ISSUES

Whether an application for a stay of proceedings could be decided upon without considering the applicant's brief or affidavits?

Whether the Court of Appeal exercised its discretion in dismissing the application for a stay of proceedings judiciously and judicially?

FACTS

The applicant, a customer of the respondent bank, had requested the allocation of a certain amount of foreign exchange into its account. The bank complied with the request and then, in response to further instruction from the appellant, effected the transfer of the foreign exchange to a third party. After the transaction had been effected, the bank requested that the appellant settle its indebtedness in respect of the foreign exchange allocated to its account. When no payment was forthcoming, the bank approached the High Court for an order that the appellant be wound up under the provisions of Section 408(d) and 409(a) of the Companies and Allied Matters Act of 1990.

In a preliminary objection, the appellant contended that the High Court lacked jurisdiction to entertain the matter, and that the filing and prosecution of the petition was an abuse of the judicial process which was aimed at harassing and intimidating the respondent into accepting liability for a debt which was in dispute. The High Court found no merit in the objection and dismissed it. The appellant then appealed to the Court of Appeal, and also brought an application for a stay of proceedings pending the determination of the appeal. The application was however, dismissed. Dissatisfied, the appellant further appealed to the Supreme Court.

HELD (Unanimously allowing the appeal)

1.      On the court's powers in an application for a stay of proceedings

The Court of Appeal has the inherent power to stay proceedings pending appeal in order that the res may be preserved. The power, which is discretionary, must be exercised judicially and also judiciously. The res to be preserved in the present case was the appellant, as the petition was for the winding-up of the appellant. The appellant was, therefore, the res to be preserved pending the determination of the interlocutory appeal before the court below. If the proceedings were not stayed while the interlocutory appeal by the appellant was pending in the Court of Appeal, the danger that the winding-up proceedings could continue in the Federal High Court and even be concluded was real and present. Should this happen and the appeal before the Court of Appeal succeeded, the damage in winding up the appellant could have taken place. Per Uwais, JSC, at page 602.

2.      On the Court of Appeal's exercise of its powers

The Court of Appeal misconstrued the issue which it was required to address. That amounted to a failure to properly exercise its discretion. The present Court held that the application for a stay of proceedings should have been granted. Per Uwais, JSC, at page 602.

3.      On the object of a stay of proceedings

The primary duty of all courts (both trial and appellate) is to preserve the res (subject matter of litigation) so that at the end of the exercise, whatever decision is reached is not rendered nugatory. The determinant question in this type of application is balance of convenience. What must be asked is who would stand to lose more if the status quo was not maintained? Per Wali, JSC, at page 610.

4.      On the constitutional right to a fair trial

The peremptory nature of the order in terms of which the appellant's application was dismissed without a consideration of the appellant's brief, affidavit and other documents, breached the appellant's fundamental rights to fair hearing as enshrined in Section 33(1) of the 1979 Constitution (now to be found in Section 36(1) of the 1999 Constitution). Per Onu, JSC, at page 611.

5.      On the review of the exercise of discretion by a lower court

An appeal court in reviewing the exercise of a discretion by a lower court, should not substitute its own discretion for that of the lower court, except where it is satisfied that the discretion was exercised arbitrarily or illegally or without due regard to all the necessary considerations having regard to the circumstances of the particular case. Per Kalgo, JSC, at page 615.

Uche Nwokede for the appellant

No appearance for the respondent

The following cases were referred to in this judgment:

Nigeria

Agbaje v Adelekan (1990) 7 NWLR (Part 164) 596

Ajomale v Yaduat (No 2) (1991) 5 NWLR (Part 191) 266

Akapo v Habeeb (1992) 6 NWLR (Part 247) 266

Akilu v Gani Fawehinmi (1989) 2 NWLR (Part 102) 122

Aladetoyinbo v Adewunmi (1990) 6 NWLR (Part 154) 98

Alhaji Otapo v Chief Sunmonu (1987) 5 SC 228; (1987) 2 NWLR (Part 58) 587

Awani v Erejuwa (1976) 11 SC 307

Balogun v Balogun (1969) 1 All NLR 349

Boyo, In re (1970) 1 All NLR 111

Civil Service Commission & another v Alexius I Buzugbe (1984) 7 SC 19

Efetiororoje v Okpalefe II (1991) 5 NWLR (Part 193) 517

Elufioye v Halilu (1993) 6 NWLR (Part 301) 570

Government of Lagos State v Ojukwu (1986) 1 NWLR (Part 18) 621

Hansa International Construction Ltd v Mobil Producing Nigeria (1994) 9 NWLR (Part 366) 76

