IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
BEFORE HIS LORDSHIP HON. JUSTICE ELIZABETH A OJI PhD.
DATE: MONDAY 12TH JULY 2021 SUIT NO. NICN/LA/101/2020
MR. BENJAMIN BENNETT - APPLICANT
1. FLUID POWER MARINE SERVICE LIMITED
2. FIDELITY BANK PLC - RESPONDENT
A A Olumekor and Chinedu Nwobodo for the Applicant
M E Bassey for the 2nd Respondent
No Representation for the 1st Respondent.
1. The Applicant commenced this suit by an Originating Motion dated 10th March 2020 and filed on the same date. It is brought pursuant to section 16 of The National Industrial Court Act, 2006; Order 22 Rule 2(3), Order 3 Rule 1(c) of National Industrial Court of Nigeria (Civil Procedure) Rules, 2017, Article 26 Rule 3 of the Arbitration Rules under the Arbitration and Conciliation Act, 1988 and under the inherent jurisdiction of this Court. The Originating Motion seeks the following reliefs:
1. AN ORDER of this Honourable Court freezing the various bank accounts of the 1st Respondent held with the 2nd Respondent pending the hearing and determination of this suit.
OR IN THE ALTERNATIVE:
2. AN ORDER of this Honourable Court compelling the 1st and 2nd Respondents to set aside and preserve the total sum of US$242,268.98 representing the amount due to the Applicant under and by virtue of the contract of employment dated 1st March, 2018 between the Applicant and the 1st Respondent from the accounts of the 1st Respondent with the 2nd Respondent pending the commencement and determination of arbitration proceedings between the Claimant and 1st Respondent as provided under the contract of employment between the parties.
AND for such further order or orders as this Honourable court may deem fit to make in the circumstances of this case.
2. The grounds upon which the application is brought are that:
i. The 1st Respondent owes the Applicant salaries, allowances and other entitlements.
ii. The funds in the accounts of the 1st Respondent are the only assets of the company.
iii. The foreign directors of the 1st Respondent have failed to perform the outstanding responsibilities of the company but have continued to deplete the accounts of the company by withdrawing huge sums of money for reasons other than the business of the company.
iv. That there is an arbitration clause in the contract of employment between the Applicant and the 1st Respondent.
v. The Applicant's claims in this suit are premised on the contract of employment executed between the Applicant and the 1st Respondent and is most likely to succeed as the parties are bound by the contract.
vi. If this application is not granted pending the commencement and determination of arbitration between the parties. The 1st Respondent will completely deplete all the funds of the 1st Respondent with the connivance of the 2nd Respondent and thereby render the award which the Applicant may obtain at arbitration nugatory and incapable of yielding any fruit for the Applicant.
3. The matter came up for mention on the 30TH October 2020 and 14th December 2020 with neither of the parties in Court. On the 3rd February 2021, the Claimant and the 2nd Defendant were represented in Court. The matter was adjourned for the hearing of the Originating Motion. On 23rd February 2021 the matter was again called up for hearing of the Motion. Neither of the two Defendants were in Court. The Court noted that there was proof of hearing notice served on the Defendants. Up to this point, the Defendants had not filed any process in response to the application. The application was therefore heard on24th June 2021 and the matter adjourned for judgment.
