AGRO-ALLIED DEVELOPMENT ENT. LIMITED v. UNITED SHIPPING TRADING CO INC.
(2010)LCN/3997(CA)
In The Court of Appeal of Nigeria
On Friday, the 23rd day of July, 2010
CA/L/159/05
RATIO
WHETHER GROUNDS OF APPEAL MUST BE PREDICATED ON THE DECISION APPEALED AGAINST OR ANY NEW ISSUE RAISED WITH THE LEAVE OF THE APPELLATE COURT AND ISSUES FOR DETERMINATION IN AN APPEAL MUST BE DISTILLED FROM THE GROUNDS OF APPEAL
It is pertinent that grounds of appeal must be predicated on the decision appealed against or any new issue raised with the leave of the appellate court and issues for determination in an appeal must be distilled from the grounds of appeal. Any issue raised in an appeal which is completely divorced from the grounds of appeal is incompetent and liable to be struck out. PER HUSSEIN MUKHTAR, J.C.A.
PUBLIC POLICY: DEFINITION OF THE WORD “PUBLIC POLICY“
…public policy is defined as follows: “Community sense and common conscience extended and applied throughout the state to matters of public morals, health safety, welfare and the like.” Ige, J.C.A (of blessed memory) observed in the latter case thus: “Public policy has been described by Jowitt’s Dictionary of English Law 2nd Edition as ‘the principles under which freedom of contract and private dealings is restricted by law for the good of the community.” PER HUSSEIN MUKHTAR, J.C.A.
JUSTICES:
RAPHAEL CHIKWE AGBO Justice of The Court of Appeal of Nigeria
ADZIRA GANA MSHELIA Justice of The Court of Appeal of Nigeria
HUSSEIN MUKHTAR Justice of The Court of Appeal of Nigeria
Between
AGRO-ALLIED DEVELOPMENT ENT. LIMITED – Appellant(s)
AND
UNITED SHIPPING TRADING CO INC. – Respondent(s)
HUSSEIN MUKHTAR, J.C.A.(Delivering the Leading Judgment): The plaintiff (the respondent herein) brought an originating motion at the Federal High Court Lagos (the court below) for enforcement of the arbitral award against the defendant (the appellant herein) made in London on the 28th April, 1997 as detailed in paragraph 16 of the supporting affidavit dated 11th February, 1998 thus:
“The sums of the award for which the plaintiff/applicant as at 10th February, 1998 now seeks to enforce the judgment are as follows:
a. US$ – DOLLARS
Principal sum due at date of award = US$84,531.81
Interest at 8% from date of award @
daily rate of $18.52 to today = US$5,352.28
10.2. 1998 (289 days)
Total due at 10 February, 1998 = US$89,866.09
b. GBP STERLING
i. Tribunal’s cost of Arbitration award = GBP8,319.00
Interest at 8% from date Of award @
daily rate of GBP 1.82+to today 10-2-
1998 (289) day = GBP 525.98
= GBP 8,844.98
ii. Claimants’ legal costs Pursuant to arbitration
award = GBP24,753.71
Interest at 7% from the date of award
@ daily rate of GBP 5,42 to today
10.2.1998 (289 days) = GBP 1,566.38 = GBP26,320.09 = = = = = = = =
c. Estimated legal cost for Enforcing
award at Lagos = GBP 5,845.00
GRAND TOTAL a. US$89,866.09 = = = = = = = = b. GBP41,010.09
The parties legal relationship emanated from a charter-party agreement in a gencon form between the appellant as “chatterer” and the respondent as “owners” of a vessel “M/V Parnomos”. The respondent chattered the said vessel to the appellant under the said charter-party agreement, under clause 37 of which, any dispute arising thereunder was to be referred to a London Arbitration to be resolved under English Law.
In due course a dispute arose under the charter-party for demurrage and stevedoring damage in respect of which the respondent initiated arbitration proceedings in London against the appellant. Both parties were represented by their solicitors in London during the arbitration proceedings, at the end of which the arbitrators gave their unanimous reasoned final award exh FA2 thus:
“WE FIND AND HOLD THAT
1. The owner’s claim succeeds in full
2. The charterers’ counterclaim fails and is hereby dismissed.
WE AWARD AND ADJUDGE that the charterers do forthwith pay to the owners the sum of US $87,672.24 (Eighty Seven Thousand, Six Hundred and Seventy Two United States Dollars and Twenty Four Cents) plus interest on the sum of US $75,672.24 (Seventy Five Thousand, Six Hundred and Seventy Two United States Dollars and Twenty Four Cents) at the rate of seven and one quarter per cent per annum from 20th October, 1993 until the date of this our award and at the same rate on the sum of US $12,000 (Twelve Thousand United States Dollars from 1st December, 1996 until the date of this our award.