Jadesimi v Okotie Eboh & others (1989) 1 NWLR (Part 16) 264

Kigo (Nig.) Ltd v Holman Bros (Nig.) Ltd (1980) 5-7 SC 60

Kufeji v Kogbe (1961) 1 All NLR 113

Lijadu v Lijadu (1991) 1 NWLR (Part 169) 627

Mohammed v Kano N A (1968) 1 All NLR 424

Nnoye v Anyiichie (1989) 2 NWLR (Part 101) 110

Nzeribe v Dave Eng Co Ltd (1994) 8 NWLR (Part 361) 124

Obeya Memorial Specialist Hospital & another v A-G, Federation & another (1987) 3 NWLR (Part 60) 325

Ojukutu v Odeh 14 WACA 640

Okafor v Nnaife (1987) 4 NWLR (Part 64) 129

Okoduwa v The State (1988) 2 NWLR (Part 76) 333

Orji v Zaria Industries Ltd (1992) 1 NWLR (Part 216) 124

Paper Sack Nigeria Ltd v Marketing and Shipping Enterprises Ltd (1977) 3 FHCLR 342

Shekoni v Ojoko 14 WACA 504

Shodeinde v The Trustees of Ahmadiyya Movement-in-Islam (1980) 1-2 SC 163

University of Lagos v Aigoro (1985) 1 NWLR (Part 1) 143

Vaswani Trading Co v Savalakh (1972) 12 SC 77, (1972) 1 All NLR (Part 2) 483

Foreign

Collins v Vesty of Paddington (1880) 5 QBD 368

Shankkton v Swift (1913) 2 KB 304

The following statutes were referred to in this judgment:

Nigeria

Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria 1990: Ss 408(d); 409(a)

Constitution of the Federal Republic of Nigeria 1979: S 33(1)

Constitution of the Federal Republic of Nigeria 1999: S 36(1)

Uwais, CJN (Delivered the Leading Judgment):- This is an interlocutory appeal from the decision of the Court of Appeal, Lagos Division (Musdapher, JCA, Uwaifo, JCA, as he then was, and Pats-Acholonu, JCA).

The facts of the case, which are not in dispute, are briefly as follows:-

The respondent herein was petitioner in the Federal High Court, Lagos while the appellant herein was the respondent to the petition. The appellant operated an account with the respondent. On 18 March 1992, the appellant sent a letter to the respondent requesting for allocation of foreign exchange. In the months of March and April 1992 the sum of US$200,000 (United States two hundred thousand dollars) equivalent then to N3,636,000 was allocated to the account of the appellant. By a letter dated 26 March 1992, the appellant requested another bank, Continental Merchant Bank Plc, to send some documents, including Form M, to the respondent to enable the respondent to dispose of the foreign exchange allocated to the account of the appellant. The Continental Merchant Bank Plc forwarded the necessary documents to the respondent vide a letter dated 30 March 1992. The respondent effected the transfer of the foreign exchange as instructed by the appellant and debited its account.

Subsequently the respondent made demands upon the appellant to settle its indebtedness to the respondent with respect to the foreign exchange but the appellant failed to do so. By 31 August 1994 the amount owed to the respondent by the appellant on the transaction amounted to N10,275,777.17 being the foreign exchange allocated and the accrued interest thereupon. Consequently, the respondent filed a petition on 3 November 1994 in the Federal High Court Lagos alleging that the appellant was insolvent and unable to pay its debt, and praying thus:-

"1.     That United Spinners Nigeria Limited may be wound up by the court under the provisions of Section 408(d) and 409(a) of the Companies and Allied Matters Act of 1990.

2.      Or such other orders as may be made in the premises as shall be just."

On 6 January 1995, the appellant filed a Notice of Preliminary Objection on the grounds that the trial court had no jurisdiction to entertain the petition and:-

"(b) That the filing and prosecution of the petition is an abuse of the judicial process aimed at harassing and intimidating the respondent into accepting liability for and making good a debt which is doubtful and very much disputed."

Furthermore, an affidavit sworn to by the Accounts Manager of the appellant, Mr Elijah Arabamoi, was filed in support of the preliminary objection. The affidavit stated in part as follows:-

"2.     I have studied the petition to wind up served on us and observed that several statements contained therein are incorrect in material particulars and omit to mention several material facts relevant to the issue.

3.      The petitioner, on our instructions remitted the total sum of $200,000 to some of our suppliers in Germany on or about 25 March 1992 and 10 April 1992 and were supposed to, as is the usual banking practice, debit our account with them immediately to the tune of the Naira equivalent.

