IPCO (W.A.) HOLDING LTD & ANOR. v. SEMBCORP ENG. PTEL LTD (2011)

IPCO (W.A.) HOLDING LTD & ANOR. v. SEMBCORP ENG. PTEL LTD

(2011)LCN/4226(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 5th day of January, 2011

CA/PH/12/2007

RATIO

JURISDICTION OF THE COURT:POSITION OF THE LAW ON THE JURISDICTION OF THE TRIAL COURT WHERE A PLEA FOR REFERENCE TO ARBITRATION ARISING FROM AN AGREEMENT IN A CONTRACT BETWEEN THE PARTIES HAS SUCCESSFULLY BEEN RAISED

Where a plea for reference to arbitration arising from an agreement in a contract between parties has successfully been raised, the trial court cannot proceed to determine a dispute it otherwise could. The plea for reference to arbitration constitutes a challenge to the court’s jurisdiction and ignoring the challenge amounts to ignoring a party’s right, pursuant to an agreement with the other, to submit the dispute to arbitration first. In real pragmatic terms, the court would lack jurisdiction to proceed in the light of the agreement which parties voluntarily and lawfully subscribed to thereby ousting the jurisdiction of the court until and unless a condition precedent has been met. PER M. DATTIJO MUHAMMAD, J.C.A

JURISDICTION OF THE COURT: MEANING OF THE WORD “JURISDICTION”; CIRCUMSTANCE WHEN A COURT WILL BE SAID TO HAVE JURISDICTION TO ENTERTAIN A MATTER BEFORE IT

IRREGULAR PROCEDURE : POSITION OF THE LAW WHERE A PARTY FAILED TO OBJECT TO THE USE, BY THE COURT, OF AN IRREGULAR PROCEDURE, BUT PARTICIPATED IN THE PROCEEDINGS IN SPITE OF THE IRREGULARITY

…where the Appellants not only failed to object to the use by the court of the irregular procedure but participated in the proceedings inspite of the irregularity, they cannot now complain. They are deemed to Have waived their right to protest and endorsed the procedure inspite of its irregularity see; Katsina Local Authority v. Makudawa (1971) 1 NWLR 100, Jadesimi v. okotei-Eboh (1986) l NWLR (pt.16) 264, NDIC v. central Bank of Nigeria (2002) 7 NWLR (Pt.766) 272. PER M. DATTIJO MUHAMMAD, J.C.A

ADMISSION: WHAT THE WORD “ADMISSION” ENTAILS

In Black’s Law Dictionary, 6th Edition, admission has been defined as a statement by a party or someone identified with him in legal interest, of the existence of a fact which is relevant to the cause of his adversary. An admission is, therefore, a formal waiver of proof which relieves the opposing party from proving the admitted facts and bars the party who made the admission from disputing same. where made by a party’s attorney for the purpose of being used as a substitute for the regular legal evidence of the facts at trial, the admission is called judicial admission. See Onyenge v. Ebere (2004) 13 NWLR (pt.889) 20 and Archibong v. Ita (2004) 2 NWLR (858) 590 SC. PER M. DATTIJO MUHAMMAD, J.C.A

ISSUE OF JURISDICTION: ESSENCE OF THE ISSUE OF JURISDICTION

In the case of BASF. NIG. LTD vs. FAITH ENT. LTD in 41 Nigeria Supreme Court Quarterly Reports 381, particularly at 395, MUNTAKA COOMASSIE, JSC has stated as follows:- “It is pertinent in my view to consider an important issue of jurisdiction raise by the respondent herein. This is so because the issue of jurisdiction is so fundamental and being a threshold issue, it is imperative to have it determined first before proceeding to the substantive matter since lack of it would deprive this court the power to pronounce on the main issue.” PER ISTIFANUS THOMAS, J.C.A.

JUSTICES

MUSA DATTIJO MUHAMMAD Justice of The Court of Appeal of Nigeria

ISTIFANUS THOMAS Justice of The Court of Appeal of Nigeria

TUNDE OYEBANJI AWOTOYE Justice of The Court of Appeal of Nigeria

Between

IPCO (W.A.) HOLDING LTD & ANOR. Appellant(s)

AND

SEMBCORP ENG. PTEL LTD Respondent(s)

