Before Their Lordships
OBANDE FESTUS OGBUINYA - Justice of The Court of Appeal of Nigeria
ONYEKACHI AJA OTISI - Justice of The Court of Appeal of Nigeria
ABUBAKAR SADIQ UMAR - Justice of The Court of Appeal of Nigeria
Between
CIG MOTORS COMPANY LIMITED - Appellant
And
MIDASCOPE GLOBAL RESOURCES LIMITED - Respondent
ABUBAKAR SADIQ UMAR, J.C.A. (Delivering the Leading Judgment): This appeal is against the Ruling of the Lagos State High Court in Suit No. ID/ADR/1177/2019 delivered by J.E Oyefeso on 12th February, 2020 wherein the learned trial judge dismissed the Appellant's application dated 4th March 2019 praying the Court to grant as follows:
1. An order for stay of proceedings of this matter pending the referral of the dispute and determination of same by Arbitration.
2. And for such further order(s) as the Court may deem fit to make in the circumstances.
The action culminating into the instant appeal was commenced by the Respondent at the High Court of Lagos State vide a Writ of Summons filed on 21st January, 2019 wherein the Respondent as Claimant claimed as follows:
1. The sum of N7, 043,161.25 (Seven Million and Forty three Thousand, One Hundred and Sixty One Naira and Twenty- Five Kobo, Claimant under and by virtue of their Branding Contract service transactions.
2. The sum of N20,000,000.00 (Twenty Million Naira) as general, punitive and exemplary damages for breach of contract, and for the wrongful conducts of the defendant in wrongfully breaching the Claimant's right to fair trade, negligence and lack of exercise of care on the part of the Defendant.
3. Legal cost of this suit at a flat charge of N1,550,000.00 (One Million, Five Hundred and Fifty Thousand Naira only
4. Interest on the total sum claimed at the rate of 21% per annum from the date of issuance of this writ till judgment and from the Day of Judgment till the date the judgment sum is fully paid and liquidated.
After being duly served with the originating processes in the suit, the Appellant entered a conditional appearance and filed an Application wherein it prayed for an order for stay of proceedings in the matter pending the referral of dispute and determination of same by Arbitration. In response to the Appellant's Application for stay of proceedings, the Respondent filed a Counter Affidavit dated 14th March, 2019 together with a written address to which the Appellant filed a Reply on Point of Law dated 27th March, 2019. The Respondent thereafter filed a Motion on Notice dated 27th March, 2019 praying the Court to enter final judgment against the Appellant for default of pleadings. The Appellant in response filed a counter affidavit dated 3rd April, 2019 urging the trial Court to dismiss the Respondent's application for final judgment.
The Appellant's application for an Order for stay of proceedings dated 4th March 2019 was heard on the 11th December, 2019 and the lower Court on 12th February, 2020 delivered its ruling and dismissed the Appellant's application on the ground that the filing of a Counter Affidavit to the Respondent's motion for default judgment is a submission to the jurisdiction of the lower Court and the Appellant can no longer take advantage of Section 5 of the Arbitration Act.
Dissatisfied with the ruling of the lower Court, the Appellant filed a Notice of Appeal dated 9th July, 2020 and filed on the 13th July, 2020 containing Four (4) grounds of appeal upon which the Appellant sought to set aside the lower Court's decision.
The parties filed and exchanged their respective Briefs of Argument and were deemed on the 26th April, 2022. The Appellant's Brief of Argument was settled by Kelechi Okeke Esq. Counsel to the Appellant formulated the following issues for the determination of this Appeal in the Appellant's Brief of Argument to wit:
1. Whether the trial Court was right in raising suo motu and deliberating on the issue as to whether the subsequent counter affidavit filed on 3rd April, 2019 by the Appellant in opposition to the Respondent's Motion for Default Judgment amounted to submitting to the jurisdiction of the Court, without inviting the parties to address the Court on that issue raised suo motu by the Court?
2. Whether the learned trial judge was right by striking out paragraphs 6 and 7 of the Appellant's affidavit dated 4th March, 2019
3. Whether the learned trial judge was right by holding that the Appellant has submitted to the jurisdiction of the Court and can no longer take advantage of Section 5 of the Arbitration Act for subsequently filing a counter affidavit and thereafter, dismissed the Appellant's application for stay of proceedings?
