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ZEDICI CAPITAL LTD v. GOVT OF CROSS RIVER STATE OF NIG & ANOR (2021)

ZEDICI CAPITAL LTD v. GOVT OF CROSS RIVER STATE OF NIG & ANOR

(2021)LCN/15845(CA)

In the Court of Appeal

(ABUJA JUDICIAL DIVISION)

On Thursday, September 30, 2021

CA/ABJ/CV/797/2020

Before Our Lordships:

Moore Aseimo Abraham Adumein Justice of the Court of Appeal

Uchechukwu Onyemenam Justice of the Court of Appeal

Elfrieda Oluwayemisi Williams-Dawodu Justice of the Court of Appeal

Between

ZEDICI CAPITAL LIMITEDAPPELANT(S)

And

1. GOVERNMENT OF CROSS RIVER STATE OF NIGERIA 2. ATTORNEY-GENERAL OF CROSS RIVER STATE RESPONDENT(S)

 

RATIO:

MEANING OF ARBITRATION

In plain English Language, “arbitration” means “hearing and determination of a dispute by an impartial referee selected or agreed upon by the parties concerned”; and the award or decision made byan arbitrator upon a disputed matter is “arbitrament” – Collins English Dictionary, page 72. PER ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A. 

MISCONDUCT IN ARBITRAL PROCEEDINGS

It is pertinent at this stage to note that the word “misconduct” which is of wide import really has no specific definition. Be that as it may, the apex Court per Ogundare JSC of blessed memory in the case of TAYLOR WOODROW (NIG) LTD V. SUDDEUTSCHE ETNA-WERK GMBH (1993) LPELR-3139 (SC) painstakingly listed cases that fall under what has been held to be misconduct on the part of an Arbitrator thus:
“…But misconduct occurs, for example: (1) if the arbitrator or umpire fails to decide all the matters which were referred to him; (2) if by his award the arbitrator or umpire purports to decide matters which have not in fact been included in the agreement of reference; for example, where the arbitrator construed the lease (wrongly) instead of determining the rental and the value of buildings to be maintained on the land; or where the award contains unauthorized directions to the parties; or where the arbitrator has power to direct what shall be done but his directions affect the interests of third persons; or where he decided as to the parties’ rights, not under the contract upon which the arbitration had proceeded, but under another contract; (3) if the award is inconsistent, or is ambiguous; or even if there is some mistake of fact, although in that case the mistake must be either admitted or at least be clear beyond any reasonable doubt; (4) if there has been irregularity in the proceedings, as, for example, where the arbitrator failed to give the parties notice of the time and place of meeting, or where the agreement required the evidence to be taken orally and the arbitrator received affidavits, or where the arbitrator refused to hear the evidence of a material witness, or where the examination of witnesses was taken out of the parties’ hands, or where the arbitrator failed to have foreign documents translated or where, the reference being totwo or more arbitrators, they did not act together, or where the umpire, after hearing evidence from both arbitrators received further evidence from one without informing or hearing the other, or where the umpire attended the deliberations of the appeal board reviewing his award: (5) if the arbitrator or umpire has failed to act fairly towards both parties, as, for example, by hearing one party but refusing to hear the other, or by deciding in default of defence without clear warning, or by taking instructions from or taking with one party in the absence of the other or by talking evidence in the absence of one party or both parties, or by failing to give a party the opportunity of considering the other party’s evidence, or by using knowledge he has acquired in a different capacity in such a way as to influence his decision or the course of the proceedings, or by making his award without hearing witnesses whom he has promised to hear, or by deciding the case on a point not put to the parties: (6) if the arbitrator or umpire refuses to state a special case himself or allow an opportunity of applying to the Court for an order directing the statement of aspecial case; (7) if the arbitrator or umpire delegates any part of his authority, whether to a stranger or to one of the parties, or even to a co-arbitrator: (8) if the arbitrator or umpire accepts the hospitality of one of the parties, being hospitality offered with the intention of influencing his decision: (9) if the arbitrator or umpire acquires an interest in the subject matter of the reference, or is otherwise an interested party; (10) if the arbitrator or umpire takes a bribe from either party.”
This Court followed and elaborately listed acts as aforementioned in the case of TRIANA LTD v. UNIVERSAL TRUST BANK PLC 2009 LPELR-8922 CA. per Inyang Okoro, JCA as he then was. PER ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A. 

