(2018) lpelr-45546(ca)lawpavilionpersonal.com/ipad/books/45546.pdf · in the court of appeal in the...
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MEKWUNYE v. LOTUS CAPITAL LTD & ORS
CITATION: (2018) LPELR-45546(CA)
In the Court of AppealIn the Lagos Judicial Division
Holden at Lagos
ON FRIDAY, 20TH APRIL, 2018Suit No: CA/L/1349/2016
Before Their Lordships:
TIJJANI ABUBAKAR Justice, Court of AppealBIOBELE ABRAHAM GEORGEWILL Justice, Court of AppealJAMILU YAMMAMA TUKUR Justice, Court of Appeal
BetweenDR. CHARLES D. MEKWUNYE - Appellant(s)
And1. LOTUS CAPITAL LIMITED2. STANBIC IBTC ASSET MANAGEMENT LIMITED3. MTN NIGERIA COMMUNICATIONS LIMITED4. HIS HOLDING LIMITED5. INT. TOWERS LIMITED
- Respondent(s)
RATIO DECIDENDI
(201
8) LP
ELR-45
546(
CA)
1. ARBITRATION AND CONCILIATION - ARBITRATION: Whether matters relating to crime or allegation o fraud are arbitrable disputes"It is undisputed that before a matter can be referred to arbitration, same must first be seen to be arbitrable. The dispute must not relate or cover matters which by law, are not permitted to besettled by other dispute resolution mechanisms other than in Court, the Arbitration and Conciliation Act, Cap A18, does not demarcate between disputes that are arbitrable or otherwise, it hashowever been judicially recognized as a matter of public policy that matters relating to crime, matrimonial causes, winding up of a company or bankruptcy are of such nature that cannot besettled by arbitration. See: BCC TROPICAL (NIG.) LTD v. GOVERNMENT OF YOBE STATE OF NIGERIA & ANOR (2011) LPELR-9230 (CA).As the argument of the counsel in this appeal shows, arbitrability of fraud is one of the contentious issues in arbitration, particularly as it involves questions of what type of issue can and cannotbe submitted to arbitration. It has always been the case that where fraud and serious malpractices are alleged in a dispute, same cannot be referred to an arbitrator for resolution. Thejurisdiction of the regular Court on this issue is iron-clad, as fraud, financial malpractice and collusion are allegations with criminal consequences and therefore reserved for the Courts, and anarbitral tribunal, being a creature of contract, is not endowed with general and wide jurisdiction, bestowed upon regular Courts, which are equipped to adjudicate in complex issues and arecompetent to offer wider range of reliefs to the parties in dispute. See: Alipak Banerjee & Vyapak Desai on "Is Fraud Open To Arbitration."In the instant appeal, it is undisputed that the Appellant pleaded fraud with the particulars thereof, particularly at paragraph 45 of the Appellant's Statement of Claim alleging that the 1stRespondent's Telecoms Private Equity Fund Investment Agreement is a Ponzi Scheme and an instrument of fraud, used by the Respondents to defraud unsuspecting Nigerians including theAppellant. It is in this regard that the Appellant sought a declaration that the 1st Respondent's Telecom Private Equity Fund is a Ponzi Scheme used by the 1st Respondent to defraud theAppellant. Appellant holds the view that the issue of fraud alleged in the instant case cannot be resolved by arbitration. The learned Counsel for the 1st Respondent contended otherwise thatthe principal claim of the Appellant is for breach of Agreement and that the use of "fraud" by the Appellant in this case does not refer to any form of criminal offence, but is at best contractualmisrepresentation. I am not aware of any decision of the Superior Courts in this country where the instant issue was considered and pronounced upon. I therefore take solace in decisions inother jurisdictions, which though are of persuasive authority, but are nevertheless applicable to the issues herein. See the decisions in SWISS TIMING LTD v. ORGANISING COMMITTEE, COMMONWEALTH GAMES 2010 (2014) 6 SCC 677; WORLD SPORT GROUP (MAURITIUS) LTD v. MSM SATELLITE (SINGAPORE) PTE LTD in Civil Appeal No. 895 of 2014.In WORLD SPORT GROUP (MAURITIUS) LTD (Supra), the parties entered into a partnership deed on 1st April 1994 for running a hotel. While the Appellant was entrusted with administration, theRespondents alleged that the Appellant had failed to make regular deposits of money into the common operating bank account and had fraudulently siphoned off an amount of INR 10,00,050. Ina separate raid conducted by the Law Enforcement Agents (CBI) on premises of the Appellant's relative, an amount of INR 45,00,000 was seized and alleged to have been given by the Appellantfor business of the hotel. The Respondentsfiled a civil suit seeking right of administration of the hotel. The Appellant sought reference of the dispute to arbitration under Indian Arbitration Act. The High Court rejected the Appellant'sapplication on the ground that the dispute involved allegations of fraud. Aggrieved by the decision, the Appellant preferred an appeal before the Supreme Court. It was the contention of theRespondents in that case, just as the one before this Court that, where allegations of fraud are involved civil Courts are the appropriate forum for adjudication. The Supreme Court of Indiarejected the general notion that elements of criminal wrongdoing detracted from the jurisdiction of arbitral tribunal. Referring to the Indian Arbitration Legislation and the New York Convention,the Court considered that the allegations of fraud did not impact on the validity of the arbitration agreement; the fact that fraud was alleged did not render the agreement inoperative orincapable of being performed.?The foregoing decisions of the Indian Supreme Court are instructive and I must say the reasoning therein is compelling. It is my view, that to accept the Appellant's contention to the effect thatarbitration should be shut out, merely on the basis of allegation of fraud, which has not been subject to proof, would undoubtedly destroy the very purpose for which the parties had agreed bycontract to submit to arbitration. In as much as the allegation of fraud does not relate to the validity of the substantive contract, which is even separable from the Arbitration clause, I am of theopinion that the Court ought to act with caution and circumspection as the allegations of fraud in the circumstances of this case, can be duly considered by an Arbitrator or Arbitral Tribunal. Theallegation of fraud by the Appellant herein is not directed, at the arbitration agreement, thereby impeaching same and the resultant arbitration, nor is it directed at the main contract; I amtherefore unable to accept the submissions of learned Counsel for the Appellant that mere allegation of fraud renders the dispute herein un-arbitrable.I am mindful of the fact that Appellant relied on the decision of this Court in B. J. EXPORT & CHEMICAL COMPANY LTD v. KADUNA REFINING & PETRO-CHEMICAL COMPANY LTD (supra),particularly the dictum of MOHAMMED, JCA at page 36, paras. B-G; thus:"It is trite that the disputes which the subject of an arbitration agreement must be arbitrable. In other words, the agreement must not cover matters which by the law of the State are notallowed to be settled privately or by arbitration usually because this will be contrary to the public policy. Thus, a criminal matter, like the allegation of fraud raised by the respondent in this case,does not admit of settlement by arbitration as was clearly stated by the Supreme Court in KANO STATE URBAN DEVELOPMENT BOARD v. FANZ CONSTRUCTION LTD. (1990) 4 NWLR (Pt. 142) 1 at32-33. This position of the law appears to have been further stated under the Arbitration and Conciliation Act, CAP 19 Laws of Federation...."I must say that decision of this Court in the above case is inapplicable to the instant case. The dispute between the parties in that case arose out of an agreement entered between the partiesby which the Appellant hired four ISO Tanks from the respondent for shipment of petroleum products on a rental charge of N10,000.00 for each tank for a period of 8 weeks. The Appellant tookdelivery of the tanks and used same to ship petroleum products to Europe. At the expiry of the 8 weeks period of lease of the tanks, the Appellant failed to return them to the Respondent asagreed.When the Respondent demanded for the return of the tanks, the Appellants attributed its failure to return same to the uncertainty in the political situation in Nigeria, due to the crisis relating tothe June 12, 1993 election, and subsequently the industrial action at the Lagos Port but finally returned them in September 1993 in clean condition along with the payment of N80,000.00 rentalcharges. However, nearly three months thereafter, the Appellant raised problems encountered with the tanks by its Agent in Europe who claimed the sum of $85,016.00 from the respondentbeing alleged expenses incurred on account of unsuitability of the tanks, etc. When the Appellant's claim was resisted by the Respondent, the Appellant proposed the appointment of anarbitrator to resolve the dispute and this was accepted by the Respondent, whereupon the parties jointly appointed the arbitrator. When the partiesappeared before the arbitrator, instead of the earlier claim of $85,016.00, the Appellant filed a claim of $400,000.00 before the arbitrator. Rather than responding to the Appellant's claim beforethe Arbitrator, the Respondent commenced an action before the Kaduna State High Court vide an Originating Summons seeking (1) A declaration that the Appellant's claim against theRespondent upon which reference was made to the Arbitrator is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement; and(2) Leave to revoke the arbitration agreement and the arbitrator's authority upon the said ground.It is obvious the situation and circumstance of the instant case are not consistent with the one in B. J. EXPORT & CHEMICAL COMPANY LTD where the Respondent's allegation of fraud goes to theroot of the Arbitration Agreement. In the instant case, it does not and I am therefore unable to reach similar conclusion as reached by this Court therein. At any rate, the ratio in that casesupports the position earlier expressed that where the allegation of fraud affects the validity of the substantive contract and/or the Arbitration Agreement, same cannot be determined by anArbitrator; only regular Courts have jurisdiction to consider and pronounce on such issue. In the instant case, the allegation of fraud does not affect or relate to the validity or otherwise of thecontract between the parties or the Arbitration Agreement; therefore the reasoning expressed in decision of this Court in B.J. EXPORT & CHEMICAL COMPANY LTD cannot be adopted here, wherethe allegation of fraud is in relation to the performance of obligations under the contract. In that case, the allegation of fraud affects the contract, or at best, the arbitration agreement and goesto the root of the relationship between the parties. The position of the law stated by this Court in the said case remains potent but qualified to the effect only the Court can adjudicate onallegation of fraud which affects the validity of an arbitration agreement."Per ABUBAKAR, J.C.A. (Pp. 25-34, Paras. E-E) - read in context
