Shell - London High Court Ruling on Claims Re Oil Spills in Nigeria

8/12/2019 Shell - London High Court Ruling on Claims Re Oil Spills in Nigeria

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Mr Justice Akenhead:

Introduction

1. In this Group litigation, the many Claimants, numbering some 15,000 or more and

including several representative type claimants and claims on behalf of children, seekdamages at common law and statutory compensation under the law of Nigeria in

relation to oil spills from pipelines said to have been caused by Shell Petroleum

Development Company of Nigeria (Shell or SPDC) in the Niger Delta and said to

affect people living in or with connections to neighbouring areas known as Bodo and

Gokana. Preliminary issues have been ordered and the Court has heard evidence of

Nigerian law from two former Supreme Court judges, Justices Oguntade and Ayoola

for the Claimants and Shell respectively, to whom, albeit that they disagreed on much,

I am indebted.

The Background

2. Before what is now known as Nigeria became a unified country, there were different

tribal areas, including Hausa, Yoruba, Fulani, Igbo and Ogoni, the latter in the eastern

Niger delta area. Well before the 19th Century, the territories which now make up

Nigeria had systems of administration of justice. The northern area was strongly

influenced by Muslim law, principally of the Maliki School, whilst the southern areas

had systems of customary law. In 1862, the British established Lagos as a colony,

indeed setting up a court there and English law was introduced by Ordinance the

following year. In 1874, a separate government was set up for Lagos (and the Gold

Coast) and the Supreme Court was established two years later over the areas in which

the British Government had jurisdiction. A protectorate having been established by the

British for much of the northern part of what is now Nigeria, in 1914 the Colony andProtectorate of Southern Nigeria and the Protectorate of Northern Nigeria were

amalgamated. There were three tiers of court, the Supreme Court, provincial courts and

native courts. By the Nigeria (Constitution) Order in Council 1954, a federal

constitution was recognised with effect from 1 October 1954; the federation comprised

the Northern, Western and Eastern Regions and a federal territory, Lagos. The 1954

Constitution established the Federal Supreme Court. Nigeria became independent on 1

October 1960.

3. Following a long period of oil exploration, oil was discovered in January 1956 for the

first time in Nigeria apparently in commercial quantities at one field in Oloibiri in the

Niger Delta. At that time, Shell-BP had been the only or main concessionaire. It is clearthat the Federal Government considered that it was necessary to provide a statutory

framework for the creation of an oil industry, in particular for the transmission of any

oil discovered. It relatively speedily introduced a bill which became the Oil Pipelines

Act 1956 (OPA) which came into effect on 4 October 1956. At the second reading of

the bill on 2 August 1956, the Minister of Land, Mines and Power, Mr Muhammadu

Ribadu, told the House of Representatives:

Mr Speaker, Sir, hon. Members will be aware that large oil companies are

energetically exploring Nigeria for oil. Wells have been bored in a number of

localities and traces of oil found, but unfortunately it is as yet too early to say

whether it has been found in commercial quantities. But if, though I would muchprefer to say when, it is found in such quantities it is essential that the company


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finding it should have facilities to convey the oil easily and cheaply to a place of

shipment or to its place of utilisation".

He went on:

"The Bill now before the house is designed, in view of the extremely heavycapital investment required before oil can be found, to give the discoverer of oil

in commercial quantities the right to facilities for the installation of a pipeline for

the conveyance of the oil. But though its right is granted, the actual route over

which the pipeline will run must be approved by the Minister, and before it is so

approved full opportunity must be given for the lodging and hearing of

objections, the safeguarding of the rights of other interested parties and the

payment of compensation.

The grant will be one of an oil pipeline licence, which, I would stress, would

convey no title to the land itself. The license will be held for any period up to 99

years, or during the currency of the relevant oil prospecting licence or oil mininglease, and will enable mineral oils, natural gas, their derivatives and components,

and steam and water so far as that is incidental to the main purpose, to be

conveyed. The licensee will be responsible for compensating not only those

whose lands or interests in lands are dangerously affected, but also for damage

suffered by any innocent persons by any breakage or leakage of the pipe, unless

maliciously caused by a third party.

The main principle behind the bill is not a new one. There are already examples

in Nigerian law of rights to run electric cables or water mains across land not

owned by the power or water authorities which control the cables or pipes. It is

not only logical to extend this principle of oil pipelines but essential if Nigeria isto obtain the full benefit of any oil under her soil. Sir, the objects and reasons at

the end of the bill clearly explain its various clauses, and honourable members

will not wish it to go into further details at this stage."

Later in the debate, the Minister said:

I point out that mineral resources are a national asset in the hands of the

Federation and that the Company which extracts these resources pay royalties

which are paid to the region of origin in full and pays company tax to the

Federation.

Mr Speaker, Sir, I must make it clear to hon. Members that facilities must be

given to these people who spend millions of pounds in order to find oil in our

country, which in turn will go a long way to assist the economy of our country.4. There have been some amendments to the OPA. A Petroleum Act was passed in 1969

which amongst other things vested the ownership and control of all petroleum in the

state.

5. Shell from the start was and continues to be the single most dominant of the

independent oil companies who have exploited the oil resources of Nigeria, much of it

in the Niger delta area. There are thousands of kilometres of crude oil pipelines criss-

crossing the delta region as well as numerous oil extraction areas and well heads. Thereare a number of refineries, the best known perhaps being that at Port Harcourt. It is


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clear that, over the more than 50 years since 1956, there have been a large number of

oil spills, some at least of which have been the consequence of what is known as illegal

bunkering which has involved criminal gangs who drill or otherwise break into the

pipelines and extract crude oil with a view to refining it themselves and then selling it

unofficially. Over the years, there have been numerous court proceedings in relation to

oil spills against oil companies, in which Shell seem to appear often as defendant.These have been mostly proceedings by individuals, communities and other

representative bodies for damages for nuisance, negligence and under the rule in

Rylands v Fletcher as well as under the compensation provisions of the OPA. Asubstantial number of the cases have proceeded to appeals including to the Supreme

Court of Nigeria.

6. The Bodo community occupies an area south east of Port Harcourt, between it and the

sea. It is in the Gokana Local Government Area in Rivers State. Much of the area is

mangrove swamp and it is said to border a river known locally as the Bonny River; it

may well be tidal and numerous rivers and streams bisect the area. There are some

disputes as to the full geographical scope of the Bodo community area and as to whohas what land rights. It is said that the area extends to some 9,230 hectares or about 35-

36 square miles. There are 24 and 28 crude oil pipelines which run across the area.

7. The claims in these proceedings relate to two crude oil spills from the 24 pipeline in

the Bodo area said to have occurred between 28 August and 7 November 2008 and 7

December 2008 and 19 February 2009; the full extent of the spillages and their timing

is in dispute. Subject to such disputes Shell admit liability under the OPA for these

spillages.

8. By agreement between the parties but subject to some jurisdictional reservations, these

13 sets of proceedings have been brought in the English Court, initially in the QueensBench Division but latterly transferred to the TCC. Various but not all related

proceedings in the Nigerian Courts have been issued and I was told that some may

have been suspended pending the decisions of this Court.

9. Extensive pleadings have been served in the various sets of proceedings. In essence,

the various Claimants base their claims on private and public nuisance, negligence,

Rylands v Fletcherand under the OPA. Preliminary issues have been ordered, albeitby consent:

Issue 1: Whether the Claimants are only entitled to claim compensation in respect of

the 2008 spills under the OPA?

Issue 2: Whether SPDC can be liable under Section 11(5)(b) of the OPA 1990 to pay

just compensation for damage caused by oil from its pipelines that has been released

as the result of illegal bunkering and/or illegal refining?

Issue 3: Whether compensation under the following pleaded heads of loss is

recoverable by individual claimants under the OPA: shock and fear; annoyance,

inconvenience, discomfort and illness; distress and anxiety; aggravated damages;

exemplary damages?