PARTIES ARE BOUND BY THE TERMS OF THEIR AGREEMENT
It is the position of the law that if parties enter into an agreement, they are bound by its terms.
See the cases of: Hillary Farms Ltd. V. M/V Mahtra- (2007) All FWLR (Pt. 390) 1417 at 1438; ATTORNEY- GENERAL RIVERS STATE V. ATTORNEY-GENERAL, AKWA IBOM STATE & ANOR (2011) LPELR-633 (SC); AFROTEC TECHNICAL SERVICES (NIG) LTD V. MIA & SONS LTD & ANOR (2000) 15 NWLR (PART 692) 730; (2000) 12 SC (Pt. 11) 1; (2000) ALL NLR 533; BOOKSHOP HOUSE LTD V. STANLEY CONSULTANT LTD (1986) NWLR (PART 26) 87 at 97; AMINU ISHOLA INVESTMENT LIMITED v. AFRI BANK NIGERIA PLC (2013) LPELR-20624(SC).
In NIKA FISHING CO. LTD V. LAVINA CORPORATION (2008) 16 NWLR (PART 1114) 509, the Supreme Court per Niki Tobi, (JSC), put the position this way. “It is the law that parties to an agreement retain the commercial freedom to determine their own terms. No other person, not even the Court can determine the terms of contract between parties thereto. The duty of the Court is to strictly interpret the terms of the agreement on its clear terms”.  PER UCHECHUKWU ONYEMENAM, J.C.A

ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A. (Delivering the Leading Judgment): This appeal emanated from the decision of the High Court of the Federal Capital Territory, Abuja, delivered on June 8th, 2020 by Hon. Justice A. O. Otaluka wherein it was held that failure to appoint an Arbitrator in compliance with the law occasioned a miscarriage of justice in the arbitral proceedings and consequently the application for enforcement of the Arbitration Award in favour of the Appellant was refused and an order for fresh arbitration was made.

At the Court below, the Appellant (the Applicant), by a Motion on Notice sought the following orders against the Respondents:
1. An order of this Honourable Court affirming and adopting the Arbitral award made by the Panel of Arbitrators in an Arbitration between ZEDICI CAPITAL LIMITED and GOVERNMENT OF CROSS RIVER STATE OF NIGERIA, ATTORNEY GENERAL OF CROSS RIVER STATE, dated 17th July, 2019, within the jurisdiction of this honourable Court.
2. An order of this honourable Court granting leave to the Applicant for the enforcement of the said final Arbitral award made by the Panel of Arbitrators in an Arbitration between ZEDICI CAPITAL LIMITEDand GOVERNMENT OF CROSS RIVER STATE OF NIGERIA, ATTORNEY GENERAL OF CROSS RIVER STATE, dated 17th July 2019, within the jurisdiction of this honourable Court.
3. And for such further and other orders as this honourable Court may deem fit to make in the circumstances of this suit.

The story of the Appellant is that the two parties had a memorandum of understanding, Exhibit A and a contract agreement, Exhibit B, which had an arbitration clause in case a dispute arose between them which indeed arose and they went to arbitration for resolution. That the final arbitration award was made in favour of the Appellant but the Respondents refused to comply. Hence, it went before the Court below.

On the other hand, the Respondents claim that they were not involved in the appointment and constitution of the arbitral Tribunal that made the award, neither did they participate in the arbitration but became aware of it when they were served with the Motion for the enforcement of the award. The Court in its wisdom refused the application for the enforcement of the award and the Appellant being aggrieved, has approached this Court with its Notice of Appeal filed July 9th, 2020 with four (4) Grounds of Appeal.

The relief being sought in the main, is for an order of Court allowing the appeal, setting aside the judgment/ruling of the lower Court and in its place, make an order granting leave for the Appellant to enforce the Arbitral Award.

Briefs of argument were filed and exchanged by the parties according to the Rules of this Court. The Appellant’s brief filed November 23rd, 2020 and the Reply brief filed March 26th, 2021 were settled by Mr. M. A. Ofeoshi Esq. who argued the appeal on behalf of the Appellant and urged that the appeal be allowed. The Respondents’ brief as amended was filed February 23rd 2021. Mr. Tawo E. Tawo SAN argued the appeal on the Respondent’s behalf and urged that the appeal be dismissed.

The parties raised the following Issues for the determination of the instant appeal.

APPELLANT’S ISSUES
i. Whether or not the Court order for a fresh Arbitration and dismissal of the application of Appellant is justifiable when there was no application for such an order (Ground 3).
ii. Whether the decision of the lower Court in setting aside the Arbitration Award is in accordance with the governing principles in arbitration and whether it has not occasioned a miscarriage of justice (Ground 1).
iii. Whether considering the entire circumstance of this case, the judgment of the trial Court is not liable to be set aside and with an Order of this Honourable Court granting the relief of the appellant enforcing the Award forthwith (Grounds 2 and 4).

