DAEWOO NIGERIA LTD. V. PROJECT MASTERS (NIG) LTD. (2010)

DAEWOO NIGERIA LTD. V. PROJECT MASTERS (NIG) LTD.

(2010)LCN/4207(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 30th day of June, 2010

CA/PH/117/2006

RATIO

ISSUE ON JURISDICTION OF THE COURT: WHY THE ISSUE ON JURISDICTION OF THE COURT MUST FIRST OF ALL, BE DETERMINED BEFORE THE MAIN APPEAL

it is no more in dispute that an issue on jurisdiction of the court must first of all, be determined, because, jurisdiction of the court or even the parties, is the live wire on which the matter is hinged, more so, the issue is premised on the notice of preliminary objection, see Inakoju v. Adeleki (2007) 4 NWLR (Pt. 1025) 423 SC; Ntuks v. NPA (2007) 13 NWLR (Pt.1051) 392 S.C. PER ISTIFANUS THOMAS, J.C.A

NOTICE OF PRELIMINARY OBJECTION: RATIONALE BEHIND THE URGENT NEED TO DETERMINE THE NOTICE OF PRELIMINARY OBJECTION TO THE COMPETENCE OF AN APPEAL ONCE RAISED BY THE RESPONDENT

SETTING ASIDE OF AN ARBITRAL AWARD: THE TIME FRAME FOR SETTING ASIDE AN ARBITRAL AWARD UNDER THE PROVISIONS OF THE ARBITRATION AND CONCILIATION ACT CAP. A18 OF 2004

By virtue of Section 29 (1) (a) of the Arbitration and Conciliation Act Cap. A18 of 2004, the law of Nigeria is that a party who is aggrieved by an arbitral award may, within three months from the date of the award, by way of an application for setting aside, requests the court to set aside the award in accordance with subsection 2 of this section. The imperative time period, within which an applicant or aggrieved party may apply to set aside, is clearly unambiguous, thus 3 months period. PER ISTIFANUS THOMAS, J.C.A

SETTING ASIDE OF AN ARBITRAL AWARD: EFFECT OF AN APPLICATION TO SET ASIDE AN ARBITRAL AWARD FILED LONG AFTER THREE MONTHS IN VIOLATION OF SECTION 29 (1) OF THE ARBITRATION AND CONCILIATION ACT

Our apex court had clearly considered the issue of extension of time to set aside arbitral award made in section 29 (1) (a) of the Act in the case of Araka v. Ejeawu (2001) FWLR (Pt. 36) 830 at 850, where, Katsina-Alu, JSC (as he then was), clearly stated in the leading judgment as follows: “In the present case, although the award was made on 8th September 1994, the motion to set it aside was brought on 25th April, 1995. Consequently, since the motion on notice to set aside the reward was filed long after three months in violation of section 29 (1) of the Arbitration and Conciliation Act it was in competent and the trial had no jurisdiction to entertain it.” In the same case of Araka v. Ejeagwu(supra) our renowned jurist, Uguh, JSC said at page 860 para C-D as follows: “Now it is a basic principle of law that a limitation law or act removes the right of action, the right of enforcement and the right to judicial relief and leaves the plaintiff with a bare and empty cause of action which he can not enforce it such a cause of action is statute-barred. Accordingly, where the law provides for the bringing of an action within a proscribed period in respect of a cause of action, according to the plaintiff. Proceedings shall not be brought after the times prescribed by such a statute: see Michale Obeifuna v. Alexander Okoye (1962) ALL NLR 357, Fred Egbo v. Adefarasin (1987) I NWLR (Pt. 47)1.” By the doctrine of stare decisis, the apex court’s decisions in Araka v. Ejeagwu (supra); Michael Obeifuna v. Alexander Okoye (supra) and Egbe v. Adefarasin (supra), the High court or Federal High Court as in the instant appeal, have no right to extend time to set aside an arbitral award beyond the three months period. PER ISTIFANUS THOMAS, J.C.A

STATUTE- BARRED: MEANING OF THE WORD “STATUTE- BARRED”

