COMPAGNIE GENERALE DE GEOPHYSIQUE NIGERIA LIMITED V. PRINCE PAUL A. OGIUGO
(2011)LCN/4706(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 13th day of July, 2011
CA/B/93/2002
RATIO
PRELIMINARY OBJECTION: WHETHER A PRELIMINARY OBJECTION CAN PROPERLY BE RAISED BY NOTICE OF MOTION WHETHER OR NOT THE FOUNDATION OF THE OBJECTION IS ONE OF LAW OR FACT
Technical approaches to litigation and judicial proceedings have since been jettisoned in favour of substantial justice. But even at that, a preliminary objection can properly be raised by notice of motion whether or not the foundation of the objection is one of law or fact.What the Appellant asked at the lower court was for the action to be stayed while the clause on arbitration is exhausted by the parties as should be. See O.S.H.C. V. OGUNSOLA (2000) 11 NWLR (Pt. 687) pg 431 at 444. PER CHIOMA EGONDU NWOSU-IHEME (Ph. D). J.C.A
JUSTICES:
AMIRU SANUSI Justice of The Court of Appeal of Nigeria
GEORGE OLADEINDE SHOREMI Justice of The Court of Appeal of Nigeria
CHIOMA EGONDU NWOSU-IHEME Justice of The Court of Appeal of Nigeria
Between
COMPAGNIE GENERALE DE GEOPHYSIQUE NIGERIA LIMITED – Appellant(s)
AND
PRINCE PAUL A. OGIUGO – Respondent(s)
CHIOMA EGONDU NWOSU-IHEME (Ph. D). J.C.A (Delivering the leading Judgment): The facts of this appeal are short and straightforward. The Appellant was a tenant of the Respondent in the latter’s premises situate at Ugo in Orhionmwon Local Government Area of Edo State. The tenancy agreement provided in its paragraph 9 an arbitration clause. Following certain disagreement between the parties, the cute Respondent commenced proceedings at the Abudu Judicial Division of Edo State High Court and filed his Statement of Claim. Upon service of the Writ of Summons and the Statement of Claim on it, the Appellant entered a conditional appearance and thereafter brought an application for stay of proceedings pending arbitration. The Respondent filed a counter-affidavit.
The application for stay came before Edokpayi J (as he then was) who, after hearing arguments thereon struck out the application in his ruling. The present appeal which is founded on four Grounds of Appeal is against that ruling. The four grounds of appeal are as set out herein without their particulars. They read:
‘GROUND 1
The learned trial Judge erred in law when he held that the motion to stay proceedings until arbitration was not timeous as it ought to have been filed contemporaneously by S. 4 of the Arbitration Act with the memorandum of conditional appearance which is a first statement of substance on the dispute.
GROUND 2
The learned trial judge erred in law when he overruled Defendant’s application on ground that in the alternative Defendant ought to have come by way of a preliminary objection instead of a motion on Notice.
GROUND 3
The learned trial judge erred in law when he assumed original Jurisdiction and failed to stay the Suit pending arbitration.
GROUND 4
The learned trial judge erred in law when he held that Defendant/Applicant ought to have specifically asked (sic) for reference to arbitration after a stay.”
Two issues were distilled in the Appellant’s brief for determination as follows;
“(i) Whether Appellant’s application was not a due and sufficient application for a stay of proceedings pending arbitration.
(ii) Whether the Suit ought not to be stayed pending arbitration.”
The Respondent’s counsel also formulated two issues but in different phrasing. Those issues are:
‘(1) Whether an order of stay of proceedings in any matter or agreement having reference to Arbitration is automatic or must be granted as a matter of course?
(2) Whether there are no other reasons from the record of Appeal, other than the reasons given in the Ruling appealed from, upon which the motion on Notice should have in any event be property dismissed by the Hon. Trial Judge?
The Respondent filed Respondent’s notice for the ruling to be affirmed on other grounds. The issues raised by the Appellant’s counsel are more apposite to the appeal and shall be the basis of its determination.
The summary of the arguments of the Appellant’s counsel Mr. Ezaga in his brief, in summary was that the trial Judge was wrong in holding that the conditional appearance entered by the Appellant was a first Statement of Substance on the dispute before the court and therefore ought to have been accompanied by a notice of preliminary objection which was the appropriate process to be filed and not a motion on notice. This, the court held would be in line with Section 4 of the Arbitration Act 1990. Counsel argued that a memorandum of appearance could not in law amount to a Statement of Substance on the dispute. The dispute, he argued, was a purported breach of the tenancy agreement which the memorandum neither addressed nor replied. It showed that the defence had an intention to raise objection to the Suit. On the other hand a Statement of Substance is a statement replying or challenging the content of the claim. In other words, a Statement of Substance would be in the nature of a statement of defence or a counterclaim. Counsel further argued that even at that Section 5 of the Act availed the Appellant. He then argued that a Preliminary Objection could be raised by Motion on Notice.
On the second issue, Mr. Ezaga referred to paragraph 9 of the Arbitration agreement, Exhibit A and submitted that it was binding on the parties in line with the decision in ENVIRONMENTAL DEV. CONST. v. UMARA ASSOCIATES (2000) 4 NWLR (pt 652) 293 at 303.
