➥ CASE SUMMARY OF:
UBA Plc V. Triedent Consulting Ltd. (SC.CV/405/2013, July 07, 2023)
by Branham Chima.
➥ SUBJECT MATTER
Stay of proceedings for arbitral proceedings;
Submission to arbitral panel;
➥ CASE FACT/HISTORY
The Respondent by a writ of summons and statement of claim both dated the 4th day of February, 2009 on pages 1 12 of the Record of proceedings had instituted an action at the High Court of Lagos State in Suit No: LD/164/09 against the Appellant claiming the following reliefs: a. Liquidated sums of $321,162.45 and $168,000 being respectively the unpaid values of the invoices dated 14th July, 2008 and 26th April, 2008 representing the payments due to the Claimant from the Defendant for the executed part of the CRM implementation project provided by the Claimant at the request of the Defendant. The Defendant has refused, failed and or neglected to liquidate the said sums despite several demands. b. Interest on the aforesaid sums at the rate of 25% per annum from due dates till final liquidation. c. The sum of N250 Million being special and general damages for the libel contained in the Defendant’s letter of 19 August, 2008. d. The sum of N32,000,000.00 being the Solicitor’s fee and costs for the prosecution of this action.
Upon receipt of the originating process, the Appellant filed a motion on notice seeking to stay proceedings pending arbitration. The Respondent opposed the application of the Appellant by filing a counter-affidavit and written address. The trial Court dismissed the application. Dissatisfied with the judgment of the trial Court, the Appellant filed a 5 ground Notice of Appeal to the Court of Appeal wherein the decision of the High Court was affirmed. Dissatisfied with the decision of the Court of Appeal, the Appellant appealed to this Court.
➥ ISSUE(S) & RESOLUTION(S)
[APPEAL DISMISSED]
I. Whether the Court below was right to hold that before a stay can be granted pending arbitration, the party applying (the Appellant in this case) must demonstrate unequivocally by documentary evidence its willingness to submit the dispute to arbitration?
RESOLUTION:
A. THE TERMINATION OF THE CONTRACT DID NOT TERMINATE THE ARBITRATION AGREEMENT
[‘The principle of the separability and autonomy of the arbitration clause is now enacted in Section 12(2) of the Arbitration and Conciliation Act which provides as follows: “For the purpose of Subsection (1) of this Section, an arbitration clause which forms part of contract shall be treated as an arrangement independent of the other terms of the contract and a decision by the arbitral Tribunal that the contract is null and void shall not entail ipso jure the validity of the arbitration clause.” It is thus clear that the position of the Court below is unassailable in that the termination of the contract did not ipso jure terminate the arbitration clause.’]
B. THE DEFAMATORY ISSUE DOES NOT ARISE FROM THE ORIGINAL CONTRACT TO BE ARBITRABLE
[‘The Court below held on page 174-175 of the record on this point as follows: “Relief 1 of the claim at the Court below is on unpaid invoices valued $489,162.45 allegedly owed the respondent by the appellant for work done on part of the CRM implementation project of the latter. (see page 11 of the record). While relief 2 thereof on the same page 11 of the record claims pre-judgment interest of 25% per annum on the $489,162.45. The latter is attached to the former. Reliefs 3 and 4 of the claim on defamation and solicitor’s fee respectively as well as costs for the prosecution of the action are not components of the contract that gave birth to the present litigation. It follows from the above that only reliefs 1 and 2 of the claim stem from the contract. The Court below was therefore right to hold that reliefs 3 and 4 of the claim were not ingredients of or material matters arising from the contract. They are on that footing disputes or differences outside the contract and the arbitration agreement and could not have been referred to arbitration as they were not 20 contemplated or agreed upon by the parties to the arbitration agreement.” The Arbitration Clause in the agreement between the parties in this case provides as follows: “Parties shall use their best endeavors to settle dispute amicable (sic) arising from the agreement, failing which resort shall be made to an arbitration in accordance with the Arbitration and Conciliation Act Cap 19 Laws of the Federal Republic of Nigeria 1990 or any statutory provision or re-enactment thereof for the time being enforced.” The question here is whether the issue of the alleged defamatory words in the letter terminating the contract and the claim for costs of the litigation can be said to “arise” from the original agreement of the parties which the said parties were obliged to submit to arbitration … However, I cannot but agree with the Court below that reliefs 3 & 4 of the claim could not have been within the contemplation of the parties being extraneous to the original contract and could not have been disputes which ordinarily would have arisen from the contract … Thus the claim sought to be incorporated into the arbitration must be the subject of the original contract from which the arbitration clause emanated. See AFRICAN INSURANCE DEVELOPMENTCORPORATION v. NIGERIAN LNG LTD (2000) 2SC 57 at Pg. 60; (2000) FWLR Pt. 3 Pg. 431 … In the circumstances of this case, I am of the view and agree with the Court below that not all the issues submitted to the trial Court were arbitrable in view of the fact that extraneous matters outside the agreement between the parties became the subject matter of litigation which in my view was outside the substance of the original agreement which was subject to arbitration.’]
