SOPETRO MARINE LIMITED v. SP BOSTON SHIPPING CORPORATION
(2018)LCN/12306(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 18th day of December, 2018
CA/L/1331/2016
RATIO
CONTRACT: WHETHER PARTIES ARE BOUND BY TERMS OF CONTRACT
“The law is settled that parties to a written contract are bound by terms of contract” PER ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.
JUSTICES
UGOCHUKWU ANTHONY OGAKWU Justice of The Court of Appeal of Nigeria
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice of The Court of Appeal of Nigeria
TOBI EBIOWEI Justice of The Court of Appeal of Nigeria
Between
SOPETRO MARINE LTD Appellant(s)
AND
SP BOSTON SHIPPING CORPORATION Respondent(s)
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.(Delivering the Leading Judgment):
This is an appeal flowing from the judgment of the Federal High Court of Lagos (coram TSOHO, J.) delivered on the 4th day of November, 2016, in respect of final judgment.
The Appellant being dissatisfied with the decision filed a Notice of Appeal dated 7th November, 2016.
The summary of the facts leading to this appeal is that the Respondent filed a claim at the lower Court against the Defendant/Appellant as follows:
1. The sum of USD961,771,95,00 (Nine Hundred and Sixty One Thousand and Seven Hundred and Seventy One United States Dollars and Ninety Five cents) being the total indebtedness of the Defendants to the Plaintiff.
2.Interest at the rate of 4.25 percent on the aforesaid sums per annum from the till judgment debt is fully paid.
Following which the Appellant entered a memorandum of conditional appearance and a notice of Preliminary Objection to which the Respondent filed a Counter Affidavit. The Respondent filed an application for final judgment under undefended list, in the absence of a defense to the claim.
The Court consolidated both applications and at the hearing both applications were moved and the Court dismissed the Preliminary Objection and entered judgment pursuant to Order 1 Rule 4 of the Federal High Court Rules. The Appellant being dissatisfied, filed a Notice of Appeal dated 7th November, 2016.
Parties filed their briefs; Appellant brief and Reply was filed on 21st December, 2016 and 4th September, 2018 respectively, they were prepared by P. Amaran Esq, J. I. Ajadi Esq; W. B. Adesaya Esq, M. E. Amaran Esq; Anthoy Chukwudi Esq, of Amaran & Associates.
While the Respondent brief was filed on 5th October, 2018 deemed 13th December, 2018 and was prepared by Babajide Koku SAN; Victor Ogude; Emeka Nwigwe of Babajide Koku & CO
The Appellant formulated 3 issues thus;
1. Whether the lower Court ought to assume jurisdiction despite the clearly defined arbitration clause in the charter Party Agreements in which parties were agreed to first resort to arbitration?
2. Whether the matter should have been stayed pending the outcome of arbitration.
3. Whether the learned trial judge was right to have taken the Motion for Judgment and entered judgment in favour of the Respondent when the issue of the Jurisdiction was challenged?
The Respondent distilled two issues;
1. Whether or not the learned trial judge was right in affirming jurisdiction over the claim notwithstanding the parties’ agreement as to arbitrate?
2. Whether or not, the learned trial judge was right to have entered Judgment in default of Notice of Defence pursuant to Order 12 Rule 1, 3(1) and 4 of the Federal High Court (Civil Procedure) Rules 2009 in favour of the Respondent.
The Respondent filed a motion challenging some grounds of appeal in the Notice of Appeal which was moved along with adoption of Respondent?s brief, which contained arguments thereon. Same was filed on 25th April, 2018 to which the Appellant filed Preliminary Objection which he withdrew at hearing and in his reply brief at page 2 he withdrew ground two of the Notice of appeal, same was also struck out at hearing.
Appellant filed a counter affidavit and arguments thereon were contained in the Appellant?s Reply brief.
The motion basically is for the striking out of grounds 1& 2 of the Appellant Notice of appeal dated 7th November, 2016 together with the arguments thereon contained in the Appellant’s brief. On the grounds that:
1. They do not arise from the decision of the Court made on 4/11/16
2. Issue 1 & 2 for determination was distilled from ground one of the notice of appeal.
The application was supported by an 8-paragraph affidavit deposed to by Tunde Tiamiyu with an attachment i.e. Notice of Appeal.
The Appellant filed a 7 paragraph Counter Affidavit on 18th May, 2018 deposed to by Anthony Chukwudi a legal practitioner.
