TRANSCORP v. ANKOR POINTE INTEGRATED LTD
(2021)LCN/15671(CA)
In the Court of Appeal
(LAGOS JUDICIAL DIVISION)
On Thursday, March 25, 2021
CA/L/754M/2014
Before Our Lordships:
Biobele Abraham Georgewill Justice of the Court of Appeal
Frederick Oziakpono Oho Justice of the Court of Appeal
Folasade Ayodeji Ojo Justice of the Court of Appeal
Between
TRANSNATIONAL CORPORATION OF NIGERIA PLC APPELANT(S)
And
ANKOR POINTE INTEGRATED LTD RESPONDENT(S)
RATIO
WHETHER OR NOT PRELIMINARY OBJECTIONS SHOULD BE DETERMINED BEFORE THE CONSIDERATION OF THE ISSUES FOR DETERMINATION
The settled position of Law commands that, before the consideration of the issues for determination, the preliminary objection should be given prominence. The reason for this is that should it succeed, there would be no need to go into the substantive issue formulated for the determination of the appeal as the appeal would have been terminated in limine. See JIMI-JAJA VS. C.O.P, RIVERS STATE (2013) 6 NWLR (PT. 1350) 225; NEPA VS. ANGO (2001) 15 NWLR (PT. 737) 627; OKUMODI VS. SOWUMI (2004) 2 NWLR (PT. 856) 1; B.A.S.F. (NIG.) LTD. VS. FAITH ENT. LTD. (2010) 4 NWLR (PT. 1138) 105 and UDENWA VS. UZODINMA (2013) 5 NWLR (PT. 1346) 94 AT 111 PARAGRAPHS D-E. PER OJO, J.C.A.
WHETHER OR NOT ISSUES FOR DETERMINATION MUST ARISE FROM THE GROUNDS OF APPEAL
Before invoking the provision of Subsection 7 (4) of the Act this Court and indeed all Courts of record have a duty to first satisfy itself that the grounds of appeal and issues formulated therefrom relate strictly to appointment procedure as laid down by Subsections 7 (2) and (3) and not matters that are peripheral to those specified therein. It is significant to note that the right of appeal is a serious matter beyond the mere gambit of a preliminary objection as a daunting ploy calculated to stun an opponent since such right is constitutional. See EZE VS. EJELONU (1999) 6 NWLR (PT. 605) 134, 142-143 and IBRAHIM VS. BALOGUN (1999) 7 NWLR (PT. 610) 254, 266. PER OJO, J.C.A.
THE DUTY OF THE COURT ENTERTAINING AN APPLICATION TO APPOINT ARBITRATORS
Let me begin the resolution of this issue by stating from the onset that a Court entertaining an application to appoint arbitrations is only enjoined to see whether prima facie a dispute contemplated in the arbitration agreement between the contending parties has been established. Where it is shown (as in the instant case) that there is a prima facie dispute and the parties failed or neglected to appoint arbitrators to wade into that dispute, the Court will come in to help them out of the impasse. See KANO STATE URBAN DEVELOPMENT BOARD VS. FANZ CONSTRUCTION CO. LTD. (1990) 4 NWLR (Pt. 142)1. Thereafter, the Arbitral Tribunal is saddled with the responsibility of investigating in detail the dispute referred to it. PER OJO, J.C.A.
FOLASADE AYODEJI OJO, J.C.A. (Delivering the Leading Judgment): This appeal is against the Ruling of the Federal High Court, Lagos Division in Suit No. FHC/L/CS/448/2010 BETWEEN ANKOR POINTE INTEGRATED LTD. AND TRANSNATIONAL CORPORATION OF NIGERIA PLC. delivered on 9th of May, 2012 in which the trial Court found against the Appellant (then Defendant) on all issues submitted to it by the Respondent (then Plaintiff).
The Appellant is dissatisfied with the Ruling, hence, this appeal. The extant Notice of Appeal is the Amended Notice of Appeal containing four grounds of Appeal filed on 18/12/2015 and deemed properly filed on 27/1/2021.
By way of an originating motion filed on 12/04/2010, the Respondent sought against the Appellant the following reliefs:
i. An Order of this Honourable Court appointing a second arbitrator in the dispute between the Plaintiff and the Defendant in respect of the Memorandum of Understanding between the Plaintiff/Applicant and the Defendant/Respondent following the failure of the Defendant/Respondent to appoint a second arbitrator within 30 days of the receipt of the request from the Plaintiff/Applicant to do so pursuant to the notice dated the 18th of December, 2009 pursuant to clause 13 of the said Agreement.
ii. And for such further order or other orders as this Honourable Court may deem fit to make in the circumstance.
The Respondent alleged that by a Memorandum of Understanding (M.O.U.) made on 23/6/2008, the Appellant engaged her as Consultant to help develop its upstream and downstream divisions and also to manage its energy portfolio for a period of 12 months starting from 23/06/2008 at an agreed monthly fee.
Pursuant to the M.O.U, it carried out all its work with utmost diligence and sent in its monthly invoices. The Appellant paid one of the monthly fees in part and failed to pay the remaining despite repeated demands. The Appellant also failed to pay for an extra work done for her by the Respondent i.e. re-evaluation of OPL 281.