Before Their Lordships

ISTIFANUS THOMASJustice of The Court of Appeal of Nigeria

TIJJANI ABDULLAHIJustice of The Court of Appeal of Nigeria

EJEMBI EKOJustice of The Court of Appeal of Nigeria

Between

DAEWOO NIGERIA LTD.Appellant(s)

AND

PROJECT MASTERS (NIG) LTD.Respondent(s)

ISTIFANUS THOMAS, J.C.A (Delivering the Leading Judgment): The appeal is against the decision of the Federal High Court sitting at Port Harcourt delivered on 28th June, 2005, in which it dismissed the appellant’s application to set aside the Arbitral Award earlier made on 7th July, 2004. The lower court also granted leave to the respondent to enforce the said Arbitral Award.
The brief fact of the case is that, on 2nd June, 2003 the appellant entered into a sub-contract agreement with the respondent for spool fabrication, non-destructive examination and post weld heat treatment. By the clear terms of the sub-contracts agreement, any dispute arising from the execution and enforcement of the sub-contract would be resolved terminally by the Arbitration. Before the completion of the sub-contract, a dispute arose between the parties when the appellant, issued the respondent with a Notice of completion of work, titled “Demobilization Notice” which determined the agreement of the sub-contract between the parties. The appellant paid to the respondent a sum of money which it thought was adequate for the work carried out by the respondent. Not satisfied with the money paid, the respondent served the appellant with a request for Arbitration. Since both parties had agreed to resolve any dispute by pleading and appearing before a mutually accepted Arbitration Panel, the respondent filed the following reliefs against the appellant as follows:-
‘(e) That the claim is for payment of Financial Exposure incurred by the Claimant in the course of performance of the Subcontract as follows:
(i) Cost of manpower committed by Respondent for July,August and September 2003. N4,317,951.00

(ii) Cost of equipment and logistics committed by Respondent for July,August and September 2003 N7,285,710.00

(iii) Cost of Manpower committed by Respondent For October, 2003   N3,650,000.00
(iv) Cost of equipment committed by Respondent For October, 2003   N5,800,000.00
TOTAL          N21,053,661.00