2. ARBITRATION AND CONCILIATION - ARBITRATION: Whether there can be more than one party to an arbitration proceeding emanating under one contract where parties submit toarbitration"The other question under this issue relates to the Appellant's contention that since the parties in the instant suit are more than two, the dispute cannot be arbitrable. The Appellant copiouslyreferred to the view expressed by the learned authors, J. O. Orojo and M. A. Ajomo, "Law and Practice of Arbitration and Conciliation in Nigeria", Lagos: 1999, 62 that "as a general rule, there aretwo parties to an arbitration since an arbitration agreement is usually bilateral and so an arbitration proceeding under one contract cannot, without agreement of the parties, be used to resolvedisputes under another contract. Nor can a third party make himself a party to that arbitration."I must say that the Appellant's argument on this ground is misconceived. From the submissions made by the Appellant, it is conceded that there can be more than one party to an arbitrationproceedings emanating under one contract, in so far as the parties involved consent to submit to arbitration. There is nothing on record showing that the parties concerned do (or will) notconsent to arbitration. It is speculative to say the least. I am in agreement with the learned counsel for the 1st Respondent that the pivotal dispute as apparent from the reliefs sought by theAppellant herein, is between the Appellant and the 1st to 3rd Respondents. As a matter of fact, the reliefs sought against the 4th and 5th Respondents, who are not parties to the arbitrationagreement nor agents or privies of the parties thereto, are consequential and ancillary to the principal reliefs sought by the Appellant. As a matter of fact, Reliefs J, Q and U are declaratory andinjunctive reliefs geared towards invalidating the contract purportedly executed by the 1st to 5th Respondents, towards changing the "character and form of the Appellant's investment in theMTN Linked Unit." These reliefs are undoubtedly hinged on the principal claim sought by the Appellant. The only conclusion is that the addition or status of the 4th and 5th Respondent isinsufficient to warrant the conclusion urged on us by the Appellant. Appellant's argument on this issue is therefore misconceived."Per ABUBAKAR, J.C.A. (Pp. 34-36, Paras. F-D) - read in context(2
018)
LPELR
-4554
6(CA)
3. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE: Whether an agreement to submit a dispute to arbitration ousts the jurisdiction of Court"The grievance of the Appellant under this issue is that the learned trial judge refused to follow the decisions in OBEMBE v. WEMABOD ESTATE (supra) and K.S.U.D.B. v. FANZ LTD (supra) and Imust say that the Appellant's complaint is unfounded having had the benefit of studying the decisions referenced. In OBEMBE, the Supreme Court, per FATAYI-WILLIAMS, JSC held as follows:"As we have pointed out earlier, 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 suchan 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. 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 had jurisdiction to stayproceedings by virtue of its power under Section 5 of the Arbitration Act (Cap 73 of the Laws of the Federation)...No stay was asked for by the defendants/respondents after they were served with the writ of summons. On the contrary, they accepted service of the statement of claim, filed their ownstatement of defence, testified in their defence and took part in the proceedings until judgment was delivered. In order to get a stay, a party to o submission must have taken NO step in theproceedings. A party who makes any application whatsoever to the Court, even though it be merely an application for extension of time takes a step in the proceedings. Delivery of a statementof defence is also a step in the proceedings... Moreover, if the Court has refused to stay an action, or if the defendant has abstained, as in the case in hand, from asking it to do so, the Court hasseizing of the dispute, and it is by its decision and by its decision alone, that the right of the parties are settled...."In K.S.U.D.B. (supra), the Supreme Court similarly held as follows:"Both the decision in Doleman & Sons v. Ossett Corporation (supra) and that of this Court Obembe v. Wemabod Estates Ltd. (supra) recognize it that the Court alone has not only the jurisdictionbut also the duty to settle the dispute between the parties if called upon to do so. These cases also recognize it that under the relevant section of the arbitration low, upon the application of thedefendant to an action brought in breach of agreement to proceed by arbitration the Court has power to stay the proceedings. In other words, under the provisions of the Arbitration law, theCourt had power to refuse to entertain proceedings brought before it in breach of an agreement to decide the matter by arbitration. However the defendant is not given by the law a carteblanche as to when to apply for the stay of proceedings...."Learned Counsel for the 1st Respondent argued that the decision in the case under reference is not relevant to the facts of the case at hand, and I agree with learned counsel. In the instantcase, the learned trial judge held at pages 474 to 475 of the Records of Appeal as follows and I quote:"I have examined the claim put forward by the Plaintiff which was commenced by Writ of Summons asking the Court to enforce all the Terms set out in the Telecoms Private Equity FundInvestment Agreement dated 21st of August, 2008. Amongst other reliefs sought is for the Court to hold that the 2nd Defendant is a party to the said agreement. Definitely from the reliefssought a dispute has occurred.I found from the claim that the Plaintiff acknowledges the agreement entered into and in particular when he sought that the 2nd Defendant should be declared a party to the agreement. Hebelieves that the 3rd, 4th and 5th Defendants have one thing or the other to do with the transaction which he entered into with the 1st Defendant.An Arbitration clause where embedded in a document voluntarily entered into by parties must of necessity be honored in good faith in the absence of fraud or mistake. The Court must notengage in rewriting agreement for parties...I believe that once an arbitration clause is retained in a contract which is valid and subsisting and the dispute is within the contemplation of the Clause, the Court should give regard to thecontract by enforcing the Arbitration Clause....In the present case if the Plaintiff is not happy with the outcome of the Agreement he ought to have gone to Arbitration and exhaust all the mechanism put in place within the Agreement beforeapproaching...Failure to do so tantamount to not fulfilling the condition precedent to adjudication. As long as this situation exists the Court cannot be said to have the jurisdiction and competence to examinethis matter and all other applications before it..."I am unable to, in the peculiar circumstances of the instant case, hold the view that the learned trial judge failed to follow the decision of the Supreme Court referred to by the Appellant. It isundisputed that contrary to the situation in OBEMBE, the 1st Respondent herein sought for an order for stay of proceedings pending arbitration. From the records before us, it ought not bedisputed that the 1st Respondent had taken no step in the proceedings in the suit at the lower Court. In the Appellant's Reply, it was submitted that the 2nd Respondent filed several processesand joined issues with the Appellant and these steps taken by the 2nd Respondent amount to submitting to the jurisdiction of the lower Court.Granted that it is obvious that the 2nd Respondent had taken steps in the proceedings at the lower Court, and is therefore precluded from enjoying the privilege of being granted an order ofstay pending arbitration, pursuant toSection 5 of the Arbitration and Conciliation Act, I am unable to accept the submissions of the Appellant that the steps taken by the 2nd Respondent amount to submission to the jurisdiction ofthe lower court by the other parties, or the 1st Respondent herein in particular. The decision of the Supreme Court is clear on the position that it is only a party who has taken a step in theproceedings in Court that is estopped from asking the Court for a stay to refer the matter to arbitration in accordance with Section 5(1) of the Arbitration and Conciliation Act. Here, it will beunconscionable and therefore wrong to ascribe the steps taken by the 2nd Respondent with respect to the proceedings as those of the 1st Respondent, as the Appellant has urged. The recordbear witness, the Appellant conceded that the 1st Respondent had taken no step in the proceedings at the lower Court. This is sufficient on this issue as it relates to Section 5(1) of theArbitration and Conciliation Act.?Nevertheless, it is certainly also not the contention of the Appellant that the learned trial judge erred when she held that, considering the circumstances of the instant case, where parties haveby agreement agreed to arbitrate any dispute arising from the contract executed by them, recourse to arbitration is a condition precedent to the exercise of the jurisdiction of the Court.Arbitration clause is not a magic wand used to forestall the exercise of jurisdiction of the Court; rather it is only a mechanism built into a contract to enable the parties, in the event of dispute, tofirst explore the option of settling same out of Court failing which they can proceed to Court. See: MESSRS NV SCHEEP v. MV'S ARAZ (2000) 12 SC (Pt. 10) 154 at 213 where it was held:"In any event, the arbitration clause did not seek to oust the jurisdiction of the Court as all it did was to allow parties the avenue and possibilities of settling disputes amicably out of Court. Theposition of the law is that an arbitration clause in agreement generally does not oust the jurisdiction of the Court or prevent the parties from having recourse to the Court in respect of disputearising therefore. A party to an agreement with an arbitration clause has the option to either submit to arbitration or to have the dispute decided by the Court...."Therefore, the reasoning of the learned trial judge earlier reproduced does not in my view, run contrary to the decision in OBEMBE (supra). Appellant's submission on this issue is thereforemisconceived."Per ABUBAKAR, J.C.A. (Pp. 41-49, Paras. E-A) - read in context
(201
8) LP
ELR-45
546(
CA)