C. AN ARBITRAL PANEL CANNOT DETERMINE LEGAL QUESTIONS
[‘My Lords, a claim for defamation arising out of libel is a claim at common law. It remains a question of law. A claim for defamation can only be effectively determined by a Court of law. An arbitrator or an arbitral panel is not imbued with the powers to answer legal questions. Thus before a dispute can be referred to arbitration, same must first and foremost be seen to be arbitrable. An arbitrator cannot grant a relief for damages arising from the determination of the legal question as to: “whether the letter dated 19th August, 2008 is injurious to the reputation of the Respondent.”’]
D. ARBITRAL PROCEEDINGS HAD NOT BEGUN AND THUS STAY OF PROCEEDINGS CANNOT BE GRANTED
[‘Learned Appellant’s Counsel has insisted that the application for stay of proceedings was brought under Section 4 of the Act and that the Court is only obliged to grant the stay without more, no questions asked. I beg to disagree with that position. A clear interpretation of Section 4(1) shows that the section talks about the party asking for stay submitting his statement on the substance of the dispute presumably to the arbitrators and in that case, the Court must refer the parties to arbitration about to be commenced or already commenced and continued. There was nothing on the face of the Appellant’s motion paper to show that it had prepared its statement to be submitted to arbitration. My Lords, it is apparent that the intention of the draftsmen of the Arbitration and Conciliation Act is that Section 4 will only apply where the arbitration proceedings has in fact been initiated i.e. either party may have filed their 31 statement before the arbitral tribunal. This position is expressly corroborated by Section 4(2) of the Act which provides that the arbitral proceedings may nevertheless be commenced or continued while the matter is pending before the Court. This simply means that the arbitral proceedings must have already come alive at the time the application for stay of proceedings is being brought before the Court … Therefore the law in Section 4(1) requires the applicant to file the motion for stay of contemporaneous with the time the “first statement” of the party in respect of the substance of the dispute is submitted to the arbitrator. In this case, the Appellant herein who was the applicant at the trial Court did not submit any material to show that an arbitrator had been appointed by either of the parties to whom a “first statement” of the substance of the dispute should have been submitted. My Lords, the requirements of Section 5 highlights the interpretation of Section 4(1) given above … Section 4 requires the application to be made not later than “when submitting his first statement on the substance of the dispute while Section mandates the Applicant to bring the application “at any time after appearance and before delivering pleadings”. It is my view that it was intended by the draftsmen of the Arbitration and Conciliation Act that Section 4 of the Act will apply when the arbitral proceedings has been initiated and the Applicant brings the application for stay of proceedings “not later than when submitting his statement of the dispute”. There is nothing known as ” first statement on the substance of the dispute” in our adjudicatory system before the Court. What is more,Section 4(1) expects the applicant to make his application for stay of proceedings not later than when submitting his first statement of the substance of the dispute. This means that the Applicant’s application for stay ought to be brought at a time when arbitral proceedings have been initiated. The jurisprudence behind this is very simple. A party who is seeking stay of proceedings pending arbitration just like in a case of stay of proceedings pending appeal is duty bound to show its utmost and genuine desire to submit before the arbitral tribunal. It could never have been the intention of the draftsmen of the Act that an application for stay of proceedings pending arbitration will be granted as a matter of course. Consequently, even if the Appellant’s application was brought