RESPONDENTS’ ISSUES
i. Whether having regard to the circumstances, facts of this case and the law, the decision of the lower Court dismissing the Appellant’s application for the adoption and enforcement of the arbitral award is not justifiable wherefore occasioned a miscarriage of justice.
ii. Whether having dismissed the Appellant’s application for the enforcement of the arbitral award the order setting aside the award and for a fresh arbitration by the lower Court was inappropriate to warrant this Honourable Court to set aside the order aforesaid and in its stead order or grant the application for the enforcement of the award.

​Having very carefully gone through the Record and the two sets of Issues by the parties, one is inclined to formulate a single issue thus, satisfied that it will justly and fairly determine the appeal once and for all:
“Whether or not the Court below was right when it refused the Appellant’s application for the adoption and enforcement of the arbitral award and ordered parties to resume a fresh arbitration”.

SUBMISSION MADE ON BEHALF OF THE APPELLANT
The position of the learned Appellant’s Counsel is that the parties submitted voluntarily to arbitration and are therefore bound and in support cited the case of C. N. ONUSELOGU ENTERPRISES LTD. V. AFRIBANK PLC. 2006 ALL FWLR PT. 310 1744 CA. He submitted that the manner of appointing the first three Arbitrators slightly differs from that of a substitute arbitrator as provided for by Section 11 of the Arbitration and Conciliation Act (ACA). Further that, the two remaining Arbitrators after the resignation of Mrs. Nella Rabana, SAN are by both parties since Mrs. Rabana SAN participated in the appointment of one of the two remaining arbitrators and it was the remaining two Arbitrators that appointed the third arbitrator who chaired the proceedings. That, that was the procedure, as there was no provision in the Concession Agreement for the appointment of a substitute Arbitrator. Therefore, the appointment of the third arbitrator was in order, he argued and the appointment on its own cannot be a basis for setting aside the award, there being no fraud or misconduct of Arbitrators. In support, he cited the cases of VITAMALT V. ABDULLAHI 2006 ALL FWLR PT. 341 1304 and ARAKA V. EJEAGWU 2001 FWLR PT. 36 830 SC.

The learned Counsel submitted further that, the law is to the effect that an application to set aside an award must be made before the successful party takes step to enforce the award which was not the case herein and cited in support the case of IHUNWO V. IHUNWO & ORS 2004 ALL FWLR PT. 199 1444. Further that, at the time of filing the application for enforcement of the award, it had become the judgment of the Court and the Court’s power to set it aside or interfere did not exist by virtue of Order 19 Rule 11 (g). He argued that the Respondents were sent reminders in respect of a substitute Arbitrator and that they waived their right by not objecting to non-compliance with the provision of the law under Section 33 of the ACA. Further that the Court was wrong to have relied on the cases of BARR. MRS AMANDA PETERS PAM V. ALL NIGERIA PEOPLES PARTY ORS. 2007 LPELR 9000 CA, OKAFOR V. A.G. ANAMBRA STATE 1991 6 NWLR PT. 200 659 and CHIEF ETETE S. OWOH & ORS V. CHIEF KINGSTONE U. ASUK & ANOR. 2008 LPELR 2853. He cited instead the cases of MUTUAL LIFE AND GENERAL INSURANCE LTD. V. IHEME 2014 1 NWLR PT. 1389 671 CA and AYE TENUS ENT. LTD. V. SAIPEN NIG. LTD. 2009 2 NWLR PT. 1126 483 as applicable.

The learned Counsel submitted that the Court was wrong to have made an order that was not sought by the party, not being a father Christmas and cited the cases of ADENIJI V. ADENIJI 1972 4 SC 10 and AJAYI V. TEXACO 1987 1 ALL NLR PT. 1 340 SC. He argued that it was wrong for the Court to have treated the case as one of the ordinary day to day matters before it as arbitration proceedings are sui generis and to have ignored the latitude of powers vested in Arbitrators by Section 15(2) & (3) of the ACA.
He submitted further that, the Court had no power to set aside the award when it did and therefore the proceedings and order are all nullity and cited in support the case of MADUKOLU V. NKEMDILIM 1962 1 ALL NLR PT. 4 581. And that,the Court misconceived the law and facts and found wrongly therefore. In conclusion, he urged that the appeal be allowed and the order of Court be set aside.

SUBMISSION MADE ON BEHALF OF THE RESPONDENTS
The learned Respondents’ Counsel conceded that the initial arbitral Tribunal was according to the parties’ arbitration agreement and Section 7(2) and Section 11 of the ACA but that another Tribunal that was purportedly constituted upon the resignation of the said Mrs. Rabana SAN was not in keeping with the parties’ arbitration agreement and the ACA. That it is not correct that Mrs. Rabana SAN was appointed by a third party and therefore the appointment of the substitute was improper. Further that the Respondents were never given any notice to appoint a substitute Arbitrator. He argued that the arbitral proceedings grossly violated Section 36(1) of the 1999 Constitution of the Federal Republic of Nigeria as amended, Section 7(2) (a) and (b) and 14 of the ACA, Article 7 (1) and (3) of the Arbitration and Conciliation Rules and Article 16.2.1 of the Concession Agreement between the parties. He contended that Section 14 of the ACA which provides for equal treatment for the parties was violated and the said order for direction cannot override the agreement of the parties. Further he argued that the Respondents never participated in the arbitration proceedings and could therefore not be said to have waived their right under Section 33 of the ACA.