4.      The petitioner instead debited another of their customers and did not discover this until on or about 19 May 1993 when they wrote us to say that they had accordingly debited our account with the principal sum of N3,636,000 plus the accrued interest. Attached herewith and marked Exhibit 'EAI' is a photocopy of the said letter.

5.      The petitioner followed up with their letter dated 14 June 1993 by which they informed us that the principal sum plus accrued interest came to the sum of N5,449,355.42 and asking us to pay them the said sum. Attached herewith and marked Exhibit 'EA2' is photocopy of the said letter.

6.      In subsequent meetings and telephone discussions we stated categorically that we accept no liability for the allegedly accrued interest and would pay only the principal sum given their negligence in the matter.

7.      The petitioner's present Deputy Managing Director, Mr Akinsola Akinfemiwa, then wrote a letter dated 18 June 1993 pleading with our Managing Director, Mr Ravi Chanrai, to intervene and help them out of the problem which they had created. Attached herewith and marked Exhibit 'EA3' is a photocopy of the said letter.

8.      It is pertinent that, together with our sister companies we maintain accounts with well over twenty commercial and merchant banks given the size and volume of business ventures and activities with the result that keeping a tab on all our accounts is a major full time task in itself even without the negligence of any of our bankers.

9.      Further to paragraph 8 above, we wrote a letter dated 18 May 1992 to the petitioner asking them to avail us with our bank statement on a weekly basis given the critical need for us to closely and constantly monitor our bank balances and plan accordingly. Attached herewith and marked Exhibit 'EA4' is a photocopy of the said letter.

10.     Meanwhile, we continued to insist that we would not pay any sum more than the principal sum which the Petitioner refused to accept and purported to continue to calculate interest and by their letter dated 17 January 1994 had calculated the sum of N8,020,537.17 as our total outstanding indebtedness, threatening to wind us up if we fail to pay the said sum within 21 days. Attached herewith and marked Exhibit 'EA5' is a photocopy of the said letter.

11.     When we ignored what we considered their unnecessary and baseless threat as contained in Exhibit 'EA5', the petitioner unilaterally purported to grant us some concession on their equally unilateral interest computation vide their letter dated 8 February 1994 wherein they asked us to pay them the sum of N6,828,593.69 in full and final settlement of the sum of N9,105,408.50. Attached herewith and marked Exhibit 'EA6' is a photocopy of the said letter.

12.     Meanwhile, the petitioner had earlier, by their letter dated 4 January 1994 advised us that they had issued a commercial paper on our account in the sum of N8 million 'to normalise the unauthorised overdraft in the account' notwithstanding that there was no mandate from us for such thing to be done. Attached herewith and marked Exhibit 'EA7' is a copy of the said letter.

13.     After the petitioner made what they called 'Final demand notice of amount outstanding' dated 28 March, 1994 there ensued a rather long drawn out negotiations between us punctuated by the political crisis of June-September 1994 at the end of which we offered to pay the sum of N5 million in full and final settlement which the petitioner refused to accept by its letter dated 4 October 1994 wherein they also stated that they would accept the sum of N8,16 million instead. Attached herewith and marked Exhibits 'EA7' and 'EA8' respectively are photocopies of the said letters.

14.     The petitioner's present Counsel, by a letter dated 20 October 1994, wrote us enclosing a draft copy of the petition, threatening to file it within seven days if we fail to pay the petitioner the sum claimed in the petition. Attached herewith and marked Exhibit 'EA9' is a photocopy of the said letter and accompanying petition.

15.     We then got our solicitors to write the petitioner the letter dated 27 October 1994, a photocopy of which is attached herewith and marked 'EA10'.

16.     In the circumstances of this case, I am convinced that this petition is intended to stampede us into paying the petitioner monies which Frank Hoenyosi, our Solicitor, tells me and I verily believe that they are not in any way entitled to especially given their negligence in not representing to us the correct state of our account with them.

17.     We have in the meantime paid the sum of N3,636 million to the petitioner which I verily believe is the whole extent of our indebtedness to the petitioner. Attached herewith and marked Exhibit 'EA11' and 'EA12' are photocopies of the cheque and covering letter sent to the petitioner's Counsel by our own Counsel."

Further affidavit and counter-affidavit were respectively filed by the appellant and the respondent. Thereafter the appellant filed a Notice of Preliminary Objection.