4. ARBITRATION AND CONCILIATION - ARBITRATION: Condition precedent for the exercise of discretion of Court to grant an order staying proceedings pending reference to arbitration"Under this issue Appellant's complain is that the learned trial judge ignored the provisions Section 5(2) of the Arbitration and Conciliation Act as well as the decisions in M.V. PARNOMOS BAY v.OLAM (NIG.) PLC (supra) and UBA v. TRIDENT CONSULTING LIMITED (supra).Section 5 of the Arbitration and Conciliation Act reads as follows:(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 arbitrationagreement 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.(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 orderstaying the proceedings."The power donated to the lower Court under the above section is no doubt discretionary and with all the discretionary powers, the appellate Court is always loath to interfere with the way aCourt exercises its discretion unless where the discretion was wrongly exercised; or tainted with some irregularity, or in other instances where the Court sees any reason to interfere with same.See UNILAG v. AIGORO (1985) 1 NWLR (Pt. 1) 143; AJUWA & ANOR v. SPDC NIG. LTD (2011) LPELR-8243 (SC). It must therefore be stated that the competing rights of the parties to justice in thecase must be considered; where such exercise of discretion is motivated by some ulterior considerations in favor of an applicant without adequately taking into account the Respondent's equalright, the discretion will not be said to have been judicially and judiciously exercised. See N.N.P.C. v. FAMFA OIL LTD & ANOR (2009) LPELR-2023 (SC).As I earlier stated, it is the Appellant's complaint that the learned trial judge ignored the provisions of Section 5(2) of the Arbitration and Conciliation Act in reaching the conclusion that the suitbe stayed pending reference to arbitration. Clearly, the purport of Section 5(2) is that a Court may make an order staying proceedings if it is satisfied that there is no sufficient reason(s) why thematter should not be referred to arbitration and that the Applicant was at the time when the action was commenced, willing and ready to do all things necessary for the conduct of thearbitration.Appellant cited the decision in M.V. PANORMOS-BAY v. OLAM (NIG.) PLC (supra) where this Court, per GALADIMA, JCA (as he then was) held that it is the party praying for arbitration as an'applicant' that has the duty to comply with Section 5(2)(b) of the Act by commencing the proceedings. To the contrary, it is the contention of learned Counsel for the 1st Respondent that thedecision in that case was overruled by this Court in ONWARD ENTERPRISES LIMITED v. MV. "MATRIX" & ORS (2008) LPELR-4789 (CA) at Pages 29 to 30, Paras. D to C, where this Court, perMSHELIA, JCA held:"... It is a basic principle of law that where parties to a contract have under the terms thereof agreed to submit to arbitration if there is any dispute arising from the contract between them adefendant who has not taken any steps in the proceedings commenced by the other party, may apply to the Court for stay of proceedings of the action to enable parties to go to arbitration ascontracted.Once an arbitration clause is retained in a contract which is valid and the dispute is within the contemplation of the clause, the Court should give regard to the contract by enforcing thearbitration clause... It is therefore the general policy of the Court to hold parties to the bargain into which they had entered unless there was a strong, compelling and justifiable reason to holdotherwise or interfere. In the instant case, appellant who had the onus to advance compelling reason as to why this Court should interfere with the discretionary power of the trial Judge hadfailed to do so. There is nothing to show that the arbitration agreement was imposed on the appellant. Since both parties voluntarily entered into the agreement same should therefore bebinding on them...."I have had the benefit of reading the decision of the Court in ONWARD ENTERPRISES LIMITED (supra) and I agree with the submissions of learned Counsel for the 1st Respondent that thedecision in M.V. PANORMOS BAY (supra) cannot stand as authority on the issue at hand. This is apparent from the reasoning expressed by my learned brother MSHELIA, JCA at Pages 26 to 28,Paras. F to G, as follows:"I am mindful of the decision of this Court in M.V. Panormos Bay v. Olam (Nig.) Plc supra referred to us by respondent's counsel. In that case this Court declared null and void an arbitrationagreement which states that disputes between parties shall be referred to Arbitration in London on the ground that Section 20 of the Admiralty Jurisdiction Act 1991 is a statutory limitation tothe enforcement of the arbitration agreement in the bills of lading.The reason is that such agreement would deny the Nigerian Courts temporarily of jurisdiction. As rightly observed by respondent's counsel the Court was not called upon to consider theSupreme Court decision in M.V. Lupex v. N.O.C. & S Ltd supra as well as Section 10 of the Admiralty Jurisdiction Act 1991.In M.V. Lupex v. N.O.C. & S Ltd Supra the appellant requested the trial Federal High Court to stay proceedings of the action filed by the respondent in view of the agreement the two partiesentered in clause 7 of the Charter-Party which reads:"7 That parties agreed inter alia on arbitration in London under English Law in the event of dispute,"The Federal High Court refused the stay of proceedings and on appeal this Court affirmed the decision of the trial Court. On further appeal to the Supreme Court, the appeal was allowed andstay of proceedings was ordered. The apex Court held among other things that where parties have agreed to refer their dispute to arbitration in a contract, it behoves the Court to lean towardsordering a stay of proceedings. By this decision it is clear that stay of proceedings, could be granted pending reference to arbitration in a foreign country in deserving cases. I wish to note thatSection 20 of the Admiralty Jurisdiction Act was not discussed in that case...."It is therefore clear that the decision in M.V. PANORMOS BAY (supra) does not reflect the position of the law in this regard and same cannot be relied upon successfully by the Appellant insupport of his contention that no order of stay should be granted by the lower Court pending arbitration. For the avoidance of doubt, the reasoning in that decision does not accord with thedecision of the Supreme Court in M.V. LUPEX, it cannot be relied upon.Appellant's counsel also made reference to UBA v. TRIDENT CONSULTING LIMITED (supra), where the facts show that the Respondent entered into a contract with theAppellant for the implementation of automated Customer Relationship Management (C.R.M.) software for certain aspects of her banking business. There was an arbitration clause in the contractexecuted by the parties. When dispute subsequently arose in respect of some outstanding payments to the credit of the Respondent, the Appellant terminated the contract and the Respondentthen commenced an action at the High Court of Lagos State on sundry reliefs. The Appellant filed an application for stay of proceedings pending arbitration and the application was refused. Onappeal to this Court, it was held that for an application for stay of proceedings pending arbitration to succeed, the Applicant must adduce documentary evidence showing the steps he has takenin respect of the commencement of the arbitration. According to my learned brother IKYEGH, JCA:"Before a stay may be granted pending arbitration, the party applying for a stay must demonstrate unequivocally by documentary and/or other visible means that he is willing to arbitrate. Hedoes it satisfactorily by notifying the other party in writing of his intention of referring the matter to arbitration and by proposing in writing an arbitrator or arbitrators for the arbitration. In theinstant case, the only paragraph of the affidavit evidence of the appellant relevant to the matter deposed in paragraph 8 thereof that:'I was informed by Mr. Ugochukwu Okwesili, a Legal Officer in the applicant Bank in a meeting in our office at 57, Marina, Lagos on the 13th day of May, 2009 at about 2:30pm while reviewingthis matter and I verily believe him that the parties are unable to resolve the matter amicably and that the applicant is ready to do everything necessary to the proper conduct of the Arbitrationin respect of the dispute alleged to have arisen between the parties.'The deposition above is not enough. There must be documentary evidence showing the applicant wrote to the respondent notifying her of the willingness to resort to arbitration over the disputeand also, specifying in the letter or correspondence an arbitrator or arbitrators proposed to be appointed for the arbitration for the ratification or approval of the party."It is settled that the duty of the Court is to give effect to the clear and unambiguous provision of the law and not distort same. See: NIGERCARE DEVELOPMENT COMPANY LTD v. ADAMAWASTATE WATER BOARD & ORS (2008) 9 NWLR (Pt. 1093) 498 SC. In AROMOLARAN v. AGORO (2014) LPELR-24037 (SC), the Apex Court, per GALADIMA, JSC held:"I must say that the duty of the Court is to interpret the words contained in the statute and not to go outside the clear words in searching of an interpretation which is convenient to the Court orto the parties in the process of interpretation. The Court will not embark on a voyage of discovery. Where a statute is clear and unambiguous, as in this case. This Court will follow the literal ruleof interpretation where the provision of the statute is clear and no more."I have earlier made reference to and copiously reproduced Section 5(2) of the Arbitration and Conciliation Act. For emphasis, by that section the lower Court has a discretionary power to grantan order of stay pending arbitration if it is satisfied that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement and theparty making application for stay is ready and willing to do all things necessary to the proper conduct of the arbitration. The view expressed by this Court in UBA v. TRIDENT CONSULTINGLIMITED (supra) is to the effect that it is not enough for the Applicant to merely depose that he is ready and willing to ensure the proper conduct of the arbitration, he must show same throughdocumentary evidence.It is my view with all due respect that placing the burden of presenting documentary evidence to support an application for stay of proceedings pending arbitration constitutes a departure fromthe plain provisions of Section 5(2) of the Act, particularly in cases where the Applicant has deposed to facts in that regard. Section 5 of the Arbitration and Conciliation Act does not make it acondition precedent before an order of stay pending arbitration can be granted, a Court will be expected to be careful in granting an order staying proceedings pending reference to arbitrationwhere the Applicant has not taken any steps in the proceedings, and the Court is satisfied that there is no sufficient reason that the matter should not be referred to arbitration and where theApplicant has been able to show that he is ready and willing to do all things necessary for the proper conduct of arbitration.It cannot be disputed that the purpose of an Applicant deposing to an affidavit is to provide oral and for documentary evidence to support an application filed in Court. It is used to provideevidence to prove a material point(s) in argument. See: HON. JUSTICE GARBA ABDULLAHI v. THE EXECUTIVE GOVERNOR OF KANO STATE & ORS (2014) LPELR-23079 (CA); AGU & ORS v. IDU(2013) LPELR-19992 (CA). As a matter of fact therefore affidavit constitutes evidence. See: NWOSU v. IMO STATE ENVIRONMENT SANITATION AUTHORITY & ORS (1990) SCNJ 