M. DATTIJO MUHAMMAD, J.C.A (Delivering the Leading Judgment): On the 10th June 1999, the Respondent in this appeal commenced suit No.NHC/109/99 at the Nchia division of the High court of Rivers state claiming the outstanding sum of US $4,733,183.62 with accrued interest against the Appellants as defendants. The two parties had, on 19th December 1995, entered into an agreement for the supply of various forms of equipments to the Bonny Export Terminal in Rivers state owned by the Nigerian National Petroleum corporation. The Plaintiff/Respondent is, under the agreement, the supplier of the equipments, the total cost of which is US$7,778,875.00.
The action from which the instant appeal arose is for the recovery of the outstanding balance of the cost of the contract after the Appellant had persistently refused to pay the sum inspite of Respondent’s repeated demands allegedly agreed and approved the payment of the sum of US $837,725.00 the to Respondent- Having entered appearance, the Appellants by an application, filed on 18th October 1999, prayed the lower court that the matter be referred to arbitration as provided for by clause 26 of the contract, Exhibit A. They also asked that further proceedings into the ratter be stayed pending the arbitration.
Upon receipt of Appellant’s application, the Respondent filed a motion seeking the court’s order for judgment against the Appellants in the sum of US $837,725.00 which sum had been admitted and thence not within the subject matter of arbitration’ Annexed to Respondent’s application, are the invoices bearing Appellants’ purported admission of the sum in respect of which judgment was being urged.
Arguments in respect of the two applications were heard jointly by the court on 27th March 2000. In a considered ruling, dated 14th November 2000, the court having found that Appellants had admitted Respondents claim to the tune of us $837.725.00, accordingly entered judgment for the Respondent on the grounds that the sum does not form the subject matter of Arbitration. The court otherwise granted Appellants’ application and referred the matter to arbitration’ Aggrieved with the court’s ruling, the defendant has appealed against same on a notice containing four grounds.
Parties have filed and exchanged briefs of arguments and same, including Appellants’ reply brief have been adopted and relied upon at the hearing of the appeal.
The two issues formulated by the Appellants at paragraph 3.01 0f their brief as calling for determination in the appeal read:-
(i) whether the learned trial judge was right in granting judgment final whilst considering an application or jurisdiction. (Distilled from Grounds 1 and 2 of the Grounds of Appeal)
(ii) In the alternative, whether the learned trial judge was right in holding that there was an admission of liability to the tune of Us $937,725.00 (Eight Hundred and Thirty-seven thousand, seven Hundred and Twenty-five US- Dollars) by the Defendants/Appellants. (Distilled from Grounds 3 and4 of the Grounds of Appeal.
The two issues the Respondent distilled from the grounds of Appeal for determination are:-
1. Whether the learned trial judge was right in entertaining and granting an application for judgment on admission whilst considering an application seeking a reference to arbitration?
2. whether the learned trial judge was right in holding that there was an admission of liability to the tune of US $837 ,725.00 (Eight Hundred and Thirty seven Thousand seven Hundred and Twenty five Dollars) by the Defendants/Appellants.
On Appellants first issue, their learned counsel submits that the motion before the lower court as indicated at page 235 lines 15-30 0f the record of appeal is theirs filed on 18 – 10 – 99. The motion challenges the lower court’s jurisdiction and prays that the matter before the court be referred to arbitration as required by the contract agreement between the parties. The court’s failure to consider whether the condition precedent to the exercise of its jurisdiction, whether the matter is one for arbitration or not, is a grave error. Learned counsel cited the decisions in Nokoprise Intermark Company Limited & ors. v. Dobest Trading corporation Inc. & ors. (1997) 9 NWLR (pt.520) 334 at 336 and Gabriel Madukolu and Ors. V. Johnson Nkemdilim (1962) 2 ANLR 581 at 590.
Learned Appellants’ counsel further contends that the only motion before the court is Appellants application and none other. The law is settled, it is argued, that a court must restrict itself to the prayers contained in the application before it. The court has no jurisdiction to do otherwise. The lower court’s order giving final judgment to the Plaintiff/Respondent as prayed for in an application that is not before the court is a nullity since same has proceeded without the necessary jurisdiction. Reliance is placed by counsel on App & ORS v. Professor Arbert F. Ogunsola (2002) 5 NWLR (pt.761) 484 at 503, and Union Bank of Nigeria plc v. Ekuro arms Ltd. & Anor (2001) FWLR (Pt. 67) 1019 at 1031.
Concluding his argument under the issue, learned Appellant’s counsel submits that because the lower courts’ order entering judgment for the Plaintiff/Respondent in respect of the sum allegedly admitted by the Appellants is a violation of the latter’s right to fair hearing, same should be set aside. The case of Pius okeke & 9 ors. v. Iche otika Nwohoye & 3 ors. (1999) 13 NWLR (Pt-635) 495, counsel contends, buttresses their stand.
Under Appellant’s 2nd issue, which learned Appellant counsel argues in the alternative, he asks that it be taken without being conceded that the lower court has the jurisdiction to consider plaintiff Respondent’s application for the order the court made entering judgment for the sum the Appellants allegedly admitted. The court’s conclusion that the Appellants have admitted the sum, it is argued, is manifestly wrong. Appellants have, in opposition to Plaintiff/Respondent affidavit in support of the application for judgment, filed a counter – affidavit on 17 – 3 – 2000. By paragraphs 9, 10, 11 and 12 of the counter affidavit as well as Exhibit “INJ” annexed to the counter-affidavit, Appellants indebtedness has not only been strongly denied, Respondent is averred to have been overpaid to the tune of US $367,056,89. The lower court’s finding that the Appellants have admitted owing the Respondent the sum of US &837,725.00 as part of the latter’s claim at page 241 lines 15 -25, learned Appellants counsel contends, results from the court’s improper evaluation of the affidavit evidence of the two sides. The basis of the finding has not been explained by the court. A decision such as that inspite of the persisting conflict of the sworn affidavits of parties is perverse. The court is under duty to resolve the conflict in the evidence before it can validly determine the issue in controversy. Relying on the case of E.O. Falola v. Union Bank of Nigeria Plc. (2005) 7 NWLR (Pt. 924) 405 at 408, learned counsel urges that the issue as well as the appeal be resolved in favour of the Appellants.
