Post-Judgment Interests In Nigeria |Nonso Anyasi

Introduction

It
is common knowledge that the Nigerian Courts will not award a relief that was
not expressly claimed by a party at trial because the Courts are prevented from
doling out unsolicited gifts like Father Christmas.[1]
However, it appears that many companies are unaware of an exception to this
rule, which exists in the rules of almost every High Court in Nigeria wherein
the Courts are permitted to award post judgment interest on every judgment sum,
even where same was not claimed by a successful litigant in his pleadings.[2]

Post Judgment Interests in the Various Rules of
High Court

Every
Court of equipollent jurisdiction with the high court (Federal High Court,
State High Courts, National Industrial Court and the Investment and Securities
Tribunal) has a provision in its rules which recognizes the award of
post-judgment interests on judgment debts at the rate of not more than 10% per
annum. This interest shall immediately apply on every judgment debt and it is
immaterial whether the judge made no pronouncement on it or whether the
successful party did not claim for this relief.

In
the Federal High Court, Order 23 Rule 5
of the Federal High Court Civil Procedure Rules 2019 provides as follows:

“The Judge at
the time of making any judgment or order or at any time afterwards, may direct
the time within which the payment is to be made or other act is to be done,
reckoned from the date of the judgment or order or from some other point of
time, as the judge deems fit and may order interest at a rate not exceeding ten
per cent per annum to be paid upon any judgment.”

In
the High Court of Lagos State, Order
39 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules 2019
similarly provides as follows:

“The Judge may at the time of making any
Judgment or Order or at any time afterwards, direct the time within which the
payment is to be

(a)             
made or other act is to be done,

(b)             
reckoned from the date of the Judgment or
Order, or some other date or time, as the Judge deems fit; and may order
interest at a rate not less than 10% per annum to be paid upon judgment.”

In
the High Court of the Federal Capital Territory, Abuja, Order 39 Rule 4 of the High Court of the Federal Capital Territory
(Civil Procedure) Rules 2018 also provides thus:

“The Court at
the time of making any judgment or order, or at any time afterwards, may direct
the time within which the payment is to be made or other act is to be done,
reckoned from the date of the judgment or order, or from some other point of
time, as the Court may deem fit and may order interest at a rate not less than
10% per annum to be paid upon any judgment.”

Similar provisions exists in the rules of the
various State High Courts in Nigeria. Please see Order 35 Rule 4 of the Akwa Ibom State High Court (Civil Procedure)
Rules, 2009 and Order 35 Rule 4 of
the Ogun State High Court (Civil Procedure) Rules, 2014 for instance.

In the National Industrial Court, Order 47 Rule 7 of the National Industrial
Court of Nigeria (Civil Procedure) Rules 2017 contains a similar provision
thus:

“The Court
may at the time of delivering the judgment or making the order give direction
as to the period within which payment is to be made or other act is to be
performed and may order interest at a rate not less than 10% per annum to be
paid upon any judgment.”

In
the Investments and Securities Tribunal, Order
7 Rule 7 of the Investments and Securities Tribunal (Procedure) Rules 2014
also contains a more detailed provision thus:

“When a
decision awards a party a monetary sum (other than in respect of costs and
expenses), the award shall, unless set aside, and subject to any variation on
appeal or review, carry interest at the commercial rate from the date of the
event giving rise to the application to the Tribunal and or at the rate of ten
percent from the date of the decision. The interest may be recovered in the
same manner as the award to which it relates.”

Rationale Behind the Award of Post-Judgment
Interests

Post
Judgment interests on a judgment sum are awarded to a successful litigant to
encourage judgment debtors pay off the judgment debt as soon as possible. Our
legal system also acknowledges the inordinate length of time it takes for
appeals to be heard. An appeal may take as long as ten years to be concluded at
the Apex Court, such that a monetary award of the trial Court may have lost its
worth by the time the Supreme Court affirms the judgment of the trial Court.
Hence, the rules of every trial/High Court empowers the Courts to award
post-judgment interest on every judgment debt at the rate of not less than 10%
per annum.

Interestingly,
every judgment of the trial/High Court actually carries post-judgment interests
at the rate of 10% p.a. Hence, even where the trial Court is silent on the
issue of post-judgment interest, the apposite rules of that Court automatically
imputes interest at the rate of 10% per annum on the judgment sum.

The
Supreme Court of Nigeria has explained the rationale behind the compulsory
award of post-judgment interests in the case of Berliet (Nig.) Ltd. v. Kachalla
(1995) 9 NWLR (Pt.420) 478 when the Noble Lord Ogundare JSC held with
exquisite erudition as follows:

“The
principle behind the rule seems to me to be to provide incentive to judgment
debtors for the speedy payment of judgment-debts and to ensure that judgment
creditors do not suffer much detriment as a result of a delay in the settlement
of judgment debts. The wording of the rule clearly shows that the judgment
automatically carries interest at 10 per centum per annum until it is
satisfied. The rule however, gives the court a discretion to order otherwise.
In my respectful view, this discretion is a veto which the trial court may
exercise to direct that no interest be paid on a judgment debt, or to order
that a lesser interest be paid. Where he does not give any direction or where
the judgment is silent as to payment of interest on the judgment debt, the
judgment debt automatically carries interest at the rate fixed by the rule,
that is, 10 per centum per annum from the date of the judgment.”

