INTRODUCTION
Oil spill litigation continues to be controversial in Nigeria. Due to some perceived weaknesses in their national legal systems, host communities from developing countries continue to test the limits of the principles of both public and private international law by pursuing transnational tort-based oil spill compensation litigation against oil companies outside their own legal systems and national courts. Initially, this was mainly in US Federal District Courts, courtesy of the Aliens Torts Claims Act of 1789.Footnote 1 More recently, these claims have arisen in Dutch courts,Footnote 2 English courtsFootnote 3 and the regional Economic Community of West African States Community Court of Justice.Footnote 4 Within Nigeria, there was some confusion as to whether State High Courts or the Federal High Court had jurisdiction in respect of oil spill claims.Footnote 5 Even though the Supreme Court laid this controversy to rest more than a decade agoFootnote 6 the issue continues to linger in that court.Footnote 7 The controversy surrounding oil spill litigation claims has however apparently not abated following the recent Court of Appeal decision in Dadoru Benson v Mobil Producing (Nigeria) Unlimited (Dadoru v Mobil).Footnote 8 This case considered whether statutes of limitation apply to oil spill compensation claims. The case unwittingly generates another controversial issue: whether common law tort rights that traditionally form the basis of oil spill compensation claims in Nigeria continue to be valid and enforceable within the Nigerian legal system in light of the Oil Pipelines Act.Footnote 9 This article examines these issues.
DADORU V MOBIL: FACTS OF THE CASE
In this case, the appellant, a claimant in the Federal High Court, filed an action against Mobil Producing (Nigeria) Unlimited (Mobil) alleging a rupture to Mobil's oil pipeline in 1998 at Idoho, Eket in Akwa Ibom State, causing an oil spillage that damaged his fishing nets. According to the claimant, Mobil paid him the sum of N10,000 (approximately US$30. The claimant's grievance was that Mobil failed to make adequate payment despite his repeated complaints that this amount was inadequate, hence the action filed in 2006. Mobil objected to the suit on the ground that it was statute barred, based on the Limitation Law of Bayelsa StateFootnote 10 (Bayelsa Limitation Law) as well as the English Limitation Act of 1623 (1623 Act).Footnote 11
The lower court came to a finding of fact that the claimant's cause of action accrued in 1999 and held that the action was statute barred under the Bayelsa Limitation law, under the 1623 Act and based on equitable principles. Based on this, the court dismissed the action. This decision was however set aside unanimously on appeal.Footnote 12 The sole issue for determination in the Court of Appeal was “whether or not the action of the appellants in the lower court was statute barred in view of either the Limitation Law of Bayelsa State or Limitation Act of 1623”.Footnote 13 Although the Court of Appeal came to a finding of fact that “it is clear from the amended statement of claim that the cause of action occurred in 1998 and the action was instituted on 10/11/06, ie eight years after”,Footnote 14 the court resolved this issue in favour of the appellant. The court held that the appeal was meritorious and remitted the case back to the trial court to be tried by another judge.Footnote 15 The court's rationale was predicated on the fact that the Bayelsa Limitation Law and the 1623 Act did not apply.
In respect of the 1623 Act, the court held that this law “is no longer applicable in Nigeria”Footnote 16 because, by virtue of the Limitation Act of 1966, local statute now covered this area. In respect of the Bayelsa Limitation Law, the court held that this law was inapplicable as it sought to “curtail the exercise of the right of action” created under the Oil Pipelines Act. Based on this, the court reasoned that the Bayelsa Limitation Law was unconstitutionalFootnote 17 and, to the extent of the restriction that it placed on rights created under the Oil Pipelines Act, was inconsistent with that act, a federal law. Invoking section 4(5) of the Nigerian Constitution of 1999 (the Constitution),Footnote 18 the court held that, being a state law, the Bayelsa Limitation Law was inapplicable.Footnote 19 The court also held that, as a state law, the Bayelsa Limitation Law cannot apply to a federal law.Footnote 20 Based on this, the court remitted the case to the Federal High Court for trial before another judge, despite a clear finding that the action accrued at least eight years before it was commenced.
In a more recent decision, the Federal High Court was confronted with a similar situation in the case of Israel Jack v The Shell Petroleum Development Company of Nigeria Ltd.Footnote 21 An objection was raised to the competence of the suit on the ground that the cause of action accrued in 2006 while the suit was commenced outside the mandatory five years allowed under the Rivers State Limitation Law and the 1623 Act. Very predictably, relying on the Dadoru v Mobil judgment, the Federal High Court dismissed the objection and held that the case had been filed pursuant to the Oil Pipelines Act, which, according to it, created rights. The court concluded that these rights were limited by the state limitation law, consequent upon which it held that a conflict had arisen and that, by virtue of section 4(5) of the Constitution, the state limitation law did not apply.Footnote 22
This decision has extremely profound consequences for oil spill compensation claims in Nigeria. Currently there is considerable tension in the Niger Delta area between oil companies, their host communities and government on account of environmental degradation, resulting in much oil spill litigation initiated by the host communities and their indigenes. The effect of this decision, if it represents precedent, is that claims that before now were only pursued in accordance with relevant statutes of limitation are no longer limited by such statutes and can be brought at any time, irrespective of how long ago an oil spill occurred, the only limitation being the equitable estoppel principle of laches and acquiescence. This presents a very serious challenge from the standpoint of policy and would surely be a nightmare for oil companies.