Responding under their first issue, learned Respondent counsel submits that the lower court has considered Appellants application dated 18th October 1999 for the suit to be referred to arbitration and Respondent’s application dated 4th October seeking judgment on the sum admitted by the Appellants jointly’ The court, counsel argues, is right to have so proceeded. He supports his position with Shell Trustees (Nig) Limited v. Imam and sons (Nig) Limited (2000) 6 NWLR (Pt. 662) 639. He further contends that Appellants’ application that the matter be referred for arbitration never ousted the lower court’s jurisdiction and the court is competent to enter judgment in respect of the sum admitted by the Appellants’ citing section 5(2a) of the Arbititration and conciliation Act, and Lignes Aerinennes congolaises (L.A.C.) v. Air Atlantic Nigerian Limited (AAN) (2e006) 2 NWLR (Pt.963) 4. and confidence Insurance Limited v. The Trustees of the Ondo State college of Education staff Pension (1999) 2 NWLR (pt.591) 373, learned counsel submits that the lower court’s correct decision be allowed to persist. For one, learned counsel emphasizes, the Appellants had the opportunity of objecting to the procedure the lower court adopted in arriving at the decision being appealed against and did not. It is too late for them to do so now.
The record of appeal at page 223, learned counsel submits, shows clearly that Appellants counsel submissions at the court below are in respect of both applications. Appellants cannot, therefore, contend that the court has denied them their right to fair hearing. Counsel relies on Pabod suppliers Limited v. Beredugu (1996) 5 NWLR (Pt. 448) 309.
Under Respondent’s 2nd issue it is submitted that Appellants had admitted liability for the sum US $837,725.00 out of the total claim presented by the Respondent. This admission is contained in paragraph s 4,5and 6 of the affidavit in support of Respondent’s application for judgment for the admitted sum and annexure B1 to B16 thereto. From these averments and the combined invoices for the sum of Us $1,876,541.03, presented to the Appellants by the Respondent between August and November 1999, Bob Holcroft, the Appellant’s order manager, after disputing some of the figures, confirmed that the sum of Us $837,725.00 was owed the Respondent by the Appellants. He indicated the sum agreed upon on each of the invoices and approved same for payment. There is no conflict in the affidavit evidence before the court the resolution of which required oral evidence since tire counter-Affidavit relied upon in opposition to Respondent’s application had been found fraudulent and rejected by the lower court, a decision that has not been appealed against. Given the decision in Gabari v. Irori (2002) 14 NWLR (pt.786) 67, learned Respondents counsel submits, the lower court is bound to act on the unchallenged averments in the affidavit in support of Respondent’s application.
Granting without conceding that Appellant’s counter affidavit is still extant, it contains so much internal contradictions and same had rendered it unreliable. Learned counsel urges that the issues be resolved in Respondent’s favour and the appeal dismissed.
The Appellants on being served the Respondents brief filed a Reply brief. The Reply brief is hereby discountenanced being a clear bid to reargue the appeal rather than a reply to any fresh point raised in the Respondent’s brief that had not been addressed earlier in the Appellant’s brief. see Uzoegwu v. Ifekandu (2001) 17 NWLR (pt.741) 49 CA, Mozie v. Mbamalu (2006) 15 NWLR (Pt.1003) 466 sc and Dada v. Dosunmu (2006) 18 NWLR (pt.1010) 134 SC.
The point must outrightly be made that parties to an appeal are bound by the appeal’s print record. Mr. olumide Aju Esq., see page 232 of the Record of appeal, appeared for the plaintiff at the lower court, the Respondent in the instant appeal. Responding to the arguments of Defendant/Applicants counsel in respect of third application dated 18/10/99 for order of the lower court referring the suit to Arbitration, the counsel stated thus:-
“we have sworn to a counter affidavit by one Akeem oladejo and also fired an application dated 26/11/11 for judgment on admission. We are relying on the affidavit in support of the application as well as the counter-Affidavit filed in opposition to this application.”
Mr. Aju proceeded to argue that the parties had resolved, pursuant to clause 26 of their agreement, Exhibit A, to refer to Arbitration only such matters they had not agreed upon and since by paragraph 6 of the plaintiff Respondents, counter-affidavit in opposition to Defendants/Appellant’s application dated 18 – 10 -99, the sum of US $837,725 had, by annextures A1 -B16 been admitted by the defendants, judgment should accordingly be entered for the admitted sum in plaintiff/Respondent’s favour.
Mr. Oruwani concluded his reply to Plaintiff/Respondent counsel’s submissions by stating that the defendants/Appellants had not admitted or settled anything and that the dispute in the suit is over the whole amount allegedly owned the plaintiff.
It does not, therefore, lie in Appellants mouth to argue that plaintiffs motion for judgment for the sum that defendants purportedly admitted had not been argued at the lower court and their right to trampled upon. The 1999 constitution has provided in section 36 for a party’s right to fair hearing. It requires that the party be given opportunity to present his case before his right is determined. In the instant case Appellants have not only had such opportunity but have utilized same.
The issue the instant appeal raises is the very question the lower court addressed having rightly narrowed same at page 23g of the record thus:
“whether this court can enter judgment in favour of an Applicant against a defendant in monetary terms to the extent that is admitted by the latter and refer the reminder to an Arbitration.”
The main thrust of the argument of learned Appellant’s counsel is that their application at the lower court for the reference to arbitration of the extant matter constituted a challenge to the court’s jurisdiction and needed a decision one way or another before the court does anything else. Learned Appellants counsel insists that the lower court is wrong in its consideration of Respondent’s application for judgment of the sum allegedly admitted by the Appellants.
Learned Appellant’s counsel is not totally wrong.
Where a plea for reference to arbitration arising from an agreement in a contract between parties has successfully been raised, the trial court cannot proceed to determine a dispute it otherwise could. The plea for reference to arbitration constitutes a challenge to the court’s jurisdiction and ignoring the challenge amounts to ignoring a party’s right, pursuant to an agreement with the other, to submit the dispute to arbitration first. In real pragmatic terms, the court would lack jurisdiction to proceed in the light of the agreement which parties voluntarily and lawfully subscribed to thereby ousting the jurisdiction of the court until and unless a condition precedent has been met.