(See letters PM/DW/03/012 of 19.9.03, PM/DW/03/018 of 18.10.03 and DW/OO-L-/138 of 29.8.03 and minutes of meeting of 01.7.03 respectively)
(v) Interest on the total claim of N21,053,053,661.00 at the rate of 25.5% (Bank charge on loan sourced for the exposure. See letter PM/DW/03/007 of 10.7.03) per annum from October 18,2003 until the debt is liquated.
(f) That the relief sought is an Award directing the Respondent to pay the sum of N21, 053,661.00 plus interest thereon, to the Claimant forthwith.
(g) That the claimant has appointed the First Arbitrator namely: H.A. BELLO, Esq. KSM, Legal Practitioner of H.A. BELLO & Co., Suite 413,4th Floor, P.A.B. Building, Azikiwe Road, Port Harcourt.
(h) That you are to appoint the Second Arbitrator within thirty (30) days after your receipt of this Notice.”
During the Arbitration Proceeding, the appellant counter claimed against the respondent claiming the sum of N90,444.550.00 as damages suffered as a result of the breach of the respondent in detaining materials supplied under the sub-contract.
After hearing the parties and their respective witnesses, the Arbitration Tribunal on 7th July, 2004, granted the reliefs in favour of the present responder which totaled N26, 221,128.00 as contained on pages 91 and 92 of the record. The Arbitration Tribunal considered the appellant’s counter-claim and dismissed same.
After the expiration of the 14 days requisite period of the payment of the Arbitration award, the present respondent filed at the Federal High court in suit No. FHC/CS/1442/2004 against the appellant for an order granting leave to enforce the Arbitration Award. The appellant in turn filed suit No. FHC/CS/1578/04 for the setting aside of the Award on the ground that there are errors of law on the face of the Arbitration award. The parties’ suits were consolidated and determined at the lower court. The appellant’s application to set aside the Arbitration Award was dismissed while the respondent’s leave to enforce the Award was granted. All these are contained at page 407 of the record.
Dissatisfied with the decision of the lower court, the appellant filed on 19-07-2005 a notice of appeal containing 6 grounds from which it has raised 4 issues for determination that read as follows:
“(1) Whether the learned trial Judge was right in holding that the claim for work-in- progress constituted a specific question of law referred to the Arbitrate Award which can not be disturbed by the court below on ground of misconduct ( ground 1)
2. Whether’ from the facts and circumstances of this case the award of the sum of N9, 450,000.00 as cost committed for work-in-progress did not amount to a misconduct on the part of the Arbitrators or an error of law manifest on the face of the Award (grounds 1,2,3)
3. Whether the learned trial Judge was justified in holding that the Arbitrators did not misconduct themselves and/or the proceedings by awarding a pre-award interest of 25.5% per annum on the sums claimed. (ground 4)
4. Whether from the facts and circumstances of this matter the lower court was right in holding that the award costs for legal representation which was neither claimed nor asked for by the respondent as contemplated by Article 38 of the Arbitration Rules did not amount to an error of law manifest on the face of the Award. (ground 5).
On the part of the respondent, it has raised 2 issues for and they read thus:-
Was there any misconduct on the part of the Arbitrators that would have warranted the lower court to set aside the Arbitral Award made on the 7th day of July, 2004.
(b) Was the lower court right in not disturbing the Award of costs, of the legal representation as made by the Arbitrators.
In accord with the rules of this court parties filed and exchanged their respective brief including reply brief which were relied upon and adopted same on the hearing date on 29th April 2010.
The respondent filed on 3rd August, 2006, a notice of preliminary objection to the appeal on the ground, that the appellant’s application to set aside the award at the lower court was incompetent. That the trial court had no jurisdiction to entertain that application, and that, this appellate court also has no power or jurisdiction to entertain the appeal. The objection is further grounded on the tact that, the Arbitration Award, sought to be set aside at the lower court, was delivered on 7th July, 2004, whereas, the application to set aside, was filed on 17th December, 2004, thus a period of five months, ten days after the grant of the Arbitral Award. That by Section 29(1) of Arbitration and Conciliation and Conciliation Act,Cap A18 Laws of Nigeria,2004,only one period of limitation of 3 months is allowed for an applicationo set aside an Arbitral Award.Learned counsel for the respondent/objector has argued, in the respondent’s brief at pages 1-3 on the preliminary objection and has relied on the Supreme Court’s decisions in Home Devel. Ltd. v. Scancila Construction coy Ltd, (1994) 8 NWLR (Pt .362) 252. 2S3.United Nigeria Insurance Co. Ltd. v. Learned Stocco (1973) 1 All NLR l68 and Araka v. Ejeagu (2001) FWLR (Pt. 36) 830 and the law of Arbitration in Nigeria by Mr. Gauis Ezejiofor at page 104, and that the position of the law is that, an application to set aside an Arbitration Award which is brought outside the statutory period, is incompetence and must be dismissed. Learned counsel further referred to section 34 and 36 of Arbitration and Conciliation Act, 1990. Section 34 of the Act is very clear, that a court record shall not interfere in any matter governed by tire Act except where there is express provision to the effect. Section 36 of the Act, does not confer any jurisdiction or power on the court to extend the time, within which an aggrieved party can apply to set aside an arbitral award. Respondent’s counsel has urged this court to hold, that, though the appellant has applied at the lower court, an extension of time to file an application to set aside the award, the lower court had no jurisdiction to extend the time to seek leave to set aside the arbitral award that the lower court discretion which was granted on 18th February 2006 is void as a court can not make an order it has no jurisdiction to make. Counsel concluded his argument on his objection that, the appellant’s application at the lower court including the ruling of the lower court delivered on 18th February 2006, and this appeal, are incompetent and they do not go to any issue as their basis or foundation, do not exist. That the appellant can not place some thing on nothing and expect same to stand. Counsel has urged that the appeal be struck out.
In reply to the respondent’s preliminary objection, the appellant filed on 4th July, 2007, the appellant’s reply brief. In the reply brief at page I, appellant has contended that the pith and substance of the respondent’s complaint in the objection is that the appellant’s application to set aside the arbitral award was filed more than five months after the award, and that it was incompetent and ought to have been set aside. Appellant has submitted that this is not an issue to subsume or anchored under a guise of notice of preliminary objection to the instant appeal.
The appellant is of the view that from the records of this appeal, the lower court on 24-02-2005, granted the appellant an extension of time within which to bring its application to set aside the arbitral award. Appellant is still on the view that, the respondent has not challenged nor appealed against the lower court’s decision, and then submits that, the lower court’s decision is subsisting and binding on both parties even if the respondent feels that, it was wrongly made or the lower court had no jurisdiction, and that it is settled law that a decision of a court of competence jurisdiction remains valid and binding unless and until it is set aside by an appellate court or by the lower court itself where it acted without jurisdiction, and referred to and relied on the case of Rossek v. A.C.B. Ltd (1993) 8 NWLR (pt. 312) 382 ratio 1 and 2. The appellant has further argued that, the respondent as not challenged or appeal against the lower court’s ruling on 24th February 2004, that the respondent has no right to argue in this appeal that the ruling was made without requisite jurisdiction and therefore incompetent. Appellant’s counsel has conceded that at the lower court, the present respondent had raised similar issue when the appellant had filed his application for extension of time to set aside the award. That the trial court ruled and came to the decision that the appellant’s application was competence and termed it, a baseless objection without any merit. Appellant’s counsel referred to the numerous cases of N.B.C.I v. Integrated Gas (Nig) Ltd (2005) 2 SC (Pt.1) 133 at 140; Dabo v. Abdullahi (2005) 2 SC (Pt.1) 75, 91 and Dabup v. Kolo (1993) 9 NWLR (Pt. 31) 254. 262:
In concluding his argument on preliminary objection, the appellant is of the view that, by virtue of Section 36 of the Arbitration and Conciliation Act, Cap A 18 Laws of Nigeria, 2004, the Act has allowed for an extension of time in respect of the performance of any act under the Act including the requirement for the filing of an application to set aside an arbitral award under Section 29 of the same Act. That by virtue of order 23 rule 3 (1) and (2) and order 54 rule I of the federal High Court Rules, the court is empowered to extend period within which the appellant may take any step before the court. Appellant urged this court to dismiss the preliminary objection raised by the respondent.
I have carefully considered the respondent’s notice of preliminary objection. It is premised on the jurisdiction of the lower court when it entertained the appellant’s application for extension of time for leave to set aside the Arbitral Award. On 24th February, 2005, the lower court granted the appellant an extension of time within which to bring its application to set aside the arbitral award. In my considered opinion, it is not correct to say, that, it is too late for the respondent to raise his preliminary objection because it is no challenged or appeal led against the ruling or decision at the lower court. In fact, it is a deliberate misleading argument that the respondent did not challenge the appellant’s application for extension of time to set aside the arbitral award. The fact is that, the respondent vehemently opposed and filed a counter affidavit at the lower court as shown on page 395 of the record in which the trial court ruled that, the respondent’s contention was baseless and without merit. In the appellant’s reply brief opposing the thereof, has clearly conceded that-
“what is more, it is also germane to emphasis that the respondent’s raise the issue contained in their preliminary objection before the lower court and the court after thoroughly considering the respondent’s argument and the appellant’s reply therefore, came to the decision that the appellant’s application to set aside the arbitral award was competent and properly filed and that the respondent’s contention was baseless and without merits.”
The appellant’s concession quoted above has therefore debunked his contention that the respondent did not or has not challenged the decision in which the trial court granted the extension of time. Still on this issue, I am of the view that there is no need for the respondent to appeal against the issue for extension of time, because, though the application for extension of time was granted, the main issue mainly to set aside the arbitral award was dismissed by the same lower court. Move over, the respondent’s preliminary objection at the lower court and also at this appellant court is properly grounded on jurisdiction of the trial court and this court. This can be raised at any stage even at the appellate court.
At pages 2 and 3 of the respondent’s brief in respect of the preliminary objection they are stated as follows:-
“Having not been specifically empowered by the Act to extend the time within which the application to set aside an arbitral award can be made, it is my humble submission that the lower court had no jurisdiction to extend time as it did on 18th day of February 2005”.
Page 2 paragraph 7
“…. The order of extension of time made on the 18th day of February 2005 is void as a jurisdiction to make”
Page 3 paragraph 1.
“The lower court therefore, had no jurisdiction to entertain the application to set aside the arbitral award same having been filed outside the statutory period provided for same.”
(Underlined are for emphasis).
From the above submissions of the respondent quoted above, it is no more in dispute that an issue on jurisdiction of the court must first of all, be determined, because, jurisdiction of the court or even the parties, is the live wire on which the matter is hinged, more so, the issue is premised on the notice of preliminary objection, see Inakoju v. Adeleki (2007) 4 NWLR (Pt. 1025) 423 SC; Ntuks v. NPA (2007) 13 NWLR (Pt.1051) 392 S.C.