On 6/10/2009, it held a reconciliatory negotiation meeting with the Appellant in respect of the outstanding invoices without success and as a result, was compelled to invoke clause 13 of the M.O.U. by requesting for arbitration. In its notice of Request for Arbitration, it appointed Mrs. Miannanya Aja Essien SAN as sole Arbitrator and requested the Appellant to concur with the Appointment.
When the Appellant failed and/or refused to concur, the Respondent notified her of the appointment of Mrs. Miannanya Aja Essien SAN as its party-appointed arbitrator and called on her to appoint her own arbitrator failing which it threatened to apply to Court for a second arbitrator.
The Appellant failed to appoint a second arbitrator and so the Respondent applied to the Federal High Court, Lagos Division for appointment via an originating motion dated 12/04/2010.
The Appellant opposed the motion contending (among others) that:
i. There is no valid enforceable agreement to arbitrate between them; and that
ii. the arbitration agreement was procured by fraud perpetrated on it by its former officers in collusion with the Respondent.
At the end of the day, the lower Court ruled against the Appellant. The decision of the lower Court contained at page 142 is reproduced hereunder as follows:
“I therefore find and hold that this Court has the power to appoint a second arbitration (sic) to this dispute and that the Tribunal is the best place to raise the objection on point of Law.
I consequently hereby appoint Hon. Justice Abdullahi Mustapha (Rtd) FCIAB to act as the second Arbitration (sic)”
Some of the findings of the lower Court that led to the above decision are as follows:
i. That the issue that arises for determination is whether the Court should appoint a second arbitrator in the dispute that appears to have arisen in the Memorandum of Understanding (MOU) (page 141 of the Record).
ii. That by virtue of Section 7 (2) (a) of the Arbitration and Conciliation Act (ACA) the Court can appoint a second arbitrator where a party has been requested to appoint one and has failed or neglected to so appoint after the expiration of 30 days of the demand (page 141 of the record).
iii. That by virtue of Section 12 (1) of the Arbitration and Conciliation Act (ACA) the Arbitration Tribunal has the power to adjudicate on the point of Law raised by the Appellant (see pages 141-142 of the record).
iv. That by virtue of the Memorandum of Understanding, the best place to raise the Appellant’s objection is before the panel (see page 142 of the record).
The Appellant is dissatisfied with the above ruling. The extant notice of appeal is the Amended Notice of Appeal filed on 18/12/2015 which was deemed properly filed on 27/01/2021.
In accordance with the rules of this Court, parties filed their respective Briefs of Argument as follows:
i. Appellants Brief of Argument settled by Chukwuka Ikwuazom filed on 18/10/2017 and deemed as properly filed on 27/01/2021.
ii. Amended Respondent’s Brief of Argument settled by Ayodele Akintunde SAN, CArb was filed on (12/09/2019) and deemed as properly filed on 27/1/2021.
iii. Appellant’s Reply Brief of Argument filed on 26/08/2020 and deemed on 27/1/2021 was settled by the Ade Adedeji (SAN).
On 27/01/2021 when this appeal was argued, Learned Senior Counsel representing the respective parties adopted and relied on their respective briefs of argument. While the learned senior counsel representing the Appellant argued in favour of allowing the appeal, learned senior counsel representing the Respondent submitted in favour of its dismissal.
Learned Senior Counsel to the Appellant formulated the following issues for determination:
i. Whether the lower Court was right in declining to determine and rule on the issue raised by the Appellant before it (namely that there was no valid arbitration between the parties with the consequence that there was no factual or legal basis for the appointment of the arbitrator requested by the Respondent) and abdicating that responsibility to the arbitral Tribunal.
ii. Whether in the circumstance of the suit, the lower Court was right to have granted the request sought by the Respondent in its originating summons.
iii. Whether the lower Court properly exercised jurisdiction to appoint an arbitrator when a condition for the exercise of that jurisdiction had not been fulfilled by the Respondent.
Counsel to the Respondent filed a notice of preliminary objection which he argued in the Respondent’s brief of Argument and formulated three issues for the determination of the appeal as follows:
i. Whether the learned trial Judge gave a decision on the issue raised by the Appellant and rightly held that the best place for the Appellant to raise its objection on point of Law was the arbitral Tribunal.
ii. Whether the learned trial Judge rightly appointed Honourable Justice Abdullahi Mustapha (Rtd) as second arbitrator.
iii. Whether the Respondent complied with the provisions of clause 13 of the Memorandum of Understanding before filing its originating motion.
I have critically examined the issues formulated by parties and I find the following three (3) issues apt for the determination of this appeal:
i. Whether the lower Court was right when it held that the best place to raise the Appellant’s objection on point of Law was before the Tribunal.
ii. Whether the lower Court was also right when it appointed Hon. Justice Abdullahi Mustapha (Rtd) as second arbitrator.
iii. Whether the Respondent complied with the provisions of clause 13 of the Memorandum of Understanding before filing its originating motion.