Interpretation of this Rule by the Courts

Undoubtedly,
statutes and rules of Court are to be given their literal and unambiguous
meanings where the wordings of the legislature are clear and precise. However,
the Court may invoke the golden and/or mischief rule of interpretation where
the religious application of the literal rule will amount to manifest
absurdity.

A
prima facie observation of the
various rules of Court on the award of post-judgment interest would reveal that
the rules appears to give the judges the discretion to choose to order the
award of post-judgment interests or not. Some recalcitrant Judgment Debtors
have contumaciously held on to the literal construct of these rules to avoid
paying post-judgment interests where same was not expressly awarded by the
Courts. Some have argued that the use of the verb “may” in these rules evinces
the intention of the draftspersons of the rules NOT to connote mandatoriness,
and that it rather it confers a discretion on High Court judges to choose to
award the post-judgment interest or to refrain from doing so.

This
argument has been rejected by the Apex Court on a number of occasions,
including the locus classicus case of
G.K.F Investment
Nigeria Limited v Nigeria Telecommunications PLC (2009) 15 NWLR (Pt. 1164) 344
SC where
the Apex Court laid this vexed issue of the interpretation of the rules of Court
on post-judgment interests to a definite rest while interpreting the provisions
of Order 38 Rule 7 of the Lagos State
High Court (Civil Procedure) Rules 1994 which has now metamorphosed
into Order 39 Rule 4 of the High court
of Lagos State (Civil Procedure) Rules 2019 as follows:

“In the instant case where the
rules of court have provided for the recovery of interest on a judgment sum,
the entitlement is automatic unless otherwise ordered by the court. Since the
lower court had neither ordered the payment of interest to the Appellant nor
given a direction to the contrary, the sum of N200,000.00 awarded to the
Appellant automatically carries interest at the rate of 7 1/2% fixed by Order
38 Rule 7 of the Lagos State High Court (Civil Procedure) rules 1994 as
amended.”

Similarly,
in the case of Berliet (Nig.) Ltd. v. Kachalla (1995) 9 NWLR (Pt.420)478, the
Apex Court while interpreting the provisions of Order 27 Rule 8 of the High
Court (Civil Procedure) Rules 1976 of Kano State had earlier held with
unambiguous clarity as follows:

“It is not
difficult to resolve the main issue in this appeal which is the construction to
be placed on Order 27 rule 8 of the High Court (Civil Procedure) Rules 1976, of
Kano State. The rule is very clear
and unambiguous. Unless the court otherwise orders: a judgment debt carries 10
per centum per annum interest from the date of judgment until it is liquidated
by the judgment-debtor.”(emphasis mine).  

The
Court of Appeal in absolute fealty to the inveterate doctrine of stare decisis has also followed the
illustrious reasoning of the Apex Court above in the case of Uli
Microfinance Bank Nigeria Limited v. Agbanu Norbert (2018) LPELR-44953(CA) when
the jurisdiction of the appellate Court was activated to interpret the
provisions of Order 35 Rule 4 of the
Anambra State High Court (Civil Procedure) Rules, 2006 which also deals
with the automatic application of post-judgment interests on judgment debts.
The Court held thus: 

“There
is no doubt from the record that the claim for interests on the amount due to
the Claimant/Judgment Creditor was rightly awarded in the circumstances. By
Order 35 Rule 4 of the Anambra State High Court Civil Procedure Rules, 2006,
“not less than 10% per annum to be paid upon any judgment” can be
awarded notwithstanding that the time for the payment of interest or the
interest rate were not pleaded or proved at the trial. The principle of awarding post judgment interest on a liquidated
judgment sum has been accepted as an exception that no person is entitled to
any remedy or relief not claimed.” (emphasis mine).

Pragmatic Circumnavigation of the Murky Waters of
Post-Judgment Interests

As
earlier stated, many Judgment Debtors (especially companies) are in the habit
of sulking and raising frivolous objections when a victorious Judgment Creditor
demands for the payment of the outstanding post-judgment interests on a
judgment debt after the forensic dispute between the parties has been finally
settled by the Apex Court. It is only after losing out on appeals that some Judgment
Debtors discover that the compounding post-judgment interests will have doubled
the value of the judgment debt.

The
safest way to escape the financial agony which is sure to accompany the demand
for the payment of outstanding judgment debt and post-judgment interests is to
place the value of the judgment debt in a high interest yielding account before
filing a notice of appeal against the decision of the trial Court. This will
provide a safe fall-back cushion in the event that the Judgment Debtor loses on
appeal as the judgment debt would have generated sufficient interests to
satisfy the post-judgment interest when the Judgment Creditor eventually comes
knocking for his outstanding judgment debt and interests thereon.

Conclusion

It
is certain that as night follows the day, post-judgment interests at the rate
of 10% per annum shall apply to every monetary judgment debt of the High
Courts, except where the Court expressly declares otherwise.

It
will therefore be futile for any Judgment Debtor to attempt to escape the
payment of post-judgment interests on monetary judgment debts of trial Courts.
Any objection to the compulsory application of post-judgment interests would be
treated as a moot point which may only succeed in irking the Courts further and
result in the imposition of costs while the outstanding interests shall still
continue to run.

Nonso
Anyasi is a Dispute Resolution and Data Privacy Attorney based in Lagos and can
be reached via nonsoanyasi@gmail.com.