under Section 4 of the Act there was no material before the two Courts below to justify the grant of the application. Furthermore, by the wordings of Section 5 of the Act, it is my view that Section 5 was the applicable provision in the instant case as it was apparent that the arbitral proceedings was yet to commence and as such it was the duty of the Appellant to have shown by documentary evidence that it was ready and willing to submit to the arbitration and that the application sought was not a ruse or a sham to deprive the Respondent its right of access to Court. This they failed to do … In Section 5, there must be an existing Court proceedings in which the applicant has not taken steps more than filing an appearance before it can apply for stay of proceedings. With the existence of the Court proceedings, the applicant must show that the Court proceedings must stop and abide the outcome of the arbitration. The onus to prove that it was ready prior and after the initiation of the proceedings must be discharged. My Lords, the Respondent at trial and also in the two lower Courts and this Court showed that it had sufficient reason not to submit to arbitration because of the two additional claims outside the contract which were not subject to arbitration. Much ado about nothing has been made by the Appellant about the difference between Section 4 and Section 5 of the Act. Suffice it to say that I am not persuaded by some of the reasoning of the learned authors in this regard in relation to the said dichotomy and the resolution of same … In this case, the Appellant terminated the contract without recourse to arbitration to settle the initial dispute and when the other party went to Court, the Appellant sought to stop the judicial process without taking any steps to resort to arbitration to settle the initial dispute or the consequential disagreement.’]
.
.
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[CROSS-APPEAL: DISMISSED]
RESOLUTION: ‘It is obvious that the two issues settled for determination in this cross-appeal are unnecessary, unwarranted and a gross abuse of Court process. All the arguments on both issues had already been extensively argued by the parties in the Appellant and Respondent’s briefs. It shows absolute lack of understanding and emotional intelligence to subject the Court to the tedium of considering an issue already extensively adumbrated upon in the substantive appeal for no apparent reason. Having settled all the issues raised and argued in the cross-appeal in the substantive appeal, I find no reason to further expound on them. The cross-appeal is hereby dismissed.’
.
.
.
✓ DECISION:
‘My Lord the contract in this case was terminated on 2nd ptember, 2008 and the proceeding at the trial commenced on 4th 2009 while the application stay proceedings was filed on 5th May, 2009, nine months after the alleged dispute arose in August, 2008. I agree with the trial Court that this delay by the Appellant negates paragraph 8 of the affidavit in support of the Appellant’s application to stay proceedings filed at the trial Court. If the Appellant was truly willing to arbitrate, the Appellant could have taken definite steps to commence arbitration before bringing the motion to stay. This appeal is totally unmeritorious and should be dismissed. It is hereby dismissed.’
➥ FURTHER DICTA:
⦿ JURISDICTION OF NIGERIA COURTS
It is trite law that jurisdiction is the life wire of any case. The jurisdiction of a Court is the authority which the Court has to decide matters that are litigated before it. See RAHMAN BROTHERS LTD v. NPA (2019) LPELR-46415 (SC), NWANZE v. NRC (2022) LPELR 59631 (SC), BANK OF INDUSTRY LTD. v. OBEYA (2021) LPELR 56881 (SC). The jurisdiction of the Court in Nigeria is inherent and is bestowed upon it by Section 6 of the 1999 Constitution of the Federal Republic of Nigeria (as altered) (hereinafter referred to as 1999 CFRN). Under Section 6(6) of the 1999 CFRN, the judicial powers of the Court extends to all matters between government or authority and to any persons in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person. — H.M. Ogunwumiju, JSC.