Issue 4: Whether the amount of just compensation recoverable under the OPA in

relation to damage arising from oil spills (save in respect of the claims for loss ofearnings) will be assessed in accordance with the diminution in value of the land


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and/or interest in land which have been damaged and/or the loss of the amenity value

of that land or interests therein and/or consequential loss? If not, what alternative

measure should be used?

Issue 5: Whether awards of just compensation under the OPA, or awards of general

damages at common law, should be valued by reference to previous awards made by

the English Courts or by reference to the value of land and/or the cost of living in

Nigeria?

Issue 6: Whether the Court lacks jurisdiction to try some or all of the claims (as

pleaded) on behalf of the Bodo Community and the claims by the individuals under

the OPA 1990 and/or in nuisance and/or in negligence and/or Rylands v Fletcher by

reason of Section 30 of the CJJA 1982?

Issue 7: Whether the damage - both pecuniary and non-pecuniary - alleged to have

been suffered by the claimants, in both the individual and community claim, are

recoverable in claims (whether brought individually or by representative action) for

damages in public nuisance?

Issue 8: Whether interest is recoverable on awards of just compensation and/or

damages at common law for past losses?

The Constitution, the Court System and the Sources of Nigerian Law

10. The current Constitution of Nigeria is the Constitution of the Federal Republic of

Nigeria introduced by the Constitution of the Federal Republic of Nigeria

(Promulgation) Decree 1999. The Federation comprises 36 states with Abuja as the

Federal Capital Territory. The "1999 Constitution" or "the Constitution", as it is called,

was introduced by the then military government when a handover to civilian rule was

to be brought in; it replaced the 1979 Constitution and there were some similarfeatures. Section 1 of the Constitution established its supremacy. Section 1(3) enacted

that:

"If any other law is inconsistent with the provisions of this constitution, this

constitution shall prevail, and that other law shall to the extent of the

inconsistency be void."

11. Sections 4, 5 and 6 of the Constitution vest legislative, executive and judicial powers in

the National Assembly (the Senate and House of Representatives), the President and

the Federal Courts. The laws of the National Assembly have primacy over those of the

states and the National Assembly has power to make legislation from what is known asthe Exclusive Legislative List and the Concurrent Legislative List but the states

only have powers to legislate from the latter list.

12. Chapter IV of the Constitution addresses Fundamental Rights such as Section 35(6):

Any person who is unlawfully arrested or detained shall be entitled to

compensation and public apology from the appropriate authority or person

Section 44(3) of the Constitution, which is of some relevance in this case provides as

follows:


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the entire property in and control of all minerals, mineral oils and natural gas,

in under or upon any land in Nigeria or in, under or upon the the territorial waters

and the Exclusive Economic Zone of Nigeria shall vest in the Government of the

Federation and shall be managed in such manner as may be prescribed by the

National Assembly."

This undoubtedly reflects the importance of oil, in particular, to the economy of

Nigeria. This is also reflected in the exclusive jurisdiction granted (by Section

251(1)(n) of the Constitution) to the Federal High Court in civil causes and matters

relating to:

mines and minerals (including oil fields, oil mining, geological surveys and

natural gas)

13. The Constitution in Chapter VII provides for the Supreme Court, the Court of Appeal

and for the Federal High Court. The decisions of the Supreme Court are binding on

lower courts but the Supreme Court is not bound by its own decisions.

14. Although the Constitution does not itself lay this down, it is common ground that the

sources of Nigerian law are the Constitution, Nigerian legislation, received English

law, Nigerian customary law and Nigerian case law. Nigerian legislation comprises

statutes, those being Acts of the National Assembly or State Houses of Assembly.

Subsidiary legislation would include statutory regulations made under such Acts.

Received English law comprises English common law, equity, statutes of general

application in force in England on 1 January 1900, statutes and subsidiary legislation

on specified matters and English law consisting of statutes (i.e. Acts of the UK

Parliament and prerogative Orders in Council) introduced into Nigeria by English

legislation before 1 October 1960 and not yet repealed by an appropriate authority inNigeria. Section 32(1) of the Interpretation Act 1964 states:

"(1) Subject to the provisions of this section and except in so far as other

provision is made by any Federal law, the common law of England and the

doctrines of equity, together with the statutes of general application that were in

force in England on the first day of January, 1900, shall, in so far as they relate to

any matter within the legislative competence of the Federal legislature, be in

force in Nigeria."

It will be necessary to consider this provision particularly in the context of Issue 1.

There can however be no doubt that Nigerian legislation, and particularly the federallegislation, has primacy and can exclude or limit common law.

15. I accept Justice Ayoolas observation at paragraph 67 of his Third Report which stated:

The case law in Nigeria suggests that a statute will probably be held to be a

statute "of general application" if the following conditions are satisfied:

67.1. The statute was in force in England on 1 January 1900; and

67.2. That in respect of its subject-matter, it applied to all classes of the

community in England on that date.

This was not challenged effectively or at all by Justice Oguntade.


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16. Similarly, it was not challenged that Nigerian Law adopts and applies the same

principles of statutory interpretation as in England and Wales.

17. There are regular and accepted law reports of cases at first instance both in state and

federal courts, the Court of Appeal and in the Supreme Court and the Court here hasbeen referred to many such cases. They are in English and are, particularly in the

appellate courts, comprehensible and well set out. There is little current legal literature

in Nigeria and what there is is not recent, albeit that what there is can be useful for

research purposes; it is rarely used as a source of law itself.

The Approach of this Court

18. There is no dispute that the applicable law on all liability aspects is the law of Nigeria.

In this country, as elsewhere, the Court has to receive evidence of that foreign law and

for that reason each party deployed highly respected former Supreme Court Justices. I

have to assess their valuable contributions about Nigerian Law as evidence but, unliketypical cases for instance about personal injuries in which a trial judge might test a

witness evidence for instance by his or her demeanour or evasiveness, given their

extensive and illustrious careers I can not decide the evidence on their credibility in

that way but more on the intellectual weight of their opinions based primarily in

reported Nigerian law, backed up by English Law given its incorporation into Nigerian

Law.

19. This is not a case in which it is appropriate for the Court to form a view that one

Nigerian Law expert gave his evidence in a better way than the other. Justices

Oguntade and Ayoola for the Claimants and Shell respectively were each Supreme

Court Justices of distinction, albeit each now retired for some years. Each gave theirevidence in as helpful a way as they could, in circumstances in which neither, as

former judges, was particularly used to answering questions, let alone from the witness

box. Justice Oguntades reports were more general than those of Justice Ayoola, whose

reports were particularly helpful in the detail to which they went and with the

historical, legal, judicial and legislative background provided; I imply no criticism at

all of Justice Oguntades reports for being shorter and more general and they made

easier reading accordingly. It is appropriate to adjudicate on their evidence on the basis

of the strength of and support for the legal arguments which they each supported. I

have taken into account however concessions made, mainly by Justice Oguntade, when

questioned.

20. It is common ground that the Court here must put itself into the position of the

Supreme Court of Nigeria to decide in effect what that court would decide on the issues

of Nigerian Law which need to be decided upon. It is not necessary for this Court to

consider that it is bound by any Nigerian decisions as the Supreme Court of Nigeria is

not bound by its own decisions. That said, very serious weight needs to be given by this

Court to Nigerian Supreme Court decisions.

Issue 1: Whether the Claimants are only entitled to claim compensation inrespect of the 2008 spills under the OPA?

