FIRST CITY MONUMENT BANK PLC v. GARBA USMAN NAGOGO
(2016)LCN/8557(CA)
In The Court of Appeal of Nigeria
On Thursday, the 7th day of April, 2016
CA/A/476/2012
RATIO
ACTION: CAUSE OF ACTION; MEANING AND ELEMENTS OF A CAUSE OF ACTION
A cause of action is the fact or combination of facts which gives rise to a right to sue. It consists of two elements – the wrongful act of the defendant which gives the plaintiff his cause of complaint and the consequent damage. It arises and begins to run for the purpose of the limitation law from the date the breach occurs. See AJAYI V. ADEBIYI supra., WOHEREM V. EMEREUWA (2004) ALL FWLR (221) 570, EGBE V. ADEFARASIN supra and SAVAGE V. UWECHUE (1972) 1 ALL NLR(1125). PER JOSEPH EYO EKANEM, J.C.A.
ACTION: STATUTE-BARRED; HOW IS A SUIT DETERMINED IF IT IS STATUTE-BARRED OR NOT
In order to determine whether or not a suit is statute – barred, the Court is to look at;
(a) The date the cause of action accrued as disclosed in the writ of summons and statement of claim:
(b) The date of the commencement of the suit as indicated in the originating process, and;
(c) The period of time prescribed for bringing the action as stated in the relevant statute.
If the period of time between (a) and (b) is beyond the time prescribed by the relevant statute then the action is statute-barred. See AJAYI V. ADEBIYI supra 169 and ADEJUMO V. OLAWAIYE (2014) 12 NWLR (1421) 252, 284, 283. PER JOSEPH EYO EKANEM, J.C.A.
ACTION: STATUTE-BARRED ACTION; EXCEPTION TO THE RULE THAT KNOWLEDGE OF THE PLAINTIFF OF THE ACCURAL OF THE CAUSE OF ACTION IS NOT A CONDITION PRECEDENT
It is the law generally speaking that knowledge of the plaintiff of the accrual of the cause of action is of no moment in determining whether or not a suit is statute-bared. See ELABANJO V. DAWODU (2006) 15 NWLR (1001) 76 and DUZU V. YUNUSA (2010) 10 NWLR (1201) 80 – 117 and 118. There is however an exception, namely; fraudulent concealment of the right of action.
In MULIMA V. USMAN (2014) 15 NWLR (1432) 160, 202, OKORO, JSC. stated as follows:
“In AJIAONA V. KOLAWALE (supra), this Court made an exception to the ruling that knowledge on the part of the plaintiff is not a condition precedent.
That exception is where there is a fraudulent concealment of the right of action. What this means is that statute of limitation does not apply in cases of concealed fraud so long as the party defrauded remains ignorant of the fraud without any fault of his.”
It must be stated here that the fraud that is envisaged here is equitable fraud. See ADMINSTRATOR/EXECUTOR, ESTATE OF ABACHA V. EKE SPIFF (2003) l NWLR (800) 114, 172, 173 and 174. PER JOSEPH EYO EKANEM, J.C.A.
WORDS AND PHRASES: MEANING OF FRAUDULENT CONCEALMENT
In the case MULIMA V. USMAN supra 202 -203, OKORO JSC stated as follows:
“In trying to understand the meaning of the words. “fraudulent concealment”, I widen my horizon to a situation where a party is entitled to a notice of the happening of an event but such notice was not given to him though the failure to give the notice was not fraudulent but merely an oversight. Will this not amount to concealment of information though not fraudulent? I am prepared to say that where there is a concealment of a right of action whether fraudulently done or by mere over sight, the party whose right of action is concealed should not by any stretch of imagination be made to suffer it.” PER JOSEPH EYO EKANEM, J.C.A.