The learned Counsel submitted that the award had to be set aside on the ground of incurable default in the appointment of the replacement Arbitrator as the irregularity was substantial, to the root and cited in support the cases of MADUKOLU V. NKEMDILIM supra, BARR MRS AMANDA PETERS PAM V. ALL NIGERIAN PEOPLES PARTY & ORS supra. Further that where substantial irregularity is apparent, the Court can properly order a retrial and cited in support the case of XTOUDOS SERVICES NIG. LTD. V. TAISEI WA LTD 2006 SC 200.

​He argued that an award may be set aside by virtue of Section 48 (a) (iii) and (vi) and that since the Court found that the arbitration proceedings and award were a nullity and dismissed the motion, the necessary consequence in that regard was to set aside the award and order fresh arbitration. And that lack of motion for retrial or fresh arbitration before the order by the Court has not occasioned miscarriage of justice to the Appellant. The order for fresh arbitration was justified being consequential he submitted and cited in support the cases of AG, LAGOS STATE V. AG. FED. 2004 11-12 SC 85 and AWONIYI V. REG. TRUSTEES OF AMORC 2000 6 SC PT. 1 1103. He asserted that the Respondents also filed a separate Suit, FHC/CA/97/19 GOVERNMENT OF CROSS RIVER STATE & ANOR V. ZEDICI CAPITAL LIMITED timeously at the Federal High Court Calabar to set aside the award and never waived their right to object to the order for direction, the appointment of substitute Arbitrator or the jurisdiction of the Tribunal. He submitted that the invocation of Section 15 of the Act of this Court to rehear the matter does not arise as the judgment of the Court is well founded in law and justice. In conclusion, he urged that the appeal be dismissed.

THE POSITION OF THE COURT
I have very carefully read the submissions by both sides including the Appellant’s Reply, for and against this appeal and the Record herein. Having so carefully done so, I shall proceed in the determination of the instant appeal with the consideration of the sole Issue already adopted which is hereunder reproduced for ease of reference:
Whether or not the Court below was right when it refused the Appellant’s application for the adoption and enforcement of the arbitral award and ordered parties to resume a fresh arbitration.

The arbitral award that was set aside herein was as a result of a contract between the Appellant and the Respondents for the management of Obudu Mountain Resort by the Appellant under a Rehabilitate, Finance, Operate and Transfer PPP Model, to be performed in Cross River State.

​It is pertinent to state that the parties following the dispute between them, submitted to arbitration as contained in the Concession Agreement, Art. 16.2 of Exhibit B which states thus:
“Any Dispute which is not resolved amicably as provided in Article 16.1 shall be referred to arbitration under the Arbitration Act, Laws of the Federation of Nigeria 2004. The arbitration shall be by a panel of three arbitrators, one to be appointed by each party and the third to be appointed by the two arbitrators appointed by the parties. A party requiring arbitration shall appoint an arbitrator in writing, inform the other party about such appointment and call upon the other party to appoint its arbitrator. If the other party fails to appoint its arbitrator, the party appointing arbitrator shall take steps in accordance with Arbitration Act.”

The contention of the Respondents as contained on page 548 of the Record against the application by the Appellant for the adoption and enforcement of the arbitral award was that “they were not involved in the appointment and constitution of the Arbitral Tribunal as required by Section 7(2) (a) ACA which states as follows”:
“Where no procedure is specified under Subsection (1) of this section-
b) In case of arbitration with three arbitrators, each party shall appoint one arbitrator and the two thus appointed shall appoint the third, so however, that-
iii) If a party fails to appoint the arbitrator within thirty days of receipt of request to do so by the other party; or
iv) 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.”

