION OF STATUTE SHOULD NOT DEFEAT ITS’ INTENT
Generally, where the words of a statute are plain, clear and unambiguous, the Court should give them their literal meaning. So the golden or literal rule of interpretation of statutes or even a Constitution, is to give the words used therein, their ordinary and plain meaning without importation. The Court should construe the words of a statute, to save it and so avoid making a mockery of the statute, to defeat its manifest intent. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

⦿ THE JUDICIOUS AND FAIR ACTING OF A MINISTER IN LICENCE RENEWAL
A Minister is a public officer charged by the Legislature of this Country with the duty of discharging a public discretion affecting the citizens. He must discharge that function judiciously and act fairly, justly and in good faith in the interest of peace, order and good government. Where the Minister is confronted with the decision of renewing the license as in the instant case, he cannot shut his eyes to the reality of the time and take a decision that is diametrically opposed to his statutory responsibility under our law. Doing that will not only work against the interest of peace, order and good government it will lead to a failure of the very essence of his ministerial office. – Adah, JCA. Petroleum Resources v. SPDC (2021)

⦿ INTERPRETATION SHOULD NOT DEFEAT THE ULTIMATE DESIGN OF THE STATUTE
It is now trite law that in the quest to interpret or construe the provisions of a statute or the Constitution, the Court or Tribunal must construe or interpret the statute or the Constitution in order to bring out plainly the real intention of the Lawmaker or the framers of the Constitution and thus enhance its purpose. The Court or Tribunal has a bounden duty to consider as a whole the entire provisions of the law or the Constitution involved. The Statute or the Constitution in question must not be construed in a manner that will do violence to the provisions being interpreted and must not be interpreted to defeat the ultimate design or purpose of the Constitution or statute that calls for interpretation. – OLABISI IGE, JCA. Petroleum Resources v. SPDC (2021)

⦿ RENEWAL OF OIL MINING LEASE II (OML II) IS DISCRETIONARY
The renewal of Oil Mining Lease II (OML II) falls squarely within the powers and discretion of the Honourable Minister of Petroleum Resources and the renewal of such lease may be with new terms and conditions. The Appellants have offered to renew the Oil Mining Lease for the Respondent on new terms and conditions. The Respondent refused and failed to accept the offer. The Respondent cannot dictate to the Appellants, the terms and conditions under which the renewal of the lease could be crystallized. The 1st Appellant acted within his powers and in accordance with the Petroleum Act, 2004 earlier referred to. The lower Court greatly erred in law in deciding the questions raised for determination and the reliefs sought against the Appellants. – OLABISI IGE, JCA. Petroleum Resources v. SPDC (2021)

Available:  The National Assembly v. The President of The Federal Republic of Nigeria & Ors (2003)

⦿ DOCUMENTS INADMISSIBLE WHERE MAKER IS INTERESTED PARTY AND MADE DURING LIS PENDENS
By Section 83(3) of the Evidence Act 2011, documents are inadmissible in Court where the maker is an interested person and had made the documents when the proceedings are pending or anticipated. – Yahaya, JCA. Petroleum Resources v. SPDC (2021)

➥ PARTIES
APPELLANT
i. The Honourable Minister of Petroleum Resources
ii. The Minister of State For Petroleum Resources

v.

RESPONDENT
i. The Shell Petroleum Development Company of Nigeria Limited

➥ LEAD JUDGEMENT DELIVERED BY:
Abubakar Datti Yahaya, J.C.A.

➥ APPEARANCES
⦿ FOR THE APPELLANT
Osaro Eghobamien SAN.

⦿ FOR THE RESPONDENT
Olufunke Adekoya SAN.

➥ CASE HISTORY
The facts in brief, show that about seventeen Oil Mining Licences had been granted, including OML II by the Appellants. Initially, the licence was for thirty years issued in 1960. After the expiration of the thirty years, the licence was renewed for another thirty years, with effect from 1st July 1989, to expire on 30th June 2019. In October 2017, the Respondent applied for a renewal of the 17 Oil Mining Licences, including OML II, and paid the requisite application fees. In November 2018, the Department of Petroleum Resources, communicated to the Respondent, an approval for the renewal of 16 OMLs, minus OML II, for twenty years, and requested the Respondent to open a negotiation with the 2nd Appellant with “a view to returning their 45% interest in OML II to the Federal Government of Nigeria”. Pursuant to this, and after discussions, the Appellants proposed a partitioning of OML II, with the Respondent retaining a portion and the Federal Government taking a portion of the OML II. It is the position of the Respondent, that contrary to its promise, the Appellants did not communicate to the Respondent, an approval or rejection of the Respondent’s application for the renewal of the OML II.