The Respondent's Brief of Argument was settled by Tochi G. Ekwuogo Esq. Respondent's Counsel also nominated three (3) issues for determination in the said Respondent's Brief thus:
1. Whether the Court below raised suo motu and decided the issue of whether the subsequent counter affidavit filed by the Appellant in opposition to the Respondent's Motion for Default Judgment amounted to submitting to the jurisdiction of the Court, without affording the parties the opportunity of an address on same?
2. Whether the learned trial judge was right by striking out paragraphs 6 and 7 of the Appellant's affidavit dated 4th March 2019?
3. Whether the learned trial judge was right by holding that the Appellant has submitted to the jurisdiction of the Court and can no longer take advantage of section 5 of the Arbitration and Conciliation Act for subsequent filing a counter affidavit and thereafter dismissed the appellant's application for stay of proceeding?
Learned Counsel to the Appellant responded by filing a Reply Brief on 18th Day of February, 2021. The respective briefs of argument of the Appellant and the Respondent were argued and adopted on 27th April, 2022. I have given due consideration to the grounds of Appeal, the issues distilled therefrom, and the arguments put forward by Counsel in their respective briefs and I have therefore framed the following two issues which succinctly encompasses all the issues raised by the Appellant and upon which I shall determine this appeal thus:
1. Whether the lower Court was right to have dismissed the Appellant's application for Stay of Proceedings pending Arbitration for violating the provisions of Section 5 of the Arbitration and Conciliation Act, 2004.
2. Whether the lower Court was right to have struck out paragraphs 6 and 7 of the Appellant's affidavit in support of his Application for Stay of proceedings pending Arbitration.
ISSUE ONE
Whether the lower Court was right to have dismissed the Appellant's application for Stay of Proceedings pending Arbitration for violating the provisions of Section 5 of the Arbitration and Conciliation Act, 2004.
APPELLANT'S ARGUMENT
Counsel to the Appellant submitted that the Appellant and the Respondent at the lower Court did not raise the issue of whether the filing of a counter affidavit dated 3rd April, 2019 by the Appellant in response to the Respondent's motion for default judgment is tantamount to Appellant submitting to the jurisdiction of the Court and thus will no longer be able to rely on Section 5 of the Arbitration and Conciliation Act. Counsel to the Appellant relied on the case of Akere v Governor of Oyo State (2012) 12 NWLR (Part 1314) 240 to argue that since the issue was not placed before the Court, the Court ought not to have raised and resolved the issue suo motu.
The counsel to the Appellant submitted that the lower Court ought to call the parties to address it on any issue raised suo motu before the Court can proceed to resolve such issue. Therefore, the lower Court's failure to call parties to address the issue raised suo motu by the Court was a breach of the parties right to fair hearing, especially to the Appellant. Counsel to the Appellant relied on the case of Unity Bank PLC v Denclag Ltd (2012) 18 NWLR (Part 1332) 293
Counsel to the Appellant submitted that Section 5 (1) of the Arbitration and Conciliation Act provides that if any party to an arbitration agreement commences any action in any Court with respect to any matter which is the subject of an arbitration agreement, any party to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay the proceedings. Counsel to the Appellant further submitted that by the wordings of section 5 of the Arbitration Act, pleadings must not be delivered or further step must not be taken before filing application for stay of proceeding. Counsel to the Appellant submitted that the Appellant filled a Counter Affidavit dated 3rd of April, 2019 to the Respondent's Motion on Notice dated 27th March, 2019 after he had already filed an Application for an Order for stay of proceedings pending arbitration dated 4th March, 2019 and that the Appellant had not taken any step further in the matter neither had he delivered any pleadings before filing the application for an Order for Stay of Proceedings, therefore the Appellant has not violated the provisions of Section 5 of the Arbitration and Conciliation Act.
Counsel to the Appellant submitted that it is a fundamental principle of interpretation of the words of a statute that where the words used are clear and unambiguous, it should be given their ordinary meaning and as such the ordinary, plain and literal meaning of Section 5 of the Arbitration and Conciliation Act should be employed without more. Counsel relied on the case of Okotie-Eboh v Manager & Ors (2004) LPELR-2502 (SC).
Counsel to the Appellant therefore urged this Court to set aside the order of dismissal of the Appellant's application for stay of proceedings pending arbitration and substitute same with Order for Stay of proceedings pending the referral of dispute to and determination of same by Arbitration.