The Court found as follows in its evaluation of the evidence before it:
On pages 557-558 of the Record as follows:
“There is nothing in the Act and Rules from which it can be inferred that a party can appoint an arbitrator for or on behalf of another party, that would be a contravention of the Arbitration and Conciliation Act and its Rules …
Again the procedure taken by the arbitration Tribunal in appointing Mrs. Aumsi Chidinma Stella in replacement of Mrs. Nella Andem-Rabana (SAN) was in total contravention of the provisions of Section 7(2) (a) & (b) Arbitration and Conciliation Act 2004 and Article 7(2) & (3) of the Rules. There was no request/notification given to the Respondents for the appointment and replacement of Mrs. Nella Andem- Rabana (SAN) within 30 days. This is a very serious procedural irregularity affecting the appointment and/or reappointment of Respondents’ arbitrator”

​The provisions of Section 7 (1) and (2) are instructive with regard to the procedure for appointment following the withdrawal of the Respondents’ Arbitrator, Mrs. Andem-Rabana. The provisions are as follows: Section 7 (1) “Request to the party who has no arbitrator to appoint one, within 30 days of the notification.
(2) If after the 30 days of notification, the party fail (sic) to appoint, it becomes the prerogative of the Court on application of ANY of the parties to arbitration to appoint the arbitrator”.

The Court found and rightly in my view humbly on page 556 thus:
“…Assuming the conduct of the respondent gave an impression that he (sic) is not ready to proceed with the appointment, it was the duty of the applicant to invoke Section 7 (2) (a) Arbitration and Conciliation Act and Art 7 (1) and (2) of the Rules.
The Court therefore concluded and rightly thus on page 559 of the Record:
“This irregularity in the appointment is an incurable default. Thus, I hold that, failure to appoint arbitrator in compliance with the law has occasioned a miscarriage of justice in the arbitral proceedings”.

And in consequence refused the Appellant’s application to adopt and enforce the arbitral award.

​It is pertinent at this stage to state that misconduct on the part of an Arbitrator or Arbitrators as in the instant appeal include what transpired herein where the remaining two Arbitrators failed to comply with the provisions guiding their activities which were clear and unambiguous as to the necessary steps to take when a party fails or appears not willing to appoint as it ought to. It did not lie in the hands of the other two Arbitrators to appoint for the Respondents another Arbitrator in the place of Mrs. Andem-Rabana. In my view and humbly, they misconducted themselves therefore.

It is pertinent at this stage to note that the word “misconduct” which is of wide import really has no specific definition. Be that as it may, the apex Court per Ogundare JSC of blessed memory in the case of TAYLOR WOODROW (NIG) LTD V. SUDDEUTSCHE ETNA-WERK GMBH (1993) LPELR-3139 (SC) painstakingly listed cases that fall under what has been held to be misconduct on the part of an Arbitrator thus:
“…But misconduct occurs, for example: (1) if the arbitrator or umpire fails to decide all the matters which were referred to him; (2) if by his award the arbitrator or umpire purports to decide matters which have not in fact been included in the agreement of reference; for example, where the arbitrator construed the lease (wrongly) instead of determining the rental and the value of buildings to be maintained on the land; or where the award contains unauthorized directions to the parties; or where the arbitrator has power to direct what shall be done but his directions affect the interests of third persons; or where he decided as to the parties’ rights, not under the contract upon which the arbitration had proceeded, but under another contract; (3) if the award is inconsistent, or is ambiguous; or even if there is some mistake of fact, although in that case the mistake must be either admitted or at least be clear beyond any reasonable doubt; (4) if there has been irregularity in the proceedings, as, for example, where the arbitrator failed to give the parties notice of the time and place of meeting, or where the agreement required the evidence to be taken orally and the arbitrator received affidavits, or where the arbitrator refused to hear the evidence of a material witness, or where the examination of witnesses was taken out of the parties’ hands, or where the arbitrator failed to have foreign documents translated or where, the reference being to two or more arbitrators, they did not act together, or where the umpire, after hearing evidence from both arbitrators received further evidence from one without informing or hearing the other, or where the umpire attended the deliberations of the appeal board reviewing his award: (5) if the arbitrator or umpire has failed to act fairly towards both parties, as, for example, by hearing one party but refusing to hear the other, or by deciding in default of defence without clear warning, or by taking instructions from or taking with one party in the absence of the other or by talking evidence in the absence of one party or both parties, or by failing to give a party the opportunity of considering the other party’s evidence, or by using knowledge he has acquired in a different capacity in such a way as to influence his decision or the course of the proceedings, or by making his award without hearing witnesses whom he has promised to hear, or by deciding the case on a point not put to the parties: (6) if the arbitrator or umpire refuses to state a special case himself or allow an opportunity of applying to the Court for an order directing the statement of a special case; (7) if the arbitrator or umpire delegates any part of his authority, whether to a stranger or to one of the parties, or even to a co-arbitrator: (8) if the arbitrator or umpire accepts the hospitality of one of the parties, being hospitality offered with the intention of influencing his decision: (9) if the arbitrator or umpire acquires an interest in the subject matter of the reference, or is otherwise an interested party; (10) if the arbitrator or umpire takes a bribe from either party.”
This Court followed and elaborately listed acts as aforementioned in the case of TRIANA LTD v. UNIVERSAL TRUST BANK PLC 2009 LPELR-8922 CA. per Inyang Okoro, JCA as he then was.