Respondent Counsel submitted in his brief that from the judgment, the grounds do not flow from the ratio decidendi therein. He referred to CHUKWU & ORS v MTN (NIG) COMM. LTD & ANOR [2016] LPELR-41053; AHMAD DAMZOMO v MUSA & ANOR [2013] LPELR-20761 (CA); KOTOYE v SARAKI (1992) 11/12 SCNJ (PART 1) 26, TAHIR & ANOR v BON LTD (2006) LPELR-11654 (CA).
Respondent submitted further that the quotation in ground 1 cannot be located in the decision but referred to page 8-9 of the Ruling at pages 211-212 of the records of appeal for the correct findings of the Court.
On ground 2 Counsel submitted that the Court did not say that Section 20 of Admiralty Jurisdiction Act overrides any arbitration clause but referred to pages 9-10 of the Ruling and pages 212-213 of the record that the ground does not arise from the decision. He urged that both grounds be struck out.
On competency of the issues for determination based on the grounds 1, he submitted that the Appellant formulated more than one issue from one ground of appeal. He cited OKONOBOR & ORS v EDEGBE & SONS TRANSPORT CO LTD & ANOR (2010) LPELR-2488(SC); SHOLA & ORS v SUNDAY (2016)LPELR-40519 (CA); DALEK (NIG) LTD v OMPADEC [2007]7 NWLR (PT1033) 402 at 430, paras D-F; ELEMCHUKWU IBATOR & ORS v CHIEF BELI BARAKURO & ORS [2007]LPELR-1384(SC); NJEMANZE v NJEMANZE (2013) LPELR-19885(SC); FEDERAL COLLEGE OF EDUCATION v AKINYEMI [2009] ALL FWLR (PT469)1784
He urged the Court to strike out the two defective grounds.
Appellant in reply, submitted that ground one emanates from the judgment and withdrew ground One and Two of the Notice of appeal and adopted grounds one and three therein.
Appellant counsel relied on OLEKSANDR v LONESTAR DRILLING CO. LTD [2015] 9 NWLR (PT. 1464) 350-352; ABE v UNILORIN [2013] 16 NWLR (PT 1379) at 187, on the point that a ground must not be vague.
He cited in addition, DAKOLO v REWANE-DAKOLO [2011] 16 NWLR (PT. 1272) 34; UKPONG v COMM FINANCE [2006]19 NWLR (PT. 1013) 201.
Appellant finally submitted on this issue that the two grounds of appeal are clear and competent.
RESOLUTION
The Appellant in its reply brief of 4th April, 2018 in clause 2.1.6 withdrew ground two of his Notice of Appeal. Same is hereby struck out.
Ground one is a complaint against the holding of the Court, in comparison with the ruling at page 208 line 12-15 thereof and page 209 line 13 – 18 that the ground runs contrary to what Appellant claims the ruling contained. Ground 1 is not a quotation it is what the Appellant understood as ratio in the ruling.
For a clear understanding the Court held thus; By Clause 91(2) of the Charter Party agreement dated 11th April, 2011 between the Plaintiff and the Defendant all disputes or differences which cannot be resolved amicably by them should be referred to Arbitration in England.
The law is settled that parties to a written contract are bound by terms of contract
At page 209 line 15:
It has thus been held that where reference to arbitration is properly raised, the trial Court seized of the action should not ignore the party’s right to arbitration, which is a condition precedent to litigation
At page 210:
While the foregoing is basically good law, it is important not to ignore the statement in some of the decided cases that stay of proceedings could be granted pending reference to arbitration, in deserving cases whether to grant stay or not will depend on the peculiar facts and circumstances of each case.
Page 211:
In the instant case, the Defendant has nowhere in the affidavit in support of application stated any step taken or intended to be taken for the proper conduct of arbitration.
There is not even a stated willingness or readiness to do all that is necessary to facilitate arbitration
From the above, it bears no relationship with or to the contents of ground 1 neither does it flow. In fact it is a direct opposite of what the learned trial judge held in its ruling and reasons thereof. I totally agree with the objection of the Respondent counsel. See KOTOYE v SARAKI (SUPRA); AHMAD DAMZOMO v MUSA (SUPRA). Having said the above again, issues 1 and two arise from ground 1 having withdrawn ground 2 and this again is not acceptable. If the ground is incompetent then the issues are affected. Furthermore, the grounds offend the rule against proliferation of issues. See PHILLIPS v EBA ODAN COMMERCIAL & INDUSTRIAL CO LTD P26 (2012) LPELR-9718 (SC); MFA & ANOR v INONGHA (2014) LPELR -22010 (SC).