97; ANOKA v. IKPO(2013) LPELR- 20419 (CA). Even though I am mindful that the absence of counter-affidavit or contradictory depositions by a Respondent is not a free pass to judgment in favour of an applicantespecially in cases where the depositions are self-contradictory, it is especially true beyond citing authorities that depositions in affidavit which are not countered or controverted are deemed tohave been admitted. See UGWUANYI v. NICON INSURANCE PLC (2013) LPELR-20092 (SC); AKINSETE v. AKINDUTIRE (1966) LPELR-5416 (SC). Thus in OKOEBOR v. POLICE COUNCIL & ORS (2003)LPELR-2458 (SC) it was held as follows:"The attitude of the Courts to unchallenged evidence is not in doubt and it has been stated and reinstated in a plethora of cases. In Iriri v. Erhurhobara (1991) 2 NWLR (Pt. 173) 252 of 255, itwas held that where the evidence of a witness is not inadmissible in law, uncontradicted and unchallenged, a court of law can act on it and accept it as a true version of the case it seeks tosupport. In the same vein, it was decided that wherever any evidence whether affidavit or oral stands uncontradicted, unless the evidence is patently incredible, the Court ought to regard thematter to proved by that evidence as admitted by the adverse party...."Therefore, unchallenged evidence is deemed to be correct and can be acted upon by the Court. In INEGBEDION v. SELO-OJEMEN & ANOR (2013) LPELR-19769 (SC), the Court held:"It is trite law that any unchallenged and uncontradicted fact in an affidavit remains undisputed and is deemed admitted by the adversary and the Court will so hold. However, it is also the lawthat any such unchallenged and uncontradicted facts which are deemed admitted in the affidavit must be capable of proving and supporting the applicant relying on such facts. In other words, ithas been held that the affidavit evidence must necessarily be cogent and strong enough to sustain the case of the applicant...."In the instant case, just as in UBA v. TRIDENT CONSULTING LIMITED (supra), at page 259 of the record of appeal, the Applicant/1st Respondent herein deposed at paragraph 8 of its applicationfor stay as follows:"The 1st Defendant/Applicant confirms its willingness to participate in arbitration proceedings in respect of any alleged dispute arising out of or pursuant to the Telecoms Private EquityInvestment Agreement."The above deposition was not countered by the Appellant in his Counter Affidavit found at pages 309 to 311 of the record of appeal. By the reasoning expressed in UBA v. TRIDENT CONSULTINGLIMITED (supra), the above deposition is not enough, the 1st Respondent is still required to present documentary evidence in support. Considering the circumstances of the instant case, I amunable to subscribe to the reasoning in the light of the express provisions of Section 5(2) of the Act. Contrariwise, it is my humble view that unless such deposition is controverted by the adverseparty, a Court is at liberty to act upon deposition by an applicant that he is willing and ready to ensure that the arbitration is properly conducted, thereby fulfilling the requirement in Section5(2)(b). I totally agree that the reasoning in UBA v. TRIDENT CONSULTING LIMITED (supra) is only potent and tenable in instances where the Applicant's deposition in the Affidavit in support ofthe Application for stay is challenged and/or contradicted by the Respondent. In such cases, it will be necessary for the Applicant to provide further evidence in support of his deposition in thatregard which is not the case in the instant appeal.?Where, as in the instant case, the Appellant did not challenge the 1st Respondent's deposition that the latter is willing to participate in arbitration proceedings in respect of the dispute arisingfrom the Agreement executedby the parties, and there is no sufficient reason to why the matter should not be referred to arbitration, I am unable to interfere with the exercise of the lower Court's discretion granting an orderstaying proceedings pending reference to arbitration."Per ABUBAKAR, J.C.A. (Pp. 53-68, Paras. C-B) - read in context
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5. CASE LAW - JUDICIAL PRECEDENT/ STARE DECISIS: What the doctrine of stare decisis entails"It is a cardinal principle of law under the doctrine of stare decisis that every inferior Court is bound by the decision of a Superior Court; and it is not the place of an inferior Court to say that thedecision of the Superior Court was wrongly decided. See: N.E.P.A. v. ONAH (1997) LPELR-1959 (SC); PDP v. ORANEZI (2017) LPELR-43471 (SC). It must be said however that, by the doctrine ofstare decisis, inferior Courts are only mandated to follow previous decisions of Superior Courts where the case before them involves similar facts or issues. See: ANEKWE v. STATE (2014)LPELR-22881 (SC). The Supreme Court of Nigeria stated the settled position of the law regarding the meaning and nature of stare decisis in ADETOUN OLADEJI (NIG.) LTD v. NIGERIANBREWERIES PLC (2007) LPELR-150 (SC), where TOBI, JSC (of blessed memory) said:"Factual distinctions or differences in cases only avail a party when they are germane or material to the stare decisis of the case. I say this because stare decisis which means to abide or adhereto decided cases, as policy of Courts to stand by precedent is based on a certain state of facts which are substantially the same and here the word is substantially. This means that the facts thatgive rise to the principle of stare decisis are material facts, devoid of or without the unimportant details. This also means that the facts need not be on all fours in the sense of exactness orexactitude... One major criterion in the determination of the matter is that the facts of the previous case are major, substantial and material to the facts of the current case begging for theapplication of the previous case. Before the application of the previous case, the Judge should ask a question: Could the Court have arrived at the decision but for particular facts or could theCourt have arrived at a different decision in the absence of the particular facts? An unequivocal answer to the above double barrel question will pave the way for the applicability orinapplicability of the doctrine...."Per ABUBAKAR, J.C.A. (Pp. 39-41, Paras. F-D) - read in context
6. COURT - DUTY OF COURT: Duty of Court to consider/pronounce on all issues raised before it and the exception thereof"The law is well settled that every Court must consider and pronounce on all issues joined by the parties before it. See IROLO v. UKA (2002) 14 NWLR (Pt. 786) 195 at 225, paras. D-F, theSupreme Court of Nigeria held that:"It is the duty of a Court, whether of first instance or appellate to consider all the issues that have been joined by parties and raised before it for determination. If the Court failed to do so,without a valid reason, then it has certainly failed in its duty; for in our judicial system, it is a fundamental principle of administration of justice that every Court has a duty to hear, determineand resolve such questions...."In OKONJI & ORS v. NJOKANMA & ORS (1991) LPELR-2476 (SC) the Court held that when a party submits an issue to the Court for determination, the Court must make a pronouncement on thatissue except where the issue is subsumed into another issue. See also BAMGBOYE v. UNILORIN & ANOR (1999) LPELR-737 (SC).It was the contention of learned Counsel for the Appellant that the learned trial judge failed/neglected to pronounce on issues joined by the Appellant and the 2nd to 5th Respondentsrespectively but rather erroneously chose to consider and determine the issues joined between the Appellant and the 1st Respondent. The Appellant who was the Plaintiff filed this suit againstthe 1st-5th Respondents; all the Respondents filed differing objections challenging the competence of the Appellant's suit. In his Ruling on the pending applications and objections, the learnedtrial Judge stated at page 473 that: "The jurisdiction of the Court has been challenged in various forms. When the jurisdiction of a Court is challenged, the Court cannot proceed to make anyorder in this case until it has ruled on the issue of jurisdiction, one way or the other... in the circumstances of the various challenges, the most crucial is whether this matter should be referred toArbitration or attended to by this Court."It is apparent that the learned trial judge adopted the approach of picking out the "most crucial" issue relating to the jurisdiction of the lower Court, which has been raised by the respectiveparties before it. The learned judge merely considered and pronounced upon thesingle issue relating to the question as to whether the matter before him should be referred to Arbitration or not, which is one of the several issues canvassed and argued by the parties beforeit, particularly the Appellant and the 1st Respondent. This approach is seemingly in conflict with the settled position of the law that a Court must consider and pronounce upon every issueproperly placed before it for consideration and determination.I must be quick to add that, the foregoing position permits certain recognized exception which have been accepted as constituting basis for doing away with the settled practice, let me start byinching into the decision in UDO v. EKPO & ANOR (2016) LPELR-41383 (CA), Where this Court held as follows and I quote:"The general rule which is now settled is that a Court be it first or appellate, has a duty to consider all the issues pleaded before it. Howbeit, where it is of the view that a consideration of oneissue is enough to dispose of the matter, the said Court is not under any obligation to consider all the other issues posed by the parties. See 7UP BOTTLING COY LTD v. ABIOLA & SONSBOTTLING CO. LTD. (2001) 13 NWLR (Pt. 730) 469 at 499. Consequently, where a party submits an issue for determination, that Court must make a pronouncement on the issue except wherethe issue is subsumed in another and where that happens, there shall no longer be the necessity of making a separate pronouncement on the issue or issues subsumed...." (Underlining mine)Where a Court determines that a consideration of a single issue can dispose of the matter, the Court is not bound by the general position of the law to consider and pronounce on every issuesubmitted to it by parties on record, the Court is also not bound to consider every issue where the other issues are adequately covered by a consideration of a single issue. See: ADEBAYO v. A-G, OGUN STATE (2008) LPELR-80 (SC) where the Supreme Court held that a Court must make a pronouncement on every issue properly before it "except where the issue is subsumed in anotherissue." Here, while concluding on the sole issue being considered, the learned trial judge held at page 475 of the records of appeal that as long as the condition precedent was not fulfilled, "theCourt cannot be said to have the jurisdiction and competence to examine the Appellant's matter and all other applications before it." I believe the Appellant's counsel knows too well that withoutjurisdiction, the lower Court is stripped of the adjudicatory competence to consider and pronounce on any application. See MADUKOLU v. NKEMDILIM (1962) LPELR-24023 (SC). Even though aCourt is bound to consider all the issues properly before it, the failure to do so is not necessarily fatal to the judgment since the failure to do so had not occasioned a miscarriage of justice. InBAMAIYI v. STATE & ORS (2001) LPELR-731 (SC), the Supreme Court of Nigeria held as follows and I quote:"Failure to consider and pronounce on all issues submitted to a Court or tribunal will not, per se, amount to a denial of a right to fair hearing having regard to the judicial decisions on theprinciple. In some cases, it may occasion failure of justice which amounts to denial of fair hearing and in others as is the case in the present proceedings, it will not...."See: also OKOTIE-EBOH v. MANAGER & ORS (2004) LPELR-2502 (SC). There is nothing on record before us, particularly as it relates to the failure of the lower Court to pronounce on all the issuesjoined by the parties, showing that the failure has occasioned a miscarriage of justice. It is obviously of no relevance, considering the peculiar situation in the instant case, to expect the lowerCourt to pronounce on other issues, when it had already held the view that it does not have any jurisdiction to entertain the matter."Per ABUBAKAR, J.C.A. (Pp. 14-19, Paras. A-C) - read incontext