After hearing Counsel for the parties on the preliminary objection, the trial court (Abdul-Kafarati, J) delivered its ruling on 24 November 1995. In concluding the ruling the learned Judge held:-

"From the facts and circumstances of this case as can be discerned from the affidavit evidence and the exhibits attached thereto, it is my opinion that the petition to wind up the respondent company is properly before the court and is not an abuse of this Court's processes; (sic) and so I hold. I also hold the view that this Court has jurisdiction to entertain the petition. This application therefore lacks merit and is hereby dismissed."

Dissatisfied with the ruling, the appellant (herein) appealed to the court below. Whilst the appeal was pending thereat the appellant brought a Motion on Notice on 13 March 1996 praying the Court of Appeal for:-

"an order staying all further proceedings in the substantive suit pending the hearing and determination of the respondent's appeal to the Court of Appeal against the ruling of the Federal High Court, Lagos Division (coram Abdul-Kafarati, J) delivered on 24 November 1995; and for such further order(s) as (the Court of Appeal) may deem fit to make in the circumstances."

The motion came up for hearing before the Court of Appeal on 5 June 1996. Counsel for the parties addressed the court. At the end of the addresses, the motion was instantly dismissed.

The appellant then decided to appeal to this Court from the ruling of the Court of Appeal. Briefs of argument were filed and exchanged by the parties. The following issues have been formulated by the appellant for our determination:-

"(i) Did the Court of Appeal in peremptorily dismissing the application, exercise its discretion judiciously and judicially?

(ii) Was the Court of Appeal's dismissal of the appellant's application without considering the appellant's brief and adverting to the principles of law of stay of proceedings relevant to the application?

(iii) Is the Court of Appeal right to hold that the appellant's claim is puerile and this cannot in their view constitute a genuine dispute as to indebtedness?"

For its part the respondent formulated two issues for determination. They are:-

"(1)    Whilst (sic whether) on the evidence and materials placed before the Court of Appeal, there was sufficient justification for the court to refuse the grant for a stay of proceedings?

(2)     Did the Court of Appeal in fact decide the substantive appeal by its pronouncement when it refused to stay proceedings?"

In arguing Issue No 1 in the appellant's brief, it is contended that unless the Court of Appeal acted on a wrong principle or disregarded a principle or acted under a mistake of law or under a misapprehension of the facts or took irrelevant matters into account or on the ground that injustice would arise, the Supreme Court would not interfere with the Court of Appeal's exercise of discretion. The cases of Awani v Erejuwa (1976) 11 SC 307; University of Lagos v Aigoro (1985) 1 NWLR (Part 1) 143 at pages 168-9 and Efetiororoje v Okpalefe II (1991) 5 NWLR (Part 193) 517 at page 537 were cited in support. Again it is contended that each party to a case has a right to have his case determined upon its merits and courts should do everything to favour fair trial of the questions before them. The cases of Collins v Vesty of Paddington (1880) 5 QBD 368 at page 381 and Ojukutu v Odeh 14 WACA 640 were relied upon. It was then argued that the Court of Appeal did not carry out its judicial function in its ruling despite the fact that the grounds of appeal, the appellant's motion for stay of further proceedings and the brief of argument in support of the motion were before the court. As a result, the court failed to advert its mind to the principles of law applicable to application for stay of further proceedings as laid down in Akilu v Gani Fawehinmi (1989) 2 NWLR (Part 102) 122 at pages 167-169. Nor did it take into consideration the preservation of the res, and the great hardship that the winding up of the appellant would cause. That the court also failed to consider the grounds of appeal particularly the one that contended that there was a substantially disputed debt and the contention that the Federal High Court lacked jurisdiction. It is submitted that if these facts had been taken into consideration by the Court of Appeal, it would not have dismissed the motion but would have granted the stay of further proceedings. It is further submitted that for the foregoing reasons, this Court should interfere with the ruling of the court below, which was a wrong exercise of discretion, and therefore grant the application by the appellant.

With regard to Issue No 2 the foregoing argument on Issue No 1 is adopted by the appellant and in addition, it is submitted that the terse ruling given by the Court of Appeal is a violation of the appellant's right to fair hearing to wit that it failed or neglected to consider the vital issues in the appellant's brief of argument.

On Issue No 3 the appellant refers to the leading ruling delivered by Uwaifo, JCA, and contends that the Court of Appeal had prejudged the substantive suit when it stated:-

"It then says it would pay only principal sum and not the interest. This to me is a puerile claim. This cannot in my view constitute a genuine dispute as to indebtedness."

It is submitted that the dictum is perverse and cannot stand having regard to the evidence which is available to the appellant against the respondent's claim.