Jurisdiction has been defined as the power of the court to hear and determine the subject matter in controversy betwee4 parties. It is the authority of the court to exercise judicial powers. A court is said to have jurisdiction or to be competent when it is properly constituted as regards numbers and qualification of members of the bench and no member is disqualified for one reason or another; the subject matter of the case is within its jurisdiction and there is no feature in the case which prevents the court from exercising its jurisdiction and the case comes before the court initiated by due process of law and upon fulfillment of any condition precedent to the exercise of jurisdiction.SEE MADUKOLU V. NKEMDILIM (1962) 1 All NLR 587; Tukur v. Govt. of Gongola State (1989) 4 NWLR (117)517 and Adesola v. Abidoye (1999)10 – 12  – sc 109.
In the instant case, learned Appellants’ counsel is right to insist that their plea for the instant suit to be referred to arbitration constitutes a challenge to the lower court’s jurisdiction and the law is that once raised it should be timeously determined one way or another see Eze v. Ikechukwu (2002) 18 NWLR (pt. 799) 348 and Ajay Ltd Airline Management support Ltd (2003) 7 NWLR (Pt.820) 597. In Nnonye v. Anyichie (2005) 2 NIVLR (pt.910) 623 at 647, the Supreme Court stated thus:
“It may be mentioned that the effect of non-service of a pre-action notice, where statutory required, as in this case is only an irregularity which, however, renders an action incompetent.
…if, therefore, a defendant refuse to waive it and he raise it, then the issue becomes a condition precedent which must be met before the court could exercise its jurisdiction. Once it is raised, and it is shown that there has been non-service, as in the present case, the court is bound to hold that the plaintiff has not fulfill ed a pre condition before instituting his action. See Ademola II v. Thomas (1946) 12 WACA 81; Kastina Local Authority v. Makudawa (supra); and Eze v. Ikechukwu (supra).” (underling supplied for emphasis).
In Confidence Ins. Ltd. v. Trustees of Ondo State. College of Education Pension staff (1999) 2 NWLR (pt.591) 373, also, this court resolved the issue whether an arbitration Clause in a trust deed is capable of ousting the jurisdiction of the trial court or affecting the judgment entered in the case, the very issue that rages in this appeal. In that case this court held at page 386 of the Report that even though:
“the inclusion in an agreement to submit a dispute to arbitration does not generate the heat of ouster of jurisdiction of the court and that it merely postpones the right of either of the contracting parties to resort to litigation court whenever the contracting party elects to submit the dispute under contract, jurisdiction” (underling supplied for emphasis)
The foregoing decisions of the two courts still bind us. The Appellants must therefore be right to insist that the arbitration clause in the contract between the two parties that makes reference to arbitration before any of the parties can resort to court to enforce his right constitutes a challenge of the lower court’s jurisdiction on the ground that a condition precedent to the commencement of the action has not been met. Their application of 18/10/99 supported by affidavit urging the trial court to refer the matter to arbitration as agreed, is an acceptable procedure for challenging the competence of Respondent’s action against the Appellant. see Nnonye v. Anyilue (supra) confidence Ins. Ltd v. Trustees of O.S.C.E. (supra) and A.G. Kwara state v. Olawale (1993) I NWLR (Pt.272) 64. The authorities relied upon by the learned Respondent counsel not suggesting otherwise are, therefore, unavailing to his client.
Learned Respondent counsel is however right that in the determination of applications before it a court retains the discretion of entertaining one at a time or considering the lot jointly. Learned counsel to the Appellants countered that the procedure is irregular. It might as well be. As shown earlier in this judgment, however, where the Appellants not only failed to object to the use by the court of the irregular procedure but participated in the proceedings inspite of the irregularity, they cannot now complain. They are deemed to Have waived their right to protest and endorsed the procedure inspite of its irregularity see; Katsina Local Authority v. Makudawa (1971) 1 NWLR 100, Jadesimi v. okotei-Eboh (1986) l NWLR (pt.16) 264, NDIC v. central Bank of Nigeria (2002) 7 NWLR (Pt.766) 272.
The issue to resolve in the determination of this appeal is whether on the basis of the two applications argued before it the lower court is right to have discounted the sum of US $837,725.00 allegedly admitted by the Appellants out of the sum due to the Respondent and referring the remaining to arbitration.