⦿ WHAT IS AN ARBITRATION AGREEMENT?
Arbitration is a procedure for the settlement of disputes, under which the parties agree to be bound by the decision of an arbitrator whose decision is, in general, final and legally binding on both parties. The process derives its force principally from the agreement of the parties and, in addition, from the State as a supervisor and enforcer of the legal process. So where two or more persons agree that a dispute or potential dispute between them shall be decided in a legally binding way by one or more impartial persons of their choice, in a judicial manner, the agreement is called an arbitration agreement. Common law, lex non scripta and statute are the two sources of arbitration law in Nigeria. The statutory source did not codify arbitration law to the exclusion of common law. See B. J. EXPORT & CHEMICAL CO. LTD v. KADUNA PETRO-CHEMICAL CO. LTD. (2003) FWLR Pt. 165 Pg. 445 at 469 C.A. — H.M. Ogunwumiju, JSC.
⦿ CRIMINAL MATTERS & FRAUD ARE NOT ARBITRABLE
Disputes which are subject of an arbitration agreement must be arbitrable. Matters like criminal matters or where fraud is alleged and raised as a matter of public policy are not to be settled privately by arbitration. See B. J. EXPORT & CHEMICAL CO. LTD v. KADUNA PETRO-CHEMICAL CO. LTD. (Supra). — H.M. Ogunwumiju, JSC.
⦿ ARBITRATION AND LITIGATION ARE NOT MUTUALLY EXCLUSIVE
By the provisions of the Arbitration and Conciliation Act, parties to a contract can include an arbitration clause which allows for disputes to be settled by arbitration instead of litigation. At the end of the arbitration process, the agreement reached (i.e the award) will be enforced by the Courts after registration in Court. Where parties opt to arbitrate over disputes, it does not automatically oust the jurisdiction bestowed on the Court by the 1999 CRFN. Section 2(2) of the Arbitration Act states follows: “Unless a contrary intention is expressed therein, an arbitration agreement shall be irrevocable except by agreement of parties or by leave of the Court or judge.” (emphasis mine) Although it is preferable in many cases to go to arbitration rather than go to Court, it should be noted that arbitration and litigation are not mutually exclusive. Indeed the Court often complements and supplements the functions and powers of the arbitrator. For example, by stay of Court proceedings in appropriate cases; by the issue of subpoena; by making appointments where the parties cannot agree or where a party defaults; for the enforcement of awards and for setting aside awards where necessary. In these cases, the Court intervenes to ensure the proper functioning of arbitration.
⦿ LITIGATION PREPONDERATES OVER ARBITRATION IN THIS INSTANCES
No doubt, there are some instances where even though parties have submitted to arbitration, suitability of litigation preponderates over arbitration. These are instances among others: 1. Where the issue for resolution is essentially a legal one. 2. Where the issue turns largely on the credibility of the evidence. 3. Where immediate enforcement of a right is required. 4. Where one of the parties is intransigent. 5. Where there are multiparty disputes arising from a transaction e.t.c. Thus an arbitration agreement cannot and does not completely oust the jurisdiction of the Court.
⦿ AN ARBITRATION AGREEMENT IS A SEPARATE CONTRACT
The Courts have always upheld the autonomy and independence of the arbitration clause in the contract. The arbitration agreement may be drawn up separately or may form part of the transaction between the parties. Where the arbitration clause is part of the contract, it is nevertheless regarded in law as a separate contract. In HEYMAN v. DARWIN LTD (1942) A.C 356 at pp. 373-4, the Court in the United Kingdom in considering the legal status of such a clause in a contract, observed: ” … an arbitration clause in a contract is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other, but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that, if any dispute arises with regard to the obligations which the one party has undertaken to the other such dispute shall be settled by a Tribunal of their own Constitution.” — H.M. Ogunwumiju, JSC.