The settled position of Law commands that, before the consideration of the issues for determination, the preliminary objection should be given prominence. The reason for this is that should it succeed, there would be no need to go into the substantive issue formulated for the determination of the appeal as the appeal would have been terminated in limine. See JIMI-JAJA VS. C.O.P, RIVERS STATE (2013) 6 NWLR (PT. 1350) 225; NEPA VS. ANGO (2001) 15 NWLR (PT. 737) 627; OKUMODI VS. SOWUMI (2004) 2 NWLR (PT. 856) 1; B.A.S.F. (NIG.) LTD. VS. FAITH ENT. LTD. (2010) 4 NWLR (PT. 1138) 105 and UDENWA VS. UZODINMA (2013) 5 NWLR (PT. 1346) 94 AT 111 PARAGRAPHS D-E.
It is for the above reason that I shall proceed straightaway to address the issues raised in the preliminary objections.
THE PRELIMINARY OBJECTION
The ground for the Respondent’s Preliminary Objection as adumbrated in paragraph 2.15 of their brief is that the decision of the lower Court appointing a second arbitrator is not appealable in view of Section 7(4) of the Arbitration and Conciliation Act Cap. A18 LFN 2004.
Learned Senior Counsel to the Respondent submitted that a careful examination of the Appellant’s grounds of appeal reveal that they relate to the decision of the lower Court appointing a second arbitrator and therefore violate Section 7(4) of the Arbitration and Conciliation Act. To buttress his point, he commended to us, pages 58-59 of the HANDBOOK OF ARBITRATION AND ADR PRACTICE IN NIGERIA AUTHORED BY TINUADE OYEKUNLE AND BAYO OJO and the case of BENDEX ENGINEERING CORPORATION VS. EFFICIENT PETROLEUM NIGERIA LTD. (2001) 8 NWLR (Pt. 715) PAGE 333 AT 348 PAGES D-G.
He finally urged us to uphold the preliminary objection and strike out the appeal.
Learned Senior counsel to the Appellant placed a different set of Argument before us in his reply brief. He submitted the Appellant’s right of Appeal is preserved by Section 241(1) (a) of the Constitution and that the decision of the lower Court culminating into this appeal is a final one and that Section 7 (4) of the Arbitration and Conciliation Act is inconsistent with Section 241 of the Constitutionand for that reason, void by virtue of Section 1 (3) of the same Constitution. To support his position, learned counsel referred us to NIGERIAN AGIP OIL CO. LTD. VS. KEMMER (2001) 8 NWLR (PT. 716) PAGE 506; CHIEF FELIX OGUNWALE VS. SYRIAN ARAB REPUBLIC (2002) 9 NWLR (PT. 771) PG. 127 and BENDEX ENGINEERING CORPORATION VS. EFFICIENT PETOLEUM (NIG.) LTD. (2001) 8 NWLR (PT. 715) PAGE 333.
To my mind, this preliminary objection will only be sustained if at the end of the day I find that the Appellant’s complaint as adumbrated in its grounds of appeal and the issues formulated therefrom centre around Section 7 of the Arbitration and Conciliation Act so as to bring in the operation of Subsection 7 (4) of the Act that makes the decision reached on certain matters non-appealable.
I shall therefore take a look at the grounds of appeal and highlight the Appellant’s complaints therein:
i. Ground One (1) complains about the failure of the lower Court to determine and rule on the Appellant’s argument that there was no dispute between the parties capable of settlement by arbitration. Put differently, that the purported dispute is not arbitrable and if there is any dispute at all, the appropriate forum is the Court.
ii. Ground Two (2) complains about the decisions of the lower Court on appointing a second arbitrator and holding that the Appellant’s objection on points of Law is best raised before the Tribunal.
iii. Ground Three (3) centres around the issue of fraud in procuring the arbitration agreement which is now a subject of prosecution in charge No: FHC/AB/CR/86/2009 FRN VS. THOMAS ISEGHOHI & ORS.
iv. Ground Four (4) challenges the jurisdiction of the lower Tribunal to entertain the Respondent’s originating motion for failure to satisfy the condition precedent to instituting that action.
The issues which were framed from the grounds of appeal are:
i. Issue One (1) canvasses whether the lower Court was right when it declined to determine and rule on the issue that there was no valid agreement and as such, no legal basis for the appointment of the arbitrator requested by the Respondent.
ii. Issue Two (2) agitates whether the lower Court was right when it appointed Hon. Justice Abdullahi (Rtd) as second arbitrator and
iii. Issue Three (3) challenges the failure of the Respondent to comply with clause 13 of Memorandum of Understanding.
I wish to state here that, within the framework of Section 7 of the Arbitration and Conciliation Act, to determine whether or not a decision is appealable, has to be tested against Section 7 (2) and (3) of the same Act by reference to which Section 7 (4) delimit, non-appealable matters.
The provision of Section 7 of the Act (supra) is reproduced here below:
7. (1) Subject to Subsection (3) and (4) of this Section, the parties may specify in the arbitration agreement the procedure to be followed in appointing an arbitrator.
(2) Where no procedure is specified under Subsection (1) of this section-
(a) in the case of an arbitration with three arbitrators, each party shall appoint one arbitrator and the two thus appointed shall appoint the third, so however that-
(i) if a party fails to appoint the arbitrator within thirty days of receipt of a request to do so by the other party; or
(ii) if the two arbitrators fail to agree on the third arbitrator within thirty days of their appointments, the appointment shall be made by the Court on the application of any party to the arbitration agreement;
(b) in the case of an arbitration with one arbitrator, where the parties fail to agree on the arbitrator, the appointment shall be made by the Court on the application of any party to the arbitration agreement made within thirty days of such disagreement.