In the circumstances, issues 1 & 2 are incompetent and they are hereby struck out. The preliminary Objection is hereby upheld.
I shall adopt issue 3 of the Appellant having struck out issues 1 & 2 thereof. Issue three encompasses issues 1 & 2 of the Respondent’s issue for determination. Therefore the appeal shall be based on it.
ISSUE 3
The Appellant submitted that jurisdiction when raised must be resolved before proceeding to any matter in the suit. He said it was very fundamental and its absence results in a nullity. He relied on ULEGEDE v MILITARY ADMINISTRATOR BENUE STATE (1996) 6 NWLR (PT. 457) 693; A.G. LAGOS STATE v DOSUMU [1998] NWLR (PT. 111) 532 at 566, NDIC v CBN (2002) VOL 18 WRN 1-197, OMAKHAFE v MILAD EDO STATE (2005) VOL 2 MJSC.
Learned counsel for the Appellant submitted that the proper order the lower Court was expected to make was to strike out the matter, or at best stay proceedings pending arbitration.
Respondent submitted in reply that having placed the suit on the undefended list a defendant that intends to defend the action ought to file a notice of intention to defend supported by affidavit which must disclose merit. He cited KHALID v ISMAIL & ANOR (2013) LPELR-22325 (CA), OWNERS OF MV ARABELLA v NIGERIA AGRICULTURAL INSURANCE COPORATION (2008) LPELR- 2848 (SC).
Respondent referred to Order 12 (1) (3) and (4) of Federal High Court (Civil Procedure) Rules 2009 and stated the essence of undefended list in the Court rules as stated in ONOEYO v UBA PLC [2015] 10 NWLR (PT. 1466) p.118 paras B-E CA; NAFDAC v ONWUKA (2013) LPELR-22316 to emphasize that equity helps only the vigilant and renders no assistance to the indolent who fails to pursue his right diligently.
Counsel also cited BONGO v ADAMAWA STATE (2013) 2 NWLR [PT1339] 403, CHIDOKA v FCFC LTD [2013] 5NWLR (PT 1346) 144.
Respondent counsel further submitted that Appellant did not object to the consolidation order on 5th October, 2015, and Appellant insisted on relying on Notice of Preliminary Objection. He referred to proceedings of 2nd November, 2015 at page 194-195 of the record and submitted that Appellant had ample opportunity to defend the action and cannot complain afterwards.
He relied on SENATE PRESIDENT v NZERIBE (2004) 9 NWLR [PT878] AC 251 for the point that no law forbids consolidation of hearing an application challenging jurisdiction with the one for judgment provided the application for judgment is taken first and determined in the judgment/ruling and that this was the procedure adopted by the Court.
He disagreed that fair hearing was breached and urged the Court to dismiss the appeal.
In the reply, on points of law, the Appellant in reply to issue 3 reemphasized its brief that the procedure was for the learned trial Court to decide the issue of jurisdiction first before taking any further step. He referred to GARBA v MOHAMMED [2016] 16 NWLR (PT. 1537) 129, UWAZURIKE v NWACHUKWU [2013] 3 NWLR (PT. 1342) 507, MUSACONI LTD v ASPINALL (2013) 14 NWLR (1375) 439, ONYEMELUKWE v ATTAMAH [1993] 5 NWLR (PT. 293) 354 that the Court should have ruled on issue of jurisdiction first before proceeding to consider the substantive application.
He further relied on the case of ADEWALE BELLO CONST. CO. LTD v I.B.W.O. [1991] 7 NWLR (PT. 204) on the effect of misrepresented suppressed facts in an application for exparte injunction for this proposition, he relied on OKECHUKWU v OKECHUKWU [1989] 3 NWLR (PT. 108) 238. Finally he submitted that the facts upon which the decision was obtained are suppressed, concealed and misrepresented facts before the Court in their exparte application that Clause 91 has an arbitration clause between parties. He urged that the appeal be allowed.
RESOLUTION
The circumstances of this case has been spelt out in this appeal with the original two issues now struck out, the crucial issue before the Court is whether the Court erred in consolidating the two applications and proceeding with the jurisdiction first in the light of Order 12(1), (3) & (4) of the Federal High Court Rules 2009.