21. This raises an issue, which has never apparently been raised let alone addressed ordecided in any case in Nigeria, save possibly there was an oblique obiterhint in one


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first instance decision. The issue goes to whether the OPA provides an exclusive code

for compensation for people affected by oil spillages, exclusive in the sense that the

common law is excluded. It is common ground that, if it is not an exclusive code, there

are potentially arguable causes of action by one or more of the thousands of claimants

in respect of oil spillages or leakages in negligence, nuisance (both private and public)

and in Rylands v Fletcher. There are numerous cases in which parties such as all orsome of the respective Claimants in this case have sued oil companies (and often Shell)

in the courts at common law, under the OPA or based on both approaches for oil

spillages from pipelines and, whatever the outcome, whether it is a win for the

claiming parties or not, the judges have never been asked to address this issue and have

never raised this on their own motion. It is thus said that this should carry much weight

against the proposition which is advanced by Shell that the OPA is an exclusive code.

As in many jurisdictions, not least perhaps in England, the Court needs to address the

intellectual merit of the argument in these circumstances because that merit has never

been tested or ruled upon before. I can attach therefore little weight to the fact that it

has never apparently occurred either to any practitioner in Nigeria in these sort of cases

or to Shell or to any Nigerian judge of his or her own motion to raise or consider thepoint. If one reached the intellectually honest and supportable position that the OPA

was an exclusive code for the recovery of compensation in oil spillages from pipelines

in Nigeria or otherwise, then the fact that it had never been raised or addressed before

could not in logic be used nonetheless to undermine that position. I will briefly review

a number of the cases relied upon principally by the Claimants Counsel and Justice

Oguntade at Paragraph 66 below.

22. As in this country, usually the courts address the bona fide disputes which emerge on

the pleadings in the case before them. In most and possibly all the cases cited by

Justice Oguntade in which the Nigerian Courts at various levels have dealt with oil spill

compensation/damages cases it does not seem to have mattered whether the claim wasput on a common law or statutory basis; no-one raised the issue as to whether the

courts were jurisdictionally barred from hearing the common law claims. In Odiase

and Anor v. Agho and ors[1972] 1 All N.L.R (Part 1) 170, 176 Lewis J.S.C in thelead judgment in the Supreme Court said:

Normally if there is an appeal against a judgment on one point then the appeal

stands or falls on that one point. When we give judgment on that point we have

not pronounced on points not argued and, though they rest as part of the decision

of the High Court, they remain open to argument as points of law in any other

future appeal before us unfettered by any pronouncement of this Court as to their

validity.

Making an apparently unexceptional point, albeit in a dissenting judgment, in the

Supreme Court, Odu'a Investment Company Ltd v Talabi [1997] 10 NWLR 1,

Kutigi, J.S.C, said at p. 56B:

I must emphasise that a case is only authority for what is actually decided and

it is not appropriate to quote it even for a proposition that may seem logically to

follow from it."

Justice Ayoola said, and I accept, that this correctly reflects Nigerian law and the

practice of the courts.


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23. There is no express wording in the OPA which actually excludes the common law.

Thus, for example, the wording does not say that for oil spillages from pipelines the

common law is excluded or that it is the only compensation payable. It is common

ground between Justices Oguntade and Ayoola, and rightly so, that what is needed here

therefore to determine whether the common law or common law rights are excluded by

the OPA is necessary implication from the words used in the statute and possibly alsothe context. They, and I, accept that there is a rebuttable presumption against legislative

interference with the common law and that the same principles of statutory

interpretation as apply in England and Wales apply in Nigeria.

24. Professor A.E.W. Park albeit in 1968 wrote at page 50 in The Sources of Nigerian

Law(Sweet & Maxwell):

while it is beyond dispute that Nigerian legislation can override English

common law, equity and statutes, it does not automatically follow that such an

enactment removes from the law any English rule on the same or a related

subject. In each case it is necessary to examine the enactment and decide from itscontents and the surrounding circumstances whether it was intended to supplant

or merely to supplement the comparable portion of the received English law.

25. The Nigerian Supreme Court said in Awolowo v Shagari(1979) 6-9 SC 51:

A statute should always be looked at as a whole; words used in a statute are to

be read according to their meaning as popularly understood at the time the statute

became law; a statute is presumed not to alter existing law beyond that

necessarily required by the statute.

26. Another Supreme Court decision was Adeshina v Lemonu[1965] 1 ALL NLR 233 inwhich it was argued that a provision in the Minerals Act 1958 vesting property in all

rivers, streams and watercourses in Nigeria in the Crown had overridden the publics

common law right to fish in tidal waters. The Supreme Court held:

This argument overlooks the presumption against implicit alteration of the law:

see Maxwell on the Interpretation of Statutes (10th ed.) p. 81, and Craies on

Statute Law (5th ed.) p. 310. Maxwell puts it as follows: One of these

presumptions is that the legislature does not intend to make any substantial

alteration in the law beyond what it explicitly declares, either in express terms or

by clear implication

Learned counsel for the appellant has not referred to any provisions of the

Minerals Ordinance as pointing to an intention to affect existing rights of fishery

by the vesting of rivers etc. in the Crown, and we do not think that the right of

public fishing stated in Amachree v Kalio (supra) was affected by the

Ordinance. (pages 237-8)

27. In Craies on Legislation(10th ed., 2012), the author says:

14.1.2 The creation of a statutory duty to do something does not of itself

abrogate a common law duty to do that thing, unless there is something about the


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form or content of the statutory duty which is repugnant to the continuation of the

common law duty

14.1.7 Presumption against legislative interference with common law

Despite the increasing shift towards control by legislation, there remains arebuttable presumption that the legislature does not intend to alter a clearly

established principle of law

Statutes are not presumed to make any alteration in the common law further or

otherwise than the Act does expressly declare Leach v. R [1912] AC 305

So in many cases the courts have rejected a possible interpretation of legislation

on the grounds that it would involve significant departure from pre-existing

common law, without the departure being expressly provided for or a necessary

implication from the context of the provision.

28. It is then legitimate in Nigerian Law to have regard to English jurisprudence to

consider what factors should be taken into account to determine whether the rebuttable

presumption that the common law is not ousted can be rebutted. In Marriage v East

Norfolk Rivers Catchment Board[1950] 1 KB 284, the case related to the defendant,a statutory drainage board, which pursuant to powers under the Land Drainage Act

1930 had dredged spoil from a river depositing it on the bank thus raising the bank by

1-2 feet with the result that, following flooding of the river, water could not readily

return to the river so that the plaintiffs mill property was damaged. The first instance

judge had decided that there was no cause of action in nuisance or negligence because

the only remedy was under section 34(3) of that Act. The Court of Appeal dismissed

the appeal in judgments which are helpful and illustrative. Section 34 gave the boardswide powers to do extensive works in and around waterways and Section 34(3) stated:

Where injury is sustained by any person by reason of the exercise by a drainage

board of any of its powers under this section, the board shall be liable to make

full compensation to the injured person, and in case of dispute the amount of the

compensation shall be determined in the manner in which disputed compensation

for land is required to be determined by the Lands Clauses Acts".

29. Material parts of the judgments are:

It is necessary to look carefully at the Land Drainage Actto see (a) whatpowers, rights and duties are given to catchment boards; (b) how the carrying out

of those powers, rights and duties may affect various persons; and (c) whether

any and, if so, what, remedies are given to persons who may be affected by the

operationsIt is equally clear from the nature of work that the doing of it may

cause nuisance and damage to a number of people. One cannot interfere with the

course of a river, or even of a stream, without causing upset: the operation of

dredging or cleansing a river results in spoil which has to be put somewhere, and

that may create a nuisance. This was recognised by Parliament, and s.34, sub-s 3,

provides that, where injury is sustained by any person by reason of the exercise

by a drainage board of any of their powers under the section, the board shall be

liable to make full compensation to the injured person in the manner provided(Page 297 per Singleton LJ)


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I am satisfied that the remedy by way of compensation given by s.34, sub-s 3,

was intended to cover the kind of case under consideration. I am not sure that it

matters whether a violation of the legal right was shown or not: my impression is

that the intention of Parliament was to avoid lengthy and costly litigation on

questions of this kind and to ensure that anyone who suffered damage in

consequence of work done under the powers given by the section should have aright to compensation. After all, the work is undertaken for the benefit of persons

in the area; they contribute to the cost of it directly or indirectly; and if one of

them suffered damage from the operations he should be entitled to compensation

from the general fund. At least it would seem that if damage be sustained through

the operations, that will provide prima facie evidence of a right to

compensationExamination of the Land Drainage Act, 1930, and of s.34 in

particular, leads irresistibly to the view that Parliament recognised that there

might be, and frequently must be, a nuisance created by the carrying out of works

under the powers given by the section; and compensation for any damage

sustained thereby is provided (ibid page 298)

The cases cited on this aspect of the matter also included Manchester

Corporation v Farmworth ([1930] AC 171,183), where Lord Dunedin said:

"When Parliament has authorised a certain thing to be made or done in a certain

place, there can be no action for nuisance caused by the making or doing of that

thing if the nuisance is the inevitable result of the making or doing so authorised.