WE ALSO AWARD AND ADJUDGE that the charterers do bear and pay their own and the owners’ costs in this reference (the latter to be taxed if not agreed) and
WE FURTHER AWARD AND ADJUDGE that the charterers do bear and pay the cost of this award which we HEREBY TAX AND SETTLE at $8,319.00 inclusive of our fees and disbursements.
ALWAYS PROVIDED that if the owners shall in the first instance have paid any sum in respect of the cost of this award they shall be entitled to immediate reimbursement from the charterers of such sum so paid.”
The appellant paid part of the award relating to load port demurrage and stevedore damage. After an unsuccessful attempt to appeal in London against the arbitral award by an originating motion dated 19th May, 1997, the said motion was dismissed on the 7th November, 1997 (see pages 41-43 of the record). There is no appeal against the order of the London High Court dismissing the originating motion, and no action was taken to set aside the award.
As the award could not be enforced in England because, from the search conducted by the respondent, the appellant has no assets thereat, the respondent filed an originating summons at the court below seeking for leave to recognize and enforce the arbitral award in Nigeria pursuant to Arbitration and Conciliation Act Cap. 19 Laws of the Federation of Nigeria 1990. After taking full arguments from both sides the learned trial judge Senlong, J in a well considered ruling delivered on the 19th June, 2003 granted the application for recognition and enforcement of the arbitral award but refused the claim for interest which was not part of the award, (see pages 163-182 of the record). The learned trial judge made the following findings and conclusion:
“I am to observe that the plaintiff claims interest on the above three heads of claim from the date of the award to 10th February, 1998 but no such interest forms part of the award.
This court is being called upon to recognize and enforce the award and not to vary it in any way. In the circumstance I refuse to recognize the claim for interest as set out under paragraph 16 (a) (b) (i) and (b) (ii) of the originating summons. I also refuse to recognize claim (c) because it is also not part of the award sought to be enforced.”
Dissatisfied with the above ruling, the appellant brought this appeal by its notice of appeal dated 19th and filed on the 20th June, 2003 premised on four grounds as reproduced hereunder less the particulars thereof:
“1. The learned trial judge erred in law in holding that only English Law was applicable in the arbitration award.
2. The learned trial judge erred in law and misdirected himself in considering the arbitral award when he held that the award was not contrary to public Policy in Nigeria.
3. The learned trial judge erred in law and acted contrary to the Arbitration and Conciliation Act No. 11 of 1988 in recognizing and enforcing an arbitral award which considered Nigerian courts as incapable of ordering the exercise of a lien on Government Cargo.
4. The learned trial judge erred in law and misdirected himself in recognizing and enforcing the claimants legal costs in the arbitral award in the sum of GBP 24,753.71 (Twenty Four Thousand, Seven Hundred and Fifty Three Pounds and Seventy One Pence).”
The respondent filed a notice of preliminary objection dated 11th September and filed on 12th September, 2008, which was argued immediately before the hearing of the appeal on 25th March, 2010.The preliminary objection sought for striking of the appeal, or the three issues raised for determination in the appellant’s brief, and is premised on six grounds as follows:
“a. Issues A, B & C formulated by the appellant herein do not arise for determination in the appeal,
b. This honourable court has no jurisdiction to determine issues A & B which seek to attack the decision of the arbitrators and not that of the Federal High Court, Lagos.
c. Further, issue B as formulated is not predicated on any of the grounds of appeal.
d. Issue C does not also arise for determination as the Federal High Court, Lagos did not make any award but merely recognized and enforced the arbitration award between the parties.
e. Issues A, B & C formulated by the appellant are clearly not predicated on the decision of the lower court and are therefore incompetent and liable to be struck out, and
f. Consequently, the appellant’s appeal is unsupported by any brief of argument in accordance with the rules of court.
The respondent’s counsel argued that the appellant’s issues A, B and C are incompetent because they attack the decision of the London arbitration panel instead of the decision of the court below which merely recognized and enforced the arbitral award. The issues, he submitted, are incompetent and should be struck out. He relied on section 241 of the Constitution of the Federal Republic of Nigeria 1999 (hereinafter referred to as “the Constitution”).
