CREWSOLUTIONS LTD v. PELLEGRINI NIG. CATERING LTD
(2020)LCN/13960(CA)
In The Court Of Appeal
(LAGOS JUDICIAL DIVISION)
On Monday, February 10, 2020
CA/L/284/2013
Before Our Lordships:
Abimbola Osarugue Obaseki-Adejumo Justice of the Court of Appeal
Jamilu Yammama Tukur Justice of the Court of Appeal
Gabriel Omoniyi Kolawole Justice of the Court of Appeal
Between
CREWSOLUTIONS LIMITED APPELLANT(S)
And
PELLEGRINI NIGERIA CATERING LIMITED RESPONDENT(S)
RATIO
WHETHER OR NOT THERE MUST BE AN EXISTING DISPUTE FOR THE QUESTION OF ARBITRATION TO ARISE
For the question of arbitration to arise, there must be in actual fact, an existing dispute referable. This Court has held in UNITED WORLD LTD INC. V. MOBILE TELECOMMUNICATIONS SERVICES LTD (1998) LPELR 13291(CA) that:-
“…when a party to an agreement with a reference to arbitration has compromised his position by being signatory to the agreement the contents of which give numerous alternative remedies to the other party, other than resort to arbitration, and by evincing an intention to compromise to an act of the party which he is complaining about, he has robbed himself of competence or premise of referring the subject matter of complaint to an arbitration. It seems to me that the subject matter is one that cannot be referred for arbitration having regards to what I have observed. There is hardly anything left to refer.” Per IGNATIUS CHUKWUDI PATS-ACHOLONU, J.C.A (Pp. 3-18, paras. C-D).
See also KANO STATE URBAN DEVELOPMENT BOARD V. FANZ CONSTRUCTION CO. LTD (1990) LPELR-1659(SC) where the Supreme Court held thus:-
“…Similarly, there is no dispute within the meaning of an agreement to refer disputes where there is no controversy in being, as when a party admits liability but simply fails to pay, or when a cause of action has disappeared owing to the application, where it now continues to apply, of the maxim, actio persona lis mortitur cum persona…” Per ABDUL GANIYU OLATUNJI AGBAJE, J.S.C (Pp. 58-60, paras. C-B). PER TUKUR, J.C.A.
WHETHER OR NOT COST FOLLOWS EVENT
I am of the firm view that cost follows events and a Court of competent jurisdiction is vested with judicial discretion to award costs to compensate the winning party in a suit before it except in circumstances where a dispute which is brought before the Court for adjudication is wrongly decided. PER TUKUR, J.C.A.
JAMILU YAMMAMA TUKUR, J.C.A. (Delivering the Leading Judgment): The present appeal stems from the Ruling of the High Court of Lagos State, presided over by Honourable Justice G.M. Onyeabo, delivered on 1st of March, 2013. In suit No: LD/796/2012 the learned trial judge had refused to grant the application of the Appellant for stay of further proceedings in the suit at the lower Court pending referral of the dispute to arbitration. Being dissatisfied with the Ruling of the learned trial judge, the Appellant filed a Notice of Appeal on 15th day of March, 2013, challenging the Ruling of the lower Court.
FACTS
The Respondent who was the Claimant at the lower Court had entered into an agreement called the “Frame Agreement” with the Appellant thereon the Defendant at the lower Court, sometime in July, 2009. After some time, the Respondent wrote to the Appellant of its intention to pull out of the Frame Agreement. Subsequently, the Appellant agreed to a meeting which led to the “Memo of Agreement” dated 23rd February, 2012 which is exhibit E12. By this Memo of Agreement both parties agreed to await the Appellant’s communication as to
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its payment plan in respect of the accounts presented which is exhibit E13. Further to the Memo of Agreement, a letter dated 25th February, 2012 by the Appellant was sent to the Respondent which stated among other things that it would pay the Respondent the outstanding amounts owed to it in four equal monthly installments commencing from the end of March, 2012. When nothing more was heard from the Appellant, the Respondent commenced this suit in May, 2012 at the lower Court to recover the sum as shown in exhibit E13. Consequently, the Appellant brought an application before the lower Court contending that the matter ought to be first referred to arbitration. Upon hearing the application, the lower Court in its Ruling held that the application fails and same was accordingly dismissed. The Appellant, being aggrieved and dissatisfied with the decision of the lower Court, has exercised its constitutional right of appeal to ventilate its grievance before this Court by filing a notice of appeal which is dated 15th of March, 2013.