Clause 26 of the contract agreement that provides for reference to arbitration as well as the relevant sections of the Arbitration and Reconciliation Act 1990 CAP 19 Laws of the federation are very germaine to our resolution of the issue. Clause 26 of the Agreement, Exhibit A provides:-
‘In the event of any dispute not resulting in a settlement,
the dispute shall be reserved to and finally settled by Arbitration.”
clause 19 of Exhibit A has earlier provided thus:-
” …The laws of Nigeria shall apply to and govern the interpretation, performance and enforcement of the purchase order.”
Section 5(1) and (2) of the Arbitration and Reconciliation Act 1990 CAP 19 Laws of the federation applicable to Exhibit A provide as follows:-
“5(l) if any party to an arbitration agreement commences any action in any event with respect to any matter which is the subject of an arbitration agreement, any party to the arbitration agreement may at any time after appearance and before delivering any pleading or taking any other steps in the processing apply to the court to stay proceedings.
(2) A court to which an application is made under sub-section (1) of this section may, if it is satisfied: (a) that there is no sufficient reason why the matter should not be referred to arbitration in an accordance with the Arbitration agreement and (b) that the applicant was at the time when the action was commenced and the other party remains ready and willing to do all things necessary to the proper conduct of the arbitration make an order staying proceedings”.
The combined effect of clause 26 of Exhibit A and the foregoing applicable statutory provision, as held in the various cases authoritatively alluded to by both sides in this appeal, is that a court of law only assumes jurisdiction in the absence of any dispute over a transaction in respect of which an agreement between the parties has provided for reference to arbitration. It is the existence of a dispute or differences in the positions of the parties to such agreement that confers jurisdiction to an Arbitration panel. The lower court is very much aware of this position of the law. The Appellants had by their motion urged the court to refer the entire matter to arbitration. on the other hand, the Respondent by their application asserted that US $837,725.00 admitted by the Appellants should be discounted from the claim the court is to refer to arbitration. The admitted sum not being in dispute between the parties ceases to be the subject of arbitration. The lower court at page 243 of the record  of Appeal concluded its ruling as follows:-
“Since the law is that these cannot be an arbitration on the admitted portion of the claim, this court cannot therefore refer that part of the claim, made upon of US s Dollars 937,725.00 to since it does not fall within apart the claim which the panel can arbitrate upon. I shall thereby enter judgment in the sum and refer the remainder to arbitration”.
Appellants’ complaint against the foregoing is that the evidence before the lower court does not support its finding that the sum of us $837,725.00 has ceased to be in dispute having been admitted by the Appellants. This contention cannot be treated lightly.
The lower court, see pages 237 – 238 of the record, drew from paragraphs 6 and 7 of the counter-affidavit the Respondent filed in opposition to the Appellant’s application for the reference of the entire matter to arbitration. The court held thereat as follows:-
” Paragraphs 6 and 7 of the counter – affidavit spells (sic) out that part of the claim … that has been admitted ie. Exhibit A1 – B16″.
without any evaluation of these paragraphs vis-a-vis the annextures, the court after a review of the authorities on the issue concluded at page 243 of the record thus:-
“Since the law is that there cannot be an arbitration on the admitted portion of the claim, this court cannot therefore refer that part of the claim. This court cannot therefore refer that part of the claim, made up of US Dollars 837,725.00 to arbitration since it does not fail within a part of the claim which the panel can arbitrate upon.”
The question to answer here is if paragraphs 6 and 7 of the Respondents counter-affidavit and Exhibit A1 – B16 annexed thereto warrant the court’s inference of admission of the sum of US $837,725.00 out of the Plaintiff/Respondent’s claim by the defendants/Appellants. I think not.
The practice, pursuant to S. 75 of the Evidence Act, has grown that a voluntary acknowledgement of the existence of certain facts which are inconsistent with the party’s position in a given dispute is readily accepted as the best evidence of such facts and further proof of same is dispensed with. In Black’s Law Dictionary, 6th Edition, admission has been defined as a statement by a party or someone identified with him in legal interest, of the existence of a fact which is relevant to the cause of his adversary. An admission is, therefore, a formal waiver of proof which relieves the opposing party from proving the admitted facts and bars the party who made the admission from disputing same. where made by a party’s attorney for the purpose of being used as a substitute for the regular legal evidence of the facts at trial, the admission is called judicial admission. See Onyenge v. Ebere (2004) 13 NWLR (pt.889) 20 and Archibong v. Ita (2004) 2 NWLR (858) 590 SC.