The respondent, for its part, argues in its brief of argument that the Court of Appeal Rules 1981 have not made provision for the filing of a brief of argument in support of a motion for stay of proceedings nor did the court direct the appellant to file a brief of argument. The appellant acted on his own in filing the brief and so could not complain if the Court of Appeal disregarded the brief. In any case, it is said, the court did not mention in its ruling that it did not refer to the brief, in which case the appellant cannot argue that that court disregarded the brief. It is again canvassed that the fact that the Court of Appeal did not expressly refer to the brief in its ruling does not mean that it did not read it. It is then contended that in its deciding to dismiss the application peremptorily, it cannot be argued that the Court of Appeal did not advert to the brief of argument or that the argument by the appellant was not considered. It is submitted that both Counsel for the appellant and the respondent addressed the court before it gave the ruling which was based on all the material facts and documents before the court. Therefore, this cannot be regarded as a denial by the court below of the right to fair hearing. It is contended that the principles on which a stay of proceedings can be granted are laid down in the case of Okafor v Nnaife (1987) 4 NWLR (Part 64) 129 at page 136 and it is submitted on the authority of Nnoye v Anyiichie (1989) 2 NWLR (Part 101) 110 at page 115 G-H and Jadesimi v Okotie Eboh & others (1989) 1 NWLR (Part 16) 264 at page 278, that the Court of Appeal was entitled to consider the factual situation of the case by observing that the appellant could not maintain a stance that there was genuine dispute as to its indebtedness to the respondent.

Now, I think it is pertinent to reproduce the ruling of Uwaifo, JCA which is short. It reads:-

"The application before the court is for a stay of further proceedings of the petition before the lower court, i.e. the Federal High Court, on the ground that (that) court has no jurisdiction. The issue of jurisdiction has been raised because the applicant says that there was a dispute as to the indebtedness of the applicant to the petitioner/respondent. This dispute, if (sic it) is said is in regard to the interest on the facilities of $200,000 made available to the applicant. The said amount was not debited to the account of the applicant in time but when thus (sic the) error was discovered, the account was brought up to date by the petitioner. But the applicant now argues that since that debit was not done in time, it was misled. It then says it would pay only the principal sum and not the interest. This to one is a puerile claim. This cannot in my view, constitute a genuine dispute as to indebtedness. This application has no merit and it is hereby dismissed with N1,000 costs to the petitioner/respondent."

The nature of the application made before the Court of Appeal was simply to stay the proceedings in the petition brought by the respondent (herein) to wind up the appellant, pending determination of the appeal to the Court of Appeal. Now, the Court below has the inherent power to stay proceedings pending appeal in order that the res may be preserved. The power, which is indeed discretionary, must be exercised judicially and also judiciously. (See Shodeinde v The Trustees of Ahmadiyya Movement-in-Islam (1980) 1-2 SC 163 and Kigo (Nigeria) Ltd v Holman Bros (Nigeria) Ltd (1980) 5-7 SC 60). Res means a thing or things, or an object or objects. The question is: what is the res in the present case to be preserved? The petition is for the appellant to be wound up. The appellant is, therefore, the res to be preserved pending the determination of the interlocutory appeal before the court below. If the proceedings were not stayed while the interlocutory appeal by the appellant is pending in the Court of Appeal, the possibility and indeed the danger that the winding up proceedings could continue in the Federal High Court and even be concluded is real and present. Should this happen and the appeal before the Court of Appeal succeeded, the damage in winding up the appellant could have taken place. The existence of the company would not therefore have been preserved in the circumstance.

The real issue to have been considered by the Court of Appeal was not whether the appellant was indebted to the respondent but rather what could have happened if the proceedings for winding up went on in the Federal High Court and was concluded earlier than the appeal before it got determined. I am afraid the court below did not advert its mind to this very important element in the motion, as can be seen from the full text of its leading ruling quoted above. In Akilu v Fawehinmi (No 2) (1989) 4 SC (Part I) 63; (1989) 2 NWLR (Part 102) 122 at page 188, I stated as follows:-

"Some of the considerations which the courts bring to bear on any application for stay of proceedings pending appeal are that the burden is on the applicant for stay of proceedings to show that if the appeal should succeed, the success would not be in vain. Also that in the peculiar circumstances of the case a refusal of stay of proceedings would not be unjust and unequitable . . . See Jadesimi v Okotie-Eboh (1986) 1 NWLR (Part 16) 264; Obeya Memorial Specialist Hospital & another v A-G of the Federation & another (1987) 3 NWLR (Part 60) 325 and Okafor v Nnaifs (1987) 4 NWLR (Part 64) 129."