In line with the practice in this Court, parties filed and exchanged their respective briefs of argument. In the Appellant’s
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Brief of Argument which is dated 25th July, 2013 but filed 26th July, 2013, the following issues were formulated for the determination of this appeal to wit:-
1. “Whether the decision by the learned trial judge that the Respondent can maintain the action herein against the Appellant without firstly submitting the dispute between them to arbitration is not wrongful.”
2. “Whether it was right for the learned trial judge to have awarded costs against the Appellant herein.”
Whereas, the Respondent’s Brief of Argument is dated 22nd August, 2013 but filed 23rd August, 2013 wherein the following issues were formulated thus:-
1. “Whether or not the Memorandum of Agreement dated 23rd February, 2012 entered into by the Respondent/Claimant and the Appellant/Defendant has overtaken the Frame Agreement of 8th July, 2009 and constitutes a settlement of this matter.
2. Whether or not in view of the Accounts stated by the Respondent/Claimant and accepted by the Appellant/Defendant there is still a dispute referable to arbitration.
3. Whether or not in the light of the Agreement of 23rd February, 2012, the
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provision of clauses 12.2.2 and 12.2.3 of the Frame Agreement and the circumstances of this case, there is a dispute referable to arbitration.”
An examination of the issues distilled by the parties reveal that they are substantially intertwined and substantially the same.
The three issues distilled by the Respondents can be conveniently accommodated under issue 1 formulated by the Appellant.
It is against that background that I will be guided in the determination of the appeal by the issues distilled by the Appellant.
SUBMISSIONS OF COUNSEL ON THE ISSUES
On issue 1, learned counsel for the Appellant argued that the trial Court stated in its Ruling that “Exhibit A” does not oust the jurisdiction of the lower Court and that the Respondent could approach the Court without first submitting to arbitration. Counsel thus, submitted that the whole decision by the lower Court in this matter revolved round the theme so pursued by the lower Court therein as contained in the said statement made on page 136 of the record. He further submitted that the decision of the lower Court is wrongful as it emanated from the way the lower Court set
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out the issues, established facts and evaluated the facts before it. It is also the submission of the learned counsel that the lower Court wrongly took the impression and so expressed same in paragraph 4 of the Ruling on page 137 of the record, that it is clear that no further discussions were envisaged between the parties after “Exhibit E13”. Learned counsel thus, urged this Court to resolve the issue herein in favour of the Appellant and allow this appeal.
On issue 2 learned counsel for the Appellant argued that where a dispute is wrongly decided by a Court as herein, the cost, if any awarded, will not be meritorious. He accordingly, urged this Court to resolve all issues herein in favour of the Appellant.
Learned counsel for the Respondent, on his part submitted that based on the Memo and Appellant’s letters, there was clear and unambiguous admission and settlement of this matter. He further submitted that the Appellant could not have undertaken to pay, as it did, if the indebtedness is not clear and admitted. Accordingly, it is the submission of learned counsel that there was a settlement by the Appellant and Respondent following
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the termination of the contract and that the settlement was contained in the Memorandum of Agreement dated 3rd February, 2012 signed by both parties and further confirmed by the Appellant through its letter dated 23rd February, 2012.
On issue 2, as formulated by the learned counsel, it is his submission that there is an “account stated” and admitted by the parties and that under common law doctrine of “account stated”, there is no longer dispute between the parties, as such disputes were resolved in the account stated, and there is therefore, no dispute referable to arbitration. He cited The Halsbury’s Laws of England by Lord Hailsam of St Marylebone 4th Edition Volume 9 Published 1974 Butterworths London @ Page 409, Paragraphs 591 at Page 698 and ABAJUE V. ADIKPA (1994) 1 NWLR (Pt. 322) @ page 628-629. He thus, submitted that there is no dispute referable to arbitration between both parties.