(3) Where, under an appointment procedure agreed upon by the parties-
(a) a party fails to act as required under the procedure;
(b) the parties or two arbitrators are unable to reach agreement as required under the procedure;
(c) a third party, including an institution, fails to perform any duty imposed on it under the procedure, any party may request the Court to take the necessary measure, unless the appointment procedure agreed upon by the parties provides other means for securing the appointment.
(4) A decision of the Court under the Subsections (2) and (3) of this Section shall not be subject to appeal.
(5) The Court in exercising its power of appointment under Subsections (2) and (3) of this Section shall have due regard to any qualifications required of the arbitrator by the arbitration agreement and such other consideration as are likely to secure the appointment of an independent and impartial arbitrator.
Subsection 7 (2) and (3) of the Act relate to the procedure for appointing an arbitrator where such procedure is not stipulated in the parties’ agreement and also provide for the methods for curing defaults arising from the conduct of the arbitration. Subsection 7 (2)deals with a situation where no procedure for appointing an arbitrator is specified in the parties’ agreement and Subsection 7 (3)covers a situation where under the appointment procedure agreed upon by the parties, there is default on the part of one of the parties or a third party to act on the parties or two arbitrators fail to reach an agreement. In either case, an alternative formula to resolve the deadlock is provided by the same Act.
I have critically examined grounds one (1), three (3) and four (4) of the notice of appeal as well as issues one (1) and three (3) formulated for determination by the Appellant and hold that they do not come within the ambit of the dispute for which subsections 7 (2) and (3) of the Act provide a formula for resolution.
In other words, they do not touch on the appointment procedure laid down by Sub-sections 7 (2) and (3) of the Act to provide occasion for the invocation of Subsection 7(4).
Even though, Subsection 7(4) (supra) renders certain proceedings on the appointment of arbitrators non-appealable, it is however explicit on the scope of the matters that are within its purview. It is not intended as a blanket deprivation of the appeal on any matter touching on arbitration. Let me make it clear that deprivation of the right of appeal envisaged is confined to the question of appointment procedure specified in Subsections 7 (2) and (3) of the Act.
Before invoking the provision of Subsection 7 (4) of the Act this Court and indeed all Courts of record have a duty to first satisfy itself that the grounds of appeal and issues formulated therefrom relate strictly to appointment procedure as laid down by Subsections 7 (2) and (3) and not matters that are peripheral to those specified therein. It is significant to note that the right of appeal is a serious matter beyond the mere gambit of a preliminary objection as a daunting ploy calculated to stun an opponent since such right is constitutional. See EZE VS. EJELONU (1999) 6 NWLR (PT. 605) 134, 142-143 and IBRAHIM VS. BALOGUN (1999) 7 NWLR (PT. 610) 254, 266.
In fact, any legislation that seeks to deprive a citizen of his rights to appeal must always be given strict construction against the person relying on the power of deprivation.
Applying the above principle to the interpretation of Subsection 7 (4) of the Arbitration and Conciliation Act, I shall limit myself to the condition laid down by that Subsection which is exclusion from appeal of only matters relating to procedure for appointing an arbitrator as specified by subsections 7 (2) and (3) (supra).
It is for all of the above that I hold that the grounds of appeal and issues formulated therefrom do not complain about matters raised in subsections 7 (2) and (3) of the Arbitration and Conciliation Act alone.
My conclusion on the preliminary objection raised by the Respondent in this appeal is that, it lacks merit and it is accordingly overruled.
Issue One
Whether the lower Court was right when it held that the best place to raise the Appellant’s objection on points of Law was before the Tribunal.
On this issue, Learned Counsel to the Appellant submitted that a Court of Law is not allowed to pick and choose among issues raised for determination before it and referred us to OKONJI VS. NJOKANMA (1991) 7 NWLR (PT. 202) 131 AT PAGE 146 A-B; ADEBAYO VS. A.G. OGUN STATE (2008) WRN (Vol. 20) 1 AT PAGE 12 LINES 5-10; UNIVERSITY OF CALABAR VS. UGOCHUKWU & ORS (NO. 2) (2007) 17 NWLR (PT. 1063) 248 AT 269 PARAS F-G and IROLE VS. UKA (2002) 14 NWLR (PT. 786) 195 AT 225 PARAS D-F to support his submission.
Learned counsel further pointed out as follows:
i. That he raised the argument that there was no valid arbitration agreement between parties the consequence of which was that there was no dispute capable of settlement by arbitration.
ii. That he raised the issue that the purported agreement upon which the Respondent relied was procured by fraud for which some of its principal officers (including the officer who executed the agreement and the one to whom all notices under the purported agreement were to be sent) are facing criminal prosecution in charge No: FHC/ABJ/CR/86/2009 – FRN VS. TOM ISEGHOHI & ORS.
iii. That the lower Court failed to consider his submissions on the issue of validity or otherwise of the agreement to arbitrate thereby, relegating it to the background and
iv. That the lower Court also misconstrued his contention when it held that the issue arising from the objection is that the Court will not act where there is a pending criminal trial premised on the same Respondent.
It is against the above background that learned counsel to the Appellant urged us to hold that the lower Court failed in its duty to decide and pronounce on the most poignant issue before it without any justifiable reason.