The appellant’s issues (a) (b) and (c) which were allegedly not derived from the grounds of appeal read thus:
“a) Was the arbitral award of the 28th April, 1997 contrary to public policy in Nigeria in the terms of section 52 (2) (b) (ii) of arbitration and conciliation Act CAP 19 LFN 1990?
b) Did the arbitrators give any other basis for the award other than the “mistaken belief stated at p. 30 of the record – that the Nigerian government would not allow a cargo destined for its own steel works to be delayed by the exercise of a lien on the cargo and a Nigerian court will not grant such an order on government cargo?
c) Was the trial judge entitled to “award” claimants legal costs which were expressly made subject to “Taxation” by the award and confirmed by respondents solicitor as awaiting “Taxation” in Exhibit FA 6 & F A 6A – PP 56-58 of record?”
As the appellant’s counsel submitted issues (a) and (b) cover grounds 1, 2 and 3, while issue (c) is related to the 4th ground, which in turn are premised on the judgment appealed against. It is pertinent that grounds of appeal must be predicated on the decision appealed against or any new issue raised with the leave of the appellate court and issues for determination in an appeal must be distilled from the grounds of appeal. Any issue raised in an appeal which is completely divorced from the grounds of appeal is incompetent and liable to be struck out. In the instant appeal all the four grounds have been shown to be premised on the judgment appealed against. The mere reference to the findings of the London arbitration panel neither renders the grounds incompetent nor does it tantamount to appealing against the arbitral award.
The arbitral award which has been recognized and enforced by the court below cannot be completely divorced from the judgment of the court below in a water-tight sense, as it is strictly based on the arbitral award. The preliminary objection therefore lacks merit and same is hereby dismissed.
On the main appeal, the first and second issues will be treated together as both the appellant’s and the respondent’s counsel similarly did. These two issues boil down to whether the arbitral award is against public policy in Nigeria as to trigger the application of section 52 (2) (b) of the Arbitration and Conciliation Act Cap 19 LFN 1990.
The appellant’s counsel referred to clause 8 of the charter party which gives the respondent as owners of the vessel “M/V Parnomos” a right of lien on the cargo for freight, dead-freight demurrage and damages for detention provided that the appellant as chatterers shall only be responsible to such an extent to which the owners have been unable to obtain payment in respect thereof by exercising lien on the cargo.
The appellant’s counsel referred to the finding of the arbitrators that was based on the speculative opinion of an “expert testimony” by a respondent’s Nigerian Lawyer Ms. Sodipo. The arbitrators used such opinion as synonymous to public policy in Nigeria, and held that Nigerian courts were not likely to grant an order for the respondent to exercise a lien on a cargo in Lagos. The arbitration panel observed (p. 30 of the record) as follows:
“Ms. Sodipo asserted that it would have been necessary to obtain a court order before entrusting the cargo to the custody of the Nigerian Ports Authority and in this respect suggested that a court order would have been necessary which, apart from its costs, would have taken some days to obtain. Mr. Oduba disputed these statements and whilst his evidence could not be gainsaid we considered that, in practical terms, the owners might have been well advised to follow this course.
Ms. Sodipo also said that it was unlikely that the court order would have been granted because it was a government cargo.
Mr. Oduba assured us that under the Ports Decree even Government cargoes could have a lien put upon them. This was another point where we considered that theory and practice would differ. We considered that it would be most unlikely that the government would permit a cargo destined for its own steel works to be delayed by the exercise of a lien.”
The appellant’s counsel also cited the case of Alfotrin Ltd v. Attorney General of the Federation (1996) of N.W.L.R. (pt. 475) 634 where the Supreme Court upheld an award of demurrage against the Federal Government of Nigeria. He further cited the provision of section 24 (4) of the Admiralty Jurisdiction Act 1991 which provides thus:
“… Property that belongs to the Federal or State Government but does not include cargo that belongs to a corporation that is an agency of the Federal Government.”
The appellant’s counsel submitted that the learned trial judge had rightly defined public policy as stated in Dale Power Systems Plc v Witt and Busch Ltd (2001) 8 NWLR (pt. 716) 699 and Macauly v R.Z.B. of Austria (1999) 4 NWLR (pt. 600) 599 at pp 611-612 where public policy is defined as follows:
“Community sense and common conscience extended and applied throughout the state to matters of public morals, health safety, welfare and the like.”
Ige, J.C.A (of blessed memory) observed in the latter case thus:
“Public policy has been described by Jowitt’s Dictionary of English Law 2nd Edition as ‘the principles under which freedom of contract and private dealings is restricted by law for the good of the community’.”