JUSTICES
TINUADE AKOMOLAFE-WILSON Justice of The Court of Appeal of Nigeria
JOSEPH EYO EKANEM Justice of The Court of Appeal of Nigeria
MOHAMMED MUSTAPHA Justice of The Court of Appeal of Nigeria
Between
FIRST CITY MONUMENT BANK PLC – Appellant(s)
AND
GARBA USMAN NAGOGO – Respondent(s)
JOSEPH EYO EKANEM, J.C.A. (Delivering the Leading Judgment): The respondent entered into a share loan agreement with appellant for the acquisition of stocks of quoted companies as approved by the respondent. The transaction went sour resulting in the Abuja Multi-Door Courthouse appointing one Engineer Ononbhara Odigie as the sole arbitrator to arbitrate in the dispute between the parties. The appointment was subsequently agreed to and confirmed by the parties at a preliminary meeting held on 17/8/2009.
The sole arbitrator made his award in favour of the respondent. The award is dated 28/2/2010. The award was however published or made known to the appellant on 6/5/2010. Aggrieved by the award the appellant commenced Suit No.FHC/HC/CV/1786/10 at the High Court of the Federal Capital Territory, Abuja (the that Court for short) by an application pursuant to Section 30 of the Arbitration and Conciliation Act, 1988. It sought for a setting aside of the award on the ground that the arbitrator misconducted himself and thereby committed an error on the face of the record. The Suit was filed on 16/6/2010
The respondent responded to the
suit by, inter alia’ filing a notice of preliminary objection challenging the jurisdiction of the trial Court on the ground, inter alia, that the suit was statute barred having been commenced more than three months after the award was delivered.
In its ruling, the trial Court held that the action was statute barred as it was brought outside the period of three months stipulated by Section 29(1) (a)and (b) of the Arbitration and Conciliation Act, 1988.
Dissatisfied with the ruling, the appellant appealed to this Court by way of a notice of appeal which was amended by an order of this Court made on 13/11/15.
Mazi Afam Osigwe, of counsel, for the appellant in his brief of argument filed on 16/11/15 formulated the following issues for the determination of the appeal.
“A Whether the trial judge was right in his decision that the Arbitration and Conciliation Act does not intend that time for applying for the setting aside of an arbitral award pursuant to Section 29 (1) would begin to run from the date the arbitral award is communicated to the parties?
B. Whether the Court was correct in its decision that the action is statute barred.”
Augustine B. Afolabi, Es; for the respondent’ in his brief of argument dated 14/12/2015 adopted the issues formulated in the appellant’s brief.
Having read the processes in this appeal’ it is my view that only one issue arises for determination in this appeal. It is issue B in the appellants brief. I shall be guided by it with slight modification as follows:
Whether the trial Court was correct in its decision that the action of the appellant was statute barred.
This single issue covers the two issues and the arguments thereon by the appellant and the respondent
Arguments of Counsel
Appellant’s counsel, in arguing his issue A, submitted that the learned trial judge erred in his decision that it was not the duty of the Court to read into Section 29(1) of the Arbitration and Conciliation Act that the time for applying for the setting aside of an arbitral award would begin to run from the date the arbitral award was communicated and/or made known to the parties. This, he said, is because a cause of action arises when there is in existence a person who can sue and another who can be sued, and when all the facts have happened which are
material to be proved to entitle the plaintiff to succeed. It was his view that a cause of action begins to run when the person affected by it becomes aware that the facts giving rise to a possible litigation have arisen.
Counsel contended that the facts of the case on appeal are similar to the facts of the case of EDJERODE V. IKINE (2001) 12 SC (1) 94 which he set out in his brief. He opined that the cause of action arose on 6/5/2010 when the appellant was aware that the arbitrator had made a decision against her, especially in view of Article 32(6) of the Arbitration Rules which requires that copies of the arbitral award signed by the arbitrators be communicated to the parties by the arbitral tribunal.
It was his further submission, under his issue 2, that the trial Court did not lack the jurisdiction to entertain the suit as the suit was not statute barred since the decision to apply to set aside the award could only be made after the award had been communicated and not before.
Counsel finally urged the Court to allow the appeal and set aside the decision of the trial Court.
Respondent’s counsel, arguing issue 1; gave an affirmative
answer. He referred to Section 29(1) of the Arbitration and Conciliation Act, 1988 and urged the Court to give it a literal interpretation as its provision is clear and unambiguous. He cited and relied on JIBRILU V. JIBRIL (2010) ALL FWLR (638) 923. He contended that the cause of action accrued on 28/2/2010 when the award is dated and not on 6/5/2010.