I agree with learned Respondent’s counsel that given the lower court’s decision to discountenance defendants/Appellants’ counter-affidavit in opposition to Respondent’s application for judgment, a decision that has not been appealed against, the evidence contained in paragraph 5, 6 and 7 of the affidavit in support of the application for judgment as supported by annextures A1 – B1 remains unchallenged and uncontroverted and that the lower court must act on such evidence. It is indeed the principle that the decision of a validly constituted court subsists as long as it has not been appealed against and upturned. See Umanah v. Attah (2006) 17 NWLR (pt.1009) 503 SC. Learned Appellants’ counsel is however, also correct in his submission that where the unchallenged and uncontroverted evidence is self-defeating and unacceptable the trial court will be wrong to rely on such unworthy evidence. See Ogbechi v. Onochie (1988) 1 NWLR (pt.70) 370 at 379 and Jalingo v. Nyame (1992) 3 NWLR (pt.231) 538 at 545.
An exanimation of paragraphs 5, 6 and 7 of the affidavit in support of Respondent’s application and annextures A1 – B 16, which the trial court relied upon to conclude the admission by the Appellants of the amount discounted by the court from Respondent’s total claim shows clearly that such an inference is not untenable. The annextures contain hand written figures and cancellations and no where on the face of these documents have any explanation been given to show why, how and by whom the alterations were made. Even at this level it takes the detailed explanation and tabulations made by counsel at pages 8 to 10 of the Respondent’s brief to enable us appreciate the purport of the annextures and the fact that the alterations were made by Mr. Holcroft. The record of appeal does not contain similar tabulation to suggest that the lower court’s conclusion had drawn from that much.
In any event, it is wrong for counsel to proffer evidence as such is now the essence of counsel’s statement on the documents which had failed to speak for themselves’ In the absence of this explanation it would only mean that the lower court had itself and outside the court, perused the documents and drawn its own meaning and conclusions from them. It has long been the principle that the function of a court is to decide between parties on the basis of what the parties themselves demonstrated and had tested in the open court. That duty does not extend, certainly, to the examination of documentary evidence that had not been examined in open court and where such subsequent examination discloses facts that were not either incapable of being noticed or exposed to test in court. A party relying on documents in proof of his case, therefore, must specifically relate such documents to the parts of the case the documents are being  tendered. The court is not empowered to do so for the party that has neglected or outrightly refused to discharge that burden. The principle has its foundation’ this court has held, in the breach of the right to fair hearing for a court to do for a party in the recess of its chambers what the party failed to do in the advancement of its own case in the open court. see Duriminiya v. COP (1961) NNLR 70 at 73  – 74 and Terab v. Lawan (1992) 3 NWLR (pt.231) 569 at 590.
The lower court’s decision that the sum of 871,725.00 dollars the court entered judgment for the Respondent because the sum, as averred in paragraphs 5′ 6 and’ 7 of the Respondent’s counter-affidavit and annexture A1 – 816 thereto, is no longer in dispute having been admitted by the Appellants, stand in breach of these recounted principles. The paragraphs as supported by the annextures do not, on their own, in the least, suggest any admission by the Appellants of the sum under reference. The decision must have been the outcome of the inquiry undertaken by the court and on its own. The basis for the conclusion is not readily ascertainable. The sum continues to be in “dispute”
and by clause 26 of Exhibit A as well as section 5 of the Arbitration Law CAP 10 Laws of Rivers State, the lower court lacks the jurisdiction of adjudicating on the sum by excluding it from Arbitration. This resolves Appellant’s 2nd issue for the determination of the Appeal. It also determines the appeal. Being meritorious the appeal is accordingly allowed. The decision of the lower court excepting the sum of 837,725 US Dollars from the Respondent’s claim referred arbitration is hereby set – aside. Instead, the entire sum claimed by the Respondent which remains in dispute is hereby referred to Arbitration in compliance with clause 26 of Exhibit A, and the law. Appellants are entitled to the cost of the Appeal put at N50,000 and hereby ordered against the Respondent.