With regard to issue 3, learned counsel submitted that there is no dispute in this matter that can be referred to arbitration as parties having agreed and entered into a Memorandum of Agreement for that purpose there no longer exist a
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dispute for an arbitrator to consider. He referred to paragraph 11 of the Respondent’s/Claimant’s Counter-Affidavit, Exhibits E12, E13 and E14. Counsel thus, submitted that there is no dispute within the meaning of an agreement to refer dispute where there is no controversy in being, as when a party admits liability but simply fails to pay. He cited UNITED WORLD LTD INC. V. M.T.S. LTD (1998) 10 NWLR (pt. 568) pg. 106.
RESOLUTION OF THE ISSUES
The crux of the case of the Appellant herein as can be deduced from the issues raised is that there was a dispute between it and the Respondent which should be referred to arbitration before the Respondent can lawfully maintain the action in the lower Court
The question now is whether there is, in actual fact, a dispute between the Appellant and the Respondent which is referable to arbitration. To this, I shall have consideration for Clauses 12.2.1 and 12.2.3 of Exhibits “A”; “E12”; “E13;” and “E14” as contained in the record of appeal.
Clause 12.2.1 of Exhibit “A” provides and is reproduced herein thus:-
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“This Agreement shall be governed and construed in accordance with the Laws of the Federal Republic of Nigeria.” See page 30 of the record.
Clause 12.2.3 of Exhibit “A” provides:-
“All disputes arising out of or relating to or in connection with this Agreement including but not limited to any issue as to the existence, validity, the interpretation or the performance of this agreement or as to the rights or liabilities of the parties herein which cannot be resolved by the parties in accordance with clause 12.2.3. within 14 (fourteen) days from the date of the other party’s receipt of a written notice of dispute, shall be settled by arbitration in accordance with the Rules of the International Chambers of Commerce before a tribunal of three (3) arbitrators.” See page 30 of the record.
Exhibit E12 is a Memo of Agreement dated 23rd February, 2012 and same provides thus:-
“At the meeting between representatives of Pellegrini Nigeria Limited and Crewsolutions Limited on 23rd February, 2012 held in Port Harcourt, it was resolved as follows:
1. Statement of outstanding catering invoices was presented and received by
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Crewsolutions Limited
2. It was agreed that Crewsolutions Limited will communicate to Pellegrini Nigeria Catering Limited within forty eight hours on payment plan of outstanding amounts.
3. Both parties agreed that disengagement plan for the smooth takeover of JU Oritsetimeyin would be communicated to Pellegrini Nigeria Catering Limited by Crewsolutions Limited.” See page 60 of the record.
Exhibit E14 is a letter dated 25th February, 2012 by the Appellant sent to the Respondent wherein the Appellant stated among other things, that it would pay outstanding amounts owed to Pellegrini, the Respondent herein, in four monthly instalments commencing from the end of March, 2012. See page 105 of the record. While Exhibit E 13 is the Respondent’s originating process for the commencement of this suit at the lower Court.
By virtue of Exhibits “E12”; “E13;” and “E14” supra, it cannot be said that another contract has not been made by the parties which, to my mind, is an evidence of novation of contract from the Memo of Agreement. This fact has not at any time been challenged, neither did the Appellant
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deny the novation of contract. Clauses 12.2.1 and 12.2.3 of Exhibits “A” have in my view been extinguished and overtaken by Exhibits “E12”; “E13;” and “E14”. There was therefore no dispute in existence referable to arbitration. For the question of arbitration to arise, there must be in actual fact, an existing dispute referable. This Court has held in UNITED WORLD LTD INC. V. MOBILE TELECOMMUNICATIONS SERVICES LTD (1998) LPELR 13291(CA) that:-
“…when a party to an agreement with a reference to arbitration has compromised his position by being signatory to the agreement the contents of which give numerous alternative remedies to the other party, other than resort to arbitration, and by evincing an intention to compromise to an act of the party which he is complaining about, he has robbed himself of competence or premise of referring the subject matter of complaint to an arbitration. It seems to me that the subject matter is one that cannot be referred for arbitration having regards to what I have observed. There is hardly anything left to refer.” Per IGNATIUS CHUKWUDI PATS-ACHOLONU, J.C.A (Pp.