⦿ ARBITRATION AGREEMENT MUST SATISFY THE NORMAL REQUIREMENT OF A CONTRACT
My Lords, every Arbitration Agreement must satisfy the normal requirement of a contract such as consensus, capacity and legal relationship. Like any other contract, the terms must be clear and certain. The Court would, however, lean towards a construction that will give effect to the intentions of the parties. Thus, where a contract contained an arbitration clause which merely reads “Arbitration if any, by the I.C.C. Rules of London”, the Court held that the words “if any” which were the basis of the opposition were either surplusage or abbreviation for “if any dispute arises” and therefore sufficient. See MANGISTAURAUNAIGAZ OIL PRODUCTION ASSOCIATION v. UNITED WORLD TRADE INC. (1995) LLYOD’S REP. 617. There must also be a valid underlying substantive contract in existence and an arbitration agreement the terms of which are certain and enforceable. The essence of the arbitration agreement is to refer disputes arising between parties to arbitration. The words by which the reference is made must therefore be clear and express, as an inference will not be implied. So also, what is referred must be clearly and sufficiently stated to ensure that jurisdiction is conferred on the arbitrator. — H.M. Ogunwumiju, JSC.
⦿ HEADINGS OF A STATUTE SHOULD BE LOOKED AT TO CLARIFY AMBIGUITY
My Lords, I am persuaded that we must look at the heading of both sections of the statute to clarify any ambiguity. See OGBONNA v. A. G. IMO STATE (1992) 1 NWLR Pt. 220 Pg. 647, OYO STATE BOARD OF INTERNAL REVENUE v. UNIVERSITY OF IBADAN (2013) LPELR 2215. — H.M. Ogunwumiju, JSC.
⦿ COURTS OF LAW EXERCISE DISCRETION ACCORDING TO RULES OF LAW
Judges and Courts exercise their discretion in accordance with rules of law and justice 42 and not according to private opinion. An exercise of discretion is a liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar circumstances of the particular case, guided by the spirit and principles of law. — H.M. Ogunwumiju, JSC.
⦿ THE SUPREME COURT IS BOUND BY PRECEDENT
This Court is bound by precedent when the facts of the previous decisions have similar material facts with the case before the Court. See DALHATU v. TURAKI (2003) 15 NWLR Pt. 843 Pg. 310, NOBIS-ELENDU v. INEC & ORS (2015) LPELR-25127 (SC), DR. UMAR ARDO V. ADMIRAL MURTALA NYAKO & ORS (2014) LPELR-22878 (SC),NIGERIA AGIP OIL COMPANY LTD v. CHIEF GIFT NKWEKE (2016) LPELR 26060 (SC) and most importantly, the pronouncement of MUHAMMAD, JSC in the case of NWABUEZE v. THE PEOPLE OF LAGOS STATE (2018) LPELR-44113 (SC) where his Lordship held thus: “It is therefore settled that a Court … is bound by its own or the ratio decidendi of a higher Court in an earlier case, if the issues of fact and the legislation the Court considers subsequently are same or similar … where the lower Court, as in the instant case, holds itself bound by the decision… on the same or similar facts, Appellant’s grudge against the lower Court’s decision cannot therefore, be taken seriously…” — H.M. Ogunwumiju, JSC.
⦿ MARGINAL NOTES IN STATUTES
Marginal notes, otherwise known as side notes or section heads are short notations appearing above or beside each section of a statute or regulation. While marginal notes are not part of a statute, they provide an interpretative aid to Courts and are useful in considering the purpose of a section and the mischief at which it is aimed. See per Eso, JSC in OLOYO V. ALEGBE (1983) 2 S.C.N.L.R. 35 AT 57; Per Idigbe, JSC in UWAIFO V. AG BENDEL STATE (1982) 7 SC 124 AT 187 188, OSIEC & ANOR V. AC & ORS (2010) LPELR-2818 (SC), INAKOJU & ORS V. ADELEKE & ORS (2007) LPELR 1510 (SC), YABUGBE V. C.O.P (1992) LPELR 3505 (SC). — A. JAURO, JSC.