Given the foregoing position of the Court which in my considered view is in line with the law, one is unable to disturb the findings of the Court below.

In the result, this appeal cannot be allowed, it therefore fails. Consequently, the ruling of the High Court of the Federal Capital Territory, Abuja, delivered on June 8th 2020 by Hon. Justice A. O. Otaluka is hereby affirmed.

MOORE ASEIMO ABRAHAM ADUMEIN, J.C.A.: I had a preview of the judgment just delivered by my learned brother, E. O. Williams-Dawodu, JCA. I agree that the appeal is devoid of merit and it ought to be dismissed.

The appellant, as the applicant in the lower Court, by an originating motion on notice sought for orders affirming, adopting and enforcing a final arbitral award made by a panel of arbitrators. The respondents’ opposition to the appellant’s application was anchored principally on the following grounds:
1. That they nominated an arbitrator who was rejected by the appellant.
2. That the appellant requested them to nominate another arbitrator for the arbitration.
3. That the appellant failed, refused or neglected to await their nomination or appointment of an arbitrator to replace their arbitrator, who had been rejected by the appellant.
4. That they were not involved in the appointment or constitution of the arbitral Tribunal which made the award.
5. That they were not given an opportunity of a hearing in the arbitral proceedings and that they only became aware of the arbitral award when the appellant’s originating motion on notice was served on them.

See the respondent’s counter-affidavit which spans pages 167 to 185 of the record of appeal.

In its “judgment/ruling” the trial Court reviewed the affidavit evidence of the contending parties and found, on pages 550 to 552 of the record of appeal, as follows:
“Now from the records and evidence before me, the notice of arbitration and appointment of applicant’s arbitrator Mr. Nonye Agomuo was given by the Applicant on 13th July, 2018 and received by the respondent on 17/7/2018 at their Asokoro Government House, Asokoro, Abuja. It is marked as Exh Z1 annexed to the applicant’s further affidavit dated 9/9/2018.
Paragraph 2 of Exh Z1 requested the respondent to appoint their own arbitrator.
On 5/9/2018, the respondent responded to Exh Z1 by appointing Mrs. Nella Andem- Rabana (SAN). Having nominated two arbitrators to wit: Mr. Nonye Agomuo and Mrs. Nella Andem-Rabana (SAN), the Arbitration Registrar wrote the parties informing them of the appointment of Mr. Ayodele Mosebolatan David, Esq. as the 3rd arbitrator in compliance with Section 7(2)(a) Arbitration and Conciliation Act on 30th January, 2019 which states:
“In the … of an arbitration with three arbitrators, each shall appoint one arbitrator and the two thus appointed shall appoint the third …”
There was no indication that Mr. Nonye Agomuo and Mrs. Nella Andem-Rabana (SAN) failed to agree in the appointment of Mr. Ayodele Mosebolatan David. In other words, there was due compliance with Section 7(2)(a) Arbitration and Conciliation Act and the composition of the arbitrators was three as stipulated by the Act and Section 7(1) of the Arbitration Rules of the First Schedule.
On 6th September, 2018; the parties issued out an “Arbitral Tribunal’s Order for Directions” in accordance with Section 20: (1)(b)(c), Arbitration and Conciliation Act, to both parties. Exh Z2 showed that the respondent received the said copy on the same 6th September, 2018.
For clarity purposes, Section 20 Arbitration and Conciliation Act, calls for “hearing and written proceedings”, which the parties complied with by issuance of Exh Z2(a) attached to ‘further affidavit in support of Motion on Notice dated 9/9/19. “Documents ONLY Arbitration with a few hearing as provided in Arbitration and Conciliation Act (2004), Section 20 (b) & (c) Arbitral Tribunal’s Order for Directions”.
By virtue of Exh Z2(a), the parties to my mind have agreed to abide by the decision of the Tribunal of their own choice and selection unless something radically and viciously went wrong in the proceedings – Mutual Life & Gen. Ins. Ltd v. lheme (2014) 1 NWLR (Pt. 1389) 671. Exh Z2(a) stands out as the arbitral procedure and guideline.”