Facts of the Case:
4. The application is supported by an affidavit dated 10th March deposed to by Yemi Adebanjo, a Litigation Clerk in the law firm of Chris Ogunbanjo LP, Counsel to the Applicant. In the affidavit, the Deponent stated that the Applicant was employed as Managing Director by the 1st Respondent by a contract of employment dated 1st March, 2018 for an initial term of three (3) years. The appointment of the Applicant as Managing Director of the 1st Respondent was terminated by a notice of termination dated 2nd April, 2019 to take effect on the 30th of April, 2019. Upon the termination of the Applicant's appointment as the Managing Director of the 1st Respondent, he accepted the termination and informed the 1st Respondent through Koen Munniksma, a director of the company who communicated the notice of termination of employment to him that the accrued salaries and allowances due to him are as follows:
Salaries for February, March and
April, 2019 at $1,000.00 per day - $79,594.75
Housing allowance for 2019 - $80,000.00
Health Insurance - $10,569.16
Six (6) business class air tickets - $27,891.27
Total - $198,055.18
5. The Applicant also sent a letter dated 17th April, 2019 to Koen Munniksma reiterating the acceptance of the termination of his employment and restating the accrued salaries, allowances and other entitlements due to him. Neither the Board of Directors of the 1st Respondent nor Koen Munniksma responded to the letter dated 17th April, 2019. As Managing Director of the 1st Respondent, the Applicant was a signatory to the account of the 1st Respondent and it was part of his duties to pay the salaries and allowances of the staff of the company including himself. In furtherance of the foregoing, the Applicant initiated online funds transfer instructions for the payment of the salaries and allowances of himself and staff whose employments were also terminated by the 1st Respondent, on the online platform of the company's bank account with the 2nd Respondent. The 2nd Respondent refused and/or neglected to approve the funds transfer instructions, purportedly on the premise of an email by Koen Munniksma alleging that the payments were fraudulent. The said Koen Munniksma who is although a director of the 1st Respondent acted alone in his interference with the online funds transfers for the payment of the Applicant's salaries and allowances and that of other members of staff without any authority or legal basis. The Applicant instructed the firm of Chris Ogunbanjo LP to intervene with the 2nd Respondent to comply with the funds transfer instruction which was in line with Applicant's mandate on the 1st Respondent's accounts as at the date of the transaction.
6. The Applicant's lawyers wrote letters to the 2nd Respondent and also met with the Executive Director, Shared Services and the Head of Legal Services of the 2nd Respondent with a view to convince the 2nd Respondent to approve the transfer of his funds to him. At the meeting between the solicitors and the 2nd Respondent, it was revealed that the 2nd Respondent had approved the payments due to five (5) of the beneficiaries of the funds transfers with the exception of the Applicant. It was also revealed at the meeting between the solicitors and the 2nd Respondent that despite dishonouring the funds transfers which the Applicant initiated, the 2nd Respondent had allowed Koen Munniksma unfettered access to the 1st Respondent’s accounts and the latter had been consistently withdrawing various sums of money from the said accounts and is gradually depleting the funds in the said accounts. The 1st Respondent's gross revenue for the period that the Applicant was Managing Director of the 1st Respondent is US$4,421,380.89 and under his contract of employment with the 1st Respondent, he was also entitled to 1% of the gross revenue of the company which amounts to $44,213.80. Rather than pay the Applicant's outstanding salaries, allowances and other entitlements, Koen Munniksma who now operates the 1st Respondent's accounts held with the 2nd Respondent is depleting the funds in the said accounts.
7. The Board of Directors of the 1st Respondent is constituted by four (4) directors comprising of three (3) foreigners and one (1) Nigerian:
a. the foreign directors are:
i. Mike Mullen
ii. Koen Munniksma
iii. Jeffrey Magantes
b. the only Nigerian Director and shareholder is Mr. Adedoyin Afun (who has recently resigned).
8. Since the termination of the Applicant's appointment as Managing Director of the 1st Respondent, the foreign directors have failed to perform all obligations due by the company including the payment of the Applicant's salaries and allowances as they only seek to deplete the funds in the account of the 1st Respondent. Koen Munniksma who is although not resident in Nigeria surreptitiously obtained a Bank Verification Number (BVN) and has used same to gain access to the 1st Respondent's funds in the 2nd Respondent and other banks where he has continually withdrawn huge sums of money to deplete the accounts. The funds held in the bank accounts of the 1st Respondent are the only income and assets of the company from which the Applicant's salaries, allowances and other entitlements due under the contract of employment can be paid and the foreign directors of the company have shown no intention to pay him. The staff of the 1st Respondent for whom the Applicant also initiated the payment of their terminal benefits through funds transfers have received the payments due to them, but the 1st Respondent has in connivance with the 2nd Respondent refused to approve the payment due to the Applicant.
9. It is the Applicant’s averment that if this application is not granted, the 1st Respondent will completely deplete the funds in the said accounts and there will be no means available to the Applicant to recover his salaries, allowances and other entitlements if an award is granted to him by the arbitration panel. That if this application is not granted, the 1st Respondent will completely remove all the funds in its accounts held with the 2nd Respondent and thereby render any award made by the arbitral panel nugatory. That the granting of this order(s) shall in no way be prejudicial to the Respondents.