10
3-18, paras. C-D).
See also KANO STATE URBAN DEVELOPMENT BOARD V. FANZ CONSTRUCTION CO. LTD (1990) LPELR-1659(SC) where the Supreme Court held thus:-
“…Similarly, there is no dispute within the meaning of an agreement to refer disputes where there is no controversy in being, as when a party admits liability but simply fails to pay, or when a cause of action has disappeared owing to the application, where it now continues to apply, of the maxim, actio persona lis mortitur cum persona…” Per ABDUL GANIYU OLATUNJI AGBAJE, J.S.C (Pp. 58-60, paras. C-B)
It follows therefore, that there was clear and unambiguous admission and settlement of this matter between the parties by virtue of Memorandum of Agreement dated 3rd February, 2012 signed by both parties and further confirmed by the Appellant through its letter dated 23rd February, 2012. I find nothing wrong with the decision of the lower Court. Issue 1 is accordingly resolved against the Appellant and in favour of the Respondent.
The second issue for the determination of this appeal is whether it was right for the learned trial judge to have awarded costs against the Appellant
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herein. I am of the firm view that cost follows events and a Court of competent jurisdiction is vested with judicial discretion to award costs to compensate the winning party in a suit before it except in circumstances where a dispute which is brought before the Court for adjudication is wrongly decided. The suit subject matter of this appeal herein has not been found to be wrongly decided. Hence, the award of cost against the Appellant cannot be faulted by this Court. Accordingly, issue two, is also resolved against the Appellant and in favour of the Respondent.
In summation the Appeal fails and it is hereby dismissed. The decision of the lower Court delivered on 1st March 2013 in Suit No LD/796/2012 is affirmed.
There shall be costs of N200,000 in favour of the Respondent against the Appellant.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: I have been afforded the opportunity of reading in the draft the judgment of my learned brother, JAMILU YAMMAMA TUKUR, JCA and I am in agreement with the reasoning and conclusion therein.
I also hold that the appeal is dismissed; the decision of the High Court of Lagos State delivered on the 1st of March,
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2013 by Honourable Justice G. M. Onyeabo is hereby affirmed.
I also abide by all consequential orders.
GABRIEL OMONIYI KOLAWOLE, J.C.A.: I have had the privilege to read in draft, the leading judgment just delivered by my brother, JAMILU YAMMAMA TUKUR, JCA wherein he found the appeal as lacking in merit, and same was dismissed.
I agree with the analysis of the issues canvassed by parties in their respective Briefs or arguments, and as the parties have reached an understanding not only as to the amount due to be paid by the Appellant to the Respondent, but also as to the mode of the payment, there was really nothing that can be dressed up as a “dispute” which the lower Court would have referred to arbitration.
Let me state that the liberal attitude of the Courts by encouraging litigants to use and refer disputes to arbitration where they have such agreement, and to abide with the decisions therefrom should not be misconstrued as a judicial license which irate litigants would want to exploit to frustrate and delay the performance of an obligation by which an issue between both parties had been settled by the occurrence of such incident
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which my learned brother has aptly described, given the particular facts and circumstance of this case, as a “novation contract”. The application of the Appellant in the lower Court for stay of further proceedings pending reference of their perceived dispute to arbitration, is nothing but an abuse of the Court process as there was no dispute that could be so referred.
I too dismissed the appeal, and abide with the consequential orders made as to costs.
Appeal lacks merit and it’s dismissed.
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Appearances:
M.O.A. Olawepo. For Appellant(s)
A.O. Foyominio. For Respondent(s)