The onus of proving that the result is inevitable is on those who wish to escape

liability for nuisance, but the criterion of inevitability is not what is theoretically

possible but what is possible, according to the state of scientific knowledge at the

time, having also in view of certain common-sense appreciation which cannot be

rigidly defined, of practical feasibility in view of the situation and of expense."

The general principle is thus well settled, but its application in any particular case

must depend on the object and terms of the statute conferring the powers in

question (including the presence or absence of a clause providing for

compensation and the scope of any such clause), the nature of the act giving rise

to the injury complained of, and the nature of the resulting injury. I venture to

think that the questions which arise in any given case of this kind are substantially

these: first, was the act which should be occasioned the injury complained of

authorised by the statute?; secondly, did the statute contemplate that the exercise

of the powers conferred would or might cause injury to others?; thirdly, if so, was

the injury complained of an injury of a kind contemplated by the statute?; and,

fourthly, did the statute provide for compensation in respect of any injury of the

kind complained of sustained through the exercise of the powers conferred? If the

answers to all these questions are in the affirmative then, I think, it must follow

that the party injured is deprived of his right of action and left his remedy in the

form of compensation under the statute...(pages 305-6 per Jenkins LJ)

In the absence of any provision in the Act for compensating persons injured by

the exercise of the board's powers, difficult questions might arise as to the extent

(if any) to which the Act should be regarded as depriving a person thus injured of

his ordinary remedy in the courts, inasmuch as he would, if so deprived, be

wholly without remedy. But the Act including, as it does, a provision for

compensation in the shape of s.34, sub-s.3, the considerations above stated seem


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to me to lead irresistibly to the conclusion that the intention of the Act was to

make the board, acting in good faith and within their powers, the sole judge of

what was necessary or proper to be done in the way of drainage operations for the

benefit of their catchment area as a whole and, within limits which I will

endeavour to define below, to deprive persons injured by any exercise of the

board's powers of their ordinary remedy by way of action, and substitute theremedy by way of compensation prescribed by s.34, sub-s.3. (ibid pages 308-9)

The limits outside which the ordinary rights of action remain are, I think, these:

(a) The injury must be the product of an exercise of the boards powers as such,

as opposed to the product of some negligent act occurring in the course of some

exercise of the boards powers but not in itself an act which the board are

authorised to do (b) The injury must be the product of the operation which the

board intended to carry out, and not of some unintended occurence brought about

in the course of carrying out the work owing to negligence in carrying it out(c)

The operation must not be one which on the face of it is so capricious or

unreasonable, or so fraught with manifest danger to others, that no catchmentboard acting bona fide and rationally, not recklessly, would ever have undertaken

it (ibid page 309)

30. In Monro v Revenue and Customs Commissioners [2008] EWCA Civ 306, the

Court of Appeal addressed an issue as to whether a taxpayer only had a statutory

remedy for the repayment of overpaid tax as opposed to a restitutionary claim at law.

Lady Justice Arden said:

22In my judgment, the authorities give clear guidance that if Parliament creates

a right which is inconsistent with a right given by the common law, the latter is

displaced. By "inconsistent" I mean that the statutory remedy has some restrictionin it which reflects some policy rule of the statute which is a cardinal feature of

the statute. In those circumstances the likely implication of the statute, in the

absence of contrary provision, is that the statutory remedy is an exclusive one.

31. This case built upon an earlier House of Lords case, Johnson v Unisys Ltd [2001]UKHL 13, where the court had to consider whether the Employment Rights Act 1996

provided an exclusive code which precluded an employee from seeking damages for

wrongful dismissal at common law. The statute provided for limited compensation for

unfair dismissal before an industrial tribunal. Such a common law right was precluded

by the 1996 Act. As Lord Hoffman stated in the leading judgment:

37. The problem lies in extending or adapting any of these implied terms to

dismissal. There are two reasons why dismissal presents special problems. The

first is that any terms which the courts imply into a contract must be consistent

with the express terms. Implied terms may supplement the express terms of the

contract but cannot contradict them. Only Parliament may actually override what

the parties have agreed. The second reason is that judges, in developing the law,

must have regard to the policies expressed by Parliament in legislation.

Employment law requires a balancing of the interests of employers and

employees, with proper regard not only to the individual dignity and worth of the

employees but also to the general economic interest. Subject to observance of

fundamental human rights, the point at which this balance should be struck is amatter for democratic decision. The development of the common law by the


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judges plays a subsidiary role. Their traditional function is to adapt and

modernise the common law. But such developments must be consistent with

legislative policy as expressed in statutes. The courts may proceed in harmony

with Parliament but there should be no discord

56 Part X of the Employment Rights Act 1996 therefore gives a remedy forexactly the conduct of which Mr Johnson complains. But Parliament had

restricted that remedy to a maximum of 11,000, whereas Mr Johnson wants to

claim a good deal more. The question is whether the courts should develop the

common law to give a parallel remedy which is not subject to any such limit.

57My Lords, I do not think that it is a proper exercise of the judicial function ofthe House to take such a step. Judge Ansell, to whose unreserved judgment I

would pay respectful tribute, went in my opinion to the heart of the matter when

he said:

"There is not one hint in the authorities that thetens of thousands of people thatappear before the tribunals can have, as it were, a possible second bite in common

law and I ask myself, if this is the situation, why on earth do we have this special

statutory framework? What is the point of it if it can be circumvented in this way?

it would mean that effectively the statutory limit on compensation for unfair

dismissal would disappear."

58Ican see no answer to these questions. For the judiciary to construct a general

common law remedy for unfair circumstances attending dismissal would be to go

contrary to the evident intention of Parliament that there should be such a remedy

but that it should be limited in application and extent.

59. The same reason is in my opinion fatal to the claim based upon a duty of care.

It is of course true that a duty of care can exist independently of the contractual

relationship. But the grounds upon which I think it would be wrong to impose an

implied contractual duty would make it equally wrong to achieve the same result

by the imposition of a duty of care.

Lord Millett went on to say:

But the creation of the statutory right has made any such development of the

common law both unnecessary and undesirable. In the great majority of cases the

new common law right would merely replicate the statutory right; and it isobviously unnecessary to imply a term into a contract to give one of the

contracting parties a remedy which he already has without it. In other cases,

where the common law would be giving a remedy in excess of the statutory limits

or to excluded categories of employees, it would be inconsistent with the declared

policy of Parliament. In all cases it would allow claims to be entertained by the

ordinary courts when it was the policy of Parliament that they should be heard by

specialist tribunals with members drawn from both sides of industry. And, even

more importantly, the co-existence of two systems, overlapping but varying in

matters of detail and heard by different tribunals, would be a recipe for chaos. All

coherence in our employment laws would be lost.

