Understanding The Concept Of Duress In Contracts: An Analysis Of The Supreme Court's Decision In Shell Petroleum Development Company Of Nigeria Ltd & 6 Ors v E.N. Nwawka (2003) 6 NWLR (Pt. 815) 184

INTRODUCTION

The definition of the word "duress" was brilliantly defined by Ekpe JCA in Calabar Central Co-operative Thrift & Credit Society & 2 Ors v Bassey Ebong Ekpo (2001) 17 NWLR (Pt. 743) 649 at 675 as follows:

"The word duress is defined as any unlawful threat or coercion used by a person to induce another to act (or to refrain from acting) in a manner he or she otherwise could (or would); subjecting a person to improper pressure which overcomes his will and coerces him to comply with a demand to which he would yield if acting as a free agent"

This means that for duress to invalidate a contract, the threat or its effect which may have induced the contract must itself be unlawful. This paper seeks to explore the legal concept of duress in contract law as well as provide an analysis of the concept of duress based on the Court's decision in Shell Petroleum Development Company of Nigeria Limited & 6 Ors -v- E.N. Nwawka.

FACTS OF THE CASE

The appellants were: The Shell Petroleum Development Company of Nigeria Ltd. (1^st appellant), its Managing Director (2^nd appellant), Deputy Managing Director (3^rd appellant), and General Manager (4^th appellant), along with two expatriate employees (5^th and 6^th appellants) and the Director of Petroleum Resources, Ministry of Petroleum Resources (7^th appellant). The respondent was E.N. Nwawka, who claimed to be the 5^th highest ranking officer at the company. The Supreme Court delivered its judgment on Friday, 24th January, 2003, and the lead judgment was read by Emmanuel Olayinka Ayoola, J.S.C.

On December 19, 1999, the respondent received a letter from the 4^th appellant, on behalf of SPDCN, stating that he was "released from the company" as his services were no longer required. This letter included a cheque for payment in lieu of notice, in line with his contract of employment. Dissatisfied with the termination of his employment, the respondent commenced legal action on January 12, 2000, seeking various reliefs.

The core of the respondent's case centred on allegations of wrongful manipulation of the expatriate quota system by SPDCN. He claimed that foreign nationals were brought in under false descriptions to fill positions that qualified Nigerian nationals could hold, thereby depriving him of opportunities for higher posts. He alleged a "design to ease Nigerians out" of the company through "expatriate quota malpractices" detrimental to Nigerian employees.

Specific to his employment, the respondent alleged that on December 19, 1999, the 4^th appellant urged him to leave SPDCN's employment on "voluntary severance" with a "financial bait" of about N30 million if he signed an acceptance that day. Otherwise, his employment would be automatically terminated with three months' pay in lieu of notice. The respondent rejected this offer. He contended he could not have been declared redundant, given his qualifications and performance as a deputy general manager of development, despite the company's re-organisation.

In relation to this analysis, the claims and declarations sought by the Respondent were as follows:

• Claim 6: A declaration that this purported contract, which was "surreptitiously crafted and forced on Nigeria Employees of the 1^st defendant is null, void and of no effect".
• Claim 7: A declaration that the only valid contract between the 1^st defendant and the plaintiff was the one pre-existing before April 30, 1997.
• Claim 11: An order setting aside the purported contract dated April 12, 1997, as it was unilaterally foisted on the plaintiff by the 1^st defendant, as the same is not a contract at all.

The appellants sought to strike out or dismiss the action for lack of jurisdiction and for failing to disclose a reasonable cause of action, arguing that certain claims, including 6, 7, and 11, were frivolous, vexatious, and an abuse of judicial process. The Supreme Court, in a unanimous decision, allowed the appellants' appeal and dismissed the respondent's cross-appeal, striking out several of the respondent's claims, including those related to the contract of April 12, 1997.

KEY EMPHASIS ON THE PRINCIPLE OF DURESS

The Supreme Court meticulously discussed the principle of duress, particularly in the context of the respondent's claims that the April 1997 contract was "forced" upon him. The Court stated that the "basis of duress rests on pressure rather than an absence of consent." This fact emphasised the need to understand the difference between legitimate and illegitimate duress. Illegitimate pressure that amounts to duress merely renders a contract voidable, not void from the outset. This means that the contract may be ratified by the party who entered into it under duress. In essence, the coerced party may affirm or repudiate such a contract but must do so within a reasonable time; otherwise, it can be implied that the contract has been affirmed.

The case also outlined certain requirements that a party must plead to allege duress in a contract successfully. They include:

1. That consent was given.
2. The specific nature of the threat or pressure that is claimed to constitute duress.
3. The fact that consent was obtained under such pressure and by compulsion.

In relation to the case, the Supreme Court found that the respondent's pleadings did not contain the necessary averments for duress. The learned Justices noted that the respondent could not rely on duress, especially given that the new contract of employment, which he alleged was executed under duress, had existed for two (2) years before he filed his lawsuit, meaning that he had agreed to it and had even benefited under it. Like the equity maxim says, "he who comes to equity must come with clean hands".

CONCLUSION

In conclusion, the core lesson from the Supreme Court's ruling is that duress in the law of contract has essential elements which must be proved before it can be relied upon. It also emphasises the need for a party alleging duress to act promptly and decisively once the pressure has been removed, because delaying may imply ratification, depending on the circumstances of the case. As in the case here, the court was unwilling to grant a remedy to a party who, for a considerable period, had acquiesced to the very contract he now sought to repudiate. This case thus serves as a key point in explaining and defining the meaning of duress and its application in contract law.

Originally published September 1, 2025

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