It is to be noted that once a of notice of preliminary objection to the competence of an appeal is raised as done by the respondent in the instant appeal,there is urgent need to determine it because the rationale behind this is that,if preliminary objection is sustained,that will be the end of the matter, and there will be no need to look and determine any other issue or issues raised for determination. See Angbara v. Sylva (2007) 18 NWLR (Pt. 1065) 1; Ntuks v. (Supra), Amadasun v. Ume (2007)13 NWLR (Pt.1051) 214.
In the instant appeal, the respondent complied with the rules of this court in Order 3 or 15 (1) of 2002, when he filed on 3rd August, 2006, Notice of intention to rely on preliminary objection.
Not only that, the respondent incorporated the notice of preliminary objection into the respondent’s brief, and hence, the appellant filed appellant’s reply brief – see the case of Amaechi, v. Okoye (2008) 12 NWORL (Pt. 1101) 546; Abubaka v. Joseph (2008) 13 NWORL (Pt.1104) 307 S.C; Unity Bank Plc v. Bouari (2008) 7 NWLR (Pt. 1086) p72 S.C. Since the respondent’s objection is based on the jurisdiction of the trial and this appellate court, I now deem it necessary to determine.
By virtue of Section 29 (1) (a) of the Arbitration and Conciliation Act Cap. A18 of 2004, the law of Nigeria is that a party who is aggrieved by an arbitral award may, within three months from the date of the award, by way of an application for setting aside, requests the court to set aside the award in accordance with subsection 2 of this section. The imperative time period, within which an applicant or aggrieved party may apply to set aside, is clearly unambiguous, thus 3 months period.
In the instant matter the arbitration panel delivered the award on 7th July, 2004, but the appellant’s application to set aside the award was filed on 17th December 2004, thus a period of over 5 months after the arbitral award was declared. I am therefore of the considered view that the period sought to set aside the award was statute -barred because, the learned trial court, had no power to extend beyond the 3 months statutory period as expressly stated in section 29 (1) (a) of the Arbitration and Conciliation Act. Our apex court had clearly considered the issue of extension of time to set aside arbitral award made in section 29 (1) (a) of the Act in the case of Araka v. Ejeawu (2001) FWLR (Pt. 36) 830 at 850, where, Katsina-Alu, JSC (as he then was), clearly stated in the leading judgment as follows:
“In the present case, although the award was made on 8th September 1994, the motion to set it aside was brought on 25th April, 1995. Consequently, since the motion on notice to set aside the reward was filed long after three months in violation of section 29 (1) of the Arbitration and Conciliation Act it was in competent and the trial had no jurisdiction to entertain it.”
In the same case of Araka v. Ejeagwu(supra) our renowned jurist, Uguh, JSC said at page 860 para C-D as follows:
“Now it is a basic principle of law that a limitation law or act removes the right of action, the right of enforcement and the right to judicial relief and leaves the plaintiff with a bare and empty cause of action which he can not enforce it such a cause of action is statute-barred. Accordingly, where the law provides for the bringing of an action within a proscribed period in respect of a cause of action, according to the plaintiff. Proceedings shall not be brought after the times prescribed by such a statute: see Michale Obeifuna v. Alexander Okoye (1962) ALL NLR 357, Fred Egbo v. Adefarasin (1987) I NWLR (Pt. 47)1.”
By the doctrine of stare decisis, the apex court’s decisions in Araka v. Ejeagwu (supra); Michael Obeifuna v. Alexander Okoye (supra) and Egbe v. Adefarasin (supra), the High court or Federal High Court as in the instant appeal, have no right to extend time to set aside an arbitral award beyond the three months period.