In his reply on the two issues, learned counsel for the Respondent, Mr. Osayomwanbor, argued that Section 5 of the Arbitration Act 1990 does not make arbitration automatic so as to cause a stay of the proceedings relating to a matter in respect of which there is an arbitration agreement. He argued that the Appellant did not show that he had applied for reference to arbitration more so in the face of the facts disclosed by the Respondent that he had ceaselessly called for arbitration which Appellant ignored. Counsel argued that the application for stay was devoid of essential facts to sustain it.
In paragraphs 3, 4 and 5 of the affidavit in support of the motion for stay pending arbitration, the Appellant who was the Applicant at the lower court averred as follows:
“(3) The Defendant and plaintiff entered into a tenancy agreement on the 14th day of July 1998 which said agreement is herewith attached as Exhibit “A”.
(4) The slid agreement provides that dispute arising from the agreement be referred to two arbitrators each of whom shall be appointed by each of the parties in accordance with the provision of the Arbitration Act However, difference between the plaintiff and Defendant has not been referred to any arbitrator.
(5) By virtue of the said Arbitration agreement, the Defendant is ready and willing to do all things necessary for the proper conduct of the arbitration.
The tenancy agreement was exhibited as Exhibit A to the Affidavit. The Respondent in this appeal who was Respondent in the application for stay pending arbitration at the lower court admitted the averment in paragraph 3 above by paragraph 3 of his counter-affidavit. Now the tenancy agreement, Exhibit A, has an arbitration clause in its paragraph 9 which states:
“That in the event of a dispute between the parties in connection with the operation of this contract, same shall be referred to two arbitrators each of whom shall be appointed by each of the parties. The said arbitrators shall in turn appoint an umpire who stall preside over the arbitration.”
All that the motion of the Appellant did in relation to the Suit of the Respondent was to bring the attention of the court to the fact that a condition precedent to coming to arbitration had not been met. That motion together with its supporting affidavit did not answer any of the points raised in the Statement of Claim as in any particulars at all not to talk of material particulars as to constitute a Statement of Substance.
The word “Substance” used in Section 4 of the Arbitration Act 1990 in my view is the substance of the dispute i.e. the claim or rights contained in or alleged in the Suit which can only be garnered from the unit or the Statement of Claim. See generally BENDEX ENG. V. EFFICIENT PET (NIG) LTD (2001) 8 NWLR (Pt. 715) page 333 at 361.
I consider the memorandum of conditional appearance filed by the Appellant as Defendant in the lower court as a formal step which in the first instance entitled him to submit his Statement of Substance in the matter. Indeed the fact that he termed the appearance conditional emphasizes the point. It imports his intention to object to the jurisdiction of the lower court at first instance without the exhaustion of a remedy which the parties had themselves agreed to exhaust before approaching the court. It cannot therefore, obliterate his right to ask for a stay pending arbitration.
The view of the learned trial Judge that the appropriate step to take was to file a Notice of Preliminary Objection since according to him the issues were one purely on taw under Sections 4 and 5 of the Arbitration Act. I am afraid that this contention is preposterous and hinges on mere technicality. Technical approaches to litigation and judicial proceedings have since been jettisoned in favour of substantial justice. But even at that, a preliminary objection can properly be raised by notice of motion whether or not the foundation of the objection is one of law or fact.What the Appellant asked at the lower court was for the action to be stayed while the clause on arbitration is exhausted by the parties as should be. See O.S.H.C. V. OGUNSOLA (2000) 11 NWLR (Pt. 687) pg 431 at 444. It did not ask for the striking out or abatement of that action. So the argument of the Respondent’s counsel on his Respondent’s notice appear to me non-sequitur and does not call for any serious consideration here.
In the final result I will and do hereby resolve the two issues in favour of the Appellant. The Grounds, of Appeal succeed and the appeal is allowed. The ruling of the learned trial Judge striking out the application for stay is set aside. In its place an order for stay of the proceedings of the lower court in suit No. HAB/4/M4A/2001: COMPAGNE GENERALE DE GEOPHTSIQUE NIG. LTD. V. PRINCE PAUL A. OGIUGO. The parties should comply with clause 9 of their arbitration agreement by appointing one arbitrator each. The two arbitrators shall in turn appoint an umpire to preside over the arbitrator. The arbitration shall be given expeditious hearing at the end of which, depending on the result, the parties may return to court if the need arises and they so desire. I make no order as to costs.
HON. JUSTICE AMIRU SANUSI, J.C.A: Having been opportuned to read in advance the draft judgment prepared by my learned brother NWOSU-IHEME, JCA justice delivered, I am at one with the reasoning and the conclusion she arrived at therein. I have nothing useful to add, except to endorse the consequential order made therein. I also make no order on costs.
GEORGE OLADEINDE SHOREMI J.C.A.: I have had the advantage of reading the Judgment delivered by my learned brother NWOSU-IHEME J.C.A. The issues are simple. I therefore agree with the conclusion of my learned brother. I have nothing to add. The appeal is allowed.
Appearances
N.D. UKAOGO holding the brief of D.O. EZAGA For Appellant
AND
For Respondent