RESPONDENT'S ARGUMENT
In response to the argument of the counsel to the Appellant on this issue, the Respondent's counsel submitted that the issue dealt with by the lower Court was the issue of jurisdiction of the Court to entertain the Respondent's suit without first referring the matter to arbitration as required by section 5 of the Arbitration and Conciliation Act which was evident in the Appellant's motion for stay of proceedings, therefore, the lower Court cannot be said to have raised and decided the issue suo motu.
It is also the submission of Respondent's counsel that the lower Court while considering the provisions of Section 5 of the Arbitration and Conciliation Act vis-à-vis the processes filed before it was convinced that the said provisions of Section 5 of the Arbitration and Conciliation Act under which the Appellant sought to oust the jurisdiction of the Court was already breached by the Appellant when the Appellant took further steps in the matter by filing further processes in the matter.
Respondent's counsel further submitted that assuming without conceding that the lower Court raised the issue suo motu, the Court would be within its right to do so. Respondent's counsel submitted that the principle that requires that parties should be given a hearing when a Court raises an issue suo motu may not be necessary where the issue pertains to the Court's jurisdiction. Counsel relied on the case of Omokuwajo v FRN (2013) 6 SCM, 193; NNPC v Roven Shipping LTD & Anor (2019) 6 SCM, 145.
Respondent's Counsel submitted that the lower Court was right when it held that the Appellant had submitted to the jurisdiction of the Court and could no longer take advantage of Section 5 of the Arbitration and Conciliation Act for filing a counter affidavit in response to the Respondents application for default judgment. Counsel submitted that a party who intends to seek the order for stay of proceedings must not take any further step in respect of the action pending in Court, except for filing its memorandum of appearance, but since the Appellant had further filed a counter affidavit in response to the Respondent's motion for default judgment, that amounts to taking further steps in the proceedings and as such the Appellant has submitted himself to the jurisdiction of the lower Court and cannot invoke Section 5 of the Arbitration and Conciliation Act. Respondent's counsel relied on the case of Obembe v Memabode Estates Ltd (1977) LPELR- 2161 (SC)
Respondent's counsel also submitted that the grant of stay of proceedings is discretionary and the lower Court is not bound to grant the order of stay of proceedings as prayed by the Appellant, Counsel to the Respondent relied on the case of Onward Enterprises Ltd v MV Matrix (2008) LPELR-4789.
APPELLANT'S REPLY
In response to the submissions of the Respondent's counsel on this issue, the counsel to the Appellant submitted that the Respondent is wrong to argue that the counter affidavit to the Respondent's motion for default judgment amounted to submitting to the jurisdiction of the Court because the said counter affidavit was filed to oppose the Respondent's motion for default judgment after the Appellant's had earlier filed an Application for stay of proceedings pending arbitration.
Counsel to the Appellant also submitted that it is erroneous for the Respondent to argue that the issue of the Appellant's breach of Section 5 of the Arbitration and Conciliation Act raised by the lower Court pertains to jurisdiction and that an arbitration clause in an agreement does not raise the issue of jurisdiction, Counsel to the Appellant relied on the case of Bill & Brothers Ltd. & Ors. v Dantata & Sawoe Construction Co. (Nig.) Ltd & Ors (2015) LPELR-24770 (CA)
RESOLUTION OF ISSUE ONE
In resolving this issue, let me begin by saying that it is a misconception of the law to argue that the mere presence of an arbitration clause in a contract, or agreement by parties to submit a dispute to arbitration, ousts the jurisdiction of the Court. In the case of City Engineering Nig. Ltd v. F. H. A. (1997)9 NWLR (Part 520) 224, the Supreme Court pronounced on this position of law unequivocally that an agreement to submit a dispute to arbitration clause does not oust the jurisdiction of the Court. See also Confidence Ins. Ltd v Trustees of O. S. C. F. (1999) 2 NWLR (Part 591) 373
It is the argument of the Respondent that the Appellant seeks to oust the jurisdiction of the lower Court when it filed an application for an order for stay of proceeding pending arbitration. There is nothing in the face of the Appellant's application for stay of proceedings that suggests that the Appellant was seeking the ouster of lower Court's jurisdiction on the matter.