ISTIFANUS THOMAS, J.C.A.: I read in advance, the lead judgment of my learned brother, M. D. Muhammad, JCA, just delivered, and I entirely agree with the reasoning and conclusions reached in the lead judgment that the appeal is meritorious and allowed.
In my considered opinion, once there is an issue of jurisdiction of the trial court, that particular issue ought to be heard and determined before going into other matters if necessary.
In the case of BASF. NIG. LTD vs. FAITH ENT. LTD in 41 Nigeria Supreme Court Quarterly Reports 381, particularly at 395, MUNTAKA COOMASSIE, JSC has stated as follows:-
“It is pertinent in my view to consider an important issue of jurisdiction raise by the respondent herein. This is so because the issue of jurisdiction is so fundamental and being a threshold issue, it is imperative to have it determined first before proceeding to the substantive matter since lack of it would deprive this court the power to pronounce on the main issue.”
In the instant matter at the lower court, the present appellant had filed on 18th October , 1999, an application challenging the court’s jurisdiction and also prayed that, since the trial court had no power to hear the suit, let it be sent to the arbitration panel as agreed upon by parties as clearly agreed upon by their contract agreement. It is no more in dispute that, in contract agreements, once parties have put in request to hear any dispute before an arbitration panel, the court’s jurisdiction is ousted and a competent court cannot interfere parry, as done by the trial judge when he made a decision affecting the interest of the appellant. See A.G. Kwara State v. Olawale (1993) 1 NWLR (pt.272) 64, MADUKOLU v. NKEMDILIM (1962) 1 NWLR 567.
The trial court therefore had no jurisdiction to hear the suit appealed against.
with the little contribution, and the fuller detailed findings and conclusions in the read judgments, appeal is allowed. Both parties are to bear with their problems before the arbitration panel as agreed upon in their contract agreement.
I abide with consequential orders including costs in the lead judgment.