When time was running out, the Respondent approached the trial Court by way of Originating Summons for a determination of the question whether “Having (a) fulfilled all the obligations required for the renewal of Oil Mining Lease II (OML II) (including the payment of rents and royalties) and (b) applied to the 1st Defendant for a renewal of the entire OML II, is the plaintiff (and the other lessees of OML II) entitled to a renewal of OML II?

The trial Court answered the question in the affirmative and granted the reliefs sought for by the Respondent, with a variation as to the number of years the renewal would last — twenty years, instead of the thirty years prayed for.
The Appellants felt aggrieved and so filed this appeal.

➥ ISSUE(S) & RESOLUTION

[APPEAL: SUCCEEDED, IN PART]

I. Whether the trial Court was right to assume jurisdiction over this suit, same having not been instituted by the special procedure prescribed by its rules for challenging or reviewing powers of a public officer, being the Minister of Petroleum Resources & Whether the trial Court has jurisdiction to suo motu amend the Respondent’s relief so as to bring same within its jurisdiction in order that such relief may be granted.

RULING: IN RESPONDENT’S FAVOUR.
I.A. Now, regarding whether the Appellants had taken a decision or not on the application for renewal by the Respondent, I have perused the letters in issue again — letters dated 16th October 2017, for a renewal of seventeen OMLs (page 209 of the record); letter dated 8th January 2018 (page 211 of the record; letter dated 26th March 2018 (pages 131-132 of the record) and letter dated 3rd August, 2018 (page 130 of the record). In my view, letter dated 8th January 2018 (pages 133 to 135 of the record) is a rejection of the application by the Respondent. The Appellants made a counter offer to the Respondent to split OML II into three and the Government of Nigeria would retain two and give one to SPDC JV. This counter-offer was rejected by the Respondent as it felt that it was financially unrewarding. It therefore did not accept the counter-offer. The negotiations to be taken was only with a view to returning 45% interest in the OML II to the Federal Government of Nigeria. The discussion was not undertaken and concluded and it did not show that the Appellants had shifted their position from splitting the OML II into three parts. All these go to show emphatically, that the Appellants had taken a decision, not to grant the application by the Respondent, to renew OML II in the same size and acreage it was applied for. I am strengthened in this view, by the submission of the Respondent in the brief at page 15, wherein it stated that the trial Court “held that the Appellants failed to place any material before the Lower Court to demonstrate that the Appellants’ refusal of the application for renewal of OML 11 was based on national security consideration”. If the trial Court held that the Appellants had refused the application of renewal of OML II, it clearly means that the Appellants had infact taken a decision. This puts paid to any argument by the Respondent that no action was taken by the Appellants on the application for renewal of OML II. The Respondent is bound by its submission and the finding of the trial Court which it has not appealed against in that view.

I.B. The reliefs sought were therefore consequential upon the interpretation of the statute and an affirmative answer to the question poised. Therefore, the suit was not commenced as a judicial review as provided by Order 34 of the Federal High Court Rules 2019, and requiring leave to institute it. It was commenced to interpret a statute which is governed by Order 3 Rule 7 of the Federal High Court Rules 2019. It states — “A person who claims any legal or equitable right in a case where the determination of the question whether such a person is entitled to the right depends upon a question of construction of an enactment, may apply by originating summons for the determination of such question of construction and for a declaration as to the right claimed”.
In the instant appeal, the Respondent claimed to have a right under the Petroleum Act 2004, to have its licence in respect of OML II to be renewed in toto, having fulfilled the conditions enumerated. That right is dependent upon the construction of Paragraph 13(1) of the 1st Schedule to the Petroleum Act 2004. It therefore filed an Originating Summons for the determination of the question whether it is so entitled. It was therefore right in commencing the action by way of Originating Summons, as it is the mode that is ideal where the issue involved is one of construction of a statute.

Available:  MTN Nigeria Communications Limited v. Ezugwu Emmanuel Anene (2018)

I.C. Since the Appellants have averred that the Petroleum (Drilling and Production) Regulation 2019, limits the term of years for a mining licence to twenty years, the trial Court had the power and the jurisdiction to take into consideration the Regulations made pursuant to the Petroleum Act, and make the award accordingly, suo motu. Furthermore, a Court has the right to award less than what was claimed for if proved, but not over and above what a party claims.

II. Whether the Minister is under a mandatory obligation (hence excluding policy) to issue a licence once the Respondent ostensibly satisfies the statutory requirement & Whether the trial Court was right to disregard the Petroleum (Drilling and Production) Regulation in order to assume a discretion that is otherwise conferred on the Minister for Petroleum Resources.