It will be apt to state that an arbitration clause is only a stop-gap process which should never be placed in the realm of an ouster clause. In essence, Section 5 of the Act has the effect of staying the proceedings subject to the satisfaction of the necessary conditions provided in Subsection 2 and not to oust the Court of the jurisdiction to entertain the matter See Fastech (Nig.) Ltd v Zamfara State Govt. & Ors. (2019) LPELR-48135 (CA); Magbagbeola V. Sanni (2000) 4 NWLR [PT.756] 193
Therefore, an arbitration clause in an agreement is simply to postpone the right of either of the parties to litigation whenever the other contracting party elects to submit the dispute under the agreement to arbitration. The rationale for this position of law is for the reason that agreement of parties cannot override or exclude the constitutional or statutory jurisdiction conferred on the Court. Parties cannot by their agreement or otherwise confer or dislodge the Court of jurisdiction. See the case of Fastech (Nig) Ltd v Zamfara State Gov. & Ors. (supra) I therefore conclude that the Appellant in the instant case did not seek to oust the jurisdiction of the lower Court when he filed an application for stay of proceedings pending arbitration.
The fulcrum of this Appeal is whether the Appellant was in breach of Section 5 of the Arbitration and Conciliation Act when it filed a counter affidavit dated 3rd of April, 2019 to oppose the Motion for default judgment filed by the Respondent on the 27th March, 2019. Section 5 of the Arbitration and conciliation Act provides thus:
5(1) If any party to an arbitration agreement commences any action in any Court with respect to any matter which is the subject of an arbitration agreement, any party to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay proceedings.
(2) A Court to which an application is made under Subsection (1) of this section may, if it is satisfied-
(a) That there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and
(b) That the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, make an order staying the proceedings.
The express wording of the provision cited above states unequivocally that any party to the arbitration agreement "MAY AT ANY TIME AFTER APPEARANCE…" apply to the Court to stay proceedings. This provision is so unambiguous and explicit that even a layman need not go looking for a Blacks' Law Dictionary for the interpretation of same. But for the sake of clarity, I will give a further insight into this provision of the intendment of Section 5(1) of the Arbitration and Conciliation Act (2005).
What this particular provision is saying in simple terms is that the only necessary process for the Appellant to file at the lower Court, after he must have entered his appearance, is an application praying the lower Court to stay proceeding pending the determination of the Arbitration and that is exactly what the Appellant has done in this instance filing the Application dated 4th March 2019.
In Hassan v Unity Bank (2018) LPELR-45261, it was held that by virtue of Section 5 of the Arbitration and Conciliation Act, 2004, if any party to an arbitration agreement, commences any action in Court with respect of any matter which is the subject of an arbitration agreement, any party may at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay proceedings. See also Owners of the MV, LUPEX v Nigerian Overseas Chartering and Shipping Ltd (2003) LPELR-3195(SC).
The wordings of section 5 of the Arbitration Act is very clear and plain in that any party to an arbitration agreement may, at any time after appearance and before delivering pleading or taking any other steps in the proceedings, apply for stay of proceedings. We must note the words "After Appearance" and "before delivering pleading or taking any other steps in the proceedings". This provision by simple interpretation is not complicated at all. Thus, when the words of the statute are very clear, plain and unambiguous without equivocation, the Courts are bound to give effect to that meaning irrespective of the consequences. See the case of Nwobike v. FRN (2021) LPELR-56670(SC); Umeano&Ors v. Anaekwe& Anor (2022) LPELR-56855(SC).
It is my view therefore that the Respondent's interpretation of the Appellant's Motion to stay proceedings pending arbitration to mean that the Appellant was in default of pleadings is erroneous and so allowing the order of dismissal of the said application granted by the lower Court against the Appellant will mean that the Court has vested in the Respondent, the vires to amend and interpret the extant provision of Section 5(1) of the Act on the terms of the Respondent.
Essentially, for the party to bring himself within the ambit of Section 5(1) of the Arbitration and Conciliation Act, He must comply with all the 3 conditions, namely (i) enter appearance, (ii) file no defence or take no further steps in the proceedings and then (iii) apply to the Court to stay the proceedings pending arbitration. See African Insurance Development Corporation v Nigeria Liquefied Natural Gas Ltd (2000) 4 NWLR Part 653 Page 494; Fastech (Nig.) Ltd v Zamfara State Govt&Ors (supra).