Learned Senior Counsel further submitted that Section 12 (1) of the Arbitration and Conciliation Act does not oust the jurisdiction of the regular Courts in respect of an issue of Law arising in a reference but cloth the arbitral Tribunal with concurrent jurisdiction with the regular Courts. He referred us to Section 1 (3), 6 (6) (a) and 251 of the Constitution of the Federal Republic of Nigeria, 1999, to support his position and finally urged us to hold that the lower Court’s Constitutional obligation to determine the issue raised before it in the first instance will lie to prevent it from abdicating its obligation in favour of an arbitral Tribunal. He urged us to resolve this issue in favour of the Appellant and against the Respondent.
Learned Senior Counsel to the Respondent argued per contra. He opined that the lower Court considered the facts and Law and gave its decision on the issue of the validity or otherwise of the arbitration agreement contained in the Memorandum of Understanding before holding that the Tribunal is the best place for the Appellant to raise his objection.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>
</br<>
On the competence of an arbitral Tribunal to rule on its jurisdiction, learned senior counsel referred us to REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION, FIFTH EDITION PAGES 345 – 346 PARAGRAPH 5.98, PAGE 347 PARAGRAPH 5.99; CHRISTOPHER BROWN LTD. VS. GENOSSENSI – HAFT O.W.H. REGISTRIERTE (1954) 1 QB 8 at 12 and 13; VEE NETWORKS LTD. VS. ECONET WIRELESS INTERNATIONAL LTD. (2004) EWHC 2909 (QBD) and Article 21 of the Arbitration Rules contained in the Arbitration and Conciliation Act Cap. A18. LFN. He urged us to hold that the learned trial Judge was right when he reframed/reformulated the issue considered most appropriate for determination and cited EKUNOLA VS. CBN (2013) 15 NWLR (Pt. 1377) Page 224 and 265, AKPAN VS. THE STATE (1992) 6 NWLR (Pt. 218) PAGE 431; DUZU & ANOR. VS. YUNUSA & ORS. (2010) LPELR – 8989 (CA) and NNPC VS. KLIFCO (NIG.) LTD. (2011) 10 NWLR (Pt. 1255) PAGE 209 to support his submission and finally urged us to resolve this issue against the Appellant.
Let me begin the resolution of this issue by stating from the onset that a Court entertaining an application to appoint arbitrations is only enjoined to see whether prima facie a dispute contemplated in the arbitration agreement between the contending parties has been established. Where it is shown (as in the instant case) that there is a prima facie dispute and the parties failed or neglected to appoint arbitrators to wade into that dispute, the Court will come in to help them out of the impasse. See KANO STATE URBAN DEVELOPMENT BOARD VS. FANZ CONSTRUCTION CO. LTD. (1990) 4 NWLR (Pt. 142)1. Thereafter, the Arbitral Tribunal is saddled with the responsibility of investigating in detail the dispute referred to it.
Without mincing words, I am of the firm view that the learned trial Judge appreciated this function in this matter. The Judge, having satisfied himself that a dispute appears to have arisen from the M.O. U. made the right order and rightly refused to be drawn into a melee of probing the dispute, trial of which falls within the province of the arbitral Tribunal. I am certainly at one with the lower Court on this issue.
Section 12 (3) (a) and (4) of the Arbitration and Conciliation Act Cap. A. 18 LFN, 2004, provides as follows.
“(3) In arbitral proceedings, a plea that the arbitral Tribunal.
(a) Does not have jurisdiction may be raised not later than the time of submission of the points of defence and a party is not precluded from raising such plea by reason that he has appointed or participated in the appointment of an arbitrator…
(4) The arbitral Tribunal may rule on any plea referred to it under Subsection (3) of this Section, either as a Preliminary question or in an award on the merit; and such ruling shall be final and binding.
To my mind, the implication of the above provision is that a point of Law such as a plea of lack of jurisdiction can be raised by any party to the agreement in the course of the arbitral proceedings.
In MOBIL VS. SUFFOCK PETROLEUM SERVICES LTD. (2016) LPELR – 40054, this Court per EKO JCA (as he then was) at pages 12 – 13 paragraphs F-B said concerning Section 12 (1) as follows:
“Section 12 (1) of the Arbitration and Conciliation Act is clear and unambiguous that an arbitral Tribunal is competent to rule on questions pertaining to its own jurisdiction and on any objections, including the prematurity of the invocation of its jurisdiction…” It is my considered view that by referring the Appellant’s objection on point of Law to the Tribunal, the lower Court did not pick and choose among the issues raised for determination and did not abdicate his functions as argued by learned senior counsel to the Appellant. The Tribunal is indeed the most appropriate venue for the Appellant to raise his objection and I so hold.
The inevitable conclusion is that the lower Court was right when it held that the best place to raise the Appellant’s objection on point of Law was the arbitral Tribunal.
This issue is resolved against the Appellant and in favour of the Respondent.
ISSUE 2.
Whether the lower Court was also right when it appointed Hon. Justice Abdullahi Mustapha (Rtd) as second Arbitrator.