It follows, therefore, that the Court of Appeal did not exercise its discretion properly. In other words, the exercise of the discretion was neither judicial nor judicious. In my opinion, it ought to have granted the application.

Next the appellant complained that the Court of Appeal prejudged the case in the trial court when it held thus:-

". . . But the applicant now argues that since that debit was not done in time, it was misled. It then says it would pay only the principal sum and not the interest. This to one (sic me) is a puerile claim. This cannot in my view, constitute a genuine dispute as to indebtedness . . ."

There is no doubt, and it is unfortunate, that this finding by the court is prejudicial to the appellant's case before the trial court. The Court of Appeal should not have adverted to the merit of the appellant's case in the lower court. If the court had limited its consideration to the principles laid down, in a long line of decisions for the grant of stay of proceedings, it would not have been necessary for it to prejudge the merit of the case before the trial court. This propensity for appeal court to determine the merit of a case, which is not before it for a decision, had been deprecated by this Court on many occasions. It is, therefore, necessary for appeal courts to restrain themselves, in dealing with the merit of the dispute in the substantive case, which is not necessary for the determination of any interlocutory appeal brought before them.

For the foregoing reasons, I hold that the decision of the Court of Appeal not to exercise its discretion to grant the application for stay of further proceeding in the winding up petition brought by the respondent in the Federal High Court is erroneous. This is a proper case in which this Court can interfere with the decision of the court below.

Accordingly, the appeal succeeds and it is hereby allowed. The decision of the Court of Appeal is set-aside and in its place I grant the application. The proceedings for the winding up petition in the Federal High Court are hereby stayed pending the determination of the interlocutory appeal before the court below. A panel of the Court of Appeal different from the one mentioned at the beginning of this judgment shall hear the pending interlocutory appeal. Costs assessed at N10,000 are hereby awarded in favour of the appellant (herein) against the respondent (herein).

Wali, JSC:- I have had the privilege of reading in advance the lead judgment of my learned brother, Uwais, CJN and I entirely agree with his reasoning and conclusion for allowing the appeal. I shall however wish to contribute the following by way of emphasis.

The facts involved in this case have been sufficiently stated in the lead judgment and require no further recapitulation by me. Simply put, the appeal before this Court is against the refusal by the Court of Appeal to grant an interim order of stay of proceedings in the trial court involving a petition to wind up the appellant, pending the determination of the appeal before it.

The primary duty of all courts (both trial and appellate) is to preserve the res (subject matter of litigation) so that, at the end of the exercise, whatever decision is reached is not rendered nugatory (see Kigo v Holman (1980) 5-7 SC 60). The affidavit evidence in this case reveals that there is a substantial issue to be considered by the Court of Appeal. (See Kufeji v Kogbe (1961) 1 All NLR 113). The determinant question in this type of application is balance of convenience. Who will stand to lose more if the status quo is not maintained?

Considering the totality of the affidavit evidence in this case, it is my considered view that the balance of convenience lean in favour of granting the application, if the petition to wind up the appellant without resolving the issue of the extent of its indebtedness to the respondent is allowed to proceed and the appellant is wound up, no amount of damage can compensate it. (See Obeya Memorial Specialist Hospital (Ayi-Onyema Family) Ltd v Attorney-General of the Federation & another (1987) SC (Part 1) 52 and Kigo v Holman (supra)).

It is for this and the fuller reasons contained in the lead judgment of my learned brother, Uwais, CJN that I also hereby allow the appeal and grant the interim order as prayed. I abide by the other consequential orders in the lead judgment, including that of costs.

Kutigi, JSC:- I have had the privilege of reading in advance the judgment just rendered by my learned brother, Uwais, CJN. I agree with his reasoning and conclusions. There is merit in the appeal which is hereby allowed. The winding-up proceedings now before the Federal High Court are hereby stayed pending a determination of the interlocutory appeal in the court below by a differently constituted panel. I endorse the order for costs in the lead judgment.

Onu, JSC:- I had the advantage of a preview of the judgment just delivered by my learned brother, Uwais, CJN. I entirely agree with him that the appeal is meritorious and ought therefore to succeed.

In the case herein on appeal, the facts and background of which have been fully stated in the leading judgment of my learned brother, the Chief Justice to need any further recapitulation here (sic), the three issues the appellant has submitted for our determination, they indeed overlap the respondent's two issues - ask (and I propose to consider them serially) thus:-

"(i) Did the Court of Appeal in peremptorily dismissing the application, exercise its discretion judiciously and judicially?