These three conditions which must all co-exist are the conditions precedent to the grant of stay. In the instant case, the Appellant at the lower Court filed a Memorandum of Conditional Appearance on the 4th of March, 2019 and same day applied to the Court for stay of proceedings pending arbitration. It is clear from the records before this Court that apart from the Memorandum of Conditional Appearance filed by the Appellant, the Appellant took no further step in the proceedings, the Appellant had not delivered his pleadings nor has it filed any other application before the Application for stay of proceedings pending arbitration.
In determining what constitutes taking "steps in the proceedings", the Supreme Court in the cause of Obembe v Wemabod Estates Ltd (1977) Vol 11 NSCC 24 held thus:
"In order to get a stay, a party to a submission must have taken no step in the proceedings. A party who makes any application whatsoever to the Court, even though it be merely an application of extension of time, takes a step in the proceedings"
See also Seaport Global Services Ltd & Anor v MT Oryx Trader & Ors (2021) LPELR-56255. Therefore, if the Appellant has done any of these before filing his Application for stay, it would be regarded as taking "steps in the proceedings" but the Appellant had only filed his Memorandum of Appearance. In the case of Confidence Insurance Ltd v Trustees of O.S.C.E (supra), Achike, JCA (as he then was) had this to say
"It is perfectly clear to me that mere entering an appearance by the appellant be it conditional or unconditional appearance, is not controlling nor relevant to the party's right to rely on the arbitration clause inserted in the parties' agreement. On the contrary, it is in fact what happens after a party has entered an appearance that matters in determining whether or not such a party can still take advantage of the aforesaid arbitration clause."
In light of the above, it is clear that any application or pleading other than the Motion for stay of Proceedings filed after the entering of appearance will amount to taking "steps in the proceedings". In the instant case, the Appellant did not file an application whatsoever nor did it deliver any pleadings after it entered appearance. The only application filed by the Appellant after memorandum of Appearance was the Application for stay of proceedings pending Arbitration.
The Respondent, after the Appellant had filed an Application for stay of proceeding pending arbitration, went ahead to file an application for default judgment to which the Appellant responded by filing a counter affidavit. I find it mischievous that the Respondent was quick to apply for default judgment when the Appellant's application for stay of proceedings pending arbitration was yet to be heard.
So long as an arbitration clause is retained in a contract that is valid and the dispute is within the contemplation of the clause, the Court ought to give due regard to the voluntary contract of the parties by enforcing the arbitration clause as agreed by them. Where there is an application for stay of proceedings pending arbitration, the Courts have been advised to lean towards granting it. See: Sacoil 281 (Nig.) Ltd & Anor v Transnational Corporation of (Nig.) Plc (2020) LPELR-49761 (CA) see also Neural Proprietary Ltd v UNIC Insurance Plc. (2015) LPELR-40998. By reason of this and upon the fulfillment of all the three conditions mentioned earlier and highlighted in the case of African Insurance Development Corporation v Nigeria Liquefied Natural Gas Ltd (supra) that I hold that in the circumstances, the Appellant did not violate the provisions of Section 5 of the Arbitration and Conciliation Act when it filed a counter affidavit in response to the Respondent's motion for default judgment. In the light of this, I hold that the Appellant is entitled to stay of proceedings pending Arbitration.
ISSUE TWO
Whether the lower Court was right to have struck out paragraphs 6 and 7 of the Appellant's affidavit in support of his Application for Stay of proceedings pending Arbitration.
APPELLANT'S ARGUMENT
Relying on the case of Josien Holdings Ltd & Ors v Lornamead Ltd & Anor (1995) LPELR-1634 (SC), Counsel to the Appellant submitted that where an affidavit in support of an application contains extraneous materials in form of legal arguments, opinions and conclusions, such affidavit is in breach of Section 115 of the Evidence Act, 2011.
Counsel to the Appellant submitted that the Appellant in paragraphs 6 and 7 of the Affidavit dated 4th March, 2019 in support of the motion on Notice for stay of proceedings pending arbitration deposed thus:
6. That I know as a fact the Defendant/Applicant is willing and ready to go through arbitration to resolve the instant dispute between the Claimant/Respondent and the Defendant/Applicant.
7. That it will be in the interest of justice to allow the parties refer this instant dispute to arbitration for determination
Appellant's counsel submitted that the deposition contained in paragraphs 6 and 7 of the Appellants Affidavit dated 4th March, 2019 are facts and not legal arguments or opinion contrary to Sections 67 and 115 of the evidence Act therefore the lower Court was wrong by striking out paragraphs 6 and 7 from the Appellants affidavit.