Arguing this issue, learned Senior Counsel to the Appellant submitted that notwithstanding Section 7 of the Arbitration and Conciliation Act which empowers an appropriate Court to appoint an arbitrator on behalf of a party who has failed to do so, the lower Court before exercising such powers ought to satisfy itself that there is a valid and enforceable agreement between the parties, that the dispute which is sought to be arbitrated falls within the scope of the parties agreement to arbitrate and is arbitrable. He contended that, by appointing Hon. Justice Abdullahi Mustapha (Rtd) as second arbitrator, the Appellant has been compelled to arbitrate a dispute which by Law is incapable of settlement by arbitration. He referred us to the case of ONWARD ENTERPRISES LTD VS. M.V. MATRIX (2010) 2 NWLR (Part 1179) 530 at 557 – 558 to the effect that an arbitration clause can only be enforced if it is contained in a valid contract.
Learned senior counsel stressed the point that the M.O.U. and in particular, the arbitration agreement contained therein was obtained by fraud perpetrated on the Appellant by some of its former officers with the connivance of the Respondent (the beneficiary of the fraud). This being the case, the lower Court ought not to have appointed a second arbitrator as requested by the Respondent. To support his point, he cited F.A.T.B. LTD. VS. PATNERSHIP INVESTMENT CO. LTD. (2001) 1 NWLR (Part 695) 517 to the effect that fraud vitiates every contract in which it enters and an instrument the consideration for which is fraudulent even in part, is voidable at the option of the party defrauded. He urged us to resolve this issue in favour of the Appellant.
For his part, learned senior counsel to the Respondent referred us to clause 13 of the M.O.U. contained at pages 109 – 122 of the Record which provides for settlement of disputes first by negotiation, failing which the matter in dispute shall be resolved by arbitration.
He cited efforts made at persuading the Appellant to confirm the appointment of Mrs. Miannaya Aja Essien SAN as sole arbitrator which proved abortive and which compelled the Respondent to apply to the lower Court for appointment of a second arbitrator in line with Section 7 (2) (a)(i) and (2) of the Arbitration and Conciliation Act, Cap. A. 18 LFN 2004 and the case of ROYAL EXCHANGE ASSURANCE VS. BENT WORTH FIN. (NIG.) LTD. (1976) 10 NSCC 648 at 657.
He urged us to hold that the lower Court properly exercised its discretion to appoint Hon. Justice Abdullahi Mustapha (Rtd) as second arbitrator; that by virtue of Section 12 (1) of the Arbitration and Conciliation Act Cap. A. 18 LFN 2004 an arbitral Tribunal is competent to rule on the question pertaining to its own jurisdiction, that the allegation of fraud and those contained in charge NO. FHC/ABJ/CR/86/2009 are yet to be proven before any Court of Law; that the M.O.U. has not been set aside by any Court of Law on grounds of fraud, and that the Defendants in charge NO: FHC/ABJ/CR/86/2009 are presumed innocent until proven guilty. He cited ANEKWE VS. STATE (2014) 10 NWLR (Part 1415) 353 at 383 Para. H; ADEKOYA VS. STATE (2012) 9 NWLR (Pt. 1306) PAGE 539 at 565 Paras. D – E; M.M.A. INC. VS. N.M.A. (2012) 18 NWLR (Pt. 1333) PAGE 506 at 547 Paras. B – E and Section 135 (1) of the Evidence Act, 2011, to support his submission.
He further drew our attention to letters dated 02/06/2009, 19/06/2009, and 12/10/2009 respectively contained on pages 123, 124 and 125 of the record to the effect that the Appellant acknowledged and admitted the existence of the M.O.U. and therefore, its attempt to deny the agreement is an afterthought. He submitted that by Section 69 of CAMA Cap. C20 LFN 2004 and the decision inROYAL BRITISH BANK VS. TURQUAND (1856) 6 E & B 327; there is a presumption of regularity in the internal management of a company in favour of third parties dealing with that company. He urged us to resolve this issue in favour of the Respondent.
In the consideration of this issue, I find it pertinent to reproduce part of the findings of the lower Court contained at page 141 of the Record where it found as follows:
“To my mind, the issue that arises for determination is whether this Court should appoint Second Arbitration (sic) in the dispute that appears to have arisen from the Memorandum of Understanding (M.O.U.).
The single answer is yes, the Court by virtue of Section 7 (2) (a) of the Arbitration and Conciliation Act (ACA) where a party has been requested to appoint one and has failed or neglected to appoint after the expiration of thirty days of the demand …
I therefore find and hold that this Court has the power to appoint a Second Arbitration (sic) to this dispute and that the Tribunal is the best place to raise the objection on point of Law”.
Section 7(1) and 7(2) (a) of the Arbitration and Conciliation Act provides as follows:
“7(1) subject to Subsection (3) and (4) of this Section, the parties may specify in the arbitration agreement the procedure to be followed in appointing an arbitrator.
7(2) where no procedure is specified under Subsection (1) of this Section –
(a) In case of an arbitration with three arbitrators, each party shall appoint one arbitrator and the two thus appointed shall appoint the third, so however that –
i) If a party fails to appoint the arbitrator within 30 days of receipt of a request to do so by the other party; or
ii) If the two arbitrators fail to agree on the third arbitrator within 30 days of their appointments, the appointment shall be made by the Court on the application of any party to the arbitration agreement.”