7. PRACTICE AND PROCEDURE - INTERLOCUTORY APPLICATIONS/MATTERS: Whether Court can pronounce on substantive matters or issues in the course of interlocutory proceedings"The learned trial judge had at pages 474 to 475 of the record of appeal held as follows:"I have no evidence of fraud which at any rate must be established beyond reasonable doubt and there is no evidence of a mistake."It is undisputed that the proceedings at the lower Court leading to the instant appeal were still at the interlocutory stage and the Ruling being appealed against, wherein the above findings wereexpressed by the learned trial judge was interlocutory, at which time no evidence had been called or presented before the Court on the issues at stake in the suit. The law is well settled that aCourt must not comment or make pronouncement on substantive matters in an interlocutory proceeding. In a Ruling on an interlocutory application, the Court must shy away and/or refrain frommaking any observation that might appear to prejudge the main issue in contention by the parties. See: NWANKWO & ORS v. YAR'ADUA & ORS (2010) LPELR-2109 (SC); OKOTIE-EBOH v.MANAGER (2004) LPELR -2502 (SC). The learned trial judge in the instant case made observations and/or findings that there was no evidence of fraud or mistake by the Appellant. Needless tostate that the proof of the allegation of fraud or mistake by the Appellant can only be done during substantive trial and not at the interlocutory stage of the proceedings; I therefore have nohesitation in reaching the conclusion that the learned trial judge with all due respect erred."Per ABUBAKAR, J.C.A. (Pp. 71-72, Paras. B-D) - read in context
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TIJJANI ABUBAKAR, J.C.A. (Delivering the Leading
Judgment): This is an appeal against the Ruling of the
Federal High Court, sitting in the Lagos Judicial Division
delivered by C.M.A. Olatoregun J. on the 18th day of
October, 2016 in Suit No: FHC/CS/354/2015 as found at
pages 255-264 of the Records of Appeal. The suit was
commenced at the lower Court by the Appellant against the
Respondents via a Writ of Summons dated the 27th day of
March, 2015 and other accompanying processes found at
pages 1- 249 of the Records of Appeal. In response, the 1st
Respondent filed a Motion on Notice on the 24th April,
2015 found at pages 256-264 of the Records of Appeal
seeking to stay proceedings pending reference to and
determination of the dispute by arbitration as contained in
the agreement binding the parties. The 2nd Respondent
filed a Motion on Notice alongside its Statement of Defense
dated 10th June, 2015 contained at pages 355-376 of the
Records of Appeal seeking an order to strike out the suit for
misjoinder and failure to disclose reasonable cause of
action.
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The 3rd Respondent filed a Notice of Preliminary Objection
dated 27th April, 2015 contained at pages 265-291 of the
Records of Appeal seeking for an order dismissing and/or
striking out the suit for reasons of incompetence and abuse
of Court process. Also, the 4th and 5th Respondents jointly
filed a Notice of Preliminary objection dated 7th May, 2015
found at pages 338-355 of the Records of Appeal seeking
for an order dismissing and/or striking out the suit for
failure to disclose reasonable cause of action and for want
of jurisdiction.
The Appellant filed Counter-Affidavits against all the
Motions and Preliminary Objections as found at pages
309-320; 414-450; 292-308 and 377-413 of the Records of
Appeal. The 1st Respondent filed a Further-Affidavit on the
8th May, 2015 in support of its Motion as contained at
pages 327-337 of the Records of Appeal; while the 3rd
Respondent filed a Reply on Points of Law on 26th January,
2016 found at pages 463-467 of the Records of Appeal. The
lower Court heard the applications and delivered its Ruling
on the 18th day of October, 2016 contained at pages
468-476 of the Records of Appeal wherein the Court found
in
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favour of the Respondents to the effect that the Appellant's
suit cannot be heard until reference has been made to
arbitration and exhausted as contained in the agreement
which is a condition precedent to its exercise of
jurisdiction.
Peeved by the decision of the lower Court, the Appellant
filed a Notice of Appeal dated 28th October, 2016, which is
contained at pages 471-485 of the Record of Appeal. The
Appellants' Brief of Argument was settled by the Appellant
in person and was filed on the 28th day of December, 2016
but deemed as properly filed and served on the 24th day of
January, 2018. The 1st Respondent's Brief on the other
hand was filed on the 26th day of July, 2017 through
learned counsel, Chinedum Umeche, Esq.; same was
deemed as properly filed and served on the 24th day of
January, 2018. The Appellant also filed a Reply to the 1st
Respondent Brief on the 22nd day of December, 2017. The
Reply Brief was deemed as properly filed and served on the
24th day of January, 2018. The 2nd-5th Respondents filed
no Brief. Learned counsel for the Appellant formulated six
(6) issues for determination, the issues are reproduced as
follows:
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1. Whether the trial Court breached the fair hearing
right of the Appellant by its failure and/or refusal to
consider all the issues brought before it for
adjudication as contained in the processes filed by the
Appellant.
2. Whether the trial Court's failure to appreciate that
in the circumstances of this instant case with so
much bearing on the several issues therein that it is
impracticable to resolve these issues by arbitration,
the said issues having not been within the Appellant
and the 1st and 2nd Respondents pursuant to Clause
9.3 of the Telecoms Private Equity Investment
Agreement of May 21, 2008?
3. Whether the trial Court was right in refusing to
follow the established principle of law as enunciated
by the Supreme Court in the case of OBEMBE v.
WEMABOD ESTATE (1977) 5 SC 115 at 131 and
K.S.U.D.B v. FANZ LTD (1986) 5 NWLR (Pt. 39) pg.74
at 86 which is in tandem with the instant case and
which is binding on the Court as per the principle of
stare decisis.
4. Whether the trial Court was right to have ignored
the S.5(2)(b) of the Arbitration and Conciliation Act
and the decisions of M. V. PARNOMS v. OLAM (NIG.)
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PLC [2004] 5 NWLR (Pt. 865) Pg. 1 at 16, Paras. C - D
and UBA v. TRIDENT CONSULTING LIMITED [2013]
4 CLRN 119 which were cited to the Court by the
Appellant.
5. Whether the trial Court was right to have held that
there was no evidence of fraud at the preliminary
stage without averting its mind to the Appellant's
Statement of Claim decision and the case of NIMASA
v. ODEY (2013) LPELR-21402 (CA).
6. Whether the Honorable trial Judge erred in law
when it failed to determine the other issues of
jurisdiction raised by parties in this matter, and
which have a direct bearing as to whether or not the
matter as presently constituted can be referred to
Arbitration or not.
The 1st Respondent equally nominated six (6) issues for
determination also reproduced as follows:
1. Whether the lower Court breached the fair hearing
right of the Appellant in respect of issues raised by
the 2nd-5th Respondents when all parties were
allowed equal opportunities?
2. Whether the lower Court was right when it held
that the case presented by the Applicant was within
the contemplation of the Arbitration Agreement
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contained in Clause 9.3 of the Telecoms Private
Equity Investment Agreement of May 27, 2008?
3. Whether the lower Court ought to have followed
the decisions in the cases of OBEMBE v. WEMABOD
ESTATE (1977) 5 SC 115 at 131 and K.S.U.D.B v.
FANZ LTD (1986) 5 NWLR (Pt. 39) Pg. 74 at 86 which
are not relevant to the facts and circumstances of this
case.
4. Was the lower Court right to have stayed
proceedings in view of the provisions of Section
5(2)(b) of the Arbitration and Conciliation Act?
5. Whether the decision in the case of NIMASA v.
ODEY (2013) LPELR-21402 (CA) is relevant to the
facts and circumstances of the present case in view of
the Appellant's averments in paragraphs 45 and 46 of
his Statement of Claim filed at the lower Court?
6. Whether the lower Court was right to have decided
the issue of reference to arbitration first, considering
the duty/discretion of the lower Court under Section 5
of the Arbitration Act and Conciliation Act on
reference to Arbitration and Stay of Proceedings
pending Arbitration?
SUBMISSIONS OF COUNSEL
As already stated, the Appellant and the 1st Respondent
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both crafted six issues each for determination. I have
carefully considered all these issues and I am of the
undoubted view that the 1st Respondent's issues are the
same with the Appellant's issues except for the
terminologies employed to dilute the apparent similarities.
I shall therefore consider the submissions of counsel on the
issues and the reply. I must be quick to state that the
2nd-5th Respondents did not file any process in this appeal.
Before the substantive issues, learned counsel for the 1st
Respondent raised and argued preliminary points
essentially arising from the Appellant's brief, the contention
of the Appellant is that the lower Court failed or refused to
decide some of the issues raised by the 2nd-5th
Respondents and that the said 2nd-5th Respondents did not
challenge the decision of the lower Court. Counsel
submitted that the Appellant cannot complain on behalf of
the 2nd-5th Respondents and therefore, this appeal is
academic and that precious judicial time cannot be
committed to answer academic questions.