The word “statute- barred’ simply means barred by the provision of the statute. It is usually as to time, that is, the bar gives a time limit during which certain actions or steps should be taken and one is barred from taking action after period specified in the statute. Any action taken after or outside the specified limit or period is of no avail and has no valid effect, see Araka v. Eieaswu (supra)
In the instant appeal, the bar sought by the appellant at the lower court, could have been lifted if the statute or limit was allowed to be extended beyond the three months period under Section 29 (1) of the Act. Therefore the extended period granted by the trial court is invalid abinitio. The respondent’s complaint in his Notice of preliminary objection is a clear complaint about the incompetence of the suit at the trial court and this appellate court; and therefore, the trial Federal High Court had no jurisdiction to entertain the application for extension of time to apply to set aside the arbitral award which was heard and decided at the lower court. It had no power or jurisdiction to do so.
Having reached that far, the respondent’s preliminary objection is sustained. The lower court had no jurisdiction to entertain the application to set aside the arbitral award same having been filed outside the statutory period of 3 months as contained in Section 29 (1) (a) of the Arbitration and Conciliation Act.
The ruling and finding of the lower court made on 18th February, 2005 is set aside. In its stead, I enter an order of striking out the application being incompetent as the court had no jurisdiction to entertain.
Since the instant appeal had no foundation at the trial court, the appeal is hereby dismissed for being incompetent and this court has no jurisdiction to look into the parties arguments raised in their briefs. Cost of N50, 000.00 in favour of the respondent and against the appellant.