➥ PARTIES:
⦿ APPELLANT
United Bank of Africa (UBA)
⦿ RESPONDENT
Triedent Consulting Ltd.
➥ LEAD JUDGEMENT DELIVERED BY:
Helen Moronkeji Ogunwumiju, J.S.C.
➥ APPEARANCES
⦿ FOR THE APPELLANT
Chima Okereke Esq.
⦿ FOR THE RESPONDENT
Chukwudi Enebeli Esq.
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
⦿ SUBJECT MATTER OF ARBITRATION MUST BE WITHIN THE ORIGINAL CONTRACT
In BAKER MARINE (NIG) v. CHEVRON NIG. LTD (2006) 6 SC 21 at Pg. 31 &37; (2006) FWLR Pt. 326 Pg. 235 at 250, the issue in this Court was whether damages for the tort of conspiracy as opposed to that of breach of contract can be at large and that aggravated damages could be claimed and sustained by the arbitral award. This Court held that any award would be outside the arbitration agreement and the arbitrators are not allowed to re-write the arbitration agreement to include extraneous issues or parties outside the substantive contract between the parties.
⦿ DECISIONS THAT EMPHASISE THAT A PARTY APPLYING FOR STAY MUST HAVE SUBMITTED TO AN ARBITRAL PANEL FIRST
✓ In O.S.H.C v. OGUNSOLA (2000) 14 NWLR Pt. 687 Pg. 431CA, the Respondent claimed the sum of N1,969,861.20 and Pleadings were filed and exchanged. Before the case went on trial, the Defendant/Appellant applied in limine to stay proceedings in the case pending a reference of the dispute to arbitration in accordance with the agreement signed by both parties. The application was refused and dismissed by the trial Court and the case was ordered to proceed to trial where judgment was given in favour of the Respondent. At the Court of Appeal, the Respondent argued that the issue of arbitration clause was not raised and was never sought by the Appellant throughout the proceedings. The Court held that there is consensus by both parties that they are bound by the terms of the contract agreement which they duly executed or signed. What was in dispute in that case and emphasized was whether or not there was a formal request (or application) before the lower Court for the proceedings to be stayed and for the dispute to be referred to arbitration. The Court of Appeal held that since the Appellant had acted timeously by making his request or application for stay of proceedings atthe lower Court pending arbitration, the learned trial judge should have ordered a stay of proceedings and referred the matter to a referee for arbitration. Judgment was awarded in favour of the Appellant. The Court also held that parties to a written contract are bound by the terms of the contract provided such terms are not illegal or contrary to public policy. The application was brought in that case under Section 5 of the Act.
✓ In “M. V.” PANORMOS BAY v. OLAM (NIG) PLC (2004) 5 NWLR Pt. 865 Pg. 1CA, the Appellant’s action was filed pursuant to Section 4(1) and 5(1) of the Arbitration and Conciliation Act. The issue there was whether the trial Court was right to hold that there was valid, subsisting, binding and irrevocable arbitration agreement between the parties. Also, whether a finding by the trial Court that the Defendants who were the applicants and who had not taken any steps in the proceeding had enough grounds to have entitled the trial judge to order the parties therein to go for arbitration outside the jurisdiction of this Country having regards to Section 20 of the Admiralty Jurisdiction Decree and Section 5(2) of the Arbitration and Conciliation Act. The Court held Per Galadima J.C.A (as he then was) thus: “I have held that Section 20 of the Admiralty Jurisdiction Decree (supra) is a statutory limitation to the enforcement of the purported arbitration agreement contained in the bills of lading herein. Therefore by reference to the clear provisions of the said Section 20 of the Decree, this Court could declare the arbitration agreement null and void. Alternatively, if however this position is unattainable in law, then a finding by the learned trial Judge that there is a valid, subsisting, binding and irrevocable arbitration agreement between the parties and that the defendant had not taken any steps in the proceedings could not in any case have entitled the trial judge to order the parties herein to go for arbitration outside the jurisdiction of this Country since Sections 2 and 4 of the Arbitration and Conciliation Act are controlled and limited by Section 5(2) of the same Act.”