SETTING THE SCENE: EXAMINATION OF RELEVANT LIMITATION STATUTES
In respect of an action seeking compensation for damage to property, under the relevant provision of the Bayelsa Limitation Law,Footnote 23 a claimant is required to bring a claim within five years of the occurrence of the cause of action.
For its part, paragraph IIIFootnote 24 of the 1623 Act is exhaustive in the causes of actions it covers and does not expressly use the term “negligent” acts in the context of the causes of actions to which it applies. At first glance, it would therefore seem that a claim in negligence is not subject to the application of this act. It is however understandable that the 1623 Act did not expressly use the term “negligent” acts, considering the infant stages of development of this area of law at that time and the fact that the term “negligence” was yet to take a firm hold on the science of law. It is important to note however that the phrase “actions upon the case” as used in paragraph III of the 1623 Act covered actions brought by victims of negligence on account of harm to them or their property.Footnote 25 This expression however did not extend to the strict liability torts that were only introduced into the body of torts through the principle in Rylands v Fletcher two centuries after this law came into force.Footnote 26 Therefore, by paragraph III of the 1623 Act, being a claim for damage to property (fishing nets) the suit in question would have been required to be brought within six years of the cause of action accruing, but only where brought as an action in the common law tort of negligence.
DADORU V MOBIL: THREE SALIENT ISSUES
This decision raises at least three fundamental questions. What are the sources of legal rights that deal with oil spill compensation claims in Nigeria? Are limitation laws applicable to oil spill compensation claims under the Oil Pipelines Act? Is Dadoru v Mobil an authority on the application of limitation laws to oil spill compensation claims?
Source(s) of legal rights that deal with oil spill compensation claims in Nigeria
The appeal court in this case apparently assumed that the sole source of rights for oil spill compensation claims is the Oil Pipelines Act. This is because, as noted below, despite the fact that, through the received English common law applicable in Nigeria that has formed the legal basis of oil spill compensation claims in Nigeria, and even though the claimant in the suit did not specifically plead that the claim was brought pursuant to the Oil Pipelines Act, the court held inter alia that, being a state law, the relevant limitation law did not apply to the act, which is a federal law. This underlying assumption deserves to be examined. Due to how the Nigerian legal system evolved, common law rights are a part of the sources of the Nigerian legal system and can form the basis of rights that are breached and reliefs that are sought in Nigerian courts. In respect of oil spill compensation claims, on the one hand, there are specific provisions under the Oil Pipelines Act that stipulate compensation in the event of damage resulting from an oil spill. On the other hand, common law rights exist in the form of negligence, nuisance and strict liability (based on the principle in Rylands v Fletcher) that also address damage suffered on account of an oil spill.
For instance, in respect of oil spill compensation rights asserted under common law torts, by the claimant's amended statement of claim in Shell v Amaro,Footnote 27 the claimant was seeking compensation in the lower court for an oil spill that occurred as a result of a pipeline leakage based on the rule in Rylands v Fletcher and on breach of statutory duties, negligence and nuisance. One of the issues for determination before the Court of Appeal was whether the lower court was right in applying the rule in Rylands v Fletcher.Footnote 28 The court held that “the learned trial judge was right in his application of the rule in Rylands v Fletcher and held that liability existed against the oil company under the rule in Rylands v Fletcher, though not caused by negligence”.Footnote 29 In Shell v Otoko Footnote 30 the claim was similarly in respect of an oil spill from an oil pipeline leakage that caused damage to properties and, in their pleadings, the claimants based their claim on the rule in Rylands v Fletcher. The appeal court stated that this rule might be relevant in the appeal to show that the oil company was negligent.Footnote 31
In Arong v Mobil Producing Nigeria Limited,Footnote 32 a claim was sought for compensation following an oil spill from one of an oil company's installations. In his judgment, Mustapha J of the Federal High Court held that, “[w]here a plaintiff's action is founded on negligence or [sic] rule in Rylands v Fletcher simpliciter I can see this court not exercising jurisdiction. But where the negligence or rule in Rylands v Fletcher is founded upon any of the subject matters enumerated in sections 251(1) of the Constitution of the Federal Republic of Nigeria this court will not only exercise original jurisdiction but will indeed do so to the exclusion of any other courts”.Footnote 33
In Machine Umudje and Another v Shell,Footnote 34 the oil company was alleged to have constructed an access road and an oil waste pit in the course of prospecting for oil. These activities were said to have caused damage to the farmland, fish, ponds and lakes of the claimants who sought compensation against the oil company. One of the issues on appeal to the Supreme Court was the justification by the lower court for the award of damages based on the application of the principle in Rylands v Fletcher.Footnote 35 The Supreme Court discussed this principle extensively. Although the court held that the findings made by the lower court were too inconclusive and vague for damages to be justified in accordance with this principle, the court did not take issue with the lower court's application of the principle as a source of law for oil spill claims in Nigeria.Footnote 36
As for oil spill compensation under the Oil Pipelines Act, section 11(5) of the act creates substantive rights that allow an oil spill compensation claim for damage suffered by a person. It provides:
“The holder of a licence shall pay compensation –
(a) to any person whose land or interest in land (whether or not it is land in respect of which the licence has been granted) is injuriously affected by the exercise of the rights conferred by the licence, for any such injurious affection not otherwise made good; and
(b) to any person suffering damage by reason of any neglect on the part of the holder or his agents, servants or workmen to protect, maintain or repair any work, structure or thing executed under the licence, for any such damage not otherwise made good; and
(c) to any person suffering damage (other than on account of his own default or on account of the malicious act of a third person) as a consequence of any breakage of or leakage from the pipeline or an ancillary installation, for any such damage not otherwise made good.