(ii) Was the Court of Appeal's dismissal of the appellant's application without considering the appellant's brief and adverting to the principles of law of stay of proceedings relevant to the application?

(iii) Is the Court of Appeal right to hold that the appellant's claim is puerile and this cannot in their view constitute genuine dispute as to indebtedness?"

Issue No 1

(i) Now, the principles upon which a court can grant a stay of proceedings are well settled, being a matter of discretion of the court. This, as established by a long line of decided cases, depends on the facts and circumstances of each case and founded on grounds of appeal, which must not be frivolous. (See Vaswani Trading Co v Savalakh (1972) 12 SC 77, (1972) 1 All NLR (Part 2) 483; Okafor v Nnaife (1987) 4 NWLR (Part 64) 129 at page 136). Thus, unless the court has acted on a wrong or in disregard of principles for the grant or acted under a mistake of law or under a misapprehension of the facts or taken into account irrelevant matters or on the ground that injustice could arise, an appellate court will not interfere with the discretion of the High Court. (See University of Lagos v MI Aigoro (1985) 1 NWLR (Part 1) 156 at pages 168-169; Efetiororoje v Okpalefe II (1991) 5 NWLR (Part 193) 517 at 537 and Awani v Erejuwa (1976) 11 SC 307).

(ii) On the exercise of judicial discretion by the court, it was Thesiger LJ in Collins v Vestry of Paddington (1886) 5 QBD 303, 381 who said:-

"Each party has a right to have his dispute determined upon the merits and courts should do everything to favour the fair trial of the questions before them."

See also Ojikutu v Odeh 14 WACA 640.

Further, in the exercise of judicial discretion the primary objective of the court must be to attain substantial justice. Acting judicially it ought to be pointed out, imports consideration of the interest of both parties and weighing them in order to arrive at a just and fair decision.

Abiding by the principles enunciated in Aigoro's case (supra) at pages 148-149, the court below per Uwaifo, JCA as he then was, would not appear to have carried out this judicial function since before that court and in the appeal herein there was a motion for stay of further proceedings. There was also a comprehensive appellant's brief, a copy of which showed substantial and arguable grounds which could tilt the scales of justice on his (appellant's) side.

Let me exemplify the above pronouncement as follows:-

The learned Justices of the Court of Appeal, in the interwoven pieces of evidence, neither:-

(a)     Considered the principles of law applicable to the application for stay of further proceedings explicit in Akilu v Fawehinmi (No 2) (1989) 4 SC (Part 1) 63; (1989) 2 NWLR (Part 102) 122 at 165, 167; Shankkton v Swift (1913) 2 KB 304 at 311-312.

(b)     Nor did it, in my view, in peremptorily dismissing the application take into consideration relevant issues, namely: the preservation of the res, that the winding up of the appellant company will impose greater hardship on it. See In re Boyo (1970) 1 All NLR 111. The appellant while conceding that it is not every point of law raised that constitutes special circumstances: See Agbaje v Adelekan (1990) 7 NWLR (Part 164) 596, 611, but the one appellant contends which raised the issue that there is a substantially disputed debt or is bona fide contested and in this case the retroactive interest demanded but refused by the appellant, or that the Federal High Court had no jurisdiction, all these situations do not fall within the law as to winding up on the grounds of inability to pay a debt or that the company (appellant) thereby became insolvent. (See Hansa International Construction Ltd v Mobil Producing Nigeria (1994) 9 NWLR (Part 366) 76, 86-87 and Paper Sack Nigeria Ltd v Marketing and Shipping Enterprises Ltd (1977) 3 FHCLR 342 at 344).

(c)     I take the firm view that if the court below had given due consideration to the appellant's brief of argument, it would have found that a winding up order will not pay the debt owing if any, since the greater hardship will be the killing of the growing company that will consequently be thrown on the employment market. Learned Counsel for the respondent's contention, inter alia, that . . ."the Court of Appeal was entitled to consider this factual situation and was therefore justified in observing as it did, that the appellant cannot really maintain a stand that there was a genuine dispute as to indebtedness". This, in my view, is clearly wrong. However, the appellant's contention that the court below in dismissing the application failed to take into consideration the facts mentioned above, disregarded the principles of law for the grant or refusal of stay of proceedings all of which have occasioned a miscarriage of justice, has merit. A fortiori, I hold the view that the appellant's complaint that the court below in peremptorily dismissing its (appellant's) application without due consideration to the principles of law applicable to stay of proceedings, is fully justified. (See Aladetoyinbo v Adewunmi (1990) 6 NWLR (Part 154) 98 at page 107; Mohammed v Kano N A (1968)1 All NLR 424). Although a stay of execution is not granted to every applicant e.g. a contemnor - see Government of Lagos State v Ojukwu (1986) 1 NWLR (Part 18) 621 nor is it granted in every case where the grounds of appeal raise arguable point or points of law (see Balogun v Balogun (1969) 1 All NLR 349 which has restricted the scope for such a grant) e.g. in Okafor v Nnaife (1987) 4 NWLR (Part 64) 129 this Court has laid guidelines for the grant or refusal of such an application against an interlocutory decision or ruling.