32. Halsbury's Laws of England(4thEd 2001) states:
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"187. Compensation clauses

In a case where the legislature authorises interference with the rights of private

persons, provision is generally made for the payment of compensation to persons

injured. The effect of such a clause is normally to deprive persons injured of their

ordinary rights of action and to substitute the remedy by way of compensation asregards matters within the scope of the clause. The absence of such a clause from

an Act conferring powers affords an indication, though not a conclusive one, that

it was not intended to authorise interference with private rights

759. Tort of breach of statutory duty

Where the enactment itself provides a remedy the question may arise whether

it is intended to be additional to the general sanctions and remedies available

under the law or in addition to them. The enactment may expressly or by

implication exclude existing remedies

Where the Act itself provides a remedy but there is no express or impliedindication as to whether other remedies are also available, there is a prima facie

presumption that it is intended to be the only one available. This presumption

will not always exist and the question depends in each case on the construction of

the enactment concerned. The question is, however, one of the true construction

of the particular statute concerned, and it may be that the intention of the statute,

as disclosed by its scope and by its wording, that other remedies should not be

excluded"

33. Marcic v Thames Water Utilities Ltd[2003] UKHL 66 involved the flooding of theplaintiffs land with sewage discharged from the defendants sewers, caused by

overloading of the sewerage system, the defendant being the statutory undertaker underthe Water Industry Act 1991, whereby its key duty of providing an effective sewerage

system was to be enforced in the first instance by the Director General of Water

Services. The plaintiff sued for nuisance and for breach of the Human Rights Act. It

was held that common law rights were superseded by the statute. Lord Nicholls in a

leading judgment said:

21. Mr Marcic's difficulty is this. Section 94(3) provides, so far as relevant, that

a sewerage undertaker's duty to provide an adequate system of public sewers

under section 94(1) is enforceable by the Director under section 18, in accordance

with a general authorisation given by the Secretary of State. Hence, as provided

in section 18, the remedy in respect of a contravention of the sewerage

undertaker's general drainage obligation lies solely in the enforcement procedure

set out in section 18. Thus, a person who sustains loss or damage as a result of a

sewerage undertaker's contravention of his general duty under section 94 has no

direct remedy in respect of the contravention. A person in the position of Mr

Marcic can bring proceedings against a sewerage undertaker in respect of its

failure to comply with an enforcement order if such an order has been made. In

the absence of an enforcement order his only legal remedy is, where appropriate,

to pursue judicial review proceedings against the Director or the Secretary of

State, who has similar enforcement functions regarding section 94, in respect of

any alleged failure by the Director or the Secretary of State to make anenforcement order as required by section 18(1).


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22. In the present case no enforcement order has been made against Thames

Water in respect of the inadequate drainage of Mr Marcic's property. Nor has Mr

Marcic advanced a complaint that by not making such an order the Director is in

dereliction of his duty under section 18. Indeed, Mr Marcic seems to have made

no complaint of any sort to the Director, although his opportunities in this regard

were drawn to his solicitors' attention early in 1998. Rather, in advancing claimsbased on common law nuisance and under the Human Rights Act 1998, Mr

Marcic seeks to sidestep the statutory enforcement code. He asserts claims not

derived from section 94 of the 1991 Act. Since the claims asserted by him do not

derive from a statutory requirement, section 18(8) does not rule them out even

though the impugned conduct, namely, failure to drain the district properly, is on

its face a contravention of Thames Water's general statutory duty under section

94. The closing words of section 18(8) expressly preserve remedies for any

causes of action which are available in respect of an act or omission otherwise

than by virtue of its being a contravention of a statutory requirement enforceable

under section 18

33. The Goldmanand Leakeycases exemplify the standard of conduct expected

today of an occupier of land towards his neighbour. But Thames Water is noordinary occupier of land. The public sewers under Old Church Lane are vested

in Thames Water pursuant to the provisions of the 1991 Act, section 179, as a

sewerage undertaker. Thames Water's obligations regarding these sewers cannot

sensibly be considered without regard to the elaborate statutory scheme of which

section 179 is only one part. The common law of nuisance should not impose on

Thames Water obligations inconsistent with the statutory scheme. To do so would

run counter to the intention of Parliament as expressed in the Water Industry Act

1991.

34. In my view the cause of action in nuisance asserted by Mr Marcic is

inconsistent with the statutory scheme

35The existence of a parallel common law right, whereby individual

householders who suffer sewer flooding may themselves bring court proceedings

when no enforcement order has been made, would set at nought the statutory

scheme. It would effectively supplant the regulatory role the Director was

intended to discharge when questions of sewer flooding arise.

34.

In Regina (Child Poverty Action Group) v Secretary of State for Work andPensions [2010] UKSC 54, the Supreme Court addressed an issue whether theSecretary of State could sue for recovery of overpaid social security benefits by way of

the common law other than via the statutory basis therefor. Sir John Dyson (as he then

was) said:

27. There are many examples of cases where the court has considered whether

the provisions of a statute have impliedly overridden or displaced the common

law. In each case, it is a question of construction of the statute in question

whether it has done so. Deutsche Morgan Grenfell Group plc v Inland Revenue

Commissioners [2006] UKHL 49, [2007] 1 AC 558 concerned a claim for

compensation in respect of the payment of advance corporation tax which hadbeen demanded contrary to the EC Treaty. One of the issues was whether section
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intended the statutory code contained in section 71 of the 1992 Act to be

exhaustive.

35. In Total Network SL v Revenue and Customs Commissioners [2008] UKHL 19,Lord Mance said at Paragraph 130:

The critical question, in my view, is whether the statutory scheme supersedes

and displaces the common law rights and remedies which the Commissioners

would otherwise have: see Deutsche Morgan Grenfell Group plc v. Inland

Revenue Commissioners[2006] UKHL 49,[2007] 1 AC 558,per Lord Walker at

para. 135. For this to be the case, it seems to me that the statute must positively be

shown to be inconsistent with the continuation of the ordinary common law

remedy otherwise available, and further that this must be shown to be the case as

against the particular defendant. In support of the passage cited above, Lord

Walker referred to two cases where an exclusive scheme would have been "set at

nought" or "defeated" if a common law claim had been permitted. In Marcic v.

Thames Water Utilities Ltd. [2003] UKHL 66; [2004] 2 AC 42, the statutoryscheme for ensuring that water undertakers performed their statutory duties

appropriately would have been set at nought if a common law claim for damages

in nuisance had been possible; and in Autologic Holdings plc v. Inland Revenue

Commissioners [2004] UKHL 54; [2006] 1 AC 118, the majority in this House

held that, at least where the time limit for use of the statutory scheme had not

expired, a taxpayer's only way of challenging a taxing provision as contrary to

European law was by making use of the statutory tribunal scheme, as opposed to

judicial review. In contrast, in Woolwich Equitable Building Society v. Inland

Revenue Commissioners[1993] AC 70, also cited by Lord Walker, there had been

no lawful assessment, it was not therefore possible to seek a remedy through the

statutory scheme (which "where applicable, overlaid and replaced the commonlaw principles") and so a common law claim for restitution could lie: per Lord

Goff of Chieveley at pp.168G-170D, esp. at p.169H-170B. The case of Johnson

v. Unisys Ltd.[2003] 1 AC 518 falls in my opinion into the same category. The

claimant was contending for a common law remedy covering the same ground as

the statutory right available to him under the Employment Rights Act 1996

through the Employment Tribunal system, and it was held that it would have been

contrary to Parliament's intention to recognise such a remedy: per Lord Nicholls

of Birkenhead at para. 2 and Lord Hoffmann at paras 58-59.

36. The Nigerian cases broadly reflect the thinking applied in those English cases. In

Universal Trust Bank and others v Chief Oludotun Olajide Koleoso [2006] 18

NWLR 1, the Court of Appeal (Agbo JCA with whom the others agreed) said at page

15:

"It has become trite law that statutory provisions supersede common law or

customary law. Where therefore a statute has provided for certain actions,

common law provisions relating to such actions cease to apply."