Learned counsel further referred to paragraphs 45 and 46
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of the Statement of Claim at pages 17-18 of the Records of
Appeal to argue that the Appellant's case at the lower
Court was for alleged fraud and misrepresentation but that
the Appellant changed its case to fraud alone in the
Appellant's Brief. Counsel referred to AGBEOTU v.
BRISIBE [2005] 10 NWLR (Pt. 932) Pg. 1 at 19, 36
(CA) to argue that parties are bound by the records of the
Court and that a party cannot change its case on appeal.
Counsel further submitted that arguments contained in a
party's brief, no matter how brilliant, cannot substitute the
Record of Appeal. Learned counsel further referred to a
circular dated 26th May, 2017 and issued by the Chief
Justice of Nigeria to the effect that heads of Courts should
put measures in place to enforce arbitration agreements
contained in commercial contracts.
In response to the foregoing preliminary argument, learned
counsel for the Appellant submitted that the Appellant
joined issues with the 2nd-5th Respondents at the lower
Court. Counsel referred to MARINE MANAGEMENT
ASSOCIATES INC. & ANOR v. NATIONAL MARITIME
AUTHORITY (2012) LPELR-20618 (SC) pg. 27, paras.
D - E and UNILORIN v. AKINOLA (2014)
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LPELR-23275 (SC) Pg. 36, paras. E-G and submitted
that the 1st Respondent's contention that it is only the
2nd-5th Respondents that can complain of breach of fair
hearing is not the law and therefore not tenable.
I believe the argument canvassed by the learned counsel
for the 1st Respondent here is unsustainable. It is definitely
not disputed that the Appellants joined issues with the 2nd
to 5th Respondents on the issues raised by the latter. As a
result, the Appellant is not precluded from appealing on
such issues or on the failure by the learned trial judge to
consider and/or pronounce on the issues raised by the 2nd
to 5th Respondent. I am in agreement with the Appellant
that the contention of the 1st Respondent here is untenable
and same is hereby discountenanced.
ISSUE ONE
On issue No. 1 which is, "Whether the trial Court breached
the fair hearing right of the Appellant by its failure and/or
refusal to consider all the issues brought before it for
adjudication as contained in the processes filed by the
Appellant", learned counsel for the Appellant referred to
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X.S. (NIG.) LTD v. TAISEI (2006) 15 NWLR (Pt. 1003)
pg. 558, Paras. C-D and IKECHUKWU v. F.R.N. & ORS
(2015) LPELR-24445 (SC) Pg. 21-22, Paras. G-B to
submit that it is the duty of trial Courts to pronounce on all
issues raised or brought to their notice by the parties and
not to restrict themselves to one or more issues which in
their opinion disposes of the case. Counsel argued that the
parties submitted several issues for determination before
the lower Court but that the lower Court refused and/or
failed and/or neglected to rule on issues joined between the
Appellant and the 2nd, 3rd, 4th & 5th Respondents and
only chose to determine the issues joined between the
Appellant and the 1st Respondent.
Learned counsel argued that the lower Court totally failed
to appreciate that there was no way the issue of stay of
proceedings pending arbitration could have been
determined judicially or judiciously without considering and
determining the issue of joinder of parties, reasonable
cause of action, abuse of Court processes and defective
commencement of action which were all before the lower
Court. Counsel further argued that the lower Court
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failed to consider the issues raised in the Appellant's
Written Address in response to the 1st Respondent's
Application for stay of proceedings and the facts contained
in the Counter-Affidavits to the 2nd Respondent's Motion
and the 3rd and 4th & 5th Respondents' Notices of
preliminary objection.
Learned counsel cited ODETAYO v. BAMIDELE (2007)
Vol. 35 WRN pg. 1 it 5, Lines 5-10 (sc) and OBIONWU
& ORS v. I.N.E.C. (2013) LPELR-22573 (CA) Pg.
43-44, Paras. D-D to argue that the trial Court should
have considered the live issues before it. Counsel cited
BUREAU OF PUBLIC ENTERPRISE v. REINSURANCE
ACQUISITION GROUP LTD & ORS (2008) LPELR-8560
(CA) to which the lower Court was referred to on the issue
of jurisdiction but ignored. Counsel referred to NYESOM v.
PETERSIDE & ORS (2016) LPELR-40036 (SC); APC &
ORS v. IN RE: CPC & ORS (2014) LPELR-24036 (SC)
Pg. 55-55, Paras. D-E and concluded that the trial Court
breached the Appellant's right to fair hearing by ignoring
and failing to consider and determine all the issues raised
by the Appellant before it thereby occasioned a miscarriage
of justice.
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On this first issue, learned counsel for the 1st Respondent
referred to S.C.E.N. v. NWOSU [2008] All FWLR (Pt.
413) pg. 1399 at 1421, paras. E-F (CA) to contend that
the lower Court gave equal opportunity to all the parties to
be heard on all the issues raised by all the Respondents and
came to the conclusion at page 475 of the Records of
Appeal that its jurisdiction to proceed with the matter was
yet to be activated because of the failure of the Appellant to
exhaust the dispute resolution mechanism agreed in the
contract prior to the commencement of the suit.
Learned counsel relied on EGHAREVBA v. F.R.N. (2016)
LPELR-40045 (SC); IKECHUKWU v. F.R.N. & ORS
(Supra) to argue that as an exception to the general rule, a
Court needs not pronounce on all issues where the
pronouncement would negate the adjudicatory process,
prejudice the process or pervert the cause of justice of the
matter. Counsel reiterated that the trial Court did not deny
the Appellant any fair hearing and that the lower Court
having resolved that its jurisdiction was yet to be activated
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was not bound by the genera l ru le o f making
pronouncement on all issues before it. Counsel urged this
Court to resolve this issue in favor of the 1st Respondent
against the Appellant.
Learned counsel for the Appellant in the Reply Brief
reiterated his submissions under issue No. 1 in the
Appellant's Brief and further referred to NEWSWATCH
COMMUNICATIONS LTD v. ATTA [2006] 4 SCNJ (Pt.
1003] Pg. 282 at 299-300 to argue that the trial Court
breached the Appellant's right to fair hearing by choosing
to determine only the issues joined by the Appellant and 1st
Respondent and neglecting the issues raised and joined by
the Appellant and the other Respondents thereby visiting
miscarriage of justice on the Appellant. Counsel referred to
AKYEN & ANOR v . MU'AZU & ORS (2009)
LPELR-3697 (CA) Pg. 49, Paras. B-F to submit that 1st
Respondent in contending that the case of IKECHUKWU
v. F.R.N. & ORS (Supra) is inapplicable, the 1st
Respondent has not denied the principle that a Court must
pronounce on all issues raised by the parties before it
which was the decision in IKECHUKWU v. F.R.N. & ORS.
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RESOLUTION
The law is well settled that every Court must consider and
pronounce on all issues joined by the parties before it. See
IROLO v. UKA (2002) 14 NWLR (Pt. 786) 195 at 225,
paras. D-F, the Supreme Court of Nigeria held that:
"It is the duty of a Court, whether of first instance or
appellate to consider all the issues that have been
joined by part ies and raised before i t for
determination. If the Court failed to do so, without a
valid reason, then it has certainly failed in its duty;
for in our judicial system, it is a fundamental
principle of administration of justice that every Court
has a duty to hear, determine and resolve such
questions...."
In OKONJI & ORS v. NJOKANMA & ORS (1991)
LPELR-2476 (SC) the Court held that when a party
submits an issue to the Court for determination, the Court
must make a pronouncement on that issue except where
the issue is subsumed into another issue. See also
BAMGBOYE v. UNILORIN & ANOR (1999) LPELR-737
(SC).
It was the contention of learned Counsel for the Appellant
that the learned trial judge failed/neglected to pronounce
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on issues joined by the Appellant and the 2nd to 5th
Respondents respectively but rather erroneously chose to
consider and determine the issues joined between the
Appellant and the 1st Respondent. The Appellant who was
the Plaintiff filed this suit against the 1st-5th Respondents;
all the Respondents filed differing objections challenging
the competence of the Appellant's suit. In his Ruling on the
pending applications and objections, the learned trial Judge
stated at page 473 that: "The jurisdiction of the Court has
been challenged in various forms. When the jurisdiction of
a Court is challenged, the Court cannot proceed to make
any order in this case until it has ruled on the issue of
jurisdiction, one way or the other... in the circumstances of
the various challenges, the most crucial is whether this
matter should be referred to Arbitration or attended to by
this Court."
It is apparent that the learned trial judge adopted the
approach of picking out the "most crucial" issue relating to
the jurisdiction of the lower Court, which has been raised
by the respective parties before it. The learned judge
merely considered and pronounced upon the
15
(201
8) LP
ELR-45
546(
CA)
single issue relating to the question as to whether the
matter before him should be referred to Arbitration or not,
which is one of the several issues canvassed and argued by
the parties before it, particularly the Appellant and the 1st
Respondent. This approach is seemingly in conflict with the
settled position of the law that a Court must consider and
pronounce upon every issue properly placed before it for
consideration and determination.
I must be quick to add that, the foregoing position permits
certain recognized exception which have been accepted as
constituting basis for doing away with the settled practice,
let me start by inching into the decision in UDO v. EKPO
& ANOR (2016) LPELR-41383 (CA), Where this Court
held as follows and I quote:
"The general rule which is now settled is that a Court
be it first or appellate, has a duty to consider all the
issues pleaded before it. Howbeit, where it is of the
view that a consideration of one issue is enough to
dispose of the matter, the said Court is not under any
obligation to consider all the other issues posed by
the parties. See 7UP BOTTLING COY LTD v. ABIOLA
16
(201
8) LP
ELR-45
546(
CA)
& SONS BOTTLING CO. LTD. (2001) 13 NWLR (Pt.
