SQIMNGA NIGERIA LIMITED v. SYSTEMS APPLICATIONS PRODUCTS NIGERIA LTD.
COURT OF APPEAL
(LAGOS DIVISION)
(DANIEL-KALIO; BOLAJI-YUSUF; ALIYU, JJ.CA)
FACT
In 2020, the Appellant, Sqimnga Nigeria Limited (Appellant), instituted an action at the High Court of Lagos State against Systems Applications Products Nigeria Limited (Respondent), seeking to recover the sum of ₦88,801,149.05, along with interest at 10% and an additional ₦20 million as costs. The claim was based on a Master Service Agreement (MSA) executed by both parties. A key provision of the MSA Clause 14 stipulated that the agreement would be governed by the laws of the Republic of South Africa and that any dispute arising therefrom would be submitted to the exclusive jurisdiction of the South African courts. In reaction to the suit, the Respondent filed a Notice of Preliminary Objection, urging the court to decline jurisdiction on the ground that the parties had contractually chosen South Africa as the exclusive forum for dispute resolution. The Respondent argued that having freely agreed to resolve disputes only before South African courts, the Appellant was bound by that choice and could not unilaterally bring the dispute before a Nigerian court. The High Court upheld the Respondent’s objection and declined jurisdiction, holding that the parties were bound by the terms of their agreement. The court found that the Appellant had not provided any strong or compelling reason to override the jurisdictional clause and allow the Nigerian court to assume jurisdiction in breach of the agreed forum.
Dissatisfied with the ruling, the Appellant filed a Notice of Appeal at the Court of Appeal. Among other issues, one of the key issues for determination was: Whether the trial court was right to decline jurisdiction on the basis that the Appellant had not placed sufficient material before it to justify why a Nigerian court contrary to the contractual forum clause should entertain the dispute.
“The Nigerian Courts, in deciding whether to assume jurisdiction where there is a foreign clause in an agreement, are inclined to hold the parties to their bargain”
ARGUMENTS
Learned Silk for the Appellant argued that the trial court was wrong to decline jurisdiction. He pointed out that both parties are Nigerian companies, the contract was signed and carried out in Nigeria. In his view, these facts clearly supported the Nigerian court’s authority to hear the matter. He maintained that the lower court’s claim that there was “insufficient material” to assume jurisdiction was unfounded. According to him, the statement of claim, witness statement on oath, and affidavit in support of the summary judgment application all of which were before the court clearly set out the relevant facts. Since these documents were not disputed or countered by the Respondent, they should have been taken as true.
He further relied on the Brandon test, which provides guidance on when a court can take jurisdiction despite a foreign forum clause. He argued that the test was met in this case and noted that when a defendant challenges jurisdiction without filing a defence, the facts in the claimant’s pleadings may be treated as admitted. The Learned Silk also submitted that a court should not automatically refuse jurisdiction just because the parties had agreed to resolve disputes in a foreign country. He argued that the trial court had misapplied the law by insisting that the Appellant file a separate affidavit opposing the preliminary objection. Since the relevant facts were already before the court and were not challenged, no additional affidavit was necessary. Finally, he stressed the practical hardship that would result from sending the dispute to South Africa stating that it would lead to unnecessary legal expenses and travel costs, especially since all aspects of the dispute were based in Nigeria. He concluded that this hardship was obvious and did not require further proof.
In response, Learned Silk for the Respondent argued that it is settled law where there is no allegation of fraud, duress, or misrepresentation, parties are bound by the terms of their contract, and the courts are not permitted to rewrite or disregard the intentions of parties simply because one party later finds the agreement inconvenient. Counsel pointed out that although both parties are Nigerian companies, they had freely and deliberately agreed in the Master Service Agreement that the contract would be governed by South African law and that disputes would be resolved exclusively by South African courts. Having made that choice, the Appellant could not later try to avoid it by asking a Nigerian court to assume jurisdiction.
He further submitted that where a party files a suit in breach of a foreign jurisdiction clause, the law places a burden on that party to prove, with credible evidence, that strong reasons or compelling circumstances exist for disregarding the agreed forum. This principle, he noted, is well established under the Brandon test. According to Counsel, the Appellant failed to meet this burden. He argued that the Appellant’s reliance on its statement of claim, witness statement on oath, and affidavit in support of summary judgment was misplaced. A statement of claim, he explained, is merely a pleading and not evidence. Similarly, a witness statement on oath only becomes evidence when the witness formally adopts it in open court. As those documents had not been formally adopted or tested, Counsel submitted that the lower court was right to disregard them. Even if the court had considered them, he argued, they did not establish any compelling or exceptional reason to override the parties’ clear agreement on jurisdiction.
DECISION OF THE COURT
In resolving this issue, the Court of Appeal held that:
The Nigerian Courts, in deciding whether to assume jurisdiction where there is a foreign clause in an agreement, are inclined to hold the parties to their bargain. This is because parties to a contract are legally bound to do what they have agreed to, and the court will not normally interfere with the agreement of the parties in the absence of fraud, duress, or misrepresentation. The Court added that before the Nigerian Courts can exercise the discretion to assume jurisdiction in such an instance, a party seeking the same must place before the Court sufficient, compelling evidence, and strong reasons to warrant such interference.
In applying the Brandon test, the Court held that the Appellant has failed to place before the court the standard of evidence required to warrant the exercise of its discretion to assume jurisdiction. Furthermore, the Court stated that the argument of the Appellant that the court should assume jurisdiction was not borne out of any evidence adduced or placed before the court, but instead, a sentimental expression in the address of counsel who argued that since the parties are Nigerian companies, it will be a burden on them to retain legal services in South Africa without regard to the settled principle of law that address of counsel, no matter how brilliant, cannot make up for lack of evidence.
Issue resolved in favour of the Respondent
Olumide Aju, SAN for the Appellant.
Adedapo Tunde-Olowu, SAN for the Respondent.
This summary is fully reported at (2025) 03 CLRN in association with ALP NG & Co.
See www.clrndirect.com ; www.alp.company.