The appellant’s counsel argued that the learned trial judge misdirected himself by holding thus:
“Having considered the affidavit evidence before me and the submissions of counsel in this matter. I am satisfied that the plaintiff has met the conditions set out in sections 31 and 51 of the Act for the recognition or enforcement of the award under consideration. I find that the defendant has failed to discharge the burden placed upon it to satisfy the court that the award should not be accorded recognition or enforcement by virtue of the provisions of S. 52 (2) (b) (ii). I am satisfied that the award is not against public policy and ought to be recognized and enforced. In the circumstance I hereby give recognition to the award and leave is hereby granted to the plaintiff to enforce the award made by Michael D. Baskerville, Bruce David Ian Mackenzie and Timothy D. M. Rayment dated 28th April, 1997 in the following terms:
1. The principal sum due at date of award US $84,513.81 and interest, at the rate awarded by the Arbitrators
2. Tribunal’s cost of arbitration award…………….GBP 8,319.00
Claimant’s legal costs pursuant to arbitration award………..GBP 24,753.71.”
The learned trial judge, in my view, rightly applied the provisions of sections 51 and 52 of the Arbitration and Conciliation Act in recognizing and registering the arbitral award, which as he rightly observed is not contrary to any public policy in Nigeria. I am unable to see any perversity in that judgment. In other words the appellant has not shown any perversity in the decision of the court below appealed against to justify tempering, by this court, therewith. The first and second issues are accordingly resolved against the appellant and the corresponding grounds of appeal similarly fail.
On the third and final issue, the appellant’s counsel submitted that the court below took a pervasive decision on taxation by recognizing and enforcing untaxed claims. The appellant’s counsel further submitted in the reply brief that there appeared to be a misunderstanding of the reference made to the implication of an order of taxation of a solicitor’s charge under sections 16 and 17 of the Legal Practitioners’ Act. He said foreign law must be established by evidence in Nigeria. He cited the case of Ogunro v Ogedengbe (1960) 5 S.C. 137. It was, however, further submitted that the Nigerian courts should assume that foreign law is the same as Nigerian law in the absence of evidence to the contrary. He further cited the views of Iguh, JSC in Chuka Okoli & Associates v Crusader Insurance Co. Ltd (1994) 2 NWLR p. 635 holding that a bill of charges is incompetent until it is taxed, and no action to recover such charges shall be begun and, if begun, must be stayed.
The respondent’s counsel submitted that the fact that the bill was yet to be taxed does not affect the costs already ascertained. It is also submitted that the bill did not deal with any legal cost incurred in Nigeria and that makes sections 16 and 17 of the Legal Practitioner’s Act inapplicable.
The appellant’s counsel urged the court to refuse the costs of the respondent’s counsel having not been taxed.
The learned trial judge rightly recognized and enforced the arbitral award, which has not been appealed against. There was no prayer before the court below to review the arbitral award or any part thereof and, in fact, the court below could not have dissected the award made in the United Kingdom to pick and choose which part to enforce and which part not to. The learned trial judge rightly observed thus:
“I am to observe that the plaintiff claims interest on the above three heads of claim from the date of the award to 10th February, 1998 but no such interest forms part of the award. This court is being called upon to recognize and enforce the award and not to vary it in any way. In the circumstance I refuse to recognize the claim for interest as set out under paragraph 16 (a) (b) (i) and (b) (ii) of the originating summons. I also refuse to recognize claim (c) because it is also not part of the award sought to be enforced.”
The third issue is similarly resolved against the appellant and the related ground 4 therefore fails. With the resolution of all the issues against the appellant the appeal is glaringly bereft of merit and accordingly fails per force. The ruling of Senlong, J delivered on the 16th June, 2003 is hereby affirmed, and the appeal accordingly dismissed for lacking in merit.
The respondent shall be entitled to cost against the appellant assessed at Fifty Thousand Naira (N50,000.00.)
RAPHAEL CHIKWE AGBO, J.C.A: I was privileged to read in advance the lead judgment just delivered by my brother Mukhtar, J.C.A and I agree with both his reasoning and conclusions.
I adopt the judgment as mine. I abide by all consequential orders made therein.
ADZIRA GANA MSHELIA, J.C.A.: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Mukhtar, J.C.A. and I entirely agree with his reasoning and conclusion that this appeal is bereft of merit. I adopt the reasons and conclusion in the lead judgment as mine and dismiss the appeal. I abide by the order made as to costs.
Appearances
O. O. Omole For Appellant
AND
Ayo Olorunfemi with Olakunle Yusuff For Respondent