He emphasised that a cause of action arises from the time a breach of duty or act occurs which warrants a person thereby injured or a victim who is adversely affected by a breach to take a Court action in assertion or protection of his legal right that has been breached.
It was his submission that the case of EDJERODE V. IKINE supra cited by appellant’s counsel is not related to the instant case as the facts are different.
It was his further submission under issue 2, that failure to act timeously leaves a person with a bare and empty cause of action which he cannot enforce as the cause of action is statute barred
He finally urged the Court to dismiss the appeal
Resolution of the Issue
Section 29(1) of the Arbitration and Conciliation Act 1998 provides
“A party who is aggrieved
by an arbitral award may within three months;
(a) From the date of the award: or
(b) In a case falling within Section 28 of this Act from
the date the request for additional award is disposed of by Arbitral tribunal, by way of an application for setting aside, request the Court to set aside the award in accordance with Subsection (2) of this section.”
The provision of Section 29 (1) (a) of the Act is to the effect that a party to an arbitration who is aggrieved by an arbitral award has a period of three months from the date of the award to apply to the Court for the award to be set aside. It is a limitation provision, the essence of which is that the legal right to apply to set aside an arbitral award is not a perpetual right but is limited to the period of time given therein. Where the time given expires, legal proceedings cannot be validly instituted to set aside the award. The aggrieved party is left with a bare and impotent cause of action which he cannot enforce by judicial process. See EGBE v. ADEFARASIN (1987) 1 NWLR (47) 1 and AJAYI V. ADEBIYI (2012) 11 NWLR (1310) 137, 169.
A cause of action is the fact or combination of facts
which gives rise to a right to sue. It consists of two elements – the wrongful act of the defendant which gives the plaintiff his cause of complaint and the consequent damage. It arises and begins to run for the purpose of the limitation law from the date the breach occurs. See AJAYI V. ADEBIYI supra., WOHEREM V. EMEREUWA (2004) ALL FWLR (221) 570, EGBE V. ADEFARASIN supra and SAVAGE V. UWECHUE (1972) 1 ALL NLR(1125).
In order to determine whether or not a suit is statute – barred, the Court is to look at;
(a) The date the cause of action accrued as disclosed in the writ of summons and statement of claim:
(b) The date of the commencement of the suit as indicated in the originating process, and;
(c) The period of time prescribed for bringing the action as stated in the relevant statute.
If the period of time between (a) and (b) is beyond the time prescribed by the relevant statute then the action is statute-barred.
See AJAYI V. ADEBIYI supra 169 and ADEJUMO V. OLAWAIYE (2014) 12 NWLR (1421) 252, 284, 283.
By virtue of paragraph 8 of the affidavit in support of the application for setting aside of the award and Exhibit 4 (the
award) attached thereto, the award is dated or was made on 28/2/2010. The application to set aside the award was filed on 6/6/2010, that is, three months and nine days after the date of the making of the award. Section 29 (1) (a) of the Arbitration and Conciliation Act 1988 prescribes three months from the date of the award for an application to set aside an award. Ordinarily, it should be held, as was done by the trial Court, that the Suit was statute – barred.
However, statute of limitation does not apply in some circumstances like specific contracts, where there is clear evidence of disability, mistake, fraud and, in certain cases involving personal injury or death. See ADEJUMO v. OLAWAIYE supra.
In the instant case, the appellans position is that the award was nor communicated or made known to it until 6/5/2010. See paragraph 8 of the affidavit in support of the application to set aside the award at page 5 of the record of the appeal. Consequent upon this, the appellant at the trial Court contended that the cause of action began to run from 6/5/2010 and therefore the suit was not statute bared. The trial Court did not agree with him.
Rather it held as follows;
“This Court is inclined to agree with counsel for the Respondent Applicant that provision Section 29(1)
(a) of the Arbitration and Conciliation Act is applicable for the purpose of the computation of the time within which an application for setting an award must be filed. The provision expressly prescribes that the award (sic; application) must be filed within 3 months” from the date of the award.”
