This appeal raises two issues. The first concerns the nature or cause of action before the Lagos State High Court and the competence of that Court to hear and determine it. The second is whether the respondent is entitled to the protection provided under art 3.6 of the Hague Rules in the Schedule, Carriage of Goods by Sea Act, Cap 29, Laws of the Federation, 1958.

The appellant, a commercial banker, claimed for its loss in respect of an amount paid to an overseas seller for a consignment of rice covered by an irrevocable commercial letter of credit issued by the appellant for and on behalf of its customer, the second respondent. The first respondent, without sighting the bill of lading, released the goods to the second respondent without the seller's or the appellant bank's permission. The second defendant did not pay the appellant for the credit before or after taking delivery, and was never an endorsee of the bill of lading issued under the letter of credit.

The first respondent argued that, as the agent of the carrier, it was under no liability to notify the consignee or any other party of the arrival of the goods, but had, in fact, issued cargo arrival advice notes on two occasions to both the appellant and the second respondent and that it was in response to the advice that the second respondent came for delivery. In the alternative, the first respondent argued that, as the writ of summons was issued on 3 December 1980, about two years after delivery, the first respondent by virtue of art 3.6 of the Hague Rules is under no liability to the appellant. The trial Judge considered but rejected the defence that the action was statute-barred by virtue of art 3.6 and held that the Rule was inapplicable in the absence of any physical loss or damage to the cargo. The trial Judge then found in favour of the appellant. The Court of Appeal in a majority decision allowed the appeal of the first respondent, set aside the judgment of the trial Court, and held that the Lagos State High Court had no jurisdiction to hear the matter. The appellant appealed to the Supreme Court, arguing that the majority decision of the Court below should be set aside and the judgment of the trial Court restored.

Held: Appeal allowed. Judgment of the trial Court restored except for a variation in the rate of interest ordered.

On the jurisdiction point, a majority of the Court held that s 236 of the Constitution of Nigeria 1979 confers an unlimited jurisdiction on the State High Court and therefore the State High Court is entitled to exercise jurisdiction over admiralty matters. Section 8 of the Federal Revenue Court Act, which purports to curtail the inherent jurisdiction vested in the State High Court, is inconsistent with s 236 and is therefore void to the extent of this inconsistency. There is no express provision in the 1979 Constitution which precludes the State High Court from exercising admiralty jurisdiction.​ The State and Federal High Courts therefore now have concurrent jurisdiction over admiralty matters. Where an admiralty action was instituted before 1 October 1979 when the Constitution came into force, the Federal High Court would have had exclusive admiralty jurisdiction.

As to the time-bar point, the Court held that if the Hague Rules apply the action should be brought within one year after the delivery of the goods. Time therefore starts to run from the date of delivery. From the facts of this case, the appellant did not know when the first respondent released the goods to the second respondent. This being a matter peculiarly within the knowledge of the first respondent, the onus was on it not only to plead, but also to prove, the precise date or dates of delivery. If, however, the appellant admitted the date of delivery pleaded by the first respondent, the latter would be relieved of the burden of proving the exact date or dates of delivery. The appellant did not. The date of delivery thus became a vital issue with regard to the defence of limitation of action. This issue had to be proved by evidence by the first respondent. It was not so proved. In fact, the appellant argued for different dates. The issue is thus whether the delivery of the consignment of rice to the second respondent was made between 11-27 January 1979 (as the first respondent contended) or between November 1979 and January 1980 (as the appellant pleaded)? This issue had to be resolved before any Court could apply art 3.6. It was not resolved by credible evidence, as no evidence at all, let alone credible evidence, was led. Since the onus was on the first respondent to prove that the appellant's action was statute-barred by the Hague Rules, the Court below should have held that the first respondent failed to establish its defence of limitation.

It is only if and when it is established that the appellant filed its action outside the period of 'one year after the delivery of the goods' that the issue of what amounts to 'loss or damage' as envisaged and contemplated by the Hague Rules need be considered. If the appellant's dates were correct, then obviously its action taken out on 3 December 1980 was taken within the one year period allowed. In other words, such an action cannot be said to be statute-barred by the Hague Rules. Thus the majority judgment of the Court of Appeal, having not adverted to the failure of the first respondent to establish by credible evidence the actual dates of the release of the bags of rice to the second respondent, was very wrong in holding that the action of the appellant was statute-barred by art 3.6.