The trial Court, per Honourable Justice A. O. Otaluka, after considering relevant provisions of the Arbitration Conciliation Act, 2004 and the Rules thereto, then proceeded to hold, on pages 554 to 555 of the record, that:
“In the instant case, the evidence before me is that three arbitrators, Mr. Nonye Agomuo, for the Applicant, Mrs. Nella Andem-Rabana (SAN), for the Respondents were duly appointed and they in accordance with the Arbitration and appointed Mr. Ayodele Mosebolatan David, Esq. as the chairman/ leader of Tribunal.
The Tribunal commenced hearing, until 10th June, 2019, when Mrs. Nella Andem-Rabana (SAN), withdrew from the Tribunal vide Exh Z2 attached to “Further Affidavit in support of Motion on Notice” consequent upon non-compliance with Section 8(1)(2) Arbitration and Conciliation Act, 2004. The Respondent appointed arbitrator, Mrs. Nella Andem- Rabana (SAN), failing to disclose her interest, she was challenged by the other arbitrators which led to her withdrawal from the Tribunal.
Upon withdrawal of Mr. Nella Andem-Rabana (SAN), the Respondent was left without any representing arbitrator in accordance with Section 7(2)(a) Arbitration and Conciliation Act 2004. Thus, where such vacuum occurs, the parties also having consented to the provisions of Arbitration and Conciliation Act, and Arbitration and Conciliation Rules, by virtue of paragraph 20 of Exh Z2(a) (Arbitral Tribunal Order for Directions) are bound to follow the procedure as prescribed in Section 7 (2) Arbitration and Conciliation Act 2004 and Article 7(2) & (3) of the Rules.
By virtue of Section 7 (2)(a) Arbitration and Conciliation Act 2004 and Article 7(1) & (2) of the Arbitration and Conciliation Act and Rules, it is the duty of each party to appoint his own arbitrator.”

​In plain English Language, “arbitration” means “hearing and determination of a dispute by an impartial referee selected or agreed upon by the parties concerned”; and the award or decision made by an arbitrator upon a disputed matter is “arbitrament” – Collins English Dictionary, page 72.

In this case, upon the disqualification of Mrs. Nella Andem-Rabana (SAN), or upon her withdrawal as the arbitrator appointed by the respondents, in accordance with the agreement or contract between the parties, the arbitral Tribunal ought not to have proceeded with the arbitration without the respondents’ participation, when the respondents had not waived their right of participation. The absence of an arbitrator appointed by the respondents vitiated the entire arbitral proceedings and the award purportedly made by the panel of arbitrators.

Having regard to the facts and circumstances of this case, the purported arbitration was not consensual. It is settled law that a very significant feature of arbitration is that it is consensual. See Mainstreet Bank Capital Ltd. & Anor. v. Nigeria Reinsurance Corporation Plc (2018) 14 NWLR (Pt. 1640) 423 at 444, per Kekere-Ekun, JSC; where the Supreme Court stated as follows:
“A major feature of arbitration is that it is consensual. The parties have a choice. They may decide to have their dispute resolved by aCourt of law or they may choose to have it decided by an arbitrator.”
See also Ras Palgazi Construction Co. Ltd. v. Federal Capital Development Authority (2001) 10 NWLR (Pt. 722) 559; (2001) LPELR-2941 (SC).

On the definition and meaning of “arbitration agreement” the Supreme Court held as follows:
“An arbitration agreement is an agreement by which two or more parties agree that present or future disputes shall be resolved by arbitration. An arbitration clause is often included as part of the terms of a broader contract. Black’s Law Dictionary, 8th edition, defines “arbitration” as:
“a method of dispute resolution involving one or more neutral third parties who are usually agreed to by the disputing parties and whose decision is binding.”
– Per Kekere-Ekun, JSC in Mainstreet Bank Capital Ltd. v. Nigeria Reinsurance Corporation Plc (supra).
See also the cases referred to by His Lordship: NNPC v. Lutin Investments Ltd. & Anor. (2006) 2 NWLR (Pt. 965) 506; Magbagbeola v. Sanni (2005) 11 NWLR (Pt. 936) 239 and Kano State Urban Devt. Board v. Fanz Const. Co. Ltd. (1990) 4 NWLR (Pt. 142) 1.

​And where parties opt for arbitration, instead of civil litigation, they are at liberty to choose how the arbitration is conducted; the duty of the Court is to respect and pronounce upon the wishes of the parties, and “not to make a contract for them or rewrite the one they already made for themselves” – per Kekere-Ekun, JSC in Mainstreet Bank Capital Ltd. v. Nigeria Reinsurance Corporation Plc (supra). See further the case of Owoniboys Tech. Services Ltd. v. U.B.N. Ltd. (2003) 15 NWLR (Pt. 844) 5445; Sona Breweries Plc v. Peters (2005) 1 NWLR (Pt. 908) 478 and J.F.S. Investments Ltd. v. Brawal Line Ltd. &Ors. (2010) 18 NWLR (Pt. 1225) 495.