If the amount of such compensation is not agreed between any such person and the holder, it shall be fixed by a court in accordance with Part iv of this Act”.
The appeal court in Dadoru v Mobil clearly proceeded as if only the Oil Pipelines Act served as the source of rights for oil spill compensation claims, even though the claimants in that case did not expressly base their claim on the act and notwithstanding that the issue never came up in the lower court, nor did it form an issue or be raised before the appeal court. The court concluded that the relevant limitation law did not apply to that act; based on this and without testing if the oil spill compensation claim was brought in accordance with common law torts and, if so, whether the relevant limitation law would still apply in such a case, the court held that “the right of action of the plaintiff / appellants was created by section 19 of the Oil Pipelines Act 1990”.Footnote 37
It is to be noted that the court only adjudged that state limitation laws are inapplicable to the Oil Pipelines Act and did not actually declare these state laws void.Footnote 38 This however matters very little considering that the court also held limitation statutes to be unconstitutional for curtailing rights of action. Thus, in respect of claims brought within the Federal Capital Territory, the applicable Limitation Act of 1966, a federal law, would still have been disqualified by that court for having the effect of curtailing rights created under the Oil Pipelines Act.
It is curious that the appeal court in this case would pronounce the limitation law inapplicable to the claim based only on its application to the Oil Pipelines Act, when its application to common law tort rights that (as we have seen) Nigerian courts have entertained, would have made the action statute barred.
Generally, English common law that normally applies in the Nigerian legal system will automatically cease to apply where a Nigerian law is passed to cover that area.Footnote 39 In Patkum Industries Ltd v Niger Shoes Manufacturing Ltd,Footnote 40 the issue turned on whether, for the purpose of determining jurisdiction, the same right of passing-off that existed in common law and that also existed under the Trademarks Act, could be pursued as a common law right with implications for the court that would have jurisdiction. The Supreme Court held that, “it is well settled that where a common law right has been enacted into [sic] statutory provision, it is to the statutory provision so made that resort must be had for such rights and not in the common law”.Footnote 41
In the specific case of the application of common law rights to oil spill claims, in Bodo Community and Others v SPDC Footnote 42 the English High Court held that common law rights in Nigeria are now superseded by rights created in the Oil Pipelines Act in respect of financial remedies available for damage caused by the breakage of licensed pipelines, due to neglect in their protection, maintenance and operation. The judge in that case relied on Nigerian cases and Nigerian experts to the effect that, where a common law right has been enacted into a Nigerian statute, that right could only be enforced in accordance with that statute and no longer under common law.Footnote 43 If this position is correct in law then, notwithstanding that the appeal court did not consider this point, state limitation laws would still not apply to oil spill compensation claims. This is because it would mean that, having adjudged these limitation laws inapplicable to the Oil Pipelines Act, the common law oil spill compensation tort rights, which are the only other source of oil spill compensation claims to which such limitation laws would normally have applied, are no longer in operation in Nigeria.
While, as seen above, Nigerian courts have continued to apply English common law torts to oil spill compensation claims in the face of the Oil Pipelines Act, this English case is the first and so far the only judicial authority to hold categorically that common law tort rights relating to oil spill compensation claims have now been subsumed in, and superseded by, rights created in the Oil Pipelines Act. Unfortunately, English decisions are at best of persuasive authority and not binding on Nigerian courts.Footnote 44 In most oil spill cases there has been a near fixation on which court has jurisdiction, and there is actually no Nigerian case in which the issue has been specifically raised and addressed by the courts as to whether these common law tort rights are still applicable in light of the Oil Pipelines Act.
Neither have Nigerian writers addressed this important area.Footnote 45 The only writer who has come close notes on the one hand that the act codifies common law rights on negligence, nuisance and strict liability,Footnote 46 but then argues on the other hand that common law remedies are still applicable in Nigeria regarding these claims,Footnote 47 suggesting implicitly that both sources remain valid within the Nigerian legal system. The rationale for the English decision on this point therefore deserves closer scrutiny in the circumstances.