37. In Harka Air Services (Nig) Ltd v Keazor(2011) LPELR 1353 (SC), the Supreme

Court had to consider the impact of the Warsaw Convention (Air Carriers Liability) on

the common law personal injury claims of a claimant for the negligence of an air

carrier. Adekeye JSC (who delivered the leading judgment) said at page 14:
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"The Warsaw Convention is an international treaty, an international

agreement, a compromise principle which the high contracting States have

submitted to be bound by the provisions. They are therefore an autonomous body

of law whose terms and provisions are above domestic legislation. Thus, any

domestic legislation in conflict with the Convention is void. The purpose and

intention of the Warsaw Convention is to remove those actions governed by theWarsaw Convention as amended by the Hague Protocol from the uncertainty of

the domestic laws of the member States.

The law is that where domestic/common law right has been enacted into a

statutory provision, it is to the statutory provision that resort must be had for such

right and not the domestic/common law. Hence an air passenger is not at liberty

to choose as between the provisions of the convention and the domestic/common

law for claims against the carrier. Such claims have to be asserted only in

accordance with and subject to the terms and conditions of the convention and

cannot be pursued under any other law."

38. The Supreme Court had addressed the supercession issue in an earlier case, Patkun

Industries Ltd v Niger Shoes Manufacturing Co Ltd 1988 NWLR 138, which

involved a claim for infringement of trade marks and passing off and raised an issue as

to whether the Federal Court had jurisdiction to entertain such an action; it was argued

that the passing off claim was a common law claim and the State courts had

jurisdiction. Section 3 of the Trade Marks Act 1965 stated:

No person shall be entitled to institute any proceedings to prevent, or to recover

damages for the infringement of an unregistered trade mark; but nothing in this

act shall be taken to affect the rights of action for passing off goods of another

person or remedies in respect thereof.

39. Karibi-Whyte JSC, giving the lead judgment, said at pages 152-3:

The section prohibits action in respect of unregistered trade marks but preserves

the right of action for passing-off goods as the goods of another. Thus a right of

action in respect of passing-off arising from the Trade Marks Act 1965 is

preserved by the proviso italicised [as above]

It is well settled law where a statutory provision is in conflict or differ from

common law, the common law gives place to the statute. A statutory right may be

conferred in addition to, and not in derogation of a common law right-See

National Assistance Board v Wilkinson (1952) 2 QB 648. This is exactly what

Section 3 of the Trade Marks Act, 1965 has done. In addition to the right of

action conferred on the owner of a registered Trade Mark, the statute has in this

section conferred an additional right of action by preserving the right of action of

passing-off in respect of such goods

It is well settled law that where a common law right has been enacted into

statutory provision, it is to the statutory provision so made that resort must be had

for such rights and not in the common law.

40. One needs then to draw together the various strands of precedent and my conclusions

on Nigerian Law are:


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(a) A statute can supercede, and have primacy over, the common law.

(b) It can do so expressly or by implication. In either case, it will be a matter

of interpretation whether common law rights have been excluded.

(c) There is a rebuttable presumption against legislative interference with thecommon law (see Adeshina).

(d) The provision by the statute in question for compensation for victims of or

persons affected by the subject matter of the legislation is a pointer towards

the statute excluding the common law but it is not determinative. Even without

compensation, a statute can exclude the common law (see Marcic). The more

comprehensive the compensation scheme, the more likely it is that common

law is replaced by the statute. To this can be added, the more comprehensive

the code (particularly if it has extensive compensation arrangements) within

the statute in relation to the area of life or commerce, the more likely that the

common law is replaced.

(e) Where the rights granted or created by the statute are inconsistent with the

common law, such inconsistency is or may be a strong pointer towards the

exclusion of the common law (see Monro). Inconsistency in this contextmeans the statutory remedy having some restriction in it which reflects some

policy rule of the statute and is a cardinal feature of the statute.

(f) Upon examination of the statute, the Court should decide from the contents

and the surrounding circumstances whether it was intended to supplant or

merely to supplement the comparable portion of the received English law (see

Park).

(g) There have to be sufficiently substantial differences between the common

law and the statute in question and that they demonstrate that [the legislature]

could not have intended the common law remedy to survive the introduction

of the statutory scheme but the Court should not be too ready to find that a

common law remedy has been displaced by a statutory one, the mere fact

that there are some differences between the common law and the statutory

positions is unlikely to be sufficient unless they are substantial (see ChildPoverty Action Group).

(h) A factor pointing towards exclusion of the common law is that if both thecommon law and statutory provisions and machinery co-exist, differing in

matters of detail, there could be chaos (see Johnson).

(i) Another factor pointing towards or against exclusion is whether the

statutory regime would be "set at nought" or "defeated" if common law claims

can remain permitted (see Deutsche Morgan Grenfell referred to in Total

Network).

41. To the above must be added by way of general observation the basic tenets of statutory

interpretation. Primarily one looks at the words used to ascertain the meaning. If there

is ambiguity, one can have regard to the legislatures debates (Pepper v Hart[1993]AC 593). One can have regard to the purpose of the statute either derived from the


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wording within the statute itself or from extraneous sources such as reports from for

instance law commissioners reports as to the mischief which the proposed legislation

was designed to address (see Lord Browne-Wilkinson at page 630 in Pepper v Hart);this also applies to the terms in which the relevant minister introduced the legislation to

the legislature (page 631 ibid).

42. The OPA describes itself in its head note as An Ordinance to make provision for

licences to be granted for the establishment and maintenance of pipelines incidental

and supplementary to oilfields and oil mining, and for purposes ancillary to such

pipelines." Section 3 gives the Minster the power to grant "(a) permits to survey routes

for oil pipelines; and (b) licences to construct, maintain and operate oil pipelines" with

the proviso that "each licence shall be issued in respect of and authorise the

construction, maintenance and operation of one pipeline only". Part II provides for the

Minister to grant permits to survey the routes for oil or gas pipelines and for the

entitlement of a permit holder to enter the land upon or reasonably close to the route

specified in the permit and there survey, take levels, dig and bore into the soil and

subsoil, to cut and remove trees and vegetation and to do all other necessary relatedacts (Sections 4 and 5). Section 6 provides for the permit holder to give notice before

entering and sub-section (3) required it to take all reasonable steps to avoid

unnecessary damage to any land entered upon, and any buildings, crops or profitable

trees thereon and to make compensation to the owners for any damage done to any

land under such authority and not made good.

43. Part III relates to the licences to be granted to the holder of a permit to survey and to

such licensees in relation to oil pipelines. The minster may grant or refuse the licence

(Section 7(2)). Sections 7(4) and (5) require that no one other than the holder of a

licence may construct, repair or maintain an oil pipeline and that anyone who acts in

contravention of this requirement shall be guilty of a criminal offence and liable to 2years in prison or a fine and there are consequential provisions relating to the removal

of any illegal pipeline. Section 8 relates to the application for a licence. Section 9

states:

(1) Any person whose land or interest in land may be injuriously affected by the

grant of a licence made within the period specified for objections lodged verbally

or in writing at one of the specified addresses notice of objection stating the

interest of the objector and the grounds of objection.

(2) Matters relating to quantumof compensation shall not be material grounds to

be included in a notice of objection under this section

Section 10 requires the Minister to consider objections and inform the applicant and

objectors of his decision.

44. Section 11(5), with which this issue is most concerned, provides for compensation:

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 nototherwise made good; and


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(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 oron 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.

45. Sub-section (6), added by amendment to the Oil Pipelines Act 1965, provided as

follows:

"For the removal of doubt it is hereby declared that the powers granted to the

holder of a licence under this Act shall be exercisable only subject to the

provisions of this Act and of any other enactment or rule of law".