730) 469 at 499. Consequently, where a party submits
an issue for determination, that Court must make a
pronouncement on the issue except where the issue is
subsumed in another and where that happens, there
shall no longer be the necessity of making a separate
pronouncement on the issue or issues subsumed...."
(Underlining mine)
Where a Court determines that a consideration of a single
issue can dispose of the matter, the Court is not bound by
the general position of the law to consider and pronounce
on every issue submitted to it by parties on record, the
Court is also not bound to consider every issue where the
other issues are adequately covered by a consideration of a
single issue. See: ADEBAYO v. A-G, OGUN STATE
(2008) LPELR-80 (SC) where the Supreme Court held
that a Court must make a pronouncement on every issue
properly before it "except where the issue is subsumed in
another issue." Here, while concluding on the sole issue
being considered, the learned trial judge held at page 475
of the records of appeal that as long as the condition
precedent
17
(201
8) LP
ELR-45
546(
CA)
was not fulfilled, "the Court cannot be said to have the
jurisdiction and competence to examine the Appellant's
matter and all other applications before it." I believe the
Appellant's counsel knows too well that without
jurisdiction, the lower Court is stripped of the adjudicatory
competence to consider and pronounce on any application.
See MADUKOLU v. NKEMDILIM (1962) LPELR-24023
(SC). Even though a Court is bound to consider all the
issues properly before it, the failure to do so is not
necessarily fatal to the judgment since the failure to do so
had not occasioned a miscarriage of justice. In BAMAIYI v.
STATE & ORS (2001) LPELR-731 (SC), the Supreme
Court of Nigeria held as follows and I quote:
"Failure to consider and pronounce on all issues
submitted to a Court or tribunal will not, per se,
amount to a denial of a right to fair hearing having
regard to the judicial decisions on the principle. In
some cases, it may occasion failure of justice which
amounts to denial of fair hearing and in others as is
the case in the present proceedings, it will not…."
See: also OKOTIE-EBOH v. MANAGER & ORS (2004)
LPELR-2502 (SC).
18
(201
8) LP
ELR-45
546(
CA)
There is nothing on record before us, particularly as it
relates to the failure of the lower Court to pronounce on all
the issues joined by the parties, showing that the failure
has occasioned a miscarriage of justice. It is obviously of no
relevance, considering the peculiar situation in the instant
case, to expect the lower Court to pronounce on other
issues, when it had already held the view that it does not
have any jurisdiction to entertain the matter. To this extent
therefore, this issue is resolved in favor of the 1st
Respondent.
ISSUE TWO
On the second issue, which is, "Whether the trial Court's
failure to appreciate that in the circumstances of this
instant case with so much bearing on the several issues
therein that it is impracticable to resolve these issues by
arbitration, the said issues having not been within the
Appellant and the 1st and 2nd Respondents pursuant to
Clause 9.3 of the Telecoms Private Equity Investment
Agreement of May 21, 2008?" Learned counsel placed
reliance on NIKA FISHING CO. LTD v. LAVINA
CORPORATION [2008] 16 NWLR (Pt.
19
(201
8) LP
ELR-45
546(
CA)
114) 509 and HALILU AKILU v. CHIEF GANI
FAWEHINMI (No. 2) [1989] NWLR (Pt. 102) 122 to
submit that an application for stay of proceedings is not
granted as a matter of course; but that the applicant must
place before the Court sufficient grounds that will sway the
exercise of the Court's discretion in its direction. Counsel
argued that arbitration agreement is usually bilateral and
therefore, arbitration proceedings under one contract
cannot, without agreement of the parties, be used to
resolve disputes under another contract nor can a third
party make himself a party to an arbitration.
Learned counsel referred to LIGNES AERIENNES
CONGOLAISES v. AIR ATLANTIC NIGERIA LIMITED
[2006] 2 NWLR (Pt. 903) pg. 49; N.V. SCHEEP v. MV'S
ARAZ [2000] 15 (Pt. 691) Pg, 22; OBEMBE v.
WEMABOD ESTATE [1977] 5 SC 15 at 131 and
K.S.U.D.B. v. FANZ LTD (1986) 5 NWLR (Pt. 39) Pg.74
at 86-87, Paras. C-D to submit that an arbitration clause
does not oust the jurisdiction of the Court or prevent
parties from having recourse to the Court. Counsel relied
on OGUNWALE v. SYRIAN ARAB REPUBLIC [2002] 9
NWLR (Pt. 771) Pg. 127 to submit that
20
(201
8) LP
ELR-45
546(
CA)
not all the issues between the parties herein can be
determined by arbitration because most of the reliefs being
sought by the Appellant in this matter are equitable reliefs
which only the trial Court can hear and determine.
Learned counsel for the Appellant also referred to Section
5(2)(b) of the Arbitration Act; M.V. PARNOMS BY v.
OLAM (NIG.) PLC [2004] 5 NWLR (Pt. 865) Pg. 1 at
16, Paras. C-D to submit that parties seeking Stay of
proceedings pending arbitration are enjoined to commence
or initiate the arbitral process before making the
application for Stay to the Court and that the 1st
Respondent in the instant case had opportunity to initiate
the arbitration proceedings but failed to do so. Counsel
further referred to MOUKTAR MOHAMMED & USMAN
DANTATA JNR. (2012) 11 NWLR (Pt. 1310) Pg. 47-48,
Paras. H-A to contend and urge this Court to hold that the
3rd, 4th & 5th Respondents, not being parties thereto, are
not privy to the Agreement dated 21st May, 2008 between
the 1st Respondent; 2nd Respondent and the Appellant.
Learned counsel further submitted that fraud was pleaded
21
(201
8) LP
ELR-45
546(
CA)
with particulars in the instant case and therefore, it cannot
be within the contemplation of the Arbitration agreement.
Counsel cited J. EXPORT & CHEMICAL COMPANY LTD
v. KADUNA REFINING & PETRO-CHEMICAL
COMPANY LTD (2002) LPELR-12175 (CA) and urged
this Court to resolve this issue in favor of the Appellant.
On this second issue, learned counsel for the 1st
Respondent submitted that the Appellant did not deny the
Agreement and the fact that parties agreed to be bound by
arbitration. Counsel submitted that the Appellant and the
1st-3rd Respondents are bound by the arbitration clause in
the agreement dated 21st May, 2008 and that there is no
mutually exclusive claim against the 4th & 5th
Respondents. Learned counsel submitted that the use of
the word fraud in the context of this case does not refer to
any criminal offence and that a civil claim does not
automatically transform into criminal proceedings
incapable of being resolved by arbitration merely because a
party made an allegation of fraud, whether rightly or
wrongly.
Learned counsel submitted that the case of
22
(201
8) LP
ELR-45
546(
CA)
OKOLI v. MORECAB FINANCE (NIG.) LTD (Supra)
does not support the Appellant, the present suit which is
not a criminal case and that the allegation of fraud made by
the Appellant at the lower Court is that of contractual or
civil impropriety which is capable of being resolved in line
with the agreement of the parties. Counsel placed reliance
on the case of A AYYASAMY v. A PARAMASIVAM & ORS
(CA Nos. 8245-8245 OF 2016) decided by the Supreme
Court of India where it was held that allegations of fraud
are no impediments for arbitration proceedings unless the
allegation is very serious in nature or in relation to the
arbitration agreement itself. Learned counsel submitted
that OGUNWALE v. SYRIAN ARAB REPUBLIC (supra)
and J. EXPORT & CHEMICAL COMPANY LTD v.
KADUNA REFINING & PETRO-CHEMICAL COMPANY
LTD (Supra) do not support the case of the Appellant and
that the lower Court was right to have held that the case
presented by the Appellant was within the contemplation of
the arbitration agreement. Counsel urged this Court to
resolve this issue in favor of the 1st Respondent against the
Appellant.
23
(201
8) LP
ELR-45
546(
CA)
The response of learned counsel to the Appellant on the
second issue is that contrary to the Respondent's
contention, the Appellant had specific claims against the
4th & 5th Respondents as contained at paragraphs J, U and
V at pages 3-4 of the Records of Appeal. Learned counsel
further referred to UMANAH v. ATTAH [2006] 17 NWLR
(Pt. 1009) Pg. 503 to submit that the 1st Respondent did
not deny the issue of fraud and/or fraudulent
misrepresentation raised by the Appellant and that fraud is
fraud whether in civil or criminal proceeding as long as it is
pleaded and particulars of the said fraud are furnished as
done in the instant case at pages 310-311 of the Records of
Appeal.
Learned counsel for the Appellant further submitted that
the instant case is not to be determined by arbitration and
that the lower Court has a duty to determine the allegation
of crime. Counsel argued and referred to A AYYASAMY v.
A PARAMASIVAM & ORS (Supra) to contend that the
Appellant can bring action not only against parties to the
Agreement dated 21st May, 2008 but also against all
persons in the world. Learned counsel referred to pages 7-
24
(201
8) LP
ELR-45
546(
CA)
24 of the Records of Appeal to submit that the allegation of
crime against the 1st Respondent goes to the root of the
Agreement dated 21st May, 2008 and involves several
thousands of dollars and voluminous evidence and
therefore essential for a Court to determine the said issue.
Counsel again referred to OGUNWALE v. SYRIAN ARAB
REPUBLIC (Supra) and J. EXPORT & CHEMICAL
COMPANY LTD v. KADUNA REFINING & PETRO-
CHEMICAL COMPANY LTD (Supra).