RULING: IN APPELLANT’S FAVOUR.
II.A. Here, the Appellants as Ministers of Petroleum, are public functionaries engaged to do public acts, including the grant of a mining licence, when an application for it is made either afresh or for a renewal when it is made not less than twelve months before the expiration of the current lease, thus prescribing a time. If the Petroleum Act, 2004 and Paragraph 13(1) of the 1st Schedule to the said Act is considered as a whole, and consistent with the object and general context, then the word ‘shall’ used therein, can only connote, can only mean a permissive action. The Appellants may, all things being equal, exercise a discretion, and renew the mining licence or lease. Clearly, the Appellants would consider, propriety, economic sense, sociopolitical atmosphere, security and sovereignty of the Country, in addition to the stated requirements of payment of rent, royalties and other obligations to be performed by the Respondent under the lease, in exercising a discretion as to renew it or not. I am not here saying that all these aspects must be taken into consideration by the Appellants in deciding to renew or not, as that would mean that I am circumscribing their discretion or that I intend to fetter their discretion. I do not have that power. All I am saying is that, they could take these aspects and more, into consideration before deciding to renew or not. It is their prerogative, their discretion. They control the oil wells. They cannot, and that also means that the Country Nigeria, cannot be forced into entering a contract with any party. If the word shall’ is used in a mandatory sense, then the Petroleum Act is made a nonsense of, since it will mean that Nigeria as represented by the Appellants in their public offices, has no control over its resources and lacks a sovereign status to refuse to enter into a contractual agreement with another, to mine or exploit its oil resources. It will mean that the country must enter into an agreement to allow someone else to mine its oil in perpetuity, once the rents and royalties are paid and the application for renewal made twelve months before the expiry of the current mining lease. This would be a most ridiculous state of affairs, a nonsensical interpretation of the word shall’. It cannot be the intention of the Legislature which is to make laws for the good governance of the country, including its economic wellbeing, security and sovereign status, to enact the Petroleum Law to make it mandatory for the country to always enter into an agreement to allow someone as of right, to continue to lease its oil resources without an end. Whenever an interpretation of a statute or a word in a statute will lead to a situation where its object will be defeated, and its aim scattered to the winds, it must be avoided. The Courts must follow that interpretation that would enhance the object of the Act or the word.

II.B. I therefore emphasise, that in the context in which it is used, the word shall’ in connection with the Appellants, is not a matter of compulsion on the Appellants to renew the Oil Mining Leases. It connotes permissiveness i.e. they may renew it or part of it or refuse to do so in toto. They cannot be compelled to act in a particular way. The Appellants have made an offer to renew part of the OML II for the Respondent. It is for them to accept the terms or not. There is no compulsion on either side — the Appellants and the Respondent. This also means that it is of no importance, whether there is evidence of “unconscionable” and “socio-political and economic factors” before the Court or not, to be considered in granting the renewal of the OML II, since the renewal is only discretionary not obligatory. That would have been relevant only if the renewal is mandatory. On the other hand, it is also of no moment, that the Respondent is currently occupying an area more than 1000sq. km and for thirty years. The Respondent could still apply for same and it is up to the parties to agree on the terms. None of them is compelled to agree to any particular term. After all, paragraph 35 of the 1st Schedule to the Petroleum Act makes provision for the Minister to impose special terms and conditions not inconsistent with the Act, in terms of the participation by the Federal Government in the venture, and such are to be negotiated between the parties. So the Petroleum Act has infact emphasised that the relationship is one of negotiation, partnership, give and take for the mutual benefit of both, and not compulsion.

II.C. On the contention of the Appellants that the Respondent had satisfied the conditions for renewal, because his application was for a larger size contrary to the Petroleum (Drilling and Production) Regulation and for thirty years instead of twenty, I find that this does not remove the jurisdiction of the trial Court to adjudicate on it. A Court can always grant less than what was prayed for. It does not affect its jurisdiction specified by an Act or the Constitution. It was well within its power for the trial Court to grant less than what was prayed for. After all, if the Respondent is to occupy an area over and above what is allowed by law or for a term beyond what the law stipulates, equity will not allow him to benefit from same TONIMAS NIG. LTD. v. NZE B. CHIGBU (2020) 1 SCNJ 34. The trial Judge therefore had a duty to amend the relief and award what is permitted by law.

II.D. I am of the firm view that the lower Court was wrong in its interpretation of Paragraph 13 of the First Schedule to Petroleum Act as mandatory. If it has been the intention of the lawmaker to deprive the Hon. Minister his discretion pertaining to the renewal of the lease then the initial contract would have been in perpetuity without any need for renewal or application to renew the lease. This is a proper case in which the word “shall” must mean “may” so as to accommodate the new terms and conditions upon which the Minister may demand for renewal of the Oil Mining Lease II (“OML II”). There is no breach of contract on the part of the Appellants.

Available:  Okonkwo Timothy (ALIAS JOB) v. Sunday Oforka & Anor. (2007)

III. Whether the trial Court was right in failing to entertain the threat of National Security on the ground that no such evidence was laid before the Court and disregarding any such indication as in Exhibit MPR4 which was rejected.