46. Sections 12, 14 and 15 impose restrictions on the licence holder such as not

constructing works on the site of or within 50 yards of any public road, dam or

reservoir or entering upon burial grounds or cemeteries. By Section 16, the licence

holder is to provide, for owners or occupiers of land in respect of which the licence was

granted and of adjoining land or for the accommodation of the users of any customary

track, necessary crossings, bridges, culverts, drains or passages. Section 17 originally

provided that licences could be granted for up to 99 years but was later altered to a

maximum of 20 years. Sub-section (4) provided:

Every licence shall be subject to the provisions contained in this Act as in force

at the date of its grant and to such regulations concerning public safety, the

avoidance of interference with works of public utility in, over and under the land

included in the licence and the prevention of pollution of such land or any waters

as may from time to time be in force."

Sub-section (5) provided for certain conditions deemed to be included within a licence

in the absence of the express provisions to the contrary. This included an obligation "to

commence the construction of an oil pipeline within a period to be specified by the

Minister and to complete the same and all necessary installations with reasonable

dispatch, and to maintain the same during the currency of the licence" and "to

indemnify the Minister against any claims arising from injury to any person or damage

to any public or private property as a result of any act or thing done by the holder of the

licencein accordance with the licence".

47. Section 18 gave the Minister the power to permit a person other than the licence holder

to use the pipeline.

48. Part IV contains provisions which deal with compensation. Section 19 addresses what

court has jurisdiction in relation to compensation:

If there be any dispute as to whether any compensation is payable under anyprovision of this Act or if so as to the amount thereof, or as to the persons to


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whom such compensation should be paid, such dispute shall be determined by a

magistrate exercising civil jurisdiction in the area concerned if such magistrate

has in respect of any other civil matter monetary jurisdiction of at least as much

as the amount of compensation claimed and if there be no such magistrate by the

High Court exercising jurisdiction in the area concerned and, notwithstanding the

provisions of any other Act or law, in respect of the decision of a magistrate inaccordance with this section there shall be an appeal to the High Court of the

State and in respect of a decision of the High Court of the State under this section,

whether original or appellate, there shall be an appeal to the Court of Appeal:

Provided that nothing in this Act shall be deemed to confer power upon a

magistrate to exercise jurisdiction in a matter of raising any issue as to the title to

land or as to the title to any interest in land."

In this context, this provision has been superseded by the Constitution which gives to

the Federal High Court jurisdiction to deal with cases affecting oil pipelines and the

like. In Shell Petroleum Development Company Nigeria Ltd v Isaiah [2001] 11

NWLR 168, the Supreme Court addressed a jurisdictional case as to whether a StateCourt had jurisdiction in a case in which, following a tree falling on Shells pipeline,

crude oil spilled during the subsequent repairs of the pipeline polluting and damaging

the plaintiffs land, swamps and streams. The State High Court awarded the plaintiff

N22m as damages under the rule in Rylands v Fletcher. Mohammed JSC gave the

lead judgment, saying at page 179:

"It is clear from the pleadings that the spillage and pollution occurred when the

appellant was trying to repair the indented pipeline by cutting off the said section

and installing a new section. I think it cannot be disputed if I say that installation

of pipelines, producing, treating and transmitting of crude oil to the storage tanks

is part of Petroleum Mining Operations. Therefore if an incident happens duringthe transmission of petroleum to the storage tanks it can be explained as having

arisen from or connected with or pertaining to mines, and minerals, including oil

fields, and oil mining. I therefore agree that the subject matter of the respondents'

claim falls within the exclusive jurisdiction of the Federal High Court as is

provided under section 230 (1) (a) of Constitution (Suspension and Modification)

Decree No. 107. Similar opinions concerning claims pertaining to oil spillage

have been held by the Court of Appeal in Barry and 2 Ors. V. Obi A. Eric and 3

Ors. (1998) 8 NWLR (Pt.562) 404 at 416 and The Shell Petroleum Development

Company of Nigeria Limited v. Otelemaba Maxon and Ors. Maxon's (2001) 9

NWLR (Pt. 719) 541".

Based on this, and I find, based on my understanding of the evidence of both Justices

Oguntade and Ayoola, the Federal High Court has exclusive jurisdiction to deal not

only with any cases at common law but also any claim for statutory compensation

under the OPA insofar as there are separable remedies.

49. Section 20 is allied with the earlier provisions relating to compensation:

(1) If a claim is made under subsection (3) of section 6 of this Act, the court

shall award such compensation as it considers just in respect for any damage done

to any buildings, crops or profitable trees by the holder of the permit in the

exercise of his rights thereunder and in addition may award such sum in respectof disturbance (if any) as it may consider just.


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(2) if a claim is made under subsection (5) of section 11 of this Act, the court

shall award such compensation as it considers just, having regard to -

(a) any damage done to any buildings, crops or profitable trees by the holder of

the licence in the exercise of the rights conferred by the licence; and

(b) any disturbance caused by the holder in the exercise of such rights; and

(c) any damage suffered by any person 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; and

(d) any damage suffered by any person (other than as stated in such subsection (5)

of this section) as a consequence of any breakage of or leakage from the pipeline

or an ancillary installation; and

(e) loss (if any) in value of the land or interests in land by reason of the exercise

of the rights as aforesaid,

and also having regard to any compensation already awarded in accordance with

subsection (1) of this section.

(3) In determining the loss in value of the land or interests in land of a claimant

the court shall assess the value of the land or the interests injuriously affected at

the date immediately before the grant of the licence and shall assess the residual

value to the claimant of the same land or interests consequent upon and at the

date of the grant of the licence and shall determine the loss suffered by the

claimant as the difference between the values so found, if such residual value is a

lesser sum.

(4) No compensation shall be awarded in respect of unoccupied land as defined in

the Land Use Act, except to the extent and in the circumstances specified in that

Act.

(5) In determining compensation in accordance with the provisions of this section

the court shall apply the provisions of the Land Use Act so far as they are

applicable and not in conflict with anything in this Act as if the land or interests

concerned were land or interests acquired by the President for a public purpose.

(6)If the total sum awarded by the court in accordance with this section exceeds

an amount already offered to the claimant by the holder of the licence the court

may order such holder to pay the costs of the proceedings; and if the sum so

awarded does not exceed the amount offered by such holder the court shall either

order the claimant to pay the cost of the proceedings or order each side to bear its

own costs.

(7) Compensation (if any) awarded by the court in accordance with this section

shall be a sum of money payable forthwith or shall consist of periodical

instalments or partly one and partly the other.

Provided that nothing in this subsection shall preclude the court awarding

additional compensation upon subsequent application if loss or damage from the


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operation of the oil pipeline be proved and the court is of opinion that such loss or

damage is loss or damage not contemplated at the date of the original award.

50. The remaining sections in Part IV are of interest:

21. Where the interests injuriously affected are those of a local community, thecourt may order the compensation to be paid to any chief, headman or member of

that community on behalf of such community or that it be paid in accordance with

a scheme of distribution approved by the court or that it be paid into a fund to be

administered by a person approved by the court on trust for application to the

general, social or educational benefit and advancement of that community or any

section thereof.

22. If any question arises respecting the title to the lands affected under this Act,

the parties in possession as being the owners thereof, or in receipt of the rents of

such lands as being entitled thereto at the time of service under section 6 or 8 of

this Act as the case may be, shall be deemed to have been lawfully entitled tosuch lands, unless the contrary be shown to the satisfaction of the court, and they

and all parties claiming under then or consistently with their possession shall be

deemed entitled to any compensation payable under this Act, but without

prejudice to any subsequent proceedings against such parties at the instance of

any person claiming to have a better right thereto.

23. The payment to any person to whom any compensation shall be paid or the

payment into court of any compensation upon a decision of the court shall

effectually discharge the person making such payments from seeing to the

application or being answerable for the misapplication thereof.