​The agreement between the parties, in this case, was tendered by the appellant as exhibit “B”. Article 16 of the agreement – exhibit “B” deals with dispute resolution and it provides, inter alia, as follows:
“16.1 Amicable Resolution
Save where expressly stated otherwise in this Agreement, any dispute, difference or controversy of whatever nature howsoever arising under, out of or in relation to this Agreement, shall have the party notify the other (the Dispute) in writing in the first instance shall be attempted to be resolved amicably by the Parties.
16.2 Arbitration
16.2.1 Arbitrators: Any Dispute which is not resolved amicably as provided in Article 16.1 shall then be referred to arbitration under the Arbitration Act, Laws of the Federation of Nigeria 2004. The arbitration shall be by a panel of three arbitrators, one to be appointed by each party and the third to be appointed by the two arbitrators appointed by the Parties. A Party requiring arbitration shall appoint an arbitrator in writing, inform the other Party about such appointment and call upon the other Party to appoint its arbitrator. If the other party fails to appoint its arbitrator, the Party appointing arbitrator shall take steps in accordance with Arbitration Act.”
(Underlining by me for the sake of emphasis)

​By the clear, plain and unambiguous arbitration agreement of the parties, they agreed that the arbitration shall be by a panel of three arbitrators – one to be appointed by each party and third arbitrator appointed by the two arbitrators appointed by the disputing parties. The arbitrament, which is the subject of the appellant’s application in the trial Court, was not made by apanel of arbitrators appointed in accordance with or pursuant to the arbitration agreement between the parties, as the respondents were inexcusably or unjustifiably denied their right to appoint their own arbitrator.

It is for the foregoing reasons and better and encompassing reasons given in the leading judgment that I hereby dismiss this appeal.
I affirm the decision of the trial Court.

UCHECHUKWU ONYEMENAM, J.C.A.: I studied before now, the lead judgment just delivered by my learned brother, E. O. WILLIAMS-DAWODU, JCA.

I agree with the conclusion of my learned brother in the lead judgment that the procedure taken by the Arbitration Tribunal in appointing Mrs. Aumis Chidinma Stella in replacement of Mrs. Nella Andem-Rabana (SAN) was in contravention of the provisions of Section 7 (2) (a) & (b) Arbitration and Conciliation Act 2004 and Article 7(2) & (3) of the Rules.

Let me quickly add here that Article 16.2 of Exhibit B provides thus:
“Any Dispute which is not resolved amicably as provided in Article 16.1 shall be referred to arbitration under the Arbitration Act, Laws of the Federation of Nigeria 2004. Thearbitration shall be by a panel of three arbitrators, one to be appointed by each party and the third to be appointed by the two arbitrators appointed by the parties. A party requiring arbitration shall appoint an arbitrator in writing, inform the other party about such appointment and call upon the other party to appoint its arbitrator. If the other party fails to appoint its arbitrator, the party appointing arbitrator shall take steps in accordance with Arbitration Act”.

It is the position of the law that if parties enter into an agreement, they are bound by its terms.
See the cases of: Hillary Farms Ltd. V. M/V Mahtra- (2007) All FWLR (Pt. 390) 1417 at 1438; ATTORNEY- GENERAL RIVERS STATE V. ATTORNEY-GENERAL, AKWA IBOM STATE & ANOR (2011) LPELR-633 (SC); AFROTEC TECHNICAL SERVICES (NIG) LTD V. MIA & SONS LTD & ANOR (2000) 15 NWLR (PART 692) 730; (2000) 12 SC (Pt. 11) 1; (2000) ALL NLR 533; BOOKSHOP HOUSE LTD V. STANLEY CONSULTANT LTD (1986) NWLR (PART 26) 87 at 97; AMINU ISHOLA INVESTMENT LIMITED v. AFRI BANK NIGERIA PLC (2013) LPELR-20624(SC).
In NIKA FISHING CO. LTD V. LAVINA CORPORATION (2008) 16 NWLR (PART 1114) 509, the Supreme Court per Niki Tobi, (JSC), put the position this way. “It is the law that parties to an agreement retain the commercial freedom to determine their own terms. No other person, not even the Court can determine the terms of contract between parties thereto. The duty of the Court is to strictly interpret the terms of the agreement on its clear terms”. 

Exhibit B having been freely entered into by the parties is therefore binding on both the Appellant and the Respondents. I also hold that the failure to appoint Mrs. Aumis Chidinma Stella as an arbitrator in compliance with the arbitration clause in Exhibit B as provided above and in compliance with the relevant law has occasioned a miscarriage of justice in the arbitral proceedings. Consequently, this appeal is bound to fail and the same is accordingly dismissed.

​I too affirm the judgment of the High Court of Justice Federal Capital Territory delivered on 8th June, 2020 in Suit No: FCT/HC/M/8255/19 by A. O. Otaluka J.

Appearances:

Mr. M. A. Ofeoshi, with him, Mr. Chuka Favour Ben For Appellant(s)

Mr. Tawo E. Tawo, SAN, with him, IfekwabaAleke, Benjamin l. Ogar and Joshua Komolafe For Respondent(s)