RULING: IN APPELLANT’S FAVOUR.
III.A. Since Exhibit MPR4 was not written by a person interested, it was wrong on the part of the trial Court to discountenance and reject it. It was also wrong on the part of the trial Judge to take into consideration, “bad faith” and “after thought” in rejecting MPR4, since no provision in the Evidence Act has been made, to so reject it. That issue could have been taken into consideration, when assessing the weight to be attached to the document, as submitted by learned counsel to the Appellants. In that vein, I set aside the rejection of MPR4 in evidence by the trial Judge and I admit it in evidence with the same mark.

III.B. The trial Judge did not order the production of evidence of security issues for him to review in Chambers, to see their nature. He rejected the document and yet, went on to make observation on them as made in bad faith and an afterthought! He therefore, and the Respondent, cannot be heard to complain that the Appellants had failed to place any material before the Court on security issues or that the Respondent had not been heard or given an opportunity to know the nature of the security issues. He cannot put the blame on the Appellants when the Evidence Act solidly permits them to decline to disclose them to the public eye, until otherwise ordered by the Court.

III.C. We have looked at Exhibit MPR4. When it is said, that it is the Head of State of Nigeria, its President, who said that the renewal of OML II in its present form is detrimental to the “national security” of the Country, this Court should be in a position to accept his word to that extent. I do not see how a public officer would go and disclose the nature of national security issues involved, without a Court order. The public official may not even have the details. A Head of State should be trusted, if he says a project or an issue concerns national security. It will not amount to speculation on the part of the Court.

➥ ENDING NOTE BY LEAD JUSTICE – Per

➥ REFERENCED (STATUTE)
Section 2 of the Petroleum Act, 2004;
S. 83(3) Evidence Act 2011;
Paragraph 13 of the First Schedule to Petroleum Act;

➥ REFERENCED (CASE)
⦿ THE WORD “SHALL” IN RELATION TO PUBLIC OFFICERS IS DISCRETIONARY
In CHIEF DOMINIC IFEZUE v. LIVINUS MBADUGHA and ANR. (1984) LPELR—1437 (SC), Bello JSC (as he then was) stated that the word “shall” can either connote a mandatory command or a permissive action. He stated that “It is germane to the issue to state that the word shall’ has various meanings. It may be used as have been formulated in numerous cases may be summarised thus: Whenever a statute declares that a thing ‘shall’ be done, the natural and proper meaning is that a peremptory mandate is enjoined. But if the thing to be done has reference to the time of completing a public act by a public functionary, the enactment will generally be regarded as merely directory…”

⦿ THE WORD “SHALL” MAY MEAN “MAY”
In FIDELITY BANK PLC v. CHIEF MONYE and ORS. (2012) LPELR-7819 (SC), Muhammad, JSC (as he then was) held that “It is not always that a Court of law would interpret the word ‘shall’, ‘must’, as mandatory. The Court must examine the context within which the word is used. The word ‘MUST’ is often interchangeable with the word ‘SHALL’ and both can mean ‘MAY’ where the context so admits…”

⦿ THE SUBSTANCE OF JUSTICE WILL OVERRIDE IMPROPER MODE OF COMMENCEMENT UTILISED
In FGN v. ZEBRA ENERGY LTD (2002) 18 NWLR (PART 798) 162 at 204-205, per Belgore, JSC, (later CJN rtd.) who said; “Looking at the issues in the case right from Court of Appeal to this Court, I cannot understand by any shred of imagination, how, the issue of what method was used to initiate the proceedings in the trial Court arose. Procedure is a guide to smoothen passage of suit; to direct the parties what to do and to guide the Court to arrive at the justice of a case. The question of initiating the proceedings by originating summons was never a big issue at the trial Court; neither was it at Court of Appeal and in this Court. The Court shall never be shackled by procedure; case is not made for procedure, it is the other way round. Once the procedure employed has brought into focus the issue the parties contest and there is no miscarriage of justice, it will not matter that the procedure is not the correct one. Getting to the destination is what is important; it does not matter the means used. This Court will certainly not disturb a clear case of justice between the parties by suo motu raising for the parties procedural abnormalities in Courts below when the parties never seriously raised exception to that procedure. It is my view that it does not matter whether by writ of summons or by originating summons a writ was initiated, what is relevant in a case of this nature is the question of justice of the case.”

⦿ THE COURT DECLARES THE INTENTION OF THE LEGISLATURE
In Ugwu v. Ararume (2007) 12 NWLR (Pt. 1048) 367 at 498 paras. A-B this Court stated thus:- “A statute, it is always said, is “the will of the legislature” and any document which is presented to it as a statute is an authentic expression of the legislative will. The function of the Court is to interpret that document according to the intent of those who made it. Thus, the Court declares the intention of the legislature.”

➥ REFERENCED (OTHERS)

End

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