The Nigerian Court of Appeal Upholds South African Choice of Court and Choice of Law Agreement – Conflict of Laws

Case Quotation:

Sqimnga (Nig.) Ltd v. Methods Purposes Merchandise (Nig.) Ltd [2025] 2 NWLR 423 (Courtroom of Enchantment, Lagos Division, Nigeria)

The dispute on this case arose between two Nigerian corporations, Sqimnga Nigeria Ltd (the appellant) and Methods Purposes Merchandise Nigeria Ltd (the respondent). Each events had entered right into a Grasp Service Settlement in Nigeria, relating particularly to software program options. A vital provision of this settlement stipulated that the legal guidelines of South Africa would govern any disputes, and additional, that South African courts would possess unique jurisdiction to listen to any issues arising from the settlement.

When a disagreement emerged between the events, Sqimnga Nigeria Ltd initiated authorized proceedings on the Lagos State Excessive Courtroom. The respondent instantly contested the jurisdiction of the Nigerian court docket, counting on the contractual clause mandating the usage of South African legislation and courts.

On the Excessive Courtroom stage, the court docket declined jurisdiction over the matter. This determination hinged on the court docket’s dedication that Sqimnga Nigeria Ltd had not supplied adequate proof or compelling explanation why the Nigerian courts ought to assume jurisdiction opposite to the clearly stipulated jurisdiction clause within the Grasp Service Settlement.

Dissatisfied with the Excessive Courtroom’s ruling, Sqimnga Nigeria Ltd appealed to the Courtroom of Enchantment. The appellant argued that the trial decide had misapplied the related authorized ideas by overlooking uncontroverted pleadings and witness statements. Moreover, the appellant contended that litigating the case in South Africa would impose pointless bills and inconvenience upon the events.

Nonetheless, the Courtroom of Enchantment unanimously upheld the choice of the trial court docket, dismissing the attraction. In reaching this conclusion, the Courtroom emphasised a number of key issues. First, it bolstered the basic precept of contractual agreements by means of the maxims pacta sunt servanda (agreements have to be saved) and consensu facit legem (consent makes legislation), asserting that freely made agreements, absent fraud or duress, have to be upheld.

Secondly, the Courtroom emphasised that the express international jurisdiction clause agreed upon by the events might solely be put aside if a compelling justification had been supplied. To judge whether or not such justification existed, the Courtroom utilized the Brandon exams derived from the English case of The Eleftheria (1969) 1 Lloyd’s L. R. 237. These exams require the occasion difficult the jurisdictional clause to current clear proof demonstrating “sturdy trigger” for an area court docket to imagine jurisdiction in deviation from the contractual settlement. The Courtroom concluded that Sqimnga Nigeria Ltd failed to fulfill this evidentiary normal, as its arguments relied totally on pleadings, unadopted witness statements, and authorized submissions from counsel, none of which constituted ample proof to fulfill the Brandon exams.

The Courtroom acknowledged the appellant’s concern relating to the inconvenience and extra prices related to litigating overseas however held that such elements alone, with out additional compelling justification, had been inadequate to ignore the jurisdiction clause explicitly agreed upon by each events.

Consequently, the attraction was dismissed, thereby reaffirming the place that Nigerian courts will typically respect and implement international jurisdiction clauses and selection of legislation provisions in contracts except the difficult occasion can conclusively show compelling causes in any other case. Moreover, the appellant was ordered to pay the related prices.

It’s price noting that South African courts may additionally be inaccessible the place the events can not set up a adequate connection to that discussion board. For instance, in Veneta Mineraria Spa v Carolina Collieries (Pty) Ltd (1987) (4) SA 883 (A) at 894 A–B, Viljoen JA held that in a dispute between two international events (peregrini), the mere submission of the defendant (a peregrinus) will not be, by itself, adequate to confer jurisdiction on the South African court docket.

In such a case, to which court docket ought to the occasion searching for to implement its rights flip? Had counsel and the Nigerian courts benefited from comparative analysis on South African legislation, the end result might need been totally different, probably on grounds of public coverage. The Nigerian Supreme Courtroom’s determination in Sonnar (Nig.) Ltd v. Nordwind (1987) 4 NWLR (Pt. 66) 520, 535, affirms that the place a international court docket is inaccessible, a Nigerian court docket could decline to implement a international jurisdiction clause on public coverage grounds.

In conclusion, a non-public worldwide legislation lawyer finest serves their consumer by being well-versed within the comparative dimensions of the topic.