✓ In ONWARD ENTERPRISES LTD. v. M.V MATRIX (2010) 2 NWLR Pt. 843 Pg. 530 CA, the issue in that case was whether the trial Court exercised its discretion under Section 5 of the Arbitration and Conciliation Act judicially and judiciously. When the Respondents in this case brought their application for stay of proceedings, they tendered certain documents which indicated that they had appointed their own arbitrator and had communicated same to the Appellant. The Court held that by appointing their arbitrator in compliance with Clause 40 of the charter-party agreement endorsed by both parties, the Respondents fulfilled their own obligation. The approach of the Respondents clearly indicated that they were ready and willing to do all things necessary for the proper conduct of the arbitration in line with Section 5(2) of the Arbitration and Conciliation Act.
✓ In M.V. LUPEX V. NOC & S. LTD (2003) 15 NWLR pt. 844 Pg. 469SC, the parties in this case agreed to refer their disputes to arbitration in London under the English law. The Tribunal in England had started hearing the dispute and parties had begun to present their respective cases before it. This Court overturned the judgments of the two Courts below which refused stay and ordered a stay of proceedings. On the issue of discretion, the Court held per Uthman Mohammed JSC thus: “Ephraim Akpata, JSC in the book “The Nigerian Arbitration Law” is apt on the issue of staying proceedings where parties have agreed to refer their dispute to arbitration in a contract. He expressed his opinion in the following exposition: “That the power to order a stay is discretionary is not in doubt. It is a power conferred by statute. It however behoves the Court to lean towards ordering a stay for two reasons; namely; a) The provision of Section 4(2) may make the Court’s refusal to order a stay ineffective as the arbitral proceedings “may nevertheless be commenced or continued” and an award made by the arbitral Tribunal may be binding on the party that has commenced an action in Court. b) The Court should not be seen to encourage the breach of a valid arbitration agreement particularly if it has international flavour. Arbitration which is a means by which contract disputes are settled by a private procedure agreed by the parties has become a prime method of settling international commercial disputes. A party generally cannot both approbate and reprobate a contract. A party to an arbitration agreement will in a sense be reprobating the agreement if he commences proceedings in Court in respect of any dispute within the purview of the agreement to submit to arbitration.”
✓ In SAKAMORI CONSTRUCTION (NIG) LTD v. LAGOS STATE WATER CORPORATION (2021) LPELR 56606(SC), the Appellant filed the matter in the Court of trial and applied for summary judgment on 15/07/2009. But the Respondent, for reasons best known to it, neither entered appearance nor reacted to the Appellant’s originating processes et al, inspite of the proper service evidently effected on it. The Appellant’s application for summary judgment in question was heard and ruling was reserved for delivery on 11/12/2009. It was at that point in time on 11/12/2009, that the Respondent deemed it expedient to wake up from slumber and file an application for stay of proceedings, thereby seeking to momentarily arrest the judgment of the trial Court. This Court held Per Ibrahim Mohammed Musa Saulawa, JSC thus: “In my considered view, the answer to that pertinent question is not far-fetched. This Court has had cause in a plethora of authorities to reiterate the fundamental principle, that any agreement to submit a dispute to arbitration, does not automatically oust the jurisdiction of the Court. Therefore, either party to such an agreement may, prior to when submission to arbitration or award is made, commence legal proceedings regarding any claim or cause of action contained in the submission. See HARRIS VS. REYNOLDS (1845) 7QB71, OBEMBE VS. WEMABOD ESTATES LTD (1977) LPELR-SC466/1975.”
➥ REFERENCED (OTHERS)