10. The Applicant attached and relied on the following exhibits in this application:
a) Exhibit A Copy of the contract of employment dated 1st March, 2018.
b) Exhibit B Copy of notice of termination of employment.
c) Exhibit C Copy of the email exchanges between the Applicant and Koen Munniksma on 2nd April, 2019.
d) Exhibit D is a copy of the Applicant's letter dated 17th April, 2019 to Koen Munniksma accepting the termination.
e) Exhibits E, F and G Copies of the Solicitors' letters to the 2nd Respondent dated 24th April, 2019, 30th April, 2019 and 9th May, 2019 respectively.
f) Exhibit H Copy of document containing customer name, vessel name and amount in USD.
11. This action is commenced by originating motion pursuant to Order 3 Rule 1(C) of the National Industrial Court Rules 2017. The Applicant also relies on section 16 of the National Industrial Court Act in bringing this action. That section of the NIC Act provides that:
(1) The Court may grant an injunction in all cases in which it appears to the Court to be just or convenient so to do.
(2) Any such order may be made either unconditionally or on such terms and conditions as the Court thinks just.
The Rules of this Court at Order 22 also empowers this Court to make orders for interlocutory injunction and orders for interim preservation of property.
12. After considering the facts relied on by the Applicant and the arguments of Counsel contained in the written address accompanying this application; I adopt the lone issue set down for determination by the Applicant, to wit:
Whether the Applicant is entitled to the grant of this application in the circumstances of this case.
13. In his argument in support of this application, the Applicant reeled out the conditions for the grant of this type of application and cited case law authorities in support. However, before delving into the question whether the Applicant has met the conditions for the grant of orders of interim preservation of property, I find it necessary to consider whether this application is ripe for consideration.
14. The Order 22 relied on in bringing this action envisages that the parties to the application are already parties to an action before this Court. Rule 2(3) specifically referred to by the Applicant provides that “where the right of any party to a specific fund is in dispute in an action, the Court may on the application of the party, order the fund to be paid into Court or be otherwise secured.” At present, there is no suit between the parties before this Court. The explanation for this is found in the facts deposed to by the Applicant and in exhibit A - the contract of employment. Paragraph 11.2 of exhibit A provides that:
11.2 Any dispute under or arising out of this Agreement or the breach thereof shall in the first instance be attempted to be settled amicably by the Parties.
11.3 In default of amicable settlement, after one (1) month of the declaration of any dispute arising out of or in connection with this Agreement, the dispute shall be settled in accordance with the provisions of the Arbitration and Conciliation Act, Cap A18 Laws of the Federation of Nigeria, 2004 which are applicable at the time of reference to arbitration and which are deemed to be incorporated by reference into this Clause, as follows:
(a) The arbitration shall be conducted by a single arbitrator and the appointing authority shall be the current Chairman of the Chartered Institute of Arbitrators (CIArb), Nigeria Branch.
15. I have gone through the processes filed alongside this application; and do not find any document indicating that any step has been taken in pursuit of any arbitration. There is no document showing that a dispute has been declared between the parties, and that steps have been taken, in accordance with the contract of employment, towards its settlement. The provision of Clause 11.3 is clear that “after one (1) month of the declaration of any dispute arising out of or in connection with this agreement”, the dispute shall be settled by arbitration. The import of the clause is clear that a dispute has to be declared. None of the correspondences between the parties purports to declare the existence of a dispute and none purports to take steps to refer the matter to arbitration. In the circumstance, I am of the view that the Applicant has not taken the necessary steps indicative of the existence of a dispute, the commencement or existence of an arbitration, to warrant the grant of the orders sought in this Application.
16. The Applicant also relied on section 26 of the Arbitration and Conciliation Act, in bringing this application. That section which provides for interim measures of protection states as follows:
1. At the request of either party, the arbitral tribunal may take any interim measures it deems necessary in respect of the subject-matter of the dispute, including measures for the conservation of the goods forming the subject-matter in dispute, such as ordering their deposit with a third person or the sale of perishable goods.
2. Such interim measures may be established in the form of an interim award. The arbitral tribunal shall be entitled to require security for the costs of such measures.
3. A request for interim measures addressed by any party to court shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.
17. The above provision clearly shows that it is envisaged that the arbitral tribunal would have been set up before the making of the application for interim measures of protection. Though “a request for interim measures addressed by any party to court shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement”, that request must stand on the footing of an ‘existing dispute’, and not one brought in anticipation of a dispute.
18. Based on the reasons given above, I find that this application is premature. It is hereby struck out.
Judgment is entered accordingly.
Hon. Justice Elizabeth A. Oji PhD