I wish to note the following salient points from the available evidence on record:
i) Clause 13 of the M.O.U. i.e. the dispute Resolution clause, does not specify any procedure for appointing an arbitrator.
ii) By exhibit KQ 17 (notice of request for arbitration dated 19/11/2009 and contained on pages 34 – 35 of the Record. The Respondent gave the Appellant notice, requesting for the dispute to be resolved by arbitration and nominated Mrs. Miannaya Aja Essien SAN as sole arbitrator. The Respondent thereafter requested the Appellant to concur with the appointment.
iii) Thirty one (31) days after Exhibit KQ 17 was served, the Appellant failed, and/or neglected to concur with the Respondent for the appointment of Mrs. Miannaya Aja Essien SAN as sole arbitrator.
iv) The Appellant was then served exhibit KQ 18 wherein the Respondent appointed Mrs. Miannaya Aja Essien SAN as its arbitrator and called upon the Appellant to appoint its own arbitrator.
v) Instead of appointing its own arbitrator, the Appellant served on the Respondent a letter dated 14/12/2009 but received on 23/12/2009 through its Lawyers, Messrs Ude Ugochukwu & Co. wherein, it denied its indebtedness to the Respondent and contended that the M.O.U. is invalid ab initio and “non-existent”.
vi) In it’s considered ruling pursuant to an originating motion, affidavit in support and exhibits filed on 12/04/2010, the lower Court having satisfied itself that a dispute appears to have arisen from the M.O.U. and that the dispute is arbitrable, proceeded to appoint Hon. Justice Abdullahi Mustapha (Rtd) FCIARB as second arbitrator.
From all of the above, I have no hesitation in coming to the conclusion that the appointment of Hon. Justice Abdullahi Mustapha (Rtd.) FCIArb is proper and cannot be faulted by this Court. I agree in toto with learned senior counsel to the Respondent that the allegation of fraud contained in charge NO: FHC/ABJ/CR/86/2009 is yet to be proven before any Court of Law and that the M.O.U. has not been set aside. I also agree with him that the Respondent is not a party to the charge and that the Defendants in the said charge are presumed innocent until proved otherwise. Furthermore, I have critically considered the letters dated 02/06/2009, 19/06/2009 and 12/10/2009 respectively contained at pages 123 – 125 of the Record and again, agree with learned Senior Counsel to the Respondent that in the letters, the Appellant acknowledged and admitted the existence of the M.O.U. and that it’s current attempt to deny is an afterthought.
The cases of ONWARD ENTERPRISES LTD. VS. M.V.M.V. MATRIX (2010) 2 NWLR Part (1179) 530 at 557 – 558 and F.A.T.B. LTD. VS. PARTNERSHIP INVESTMENT CO. LTD. (2001) 1 NWLR (PART 695) 517 cited and relied upon by Appellant’s counsel do not support their course.
My conclusion on this issue is that, I agree with the decision of the lower Court. I find the appointment of Hon. Justice Abdullahi Mustapha (Rtd) as second arbitrator in order and I so hold.
This issue as also resolved against the Appellant and in favour of the Respondent.
Issue 3
Whether the Respondent complied with the provisions of clause 13 of the Memorandum of Understanding before filing it’s originating motion.
Learned Senior Counsel to the Appellant while arguing this issue pointed out that by clause 13 of the M.O.U. the condition to arbitration is that the parties must first resolve their dispute (if any) by negotiation initiated in writing. He submitted that, at the time of the commencement of the arbitral proceedings, a condition precedent for the exercise of the lower Court’s power to appoint a second arbitrator had not been met and urged us to resolve this issue in favour of the Appellant.
For his part, learned senior counsel to the Respondent argued that this issue was never canvassed before the lower Court and it is for the arbitral Tribunal and not the Court to rule on the alleged non-compliance with Clause 13 of the M.O.U. He however stressed that, a reconciliatory negotiation meeting which came to naught was held between parties on 6/10/2009 in respect of the outstanding invoices. To buttress his point, he referred us to:
i) A letter dated 7/10/2009 where the Respondent referred to the reconciliation meeting of 6/10/2009 (See pages 30 – 33 of the Record and
ii) A reply letter dated 12/10/2009 wherein the Appellant refused to honour the Respondent’s request for payment. (See page 125 of the Record).
He drew our attention to the fact that it was after the Appellant terminated the M.O.U by its letter dated 12/10/2009 following failed negotiations that it served its notice of arbitration dated 19/11/2009. He urged us to hold that the Respondent complied with clause 13 of the M.O.U. by first attempting to resolve the dispute by negotiation and that the trial Court was right when it appointed Hon. Justice Abdullahi Mustapha (Rtd) as second arbitrator.
This issue is a very narrow one and it also touches on the jurisdiction of the arbitral Tribunal to decide on issues bordering on its own jurisdiction. The issue whether or not the Respondent complied with a condition precedent to initiating arbitration as set out in clause 13 of M.O.U. is within the purview of the jurisdiction of the Arbitral Tribunal by virtue of Section 12(1) of the Arbitration and Conciliation Act LFN, 2004. This Section undoubtedly confers on an arbitral Tribunal the competence to rule on questions pertaining to its own jurisdiction and on any objections, including the prematurity of the invocation of it’s jurisdiction.
The lower Court was right when it refused to be drawn into the controversy of probing the dispute which falls within the province of the arbitral Tribunal.