T. O. AWOTOYE J.C.A. I have had a privilege of reading in draft of the lead judgment just delivered by my learned brother M. D. MUHAMMAD JCA. I have the following to add.
The plaintiff had instituted an action against the defendant claiming as follows:-
“WHEREOF the plaintiff claims against the defendants jointly and severally as follows:
(a) The sum of US$4,733,183.62 (four million, Seven Hundred and Thirty Three Thousand, One Hundred and Eight Three Dollars, sixty-Two Cents) being sum outstanding by virtue of change of order, extension of contract time and courier telephone charges incurred in the course of executing the standard purchase contract No. S-100-1410-003 made between the plaintiff and the defendants herein.
(b) Interest on the said sum of US$4,733,183.62 (four million, Seven Hundred and Thirty Three Thousand, One Hundred and Eight Three Dollars, sixty-Two Cents) at the rate of 8% per annum
from 1st August 1998 until final liquidation.”
The claim of the plaintiff arose from an agreement which contained on arbitration disclose in clause 26 which reads.
“IN THE EVENT OF ANY DISPUTE BETWEEN PURCHASER AND SUPPLIER ARISING OUT OF THE PERFORMANCE OR INTERPRETATION OF THE PURCHASE ORDER, PURCHASER AND SUPPLIER SHALL NEGOTIATE IN GOOD FAITH IN AN ATTEMPT TO REACH A MUTUALLY ACCEPTABLE SETTLEMENT OF SUCH DISPUTE. IN THE EVENT SUCH NEGOTIATION IN GOOD FAITH DOES NOT RESULT INTO A SETTLEMENT OF THE DISPUTE THE DISPUTE SHALL BE REFERRED TO AND FINALLY SETTLED BY ARBITRATION.”
Inspite of the above provision the Plaintiff instituted this action in court.
The defendant therefore filed a motion on notice praying for the following orders.
“1. An order directing the parties to arbitration as stipulated in the contract agreement entered into by the parties.
2. An order staying further proceedings in this suit pending the determination of the arbitration proceedings.
3. Any other(s) as this Honourable court may deem fit to make in this regard.”
The above application was heard with the motion for judgment and the court below subsequently gave a ruling as follow in his Ruling.
“Since the law is that there cannot be an arbitration on the admitted portion of the claim this court cannot therefore refer that part of the claim made up of US Dollars N837,725.00 to arbitration since it does not fall within a part of the claim which the panel on arbitrate upon. I shall thereby enter judgment in the sum and refer the remainder to arbitration.”
It is against the said ruling that the appellant filed notice and grounds of appeal containing 4 grounds of appeal.
Parties later exchanged briefs of argument the appellants formulated two issues for determination as follows:
“(i) Whether the learned trial judge was right in granting final judgment whilst considering an application on jurisdiction.
Distilled from Grounds 1 and 2 of the Grounds of Appeal.
(ii) In the alternative; whether the learned trial judge was right in holding that there was an admission of liability to the tune of US $837,725.00 (Eight Hundred and Thirty Thousand, Seven Hundred and Twenty-Five US Dollars) by the Defendant/Appellants. Distilled from Grounds 3 of and 4 of the Grounds of appeal.”
The respondent similarly formulated two issues. The issues formulated by the two parties are essentially the same.
My learned brother M. D. MUHAMMAD JCA has exhaustively and beautifully treated issue one as formulated by the parties.
I just want to add a few comments an issue 2, which also has been commendably treated in the leading judgment.
It is trite law that where a plaintiff jumps arbitration and commences an action in a court of law, a defendant is to take steps to stay the proceedings in court before taking any further proceedings apart from entry of formal appearance otherwise the defendant would be taken to have waived his right to go to arbitration. See KURUBO v. ZACH – MOTISON (NIG.) LTD (1992) 5 NWLR (pt. 239) 102, M.V. LUPEX V. N.O.C.S LTD (2003) 15 NWLR (PT. 843) 469, KANO STATE URBAN DEVELOPMENT BOARD V. FANZ CONSTRUCTION CO LTD (1990) 4 NWLR (PT. 142) 1 SC.
The court would stay such proceedings in court if such application is filed. See SONNAR (NIG.) LTD V. NORDWIND (1987) 4 NWLR (Pt. 66) 520.
The court below however refused to refer part of the contract for arbitration because of an alleged admission.
I have gone through the entire record of proceedings. I am unable to see the admission referred to by the learned trial judge.
The record of the court is a solemn declaration of what transpired in court. It must speak for the court and the parties in respect of whatever happened in the proceedings. If a document is admitted in court, its content must be demonstrated in open court and the evidence therefrom recorded in the court record to prevent private investigation by the court to the exclusion of one of the parties and resultant breach of right to fair hearing of the said party. see OWE v. OSHIBANJO (1965) 1 ALL NLR 72, HABIB BANK NTG.LTD v. GIFTS UNIQUE (2005) ALL FWLR (pt. 241) p.234.
According to Belgore JSC in FAWEHINMI CONSTRUCTION Co. LTD V. O.A.V. (1998) 6 NWLR (pr. 553) 171 at 183.
“Record of proceedings is the only indication of what took place in the court. It is not like minutes of a meeting. It is always the final reference of events step by step that took place in court.”
see also YARZABADIN & ANOR v. KANO (1961) SCN LR 144; STATE V. AIBANGBEE (1988) 3 NNWLR (PT. 84) 548 AT 577; ALHAJI ANIMASAUN v. UCH (1996) 10 NWLR (pt.476) 65 at 76.
This can not be said about the case. How the learned trial judge arrived at his decision that there was an admission in a case in which the defendants did not file any statement of defence and did not admit in any affidavit filed by them is with due respect very difficult for me to fathom.
Learned counsel for the respondent in his brief did an analysis of exhibit 81 – 816 on page 187-220 of record of proceedings with a view to highlighting the admission of the defendants. I need to state right away that there is , no evidence tested in open court to back his analysis. The documents referred to were mere annextures to the supporting affidavit of the plaintiff/Applicant. An address of counsel no matter how beautifully and brilliantly drafted cannot be a substitute for evidence. see ATANZE v. ATTAH (1999) 3 NWLR (pr. 596) 647; CITIZENS INTERNATIONAL BANK V. SCOA (NIG.) LTD (2006) 18 NWLR (PT. 1011) 333, ISHOLA V. AJIBOYE (1998) 1 NWLR (PT.532) 71; BUHARI V. OBASANJO (2005) 50 WRN 1; YOYE v. OLUBODE (1974) 9 NSCC 409.
I am unable to see any admission to warrant the decision of the trial court not to stay the whore proceedings. The judgment given ought not to have been given.
I resolve issue 2 in favour of the appellant I agree with the reasoning and conclusion of M. D. MUHAMMAD JCA in the lead judgment.
This appeal is allowed. I also abide by the order as to costs made in the lead judgment.