RESOLUTION
The plank of the Appellant's submission under this issue is
that the subject matter giving rise to the present appeal
does not fall within matters that should be subject to
arbitration, on the ground that issues before the Court
involve more than one party and that fraud is alleged by the
Appellant in his statement of claim.
It is undisputed that before a matter can be referred to
arbitration, same must first be seen to be arbitrable. The
dispute must not relate or cover matters which by law, are
not permitted to be settled by other dispute resolution
mechanisms other than in Court, the Arbitration and
Conciliation Act, Cap A18, does not demarcate between
25
(201
8) LP
ELR-45
546(
CA)
disputes that are arbitrable or otherwise, it has however
been judicially recognized as a matter of public policy that
matters relating to crime, matrimonial causes, winding up
of a company or bankruptcy are of such nature that cannot
be settled by arbitration. See: BCC TROPICAL (NIG.)
LTD v. GOVERNMENT OF YOBE STATE OF NIGERIA
& ANOR (2011) LPELR-9230 (CA).
As the argument of the counsel in this appeal shows,
arbitrability of fraud is one of the contentious issues in
arbitration, particularly as it involves questions of what
type of issue can and cannot be submitted to arbitration. It
has always been the case that where fraud and serious
malpractices are alleged in a dispute, same cannot be
referred to an arbitrator for resolution. The jurisdiction of
the regular Court on this issue is iron-clad, as fraud,
financial malpractice and collusion are allegations with
criminal consequences and therefore reserved for the
Courts, and an arbitral tribunal, being a creature of
contract, is not endowed with general and wide
jurisdiction, bestowed upon regular Courts, which are
equipped to adjudicate in complex issues and are
26
(201
8) LP
ELR-45
546(
CA)
competent to offer wider range of reliefs to the parties in
dispute. See: Alipak Banerjee & Vyapak Desai on "Is Fraud
Open To Arbitration."
In the instant appeal, it is undisputed that the Appellant
pleaded fraud with the particulars thereof, particularly at
paragraph 45 of the Appellant's Statement of Claim
alleging that the 1st Respondent's Telecoms Private Equity
Fund Investment Agreement is a Ponzi Scheme and an
instrument of fraud, used by the Respondents to defraud
unsuspecting Nigerians including the Appellant. It is in this
regard that the Appellant sought a declaration that the 1st
Respondent's Telecom Private Equity Fund is a Ponzi
Scheme used by the 1st Respondent to defraud the
Appellant. Appellant holds the view that the issue of fraud
alleged in the instant case cannot be resolved by
arbitration. The learned Counsel for the 1st Respondent
contended otherwise that the principal claim of the
Appellant is for breach of Agreement and that the use of
"fraud" by the Appellant in this case does not refer to any
form of criminal offence, but is at best contractual
misrepresentation.
27
(201
8) LP
ELR-45
546(
CA)
I am not aware of any decision of the Superior Courts in
this country where the instant issue was considered and
pronounced upon. I therefore take solace in decisions in
other jurisdictions, which though are of persuasive
authority, but are nevertheless applicable to the issues
herein. See the decisions in SWISS TIMING LTD v.
ORGANISING COMMITTEE, COMMON WEALTH
GAMES 2010 (2014) 6 SCC 677; WORLD SPORT
GROUP (MAURITIUS) LTD v. MSM SATELLITE
(SINGAPORE) PTE LTD in Civil Appeal No. 895 of
2014.
In WORLD SPORT GROUP (MAURITIUS) LTD (Supra),
the parties entered into a partnership deed on 1st April
1994 for running a hotel. While the Appellant was
entrusted with administration, the Respondents alleged
that the Appellant had failed to make regular deposits of
money into the common operating bank account and had
fraudulently siphoned off an amount of INR 10,00,050. In a
separate raid conducted by the Law Enforcement Agents
(CBI) on premises of the Appellant's relative, an amount of
INR 45,00,000 was seized and alleged to have been given
by the Appellant for business of the hotel . The
Respondents
28
(201
8) LP
ELR-45
546(
CA)
filed a civil suit seeking right of administration of the hotel.
The Appellant sought reference of the dispute to arbitration
under Indian Arbitration Act. The High Court rejected the
Appellant's application on the ground that the dispute
involved allegations of fraud. Aggrieved by the decision, the
Appellant preferred an appeal before the Supreme Court. It
was the contention of the Respondents in that case, just as
the one before this Court that, where allegations of fraud
are involved civil Courts are the appropriate forum for
adjudication. The Supreme Court of India rejected the
general notion that elements of criminal wrongdoing
detracted from the jurisdiction of arbitral tribunal.
Referring to the Indian Arbitration Legislation and the New
York Convention, the Court considered that the allegations
of fraud did not impact on the validity of the arbitration
agreement; the fact that fraud was alleged did not render
the agreement inoperative or incapable of being performed.
The foregoing decisions of the Indian Supreme Court are
instructive and I must say the reasoning therein is
compelling. It is my view, that to accept the Appellant's
29
(201
8) LP
ELR-45
546(
CA)
contention to the effect that arbitration should be shut out,
merely on the basis of allegation of fraud, which has not
been subject to proof, would undoubtedly destroy the very
purpose for which the parties had agreed by contract to
submit to arbitration. In as much as the allegation of fraud
does not relate to the validity of the substantive contract,
which is even separable from the Arbitration clause, I am of
the opinion that the Court ought to act with caution and
circumspection as the allegations of fraud in the
circumstances of this case, can be duly considered by an
Arbitrator or Arbitral Tribunal. The allegation of fraud by
the Appellant herein is not directed, at the arbitration
agreement, thereby impeaching same and the resultant
arbitration, nor is it directed at the main contract; I am
therefore unable to accept the submissions of learned
Counsel for the Appellant that mere allegation of fraud
renders the dispute herein un-arbitrable.
I am mindful of the fact that Appellant relied on the
decision of this Court in B. J. EXPORT & CHEMICAL
COMPANY LTD v. KADUNA REFINING & PETRO-
CHEMICAL COMPANY LTD (supra), particularly the
30
(201
8) LP
ELR-45
546(
CA)
dictum of MOHAMMED, JCA at page 36, paras. B-G; thus:
"It is trite that the disputes which the subject of an
arbitration agreement must be arbitrable. In other
words, the agreement must not cover matters which
by the law of the State are not allowed to be settled
privately or by arbitration usually because this will be
contrary to the public policy. Thus, a criminal matter,
like the allegation of fraud raised by the respondent
in this case, does not admit of settlement by
arbitration as was clearly stated by the Supreme
Court in KANO STATE URBAN DEVELOPMENT
BOARD v. FANZ CONSTRUCTION LTD. (1990) 4
NWLR (Pt. 142) 1 at 32-33. This position of the law
appears to have been further stated under the
Arbitration and Conciliation Act, CAP 19 Laws of
Federation...."
I must say that decision of this Court in the above case is
inapplicable to the instant case. The dispute between the
parties in that case arose out of an agreement entered
between the parties by which the Appellant hired four ISO
Tanks from the respondent for shipment of petroleum
products on a rental charge of N10,000.00 for each tank
for
31
(201
8) LP
ELR-45
546(
CA)
a period of 8 weeks. The Appellant took delivery of the
tanks and used same to ship petroleum products to Europe.
At the expiry of the 8 weeks period of lease of the tanks,
the Appellant failed to return them to the Respondent as
agreed.
When the Respondent demanded for the return of the
tanks, the Appellants attributed its failure to return same to
the uncertainty in the political situation in Nigeria, due to
the crisis relating to the June 12, 1993 election, and
subsequently the industrial action at the Lagos Port but
finally returned them in September 1993 in clean condition
along with the payment of N80,000.00 rental charges.
However, nearly three months thereafter, the Appellant
raised problems encountered with the tanks by its Agent in
Europe who claimed the sum of $85,016.00 from the
respondent being alleged expenses incurred on account of
unsuitability of the tanks, etc. When the Appellant's claim
was resisted by the Respondent, the Appellant proposed
the appointment of an arbitrator to resolve the dispute and
this was accepted by the Respondent, whereupon the
parties jointly appointed the arbitrator. When the parties
32
(201
8) LP
ELR-45
546(
CA)
appeared before the arbitrator, instead of the earlier claim
of $85,016.00, the Appellant filed a claim of $400,000.00
before the arbitrator. Rather than responding to the
Appellant's claim before the Arbitrator, the Respondent
commenced an action before the Kaduna State High Court
vide an Originating Summons seeking (1) A declaration that
the Appellant's claim against the Respondent upon which
reference was made to the Arbitrator is prima facie
fraudulent and therefore not a proper subject of arbitration
as contemplated by the parties in their agreement; and (2)
Leave to revoke the arbitration agreement and the
arbitrator's authority upon the said ground.
It is obvious the situation and circumstance of the instant
case are not consistent with the one in B. J. EXPORT &
CHEMICAL COMPANY LTD where the Respondent's
allegation of fraud goes to the root of the Arbitration
Agreement. In the instant case, it does not and I am
therefore unable to reach similar conclusion as reached by
this Court therein. At any rate, the ratio in that case
supports the position earlier expressed that where the
allegation of fraud affects the validity of the
33
(201
8) LP
ELR-45
546(
CA)
substantive contract and/or the Arbitration Agreement,
same cannot be determined by an Arbitrator; only regular
Courts have jurisdiction to consider and pronounce on such
issue. In the instant case, the allegation of fraud does not
affect or relate to the validity or otherwise of the contract
between the parties or the Arbitration Agreement;
therefore the reasoning expressed in decision of this Court
in B.J. EXPORT & CHEMICAL COMPANY LTD cannot be
adopted here, where the allegation of fraud is in relation to
the performance of obligations under the contract. In that
case, the allegation of fraud affects the contract, or at best,