(See Akilu v Fawehinmi (No 2) (1989) 4 SC (Part I) 63; (1989) 2 NWLR 122 at 165; Kigo (Nigeria) Ltd v Holman Bros (1980) 5/7 SC 61 and Jadesimi v Okotie-Eboh (1986) 1 WLR 264). My answer to Issue No 1 is accordingly in the negative.

On Issue No 2, while adopting all I have considered on Issue No 1 above, I wish to add by saying that courts are bound to decide on issues placed before them. In this wise, I am in full agreement with the appellant that a short cut or short circuiting such as employed by the court below in its ruling of 5 June, 1996, may be counter-productive. See Civil Service Commission & another v Alexius I Buzugbe (1984) 7 SC 19 at 40. The peremptory nature of the order of dismissal of the appellant's application, without a consideration of the appellant's brief, the copious affidavit and other documents exhibited, applying the principles of law on stay of further proceedings to the case in hand, in my opinion, breaches the appellant's fundamental rights to fair hearing as enshrined in Section 33(1) of the 1979 (now to be found in Section 36(1) of the 1999 Constitution. (See also Alhaji Otapo v Chief Sunmonu (1987) 5 SC 228 and Okoduwa v The State (1988) 2 NWLR (Part 76) 333).

Issue No 2 is accordingly also answered in the affirmative.

Finally, on Issue No 3 wherein the appellant contends that the leading ruling of Uwaifo, JCA (as he then was) erred in these words:-

"This dispute, if it is said is in regard to the interest in the facilities of $200,000 made available to the applicant. The said amount was not debited to the account of the applicant in time but when this error was discovered, the account was brought up to date by the petitioner. But the applicant argues that since that debit was not done, in time, it was misled. It then says it would pay only principal sum and not the interest. This to me is a puerile claim. This cannot in my view constitute a genuine dispute as to indebtedness. This application has no merit and it is hereby dismissed."

From the above conclusion, I take the view that the court below was in grave error to have refused to stay the proceedings being mindful of the fact that courts have unimpeded discretion to grant or refuse a stay. See Vaswani v Savalakh (supra). In this, like in all instances, the court is bound to exercise that discretion both judicially as well as judiciously and not erratically. Okafor v Nnaife (No 2) (1991) 5 NWLR (Part 191) 266 and Lijadu v Lijadu (1991) 1 NWLR (Part 169) 627 by preserving the res pending the hearing of the appeal.

Finally, the trial court having made a finding of the existence of a dispute over the debt without qualification but proceeding to resolve that dispute, I agree with the appellant's submission that the instant dismissal of the application by the court below, cannot, with utmost respect, be allowed to stand.

It is for the above reasons and the fuller ones contained in the said ruling of my learned brother, the learned Chief Justice, that I allow this appeal. Accordingly, I allow the appeal, set aside the ruling of the Court of Appeal and grant a stay of proceedings pending in Suit No FHC/L/11164/94 in the Federal High Court, Lagos pending the determination of the appellant's appeal to the Court of Appeal against the ruling of the said Federal High Court delivered on 24 November 1995. I award similar costs as contained in the leading judgment to the respondent.

Kalgo, JSC:- I have had the privilege of reading in draft the judgment just delivered by the learned Chief Justice of Nigeria, Uwais, CJN, and I agree with him entirely that there is merit in the appeal and it ought to be allowed.

This appeal is against the ruling of the Court of Appeal Lagos refusing an application for stay of further proceedings pending the determination of an appeal against an earlier ruling of Abdul - Kufarati, J of the Federal High Court in the same matter. The proceedings sought to be stayed was in respect of the petition for winding up of the appellant under Sections 408(d) and 409(a) of the Companies and Allied Matters Act Cap. 59 Laws of the Federation of Nigeria 1990 pending before Abdul-Kufarati, J.

There is no doubt that the Court of Appeal has the power to grant or refuse application for stay of proceedings in a trial court but that power is discretionary and must be exercised judicially and judiciously.