RESPONDENT'S ARGUMENT
Respondents Counsel argued that it was paragraphs 6 and 7 of the Counter Affidavit dated and filed on the 14th of March, 2019 by the Respondent in response to the Appellant's Application for stay of proceedings that was struck out by the lower Court and not the paragraphs 6 and 7 of the Appellant's Affidavit in support of motion for an Order for stay of proceedings pending Arbitration dated and filed 4th of March, 2019. Respondent's Counsel further argued that the lower Court only made a clerical error when it referred to the Appellant who was the Defendant/Applicant as the "Claimant." Respondent's Counsel argued that the Appellant could have just put the lower Court on notice of the error instead of making it an issue for appeal.
Respondent's Counsel however agreed with the Lower Court that paragraphs 6 and 7 of the Respondent's Counter Affidavit dated 14th March, 2019 indeed violated Section 115 of the Evidence Act, 2011 but urged this Court to hold that in the circumstances, the clerical error in the ruling of the lower Court would not vitiate the decision of the lower Court. Respondent's Counsel relied on the case of Osayande v Aikpitanyi&Ors (2010) LPELR-4802 (CA)
APPELLANT'S REPLY
Counsel to the Appellant argued that the lower Court did not make any mistake of referring to the Appellant as the 'Claimant' instead of the 'Defendant'. Counsel to the Appellant argued that the ruling of the Lower Court is very clear and unambiguous.
Counsel to the Appellant further argued that assuming Ground Two of the Notice of Appeal to wit:
"The learned trial judge erred in law by holding that "I agree with the Claimant that some of the paragraphs of the affidavit contain legal arguments contrary to Section 67 and 115 of the evidence Act. Therefore, paragraphs 6 and 7 are struck out"
Inures to the favour of the Appellant, the Respondent can only challenge the competence of Ground Two of the Notice of Appeal by way of Preliminary Objection and not in the Respondent's Brief and the Respondent's failure to come by way of Preliminary Objection makes the submission of the Respondent to be incompetent. Counsel relied on the case of GTB PLC v Fadco Ind. Nig. Ltd & Anor (2013) LPELR-21411 (CA)
RESOLUTION OF ISSUE TWO
From the face of record before this Court, the Appellant as the defendant at the lower Court filed a Memorandum of Conditional Appearance together with an application for an Order for Stay of Proceedings pending Arbitration to which the Respondent filled a Counter Affidavit and Written Address in support dated 14th March, 2019. (See page 142-143 of the Record)
The Appellant subsequently filed a Reply on Point of Law dated 27th March, 2019 to the Respondent's Written Address wherein the Appellant raised issue against paragraphs 6 and 7 of the Respondent's Counter Affidavit that the Counter Affidavit contains conclusions and legal argument in breach of section 115 of the evidence Act. The said paragraphs 6 and 7 of the Respondent's Counter Affidavit is hereby reproduced.
6. that the said arbitration clause simply relates to disputes arising out of the interpretation and/or application of the agreement as thus provided: "if any dispute between the parties hereto relating to the interpretation and/or application of this agreement which cannot be resolved by mutual consultation, such dispute shall be referred to arbitration in accordance with the Arbitration Act, 1990 Laws of the Federation of Nigeria, and any amendments thereto"
7. That the claimant's cause of action as contained in its statement of claim is not related to the interpretation and/ or application of the agreement of 1st July 2018. but rather it is for a liquidated money demand for an unpaid balance sum of N7,043,161,25 (Seven Million and Forty Three Thousand, One Hundred and Sixty One Naira and Twenty Five Kobo) owed to it by the Defendant/ Applicant with damages and interest thereof. See Page 160-161 of the record.
The Lower Court was not specific and particular in mentioning the affidavit it was referring to in the ruling delivered on the 12th of February, 2020 where the lower Court held:
"I agree with the claimant that some of the paragraphs of the Affidavit contain legal arguments contrary to Sections 67 and 115 of the Evidence Act. Therefore, Paragraphs 6 and 7 are struck out"
See page 186 of the record. Thus there is not records upon which these argument can be predicated and this Honourable Court cannot speculate whether the lower Court was referring to the Appellant's Affidavit in support of the Application for Stay of Proceedings pending Arbitration or the Respondent's Counter Affidavit. Therefore, in the circumstance, this Court will not speculate or assume to know the mind of the lower Court that are not expressly contained in the records.