This issue is also resolved against the Appellant and in favour of the Respondent.
Before concluding my judgment in this appeal, I find it very expedient to comment on the common trend these days where parties use the machinery of justice to cause injustice to the opposing side. I wish to state clearly that litigants should not use the machinery of justice to perpetuate undue delay, unfairness, injustice and oppression. It becomes very disturbing when counsel aid litigants in doing this. In the instant appeal, counsel ought to know that the right forum to raise its objections is the arbitral Tribunal which the Appellant and the Respondent agreed to from the onset and not come before us to canvass baseless arguments all in a bid to cause delay. This attitude is not right and unexplainable to the common man on the street and I condemn it in very strong terms. It certainty cannot engender public confidence in our justice system. We must never lose sight of the fact that justice is rooted in public confidence and it is essential to social order and security. The moment members of the society lose confidence in the system of administration of justice, a descent to anarchy begins.
Lawyers as operators in the administration of justice owe a duty to the society that nurtured them and made them what they are, to ensure that they conduct their activities in a manner that edifies and brings honour, respect and belief to the justice system. They should not allow themselves to be used by litigants to bring the justice system to disrepute. I wish to commend to counsel the eternal words of a great jurist J. Wesley Mc Williams who wrote in his article titled “The Law as a Dynamic Profession” which was published in an American Bar Association Journal in January 1955 (41 ABA 18) as follows:
“We belong to an ancient, to a great, to an honoured profession. The practice of Law is a worthy calling. It has rewarded us with financial success and with prestige and leadership in our communities. It has given us much happiness and the good life. From it we have received the gratitude and respect of our friends and neighbours whom we have served. Our words afford intellectual pleasure with dignity and independence, in competitions with our fellow Lawyers with whom we have cemented warm friendships and enjoyed happy companionship. For these blessings, we cannot but have a sense of gratitude and of obligation. The most productive, unselfish and wholly satisfying repayment of the obligation is constructive work to increase the effectiveness of our judicial system and the welfare of the profession.”
I adopt the above words of wisdom as mine and only hope that counsel will learn to rise above the primordial impulse of doing whatever is the bidding of their clients without regard to the effect of their actions on the entire administration of justice and the society at large. The instant appeal is a needless one and completely time wasting. I say no more.
In conclusion, I find this appeal completely devoid of merit and it is accordingly dismissed. I affirm the ruling of the lower Court in SUIT NO: FHC/L/CS/448/2010 BETWEEN ANKOR POINTE INTEGRATED LIMITED AND TRANSNATIONAL CORPORATION OF NIGERIA PLC delivered on 29th day of February, 2012. I award costs of N200,000 in favour of the Respondent against the Appellant.
APPEAL DISMISSED.
BIOBELE ABRAHAM GEORGEWILL, J.C.A.: My lord, Folasade Ayodeji Ojo, JCA, had in the lead judgment just delivered, a draft copy of which I was opportune to read in advance, covered the field on all the issues arising for determination in this appeal and holding impeccably that the appeal is devoid of any merit and thus, liable to be dismissed.
My lords, the appointment of a 2nd Arbitrator by the Court below on the application of the Respondent, following the refusal or neglect or failure of the Appellant to do so within the period as prescribed by Law, followed due process and was made on proper consideration of all relevant principles for appointment of arbitrator by the Court. See Magbagbeola V. Sanni (2005) LPELR-1815(SC). See also, Compagnie Generale De Geophysique V. Etuk (2003) LPELR-5516(CA); Bua International Ltd V. Sketchyz Consulting Ltd.(2019) LPELR-47374(CA).
Having ruminated on the salient facts of this appeal, it does appear to me that in truth appeals of this nature ought not to be seen flying at such high altitude, where airplanes are on auto pilot at cruising level, of the penultimate Court in the land because, it makes a complete nonsense of the very reason for resort to Arbitration in the first place, namely for expeditious determination of the rights and liabilities of parties who had voluntarily settled on arbitration as their first, and perhaps final, port of call for the resolution of their disputes, which are mostly commercial in nature, devoid of the legalities, technicalities and protracted nature of litigation in the Courts. But alas, and with hindsight, appeals of this nature, clearly defeat the very purpose of resorting to Arbitration, a prominent form of Alternative Dispute Resolution. It has virtually become as litigious as matters in the Courts, making one to wonder if the difference between Court litigation and arbitral proceedings is not today like the difference between six and half a dozen. So sad!
It is for the above few words of mine and for the fuller reasons adroitly marshaled out in the lead judgment that I too hold that this appeal is bereft of any merit and is thus liable to be dismissed in its entirety. I too hereby so dismiss it and I shall abide by the consequential orders made in the lead judgment, including the order as to cost.
FREDERICK OZIAKPONO OHO, J.C.A.: I had the opportunity of reading the draft of the judgment just delivered by my learned brother, FOLASADE AYODEJI OJO, J.C.A and I am in agreement with the reasoning and conclusions in disallowing the Appeal as completely lacking in merit. I subscribe to the consequential orders made thereto.
Appearances:
ADE ADEDEJI, SAN WITH HIM, BIDEMI ADEMOLA-BELLO For Appellant(s)
AYODELE AKINTUNDE, SAN WITH HIM, INIOLUWA AKINBOBOLA For Respondent(s)