Each of the provisions in section 11(5)(a), (b) and (c) of the Oil Pipelines Act deals with a different situation. In respect of section 11(5)(a), compensation may be sought in respect of any act of a licence holder (including compensation on account of an oil spill), provided that the damage for which compensation is sought affected land or an interest in land. This provision cannot for instance be the basis for compensation for damage to fishing nets. Section 11(5)(b) is broader, in the sense that it covers compensation for damage to fishing nets. Unlike section 11(5)(a) however, this provision is limited to situations where the damage arises out of the negligent act of the licence holder. Section 11(5)(c) is both broad and limiting, only dealing with compensation claims caused strictly by the breakage or leakage of pipelines and similar installations. Thus, while it will apply to oil spills from pipelines, it will not apply to oil spills from a vessel, or general oil spill or oil pollution claims not attributable to pipeline or installation leakages or breakages. In that sense it is limiting. This provision is silent as to whether negligence is a condition for its application. It is therefore arguable that damage can fall within this provision, whether or not it is caused by negligence. The better position however appears to be that since, unlike section 11(5)(b) that expressly stipulates negligence as a condition, section 11(5)(c) is silent on the negligence of the licence holder as a condition for its obligation to pay compensation, the draftsmen of this provision intended to impose a strict liability obligation on the licence holder. In that sense it is broader than section 11(5)(b). As one writer explains section 11(5)(c) of the act, “the principal liability of the licensee arising from the above provisions is to pay compensation (as distinct from damages) for any injury or damage caused by any person … Obviously, an action for negligence is incompatible with a claim for compensation”.Footnote 48
Similarly, in Nda v AG Bendel State and Others,Footnote 49 Nnaemeka-Agu J held that, compared to a claim in negligence, in a claim for compensation under the act, the defendant's action might be perfectly lawful and faultless. Thus, in respect of an oil spill that affects only land or an interest in land, a claimant can bring a claim under section 11(5)(a). Where there is an oil spill affecting property that is not land in respect of which a claimant is unable to prove negligence against a licence holder, a claim is maintainable under section 11(5)(c), and under section 11(5)(b) if negligence can be established.
It can therefore be said that section 11(5) creates rights in different ways in respect of compensation claims for persons and their property, including oil spills from pipelines, whether arising from a licence holder's act of negligence or not, in very much the same way as common law tort rights exist in negligence and strict liability, based on the principle in Rylands v Fletcher.Footnote 50 Based on the facts of Dadoru v Mobil, an oil spill compensation claim for damage to fishing nets arising from a pipeline leakage would qualify for the application of section 11(5)(c) in the absence of an allegation of negligence. Consequently, the conclusion has to be that these common law tort rights dealing with oil spill compensation claims are now superseded by the rights created under section 11 of the Oil Pipelines Act. The English decision on this point is therefore sound in law.Footnote 51 It is rather strange that the Nigerian courts continue to entertain common law oil spill claims and that this very fundamental point has eluded them all along.
In light of this analysis, the state limitation law would obviously still not have applied even if the court had tested its application to common law rights since, as seen above, those rights no longer have force in the Nigerian legal system. Considering the serious confusion in this area, the court should have provided a basis and justification for excluding common law rights and applying solely the limitation law to the Oil Pipelines Act.
Are limitation laws applicable to oil spill compensation claims under the Oil Pipelines Act?
The court held that the Bayelsa Limitation Law was inapplicable to the compensation claim brought under the Oil Pipelines Act on the grounds that: the limitation law unconstitutionally curtailed rights under that act; and the limitation law conflicted with the act, with the latter prevailing for being a federal law. It is submitted that these two grounds are erroneous. The court was in error in characterizing section 11 of the act as a “right of action”Footnote 52 when in fact it was a substantive (not procedural) right. In an unbroken line of cases, Nigerian courts have distinguished between a substantive right that is unaffected by a limitation statute and a right of action that a limitation law may curtail.Footnote 53
The court specifically found that the 1623 Act is no longer applicable in Nigeria. The court rested this conclusion on three predicates. The court held that “it seems to me also that the Oil Pipeline Act, 1990, being a later enactment, the right of action created by it cannot be said to be impacted by the 1623 Act”.Footnote 54 This is very curious. Based on cannons of statutory interpretation, the coming into force of a new law does not in itself render inapplicable an existing statute, including a received law such as the 1623 Act.
The inconsistency between the 1623 Act and the Oil Pipelines Act was the second reason provided by the court. Unlike federal and state laws that can compete on the same subject matter, necessitating regulation as to which one prevails in the event of an inconsistency, there is no concurrency between a received English law and a local law, whether federal or state. As already noted, once local laws are developed to cover an area, a received English law previously applying to that area will automatically cease to apply, obviating a need for that law and local law to apply simultaneously. Unlike common law rights that deal with oil spill compensation claims that we have already seen overlap with claims under the Oil Pipelines Act, this is not the case with the 1623 Act, which is a statute of limitation.