It would have been appropriate for the Appellant (or even the Respondent) to bring this "perceived clerical error" to the notice of the lower Court and seek clarification before making it a ground of appeal.
Furthermore, it is my view that the argument of the Counsel to the Appellant that the Respondent can only challenge the competence of Ground Two of the Notice of Appeal by way of Preliminary Objection and not in the Respondent's Brief and that the Respondent's failure to come by way of Preliminary Objection makes the submission of the Respondent to be incompetent is misconceived. It is trite that a Preliminary Objection should only be filed against the hearing of an appeal and not against one or more grounds of appeal. This is because, if the Preliminary Objection succeeds, that will be the end of the appeal. See NEPA VS. Ango (2001) 15 NWLR (Pt. 737) 627. On the whole, this issue goes to no issue as it is baseless and unwarranted.
However, in the final result and on the strength of the crux of this appeal which has been resolved in favour of the Appellant, there is merit in this appeal, therefore this appeal succeeds and thus allowed. The Ruling of the High Court of Lagos per J.E. Oyefeso, J delivered on 12th February 2020 in Suit No: ID/ADR/1177/2019 is hereby set aside.
OBANDE FESTUS OGBUINYA, J.C.A.: I had the singular privilege to peruse, in draft, the elegant leading judgment delivered by my learned brother: Abubakar Sadiq Umar, JCA. I concur fully with the reasoning and conclusion in it. I, too, allow the appeal in the manner decreed in the leading judgment. I abide by the consequential orders contained in it.
ONYEKACHI AJA OTISI, J.C.A.: I was privileged to read, in draft form, the judgment just delivered by my learned brother, Abubakar Sadiq Umar, JCA, in which this appeal was allowed. I agree with, and adopt as mine the resolution of the issues in contention. I will only make few comments in support.
I want to first point out that although the duty of the Court to uphold and enforce arbitral clauses in agreements is well settled, such clauses do not, a fortiori, oust the jurisdiction of the Court. This is because the jurisdiction of the Court, which is constitutional, cannot be eroded by an arbitral clause. Rather, by an arbitral clause, the jurisdiction of the Court is merely placed in abeyance, as it were, when activated. The Court may, upon application, make an order to stay proceedings before it, pursuant to Sections 4 (1) and 5 of the Arbitration and Conciliation Act, which provide:
4 (1) A Court before which an action which is the subject of an arbitration agreement is brought shall, if any party so requests not later than when submitting his first statement on the substance of the dispute. order or stay of proceedings and refer the parties to arbitration.
5 (1) If any party to an arbitration agreement commences any action in any Court with respect to any matter which is the subject of an arbitration agreement, any party to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, to the Court to stay the proceedings.
(2) A Court to which an application is made under Subsection (1) of this Section may, if it is satisfied-
(a) that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and
(b) that the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, make an order staying the proceedings.
See also Obembe v. Wemabod Estates Limited (1977) LPELR-2161(SC) where the Supreme Court at page 18 of the E-Report made it clear that:
"...any agreement to submit a dispute to arbitration, such as the one referred to above, does not oust the jurisdiction of the Court. Therefore, either party to such an agreement may, before a submission to arbitration or an award is made. commence legal proceedings in respect of any claim or cause of action included in the submission (See Harris v. Reynolds (1845) 7 Q.B 71). At common law, the Court has no jurisdiction to stay such proceedings, Where, however, there is provision in the agreement as in Exhibit 3, for submission to arbitration the Court has jurisdiction to stay proceedings by virtue of its powers under Section 5 of the Arbitration Act (Cap. 13 of the Laws of the Federation)."
An applicant is required by the Act, to make application for stay of proceedings at the earliest. before taking Steps in the matter. Therefore, where the applicant has taken no step, the correct order for the Court to make upon application, is one to stay proceedings, and not one striking out the suit. The Appellant was therefore entitled to an order staying proceedings pending arbitration.
For this reason, and for the fuller reasons given in the leading judgment, I also allow the appeal, and set aside the ruling of the lower Court delivered in this matter on 12/2/2020.
Appearances
Kelechi Okeke - For Appellant
Ekwuogo Tochi, with him, Benjamin Obi - For Respondent