Assuming that authors of the Arbitration and Conciliation Act were minded to include the date the copies of the award is communicated to parties as a yardstick for computing the time the application for setting aside is to be filed, it would have been expressly provided in the Act.”
It is the law generally speaking that knowledge of the plaintiff of the accrual of the cause of action is of no moment in determining whether or not a suit is statute-bared. See ELABANJO V. DAWODU (2006) 15 NWLR (1001) 76 and DUZU V. YUNUSA (2010) 10 NWLR (1201) 80 – 117 and 118. There is however an exception, namely; fraudulent concealment of the right of action.
In MULIMA V. USMAN (2014) 15 NWLR (1432) 160, 202, OKORO, JSC. stated as
follows:
“In AJIAONA V. KOLAWALE (supra), this Court made an exception to the ruling that knowledge on the part of the plaintiff is not a condition precedent.
That exception is where there is a fraudulent concealment of the right of action. What this means is that statute of limitation does not apply in cases of concealed fraud so long as the party defrauded remains ignorant of the fraud without any fault of his.”
It must be stated here that the fraud that is envisaged here is equitable fraud. See ADMINSTRATOR/EXECUTOR, ESTATE OF ABACHA V. EKE SPIFF (2003) l NWLR (800) 114, 172, 173 and 174.
Article 32(6) of the Arbitration Rules provides,
“Copies of the award signed by the arbitrators shall be communicated to the parties by the arbitral tribunal.”
Thus the Arbitration Rules impose a duty by the use of the word ‘shall’ on the arbitrator or arbitral tribunal to communicate or serve copies of the award on the parties. The use of the word “shall’ in the con of Article 32(6) is mandatory as each party is entitled to know his fate before the arbitral tribunal in order for him/her to know what to do. See NNONYE V. ANYICHIE (2005)
124 LRCN 357, 374.
Even though the failure to communicate the arbitral award is not that of the respondent but that of the arbitrator it is to my mind a case of ‘fraudulent concealment” in the equitable sense of the phrase and the appellant cannot suffer the terrible pain of his action being declared to be statute-barred on account of it. The Holy Bible, after all, condemns the proverb that.
“The fathers eat sour grapes, and the children’s teeth are set on edge.” See Ezekiel 18: 1 and 2.
In the case MULIMA V. USMAN supra 202 -203, OKORO JSC stated as follows:
“In trying to understand the meaning of the words. “fraudulent concealment”, I widen my horizon to a situation where a party is entitled to a notice of the happening of an event but such notice was not given to him though the failure to give the notice was not fraudulent but merely an oversight. Will this not amount to concealment of information though not fraudulent? I am prepared to say that where there is a concealment of a right of action whether fraudulently done or by mere over sight, the party whose right of action is concealed should not by any stretch of imagination be made to
suffer it.”
It is therefore my view that since the arbitral award was communicated to the appellant on 6/5/2010 and he filed his application on 16/6/2010, his suit was not statute-barred since the time started to run from that date.
I therefore answer the sole issue for determination in the negative and resolve it in favour of the appellant.
The appeal has merit and it succeeds. The ruling of the trial Court is hereby set aside and its in its place I dismiss the preliminary objection of the respondent at the trial Court The case is remitted to the High Court of the Federal Capital Territory, Abuja, for hearing by another Judge of the Court.
The parties shall bear their costs.
TINUADE AKOMOLAFE-WILSON, J.C.A.: I have read the lead judgment delivered by my learned brother Ekanem, JCA.I agree with the reasoning and conclusion reached therein.
MOHAMMED MUSTAPHA, J.C.A.: I read in advance the judgment just delivered by my learned brother, Joseph E. Ekanem, JCA.
I also agree that the suit is not statute barred; as a result I accordingly allow the appeal as well, set aside
the ruling of the trial Court and remit same to the FCT High Court for hearing by another judge.
I also abide by the order for costs.
Appearances
Afam Osigwe, Esq. with him, Ikechukwu Odanwu, Esq. and Tochukwu Akubuilo, Esq.For Appellant
AND
Austin Ugwuanyi, Esq. holding the brief of A. B Afolabi, Esq.For Respondent