This has been over flogged in recent times in this Court and the apex Court. In the recent case of HON JUSTICE BABATUNDE ADEJUMO V HON JUSTICE P.N.C AGUMAGU & ORS (2015) LPELR -24502(CA) per OGBUINYA JCA AT PG 25-29 paras F-B Interpreting the provisions of Order 29 Rule 1 of the Federal High Court rules:
“The provision allocates to the lower Court the power to exercise its discretion on whether or not to consolidate the application. This is confirmed by its deployment of the phrase and the Court may take such applications together? in its (1)b). In this con the word ‘may’. In celebrated case of AMADI v INEC SUPRA INAKOJU v ADELEKE (SUPRA), DAPIANLONG v DARIYE [2007] 8NWLR (PT. 1036) 332, GARUBA v OMOKHODION (SUPRA), AJAYI v ADEBIYI (SUPRA) the Supreme Court whole heartily, sanctioned the procedure of consolidation of such applications as enunciated by his Court in the case of SENATE PRESIDENT v NZERIBE (SUPRA) hence the law allows a Court to combine the Hearing of such applications save the substantive matter involved the taking of evidence…Contrariwise, the provision of Order 29 Rule (1) of the rules has accommodated the procedure, perhaps, in the interest of quick dispensation of justice.”
See IDRIS & ANOR v AGUMAGU & ORS LPELR- 24504 (CA).
The Court had issued directive orders that the applications would be consolidated, there was no objection from either of the parties present in Court and it was adjourned. The Appellant failed to file a response to the application of final judgment which was to save the time of the Court but Counsel was not diligent enough, in these days of fast track matters and zero tolerance for delay in administration of justice.
On the adoption day, he argued his Preliminary Objection and replied the final judgment application, he still did not register any objection, following which, the lower Court properly evaluated the preliminary objection and dismissed it, with the coast clear the Court proceeded to read its decision in the main judgment application,.
The Appellant has contended in clause 3.2.7 of its reply that, the exparte order was obtained through concealed and misrepresented facts. In my view, the proper forum for this kind of complaint ought to have been challenged by way of a response to the main application for final judgment and not in the appellant reply brief.
On the allegation of denial of fair hearing in the reply brief I find that, from the conduct of proceedings of the record at page 194-195 the Appellant lost the right to complain when he failed to take advantage of the opportunity of being heard on his defense by putting facts before the Court and did not utilize it. He therefore cannot cry wolf. See ENUKEME v MAZI [2014] LPELR 2340 (CA); GTB v FADCO IND NIG LTD [2013] LPELR 21411, FHA v KALEJAIYE [2011] ALLFWLR (PT. 562) 1633.
In GOVT. OF IMO STATE & ANOR v HON CHIEF ATHANASIUS UCHE OGOH & ORS [2015] LPELR-25949 (CA) MBAMBA, JCA held thus:
“Who refuses or fails to take advantage of the fair hearing process created by the Court cannot turn around to accuse the Court of denying him fair hearing.”
This Court has scrutinized the said judgment of the lower Court, the issue of preliminary objection was dealt with and dismissed before the Court proceeded to analyze the application for final judgment and therefore complied with the requirements of the law. This was what transpired in Court at page 195: N.S. OGUNDARE informed the Court about their motion for final judgment; he moved same and adopted written address
Ajadi Esq in reply had this to say to the application for final judgment:
“We have completely relied on our Notice of Preliminary Objection to argue that proper procedure was not followed in bringing the suit, Parties are bound by their agreement”
The Court adjourned for ruling…
The Appellant chose his strategy and having failed, he was not shut out or armed twisted he voluntarily chose his tactics. He therefore cannot have a second bite at the cherry.
On this note I find the appeal lacks merit and it is accordingly dismissed. The judgment of the lower Court coram TSOHO, J is hereby affirmed.
Costs of N200, 000 is awarded to the Respondent.
UGOCHUKWU ANTHONY OGAKWU, J.C.A.: I had the privilege of reading in draft the leading judgment just delivered by my learned brother, Abimbola Osarugue Obaseki-Adejumo, JCA and I agree that there is no substance in this appeal and that the same should be dismissed.
For the same reasons set out in the said judgment, I too, dismiss this appeal and abide by the consequential orders including those as to costs therein contained. Appeal dismissed.
TOBI EBIOWEI, J.C.A.: I agree.
Appearances:
Pablo Amaren For Appellant(s)
Chidima SilvanusFor Respondent(s)