Provided that were any person is in possession of any land affected by the

provisions of this Act by virtue of any estate less than an estate of inheritance, or

where any person is in possession thereof in any fiduciary or representative

character, the compensation may be paid to such persons and in such proportions

and instalments and after such notices as the court may direct."

51. Part V of the OPA addresses a number of miscellaneous matters including:

(a) Section 24 enables the court to grant a writ of possession against anyone who

hinders or obstructs persons authorised under the Act and Section 25 makes such

hindering or obstruction a criminal offence.

(b) Section 27 addresses breach of the terms or conditions of licences:

(1) If there shall be a breach of any of the terms or conditions upon which the

licence has been granted the Minister may by notice in writing require the

holder of the licence to remedy such breach within such period being not less

than three months as may be specified in such notice.

(2) If the holder of the licence shall fail within the period so specified to

remedy such breach the Minister may by notice to the holder revoke the said

licence, without prejudice to anything lawfully done thereunder and without


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prejudice to any claims for compensation against the holder made in

accordance with the provisions of this Act.

(c) Section 28 deals with what is to happen on the expiration or termination of

the licence, which includes the purchase of pipeline by the Minister or its

removal.

(d) Section 33 gives the Minister power to make regulations to prescribe

"measures in respect of public safety" and "the prevention of pollution of any

land or water" as well as "such matters relating to the construction,

maintenance and operation of oil pipelines as the Minister considers it

necessary or appropriate to prescribe".

52. The context of the OPA was, obviously, the discovery earlier in 1956 in the Niger

Delta region of potentially large quantities of oil. There was undoubtedly a very real

appreciation that this would be a critically important asset, as it has turned out to be.

Geographically, this part of Nigeria was and is for a variety of reasons a difficult areato search for, extract and transport oil. These reasons include the fact that it is partly

tidal, low lying and swampy, with large areas of water, in rivers, streams and ponds;

the area was of course significantly populated. Justice Oguntade also said that it was

known as a poor region and implicitly an area which was subject to significant criminal

activity; I am not satisfied as to that as a matter of fact as there is no contemporaneous

corroboration of that, albeit, as Section 11(5)(c) of the OPA suggests, malicious acts of

third parties must have been anticipated as a real possibility. It was undoubtedly

anticipated that there could be real difficulties in transporting any discovered and

extracted oil and the OPA was designed to facilitate this. Of course, it was also

appreciated (as is clear from the OPA itself) that people in the Delta would have land

rights and interests in or over land affected by not just the running of pipelines acrossthe Delta region but also by oil spills.

53. There was much discussion as to the impact of Section 32 of the Interpretation Act,

whose material words are: except in so far as other provision is made by any

Federal lawthe common law of Englandshall, in so far as they relate to any matter

within the legislative competence of the Federal legislature, be in force in Nigeria.

The argument hinted at by Justice Ayoola and not wholly abandoned by Shell was that

this was a strong pointer towards the common law being ousted where federal statutes

addressed an area of endeavour, such as the OPA. Ultimately, Shells Counsel in their

final submissions (if they had not accepted it before), rightly accepted that this section

simply acknowledges the principle of supercession, whereby statute can qualify or evenremove common law rights and provided a statutory platform for the controlled

reception of the English Common Law in Nigeria (in their final written submissions).

One is therefore drawn back to interpretation of the OPA to determine if the Nigerian

legislature intended to oust the common law.

54. Justice Ayoolas thesis, repeated emphatically in both his reports as well as his oral

testimony, was that the legislature introduced the OPA to provide an autonomous,

comprehensive and federal framework in Nigeria to cover the surveying for,

construction, maintenance and operation of the oil pipeline network system. He said in

evidence that the OPA provided a complete system on its own. Justice Oguntade,

whilst effectively accepting that the OPA was an important piece of legislation, wasfirm in his view that it did not and need not provide some sort of exclusive code for


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compensation for oil spills and the like and that the common law remedies could co-

exist side by side without any difficulty.

55. The compensation scheme provided for by the OPA is very broadly drawn. When one

examines the sub-heads of compensation within the sub-sections of Section 11(5), there

are some parallels and some differences between it and the common law:

(a) In sub-section (a), compensation is payable to people whose land or interest in

landis injuriously affected by the exercise of the rights conferred by the licence

It is rightly common ground between the experts that this equates to nuisance and

trespass. Indeed, it must be the case that rights to claim as against licencees for

nuisance and trespass at common law have been removed by operation of the OPA

because the behaviour involved in going into the areas which the licencee is entitled

to go into can not be unlawful as they have been rendered lawful by the OPA. There

is statutory permission to the licencee to enter, place pipelines on that land and

operate and maintain them. Like in the Marriage case, because nuisance and

trespass are predicated upon unlawful acts, the statute provides for the lawfuljustification for those activities even if they do cause damage and injurious affection.

The OPA provides for compensation for the injurious affection, which primarily

relates to the damages recoverable for nuisance at least and probably for trespass.

This provides for compensation for what are lawful acts and thus goes further than

the common law. No want of care or neglect as such has to be proved and that is, or

in many cases would be, wider than the common law relating to many types of

nuisance.

(b) The second head relates to any person suffering damage by reason of any

neglect on the part of the holderto protect, maintain or repair any work structure or

thing executed under the licence The use of the word neglect implies both faultand the failure or omission to do something which the holder was generally or

specifically required to do. As the experts each accepted, this equates to negligence

albeit it goes arguably wider because it is not hidebound by any neighbour principle

otherwise deployed in the common law relating to negligence, it is related to a

causative damage test only and is not restricted by economic loss considerations

which are a limiting feature in the tort of negligence.

(c) The third head relating to any person suffering damageas a consequence of

any breakage of or leakage from the pipeline or an ancillary installation equates

closely if not exactly to liability in Rylands v Fletcher. It envisages the escape of

something noxious, oil, brought onto land over which a party may have possessoryrights. The exclusion of liability under this sub-section for the malicious act of a

third person widens a liability under Rylands v Fletcher, since the act of a third

party (a defence to liability to such a common law claim) does not need to be

malicious.

It has not been suggested, let alone argued, that in practice any other torts are or would

be applicable, other than nuisance (public and private), trespass to land, negligence and

Rylands v Fletcher, in relation to the activities of the licence holder and for the escapeof the oil from the pipelines for any reason.

56. It can be asked why the legislature needed to provide for compensation at all ifcommon law rights were intended still to apply. The arsenal of common law rights


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would be fairly effective to protect the local people in the event of oil spills or other

escapes, albeit that there are of course defences available to the alleged tortfeasor.

Again, since the statutory effect of the granting of licences and of licencees installing,

operating and maintaining the pipelines will inevitably be to render lawful these basic

activities so that no tort is committed by simply doing what the OPA and the licence

allows, basic claims in nuisance and trespass in respect of such activities will not inthemselves be actionable as such. One then couples that with asking why the legislature

might have intended to provide only a statutory remedy for nuisance and trespass cases

but twin pronged (common law and statutory) remedies for negligence and Rylands vFletcher. The answer points to there being an intention to provide only a statutory

remedy for compensation for the injurious affection and damage caused by both the

lawful activities as well as other heads of potential liability.

57. One should ask whether the statutory regime provides a comprehensive framework.

The only way, without legislation such as the OPA or by way of widespread

compulsory acquisitions, that pipelines would or could legally have been installed in

the Niger Delta would have been by way of doubtless many thousands of dealsbetween the pipeline owners and people and communities along the proposed paths of

thousands of kilometres of proposed pipeline, with the potential risk that individuals or

communities could simply refuse to allow pipelines over their land. That it can be

inferred was a factor which at this very early stage of the development of the oil

industry in Nigeria encouraged the government to bring in this legislation and to

provide a relatively simple and expeditious system of licensing and compensation in

effect to reduce to eminently manageable proportions these types of risk.

58. The statutory regime certainl

Documents

Shell - London High Court Ruling on Claims Re Oil Spills in Nigeria