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  • First Fuels Ltd v. The Vessel “Leona 11”
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  • 2003-02-10
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First Fuels Ltd v. The Vessel “Leona 11”

FIRST FUELS LIMITED

V

THE VESSEL “LEONA 11”

OWNERS OF THE VESSEL “LEONA 11”

V

INTEGRATED OIL AND GAS LIMITED

SUPREME COURT OF NIGERIA

MUHAMMED LAWAL UWAIS, CJN ( Presided )

MICHAEL EKUNDAYO OGUNDARE, JSC

UTHMAN MOHAMMED, JSC

SAMSON ODEMWINGIE UWAIFO, JSC

EMMANUEL OLAYINKA AYOOLA, JSC ( Read the Lead Judgment )

SC.310/2001

FRIDAY, 13TH DECEMBER, 2002

CONTRACT - Bill of sale - Whether a contractual document

CONTRACT - Beneficiary of - Whether can enforce same

CONTRACT - Whether want of authority of a contracting party to agree to part of the terms embodied in written agreement - Whether can be cured by rectification

CONTRACT - Privity rule as determinant for the remedy of rectification

CONTRACT - Rectification - Object of

CONTRACT - Rectification of document - Power of court to make - How exercised – Condition precedent thereto

CONTRACT - Rule of privity as basis for rectification of a document Exceptions thereto

COURT - Rectification of document - Power of court to make - How exercised - Conditions precedent thereto

DOCUMENT - Rectification of document - Whether every type of mistake can be relied upon for so doing

DOCUMENT - Bill of sale - Whether a contractual document

DOCUMENT - Rectification - When document to be rectified embodies the terms of a prior agreement - Relevant consideration

DOCUMENT - Rectification of - Whether every type of mistake can be relied upon for so doing

DOCUMENT - Rectification of instruments - Whether equity rectifies contracts as well

EQUITY  - Rectification of document - Power of court to make - How exercised  - Conditions precedent thereto

EQUITY - Rectification  - Meaning of in the context of equitable remedy

EQUITY - Rectification - Conditions for

EQUITY - Rectification - Whether want of authority of a contracting party to agree to specific terms of a contract can be cured through rectification

EQUITY - Rectification - Misrepresentation, fraud or mistake - Whether can ground rectification of a document

EQUITY - Rectification - Object of

EQUITY - Rectification - Remedy of  - Privity rule as basis thereof

EQUITY - Rectification - When document to be rectified embodies the terms of a prior agreement - Relevant consideration

EQUITY - Rectification of document - Whether every type of mistake can be relied upon for so doing

EQUITY - Rectification of instruments - Whether equity rectifies contracts as well as instruments

MARITIME LAW - Seized vessel - Giving blank cheque to Admiralty Marshall to sell same for an amount at his discretion - Undesirability of

NOTABLE PRONOUNCEMENT - On undesirability of giving a blank cheque to Admiralty Marshall to sell a seized vessel for an amount at his discretion

SHIPPING LAW - Seized vessel - Giving blank cheque to Admiralty Marshall to sell same for an amount at his discretion - Undesirability of

WORDS AND PHRASES - ‘Rectification’  - Meaning of in the context of equitable remedy

Issue:

Whether or not the defendants have the necessary standing to seek rectification of the Bill of Sale.

Facts:

In July 1997, judgment was given in favour of First Fuels Limited ( the plaintiff). In execution of the said judgment, the Federal High Court on 7 th August, 1997 ordered that the vessel which had earlier been arrested and detained be sold by the Admiralty Marshall who was the Chief Registrar of the Federal High Court. Thereafter, chequered negotiations followed resulting in  orders for the sale of the vessel. Pursuant to the order of  the court made on 7th December, 1998, the Admiralty Marshall executed a deed of transfer dated 9th December 1998 in consideration of a  sale sum of $300,000 (Three Hundred Thousand Dollars), paid by Integrated Oil and Gas Ltd and a Bill of Sale dated 10th December 1998 issued in like terms. More than six months after the deed of transfer was executed and the Bill of Sale issued, the defendants applied to the court for  an order for rectification of the Bill of Sale in accordance with the terms of the Agreement dated 19th October 1998. The Federal High Court  granted the Order in terms as prayed on the ground that by the order of court made on 19th October, 1998 the buyers agreed on 19th October, 1998 to purchase the vessel for a sum of $1,300,000 and that this complied with that order in that the purchase was done before 30th October, 1998 for the sum of $1,300,000 which was above $350,000 as also ordered by the court. The buyers being aggrieved by the ruling, appealed to the Court of Appeal. Allowing the appeal of the buyers, the Court of Appeal held, amongst others, that the sale of the vessel was between the Admiralty Marshall and the buyers and that the sale to the buyers was absolute and not tied to any condition as to fulfilment of an agreement made between it and Alpha Marine Services Ltd. That the defendants not being parties to the bill of sale were not competent to bring an application to rectify it and lacked the standing to bring an application for rectification. Dissatisfied, the defendants appealed to the Supreme Court.