The third reason provided in the judgment is that, in light of the Limitation Act of 1966, the 1623 Act is no longer applicable in Nigeria. At first blush, this reasoning appears unassailable. After all, as already pointed out, a received English law ceases to apply once a local law comes into force. The problem with this reason however is that the Limitation Act is a federal law that is limited in application to only the Federal Capital Territory;Footnote 55 while its existence may be a basis for the non-application of the 1623 Act in the Federal Capital Territory, it cannot justify its non-application in the states of Nigeria.Footnote 56
Still, it is submitted that the 1623 Act is inapplicable to the claim in question for an altogether different reason. Section 16 of the Bayelsa Limitation Law requires that any “action founded on contract, tort or any other action not specifically provided for in Parts I and II of this Law” (emphasis added) be filed within five years. “Any other action” as used in this law is open-ended and will admit a compensation claim under the Oil Pipelines Act. Conversely, this open-ended phrase does not exist in paragraph III of the 1623 Act, which only expressly mentions specific classes of actions: actions of trespass (quare clausum fregit); actions of trespass (detinue); action sur trover [wrongful detention of or interference with goods]; replevin for taking away goods and cattle; actions of account; actions upon the case other than accounts that concern trade in merchandize between merchant and merchant, their factors or servants; actions of debt grounded upon any lending or contract; actions of debt for arrears of rent; actions of assault, menace, battery, wounding and imprisonment.
While, as already pointed out, an action for damages in negligence comes within “an action upon the case” in this received law, a strict liability claim is not covered by this phrase; after all, the strict liability principle in torts was introduced after the 1623 Act came into force. For the same reason, the phrase is not sufficiently open-ended to accommodate claims under the Oil Pipelines Act; meanwhile, common law oil compensation claims in negligence to which the 1623 Act would normally apply are, as noted above, no longer enforceable within the Nigerian legal system. In other words, in respect of a claim for compensation pursuant to the Oil Pipelines Act, the 1623 Act has no application, as it only applies to common law tort rights that, as seen above, have ceased to apply in Nigeria, at least in respect of oil spill compensation claims.
The lower court was therefore wrong in its judgment when it held that the action was statute barred by virtue of the 1623 Act and the appeal court was correct in its conclusion that the 1623 Act is not applicable. It should however be emphasised that, while this writer's conclusion coincides with the appeal court's own pronouncement that the 1623 Act is not applicable, the reasons are different and none of the court's grounds for arriving at this conclusion is, with respect, sound in law.
The court held that state limitation laws were inconsistent with the Oil Pipelines Act, a federal law, and, invoking section 4(5) of the Constitution, held that the act prevailed over these laws, with the effect that claims brought pursuant to the act were free from the limitation imposed by those state laws. The application by the court of section 4(5) of the Constitution is strange. Limitation of action is a subject that is not expressly mentioned in the exclusive legislative list, under the second schedule to the Constitution.Footnote 57 However, item 68 of the same exclusive list grants the National Assembly law-making powers on “matters incidental or supplementary to any matter mentioned” on that list. For its part, part III of the second schedule to the Constitution states that the “incidental” and “supplementary” powers of the National Assembly in the exclusive list include the power of the National Assembly to make laws on “jurisdiction, powers, practice and procedure of courts of laws”. This writer takes the view that limitation of action matters can affect the competence of an action, but not the court's constitutionally vested jurisdiction. The legal position in Nigeria is however that the concept of jurisdiction covers limitation of action matters.Footnote 58 There are Nigerian cases that have also treated limitation of action issues as procedural matters of court.Footnote 59
This has serious implications. Since, under sections 4(3) and 4(7)(a) of the Constitution, the National Assembly's powers in respect of items on the exclusive list are exclusive to it and not shared with state houses of assembly, the conclusion would seem to be that state limitation laws are invalid to the extent that limitation of action matters is an area that comes within item 68 of the exclusive list. If this interpretation is correct, while the decision under review would be correct in finding the Bayelsa Limitation Law inapplicable, the decision is still, with respect, wrong in invoking section 4(5) of the Constitution, which implies that both the National Assembly and the states have concurrent powers in this area.
Explaining the interaction between state and federal law-making organs in respect of limitation of action matters, one author put it this way:
“It therefore means, Limitation of Actions is a matter within the exclusive legislative jurisdiction of Houses of Assembly of States. This does not mean that [sic] National Assembly cannot enact a law with a limitation of actions clause. The National Assembly can do so under any matter incidental or supplementary to any matter mentioned elsewhere in the Exclusive legislative List set out in part I of the Second Schedule to the Constitution … The implication of the foregoing analysis is that Houses of Assembly of States have exclusive legislative jurisdiction in enacting a law which contains provisions of general scope with regard to limitation of actions, while the National Assembly can only enact laws containing limitation of actions clause with respect to matters within its legislative competence”.Footnote 60
This position is questionable. The better view appears to be that matters over which the National Assembly has power, pursuant to item 68 of the list, are not intended to be part of the National Assembly's exclusive powers. Section 4(3) of the Constitution that creates the National Assembly's exclusivity created it in respect of only “any matter included in the Exclusive Legislative List”. The same is the case with section 4(7)(a) of the Constitution. Item 68 of the list actually reinforces this position. It refers to “any matter incidental or supplementary to any matter mentioned elsewhere in this list”. In other words, “any matter … in this list” (being the areas that section 4(3) of the Constitution refers to as being exclusive) is markedly distinguishable from “incidental” or ”supplementary” matters that item 68 did not characterize as a “matter” “in the list”.
Apart from this literal interpretation, by the very meaning of “incidental” or “supplementary”,Footnote 61 it is clear that such matters were meant to complement and not enjoy the same status as the substantive legislative matters specifically mentioned in items 1 to 66 of the list. Finally, construing item 68 of the list in a way that allows these incidental powers to enjoy the same exclusivity as the specific matters on that list will lead to consequences for states that would produce absurd results. This is because such incidental powers can serve as justification for the National Assembly's legislative competence over virtually all the matters intended for states under section 4.
The implication is therefore that the National Assembly's power on limitation matters is not exclusive to it and this is an area with which states are also constitutionally competent to deal. It is for this reason that several federal laws exist that contain limitation of action provisions apparently made pursuant to the incidental powers of the National Assembly,Footnote 62 while at the same time there are state laws on limitation of actions. This means that the relevant federal law and the state law apply concurrently to the same subject matter on limitation of actions. Where this is the case, an inconsistency will arise between these laws in accordance with section 4(5) of the Constitution, in that the federal and state laws simultaneously prescribe different time frames for filing actions. In that case, it is the limitation of action provision provided for in the federal law that will apply and the state limitation law will be inapplicable.
Thus, in Eboigbe and Others v Nigerian National Petroleum Corporation (NNPC) (Eboigbe),Footnote 63 as was the case in Dadoru v Mobil, the claimants brought a claim for compensation against NNPC for damage to their economic crops arising out of NNPC's petroleum operations. The issue turned on whether the then Bendel State Limitation law (that prescribed a limitation period of six years) or a provision in the NNPC Act (that contained a limitation of action provision prescribing a year for such claims) would prevail. The Supreme Court had this to say on that point: “the provisions of the Limitation Law suspending the running of the limitation period prescribed in the Law do not apply as the provisions of section 12(1) of the Nigeria National Petroleum Corporation Act of 1977 are applicable notwithstanding anything in any other enactment”.Footnote 64
In Asaboro v Pan Ocean Oil (Nigeria) Ltd (Asaboro)Footnote 65 the issue before the appeal court was in fact similar in nature to the issue formulated in Dadoru v Mobil. The appellate court in that case was invited to determine “whether the learned trial judge was right to hold that the period for bringing an action to claim for fair and adequate compensation for damages to surface right under the Petroleum Act, Cap 350, Laws of the Federation, 1990 is twelve years as provided under the Limitation Laws applicable in Delta State”.Footnote 66 The claimants had attempted to justify their claim for compensation pursuant to the Petroleum Act for damage to their rubber plantation, 27 years after the cause of action arose, on the ground that, since the Petroleum Act that created the right did not provide for a limitation period, no limitation of action applied to the action and for this reason the Limitation Law of Delta State did not apply. The appeal court rejected this argument and held that the Delta State Limitation Law applied to the action, notwithstanding that it was brought pursuant to the Petroleum Act, a federal law.
A similar situation arose in Elema v National Electric Power Authority. Footnote 67 In that case the appellant, the claimant in the lower court, had argued that, since the National Electric Power Authority Act did not contain a limitation of action provision, this implied that a claim pursuant to that act was not subject to any limitation period. The appeal court held that such an argument was an “affront to public policy that seeks an end to litigation” and held that the limitation law of Edo State was applicable to the suit brought pursuant to the National Electric Power Authority Act. The court reinforced its conclusion that this state limitation law was applicable, by applying section 31(3) and (1) of the 1963 Constitution (now section 44(2)(i) of the 1999 Constitution) that recognizes general laws of limitation of action claims.Footnote 68
Similarly, in University of Calabar v Umo Edward Umo and 137 Others Footnote 69 the appeal court held that, “[t]he University of Calabar Act Cap 453, Laws of the Federation 1990 which created the applicant herein has no limitation of action clause. In the circumstances whether or not the suit against the appellant is statute barred will be determined on the Limitation Law of Cross Rivers State, section 16”.Footnote 70
Furthermore, in OA Adeniyi v Governing Council, Yaba College of Technology Footnote 71 the appeal court also pronounced on whether the Limitation Law of Lagos State applied to a federal law and held:
“The Appellant, as Plaintiff, made his claims for certain sums of money purportedly as his entitlements, under certain statutes and regulations of the Federal Civil Service and the Polytechnic Act 1990. The statute of limitation therefore applies. That the Limitation Law applies, may not make it necessary to contend suo motu that it should be the Limitation of Action Act of the Federation of Nigeria 1966, Laws of the Federation of Nigeria, 2004 that is applicable to an action governed by the Federal Polytechnic Act and Federal Civil Service Regulations. Since the duration of the Limitation period and effect in both legislations is the same, whether a plea or objection is taken under the Federal Act or Lagos State limitation of action law (as both statutes provide for a period of 6 (six) years), I shall be content to hold that the limitation law applies to this statutory contract contrary to the submission of the Appellant's learned counsel that it was not applicable”.Footnote 72
It is instructive that, as in Dadoru v Mobil, at least two of these cases specifically dealt with federal laws dealing with oil matters (Eboigbe on the NNPC Act and Asaboro on the Petroleum Act) and, like the case in question, these cases also dealt with compensation for damage to property arising from oil operations. Based on these decisions, it is clear that Nigerian courts not only recognize the legislative competence of states to make laws dealing with limitation of actions, but more importantly, and contrary to the Dadoru v Mobil decision, Nigerian cases apply these state limitation laws to rights created under federal laws for compensation. Somehow, and unfortunately, none of these cases came up for review in Dadoru v Mobil.Footnote 73
Two important points emerge from this analysis. Contrary to the decision in Dadoru v Mobil, state limitation laws actually apply to federal laws that create rights. Further, section 4(5) of the Constitution (on which the Dadoru v Mobil decision relied to render the Bayelsa Limitation Law inapplicable to the Oil Pipelines Act) is not relevant, since the Oil Pipelines Act is a law that deals with mines, minerals, oil mining, etc,Footnote 74 (and does not contain a limitation of action provision); the state limitation law is a subject that deals with civil proceedings; there is no overlap between these two areas that can form the basis of rendering the state law inapplicable.Footnote 75
Two cases deserve mention. In his leading judgement in Shell Petroleum Development Co v Farah,Footnote 76 Edozie J of the appeal court held that an action filed in 1988 in respect of damage to land that occurred in 1970 was not statute barred on the ground that the cause of action arose the year the action was filed, since the claimant only became aware that year of the defendant's refusal to rehabilitate its damaged land. In agreeing with this leading judgment, Onalaja J in his supporting judgment held that “it is even erroneous to apply the State Limitation Law to the Petroleum Act which is [sic] Federal Act whilst the Limitation Law is the Law of the State”.Footnote 77 It appears that Onalaja J was not saying anything extraordinary other than emphasizing section 4(5) of the Constitution, which provides that a state law may not apply where a federal law exists on the same matter.Footnote 78 In any event, Onalaja J's pronouncement was made obiter. Also, in Shell Petroleum Development Co Ltd v Chief Goodluck CR Meburu, the court concluded that, having previously acknowledged liability, Shell was liable for a claim that would otherwise have been statute barred; in reaching this conclusion, the court pronounced that “the respondent relying on this statement canvassed that the state limitation law can apply in respect of a federal enactment. This cannot with due respect, be true in the face of the provision of the 1999 constitution”.Footnote 79 The court in Dadoru v Mobil did not refer to, or rely on, either of these two judgments.
The best evidence that the application of state limitation laws to federal laws was contemplated is perhaps the limitation laws that actually expressly exclude specific federal lawsFootnote 80 (such as the Land Use Act and the Merchant Shipping Act) from their application, a clear indication that these state limitation laws are meant to apply normally to federal laws. Furthermore, as noted, section 44(2)(i) of the Constitution actually expressly contemplates the application to the Constitution of “any general law … relating to limitation of actions”. As seen above, it is a state limitation law that will qualify as a general law on limitation of action and not a federal law that happens to contain a provision on limitation periods, as an incidence of that federal law.
Is Dadoru v Mobil an authority on this point in Nigeria?
This judgment might have unwittingly opened the floodgates for needless litigation. On the strength of this judgment, it is of course possible for litigants seeking relief for damage attributable to oil spills, who were previously turned back by courts of first instance on account of their actions being statute barred by virtue of state limitation laws, now to attempt to appeal such decisions. It is also possible for actions that were never commenced based on the assumption that such claims are statute barred now to start finding their way to court on the basis of this judgment. In the Niger Delta this decision may not be helpful from a public policy standpointFootnote 81 as it may lead to the reopening of old wounds.Footnote 82
The defence of laches and acquiescence that, even though equitable in nature, and fact sensitive, is available to defendants who are confronted with this decision in the latter situation and remains as potent as the statutory defence of limitation of action.Footnote 83 Being special defences that are required to be raised in pleadings, it is understandable that the court did not consider this defence, as Mobil appeared not to have raised it in its pleadings. The equitable defence of estoppel by conduct may be equally strong, if a defendant finds itself in a similar situation as Mobil. The statement of claim stated that the claimant in fact received payment of ₦10,000 in 1998 for the damage caused to its fishing nets; although it complained that same year about the inadequacy of this sum, it was not until 2006 that it commenced the suit. In this writer's view, the defence of estoppel by conduct was available to Mobil in those circumstances.Footnote 84
This analysis has demonstrated why this judgment is, with respect, not sound in law. It is suggested that, while oil spill compensation claims grounded in common law rights are no longer enforceable in Nigeria based on this analysis, state limitation laws still apply to oil spill claims brought pursuant to the Oil Pipelines Act as they come under “any other action” in these provisions. For instance, part III, section 16 of the Bayelsa Limitation Law states, “[n]o action founded on contract, tort or any other action …” While an oil spill claim brought under the act cannot be said to be founded in contract or any more in torts (based on the conclusions above), it would surely come within “any other action”.Footnote 85 Such actions are therefore statute barred if brought after the statutory time bar of five years. By implication, in states whose limitation law provisions do not contain the phrase “any other action”, there is no legal basis for the limitation laws of such states to apply to oil spill claims brought under the act. On the other hand, the received English Act of 1623 no longer applies to oil spill compensation claims in Nigeria since it only applies to common law oil spill claims in negligence that we have seen are no longer enforceable in Nigeria.
Nevertheless, as the analysis above has shown, by this judgment there now exist two contradictory lines of judicial authorities of the Court of Appeal on the application of state limitation laws to federal acts: the Dadoru v Mobil decision on the one hand and the Eboigbe and Asaboro decisions on the other. Asaboro came before the Supreme Court in January 2017 and the appeal court's decision was not changed.Footnote 86
It is not very clear which decision prevails where there are conflicts with regard to appeal court decisions. The preponderance of authorities suggests that the appeal court is generally bound by its own previous decisions.Footnote 87 The court is however not bound to follow its previous decisions where new facts emerge that show that the decision was wrongly decided.Footnote 88 In the author's view, the fact that Dadoru v Mobil did not take into account previous decisions on the same point, coupled with analysis that shows that this decision is wrong in law in a number of respects, provides considerable weight to the argument that the appellate court today should not follow this decision on the application of a state law to a federal law.
Where a lower court is confronted with conflicting decisions of a superior court, there is force in the argument that Dadoru v Mobil, being later in time, will be binding on the lower court. The idea that a subsequent decision will take precedence over a previous decision of the same superior court is borne out of the assumption that the subsequent decision had the benefit of the previous decision and had reasons for departing from it, as well as the consistency that following a later decision provides. There is clear judicial support for this position, but only in respect of conflicting decisions of the Supreme Court.Footnote 89
While the argument appears sound that a lower court is bound by the most recent decision of an appellate court (except where the lower court is unaware of such a decision), at least for the sake of consistency, available judicial authority seems to suggest otherwise. In National Electric Power Authority v Onah Footnote 90 counsel to the appellant argued that the appeal court was wrong in upholding the lower court's decision for not following two previous decisions of the appeal court on an issue. The Supreme Court rejected this submission, noting that those two decisions were different from yet another decision of the appeal court that the lower court followed, and held that a lower court “is free to choose between the decisions which appeared to it correct” where there are “conflicting decisions of a superior court”.Footnote 91 Based on this, it is submitted that the most recent authority on the application of state limitation laws to federal laws is not necessarily a binding authority on this point and lower courts are at liberty to choose.
In NNPC v Chief Sele Footnote 92 an oil spillage and oil pollution were alleged to have occurred based on an negligent act arising from oil pipelines, following which claims were brought under the Petroleum Act and the Oil Pipelines Act. The court's jurisdiction was challenged and the suit argued to be statute barred. Unfortunately, the Supreme Court only dealt with the issue of jurisdiction. Its resolution of the statute bar issue would have resolved once and for all the application of a state limitation law to a federal law. Similarly, in the more recent Supreme Court judgment in Asaboro, even though the validity of the Delta State Limitation Law was in issue, and even though the court upheld the appeal court's decision that an action brought 24 years after an oil spillage was statute barred, the court failed to pronounce specifically on the application of a state's limitation law to an oil spill claim under a federal law, more specifically the Petroleum or Oil Pipelines Act, and in the process lost the chance to clarify this area.Footnote 93
Just as this contribution was proceeding to publication, the Court of Appeal handed down a decision on this point that directly contradicts Dadoru v Mobil and that is consistent with the conclusions reached above. In Shell v Dodoye West Footnote 94 an action was filed against Shell in Rivers State in 2013 for compensation for alleged damage to fishing nets by Shell's oil spill in 2006. The lower court dismissed Shell's objection that the action was subject to a statutory federal or state limitation law. In overruling the lower court on appeal, the appeal court held:
“There is no dispute that the Petroleum Act or the Oil Pipelines Act contain no provision on limitation of action but there is also no express exclusion of the application of the existing limitation law to the right of action created therein. Therefore in the absence of express provision in the Oil Pipelines Act excluding the application of existing limitation law, it follows that the claims arising under the said Oil Pipeline Act are not exempted from statutory limitation by virtue of either the Federal Act or State Law. Therefore the Limitation Law of Rivers State should apply to actions resulting from the Oil Pipeline Act within Rivers State since a Claimant cannot wait for an indefinite period of time after the accrual of his right to seek renders in the Court of Law…”Footnote 95
CONCLUSIONS
While the lower court in Dadoru v Mobil was right to apply the state limitation law to the claim, it was wrong to hold that the 1623 Act applied. The Federal High Court that subsequently followed Dadoru v Mobil was wrong in relying on it without considering previous Appeal Court decisions on the application of state limitation laws to federal laws, and without carefully weighing the correct decision in the circumstances. In respect of the Appeal Court judgment itself, while in some instances the conclusion was correct, in many situations the conclusion was based on a very faulty premise: even though solely applying the limitation law to the act was right, the failure to justify this in light of the confusion over the prevalent application of common law by Nigerian courts is difficult to understand; the conclusion that limitation laws curtailed substantive rights in statutes was not well founded. Above all, the conflict said to exist between state limitation laws and federal laws and the invocation of section 4(5) of the Constitution is not borne out from the foregoing analysis and in light of appellate cases that actually apply state limitation laws to federal laws, especially on petroleum matters. The decision in Shell v Dodoye West, which is consistent with the conclusions in this article, is to be preferred.
Dadoru v Mobil is now on appeal to the Supreme Court and it is hoped that the court will clear up the confusion in this very important area very soon, especially in light of the contradictory and more recent Court of Appeal decision in Shell v Dodoye West (also on appeal to the Supreme Court).