TIJJANI ABDULLAHI, J.C.A.: I have had the privilege of reading In draft the lead judgment just delivered by my learned brother, THOMAS, JCA and I entirely agree with the reasoning and conclusion arrive thereat.
It is now settled law that an application to set aside an arbitral award which is brought outside the statutory period of three months is incompetent and must be dismissed, See HOME DEVELOPMENT LTD V. SANCII.A CONSTRUCTION CO. LTD (1994) I NWLR (pt. 362) 252 at 253 Ratio 1; UNITED NIGERIA INSURANCE CO LTD V. LEANDRO STOCCO (1973) I ALL NLR 168 and ARAKA V. EJEAGWU (2001) FWLR (pt.36) 380 at 849 E-F and 850 B-C. ,
In the case in hand, the arbitral award the subject matter of the application that gave rise to the appeal under consideration was made on the 7th day of July, 2004.
The application to, set aside the award, as can be gleaned from the record, was filed at the Federal High Court on the 17th day of December, 2004, a period of more than 5 months after the award was made.
In the light of the foregoing I agree with His Landship that the trial court in view of the authorities cited supra has no jurisdiction to extend the time for the Appellant to file the application which gave rise to the appeal in contention.
For this reason and the more detailed ones contained in the lead judgment of His lordship, i too dismiss the appeal for lack of merit and abide by the cnsequential orders therein contained.

EJEMBI EKO, J.C.A: I read in advance the draft of the delivered by my learned brother, ISTIFANUS I agree with his conclusions on the issues.
I hereby adopt the Judgment, including the consequential orders therein.

Appearances

V.N. IHUA-MADUENYI ESQ.For Appellant

AND

N.A. AYEWOH ESQFor Respondent