In my last blog post, I made mention of a Nigerian Court of Appeal decision that applied the principle of contract law exclusively to a foreign jurisdiction clause. In that case, applying the principles of Nigerian contract law, the Nigerian Court of Appeal held that the alleged choice of court agreement in favour of Benin Republic was unenforceable because the terms were not clear and unambiguous in conferring jurisdiction on a foreign forum.
The purpose of this blog post is to analyse a more recent Nigerian Court of Appeal decision where the court gave full contractual effect to the parties’ choice of court agreement by strictly enforcing a Dubai choice of court agreement.
Damac Star Properties LLC v Profitel Limited (“Damac”) was the fall out of an investment introduced to the 1st plaintiff/respondent by the 2nd respondent allegedly on behalf of the defendant/appellant wherein the 1st plaintiff/respondent paid a deposit of 350,000.00 US Dollars for 9 apartments in Dubai and being 20% of the total cost of the apartments. The contract between the 1st plaintiff/respondent and defendant/appellant contained an exclusive choice of court clause in favour of Dubai. There was a dispute between the parties as to some of the terms of the contract. This resulted in the defendant/appellant selling the apartments to another buyer. The 1st plaintiff/respondent requested for a refund of the deposit that was paid to the defendant/appellant, but its request was declined. As a result of this, the 1st plaintiff/respondent initiated a suit for summary judgment in High Court, Federal Capital Territory, Nigeria, against the defendant/appellant and the 2nd respondent, and got an order to serve the defendant/appellant through the 2nd respondent, its alleged agent in Nigeria. At this stage, the defendant/appellant did not appear and was unrepresented in proceedings at the High Court. The High Court proceeded to hear the suit and entered judgment against the defendant/appellant with an order to refund the sum of 350,000.00 US Dollars with 10% interest from date of judgment till the judgment sum was fully liquidated. The defendant/appellant applied to the High Court to set aside the judgment, but the court dismissed the application.
The defendant/appellant appealed to the Court of Appeal. The Court of Appeal unanimously allowed the appeal. The Court of Appeal held on the basis of the exclusive choice of court agreement in favour of Dubai – which it regarded as valid – the lower court should not have assumed jurisdiction.
4. Judicial statements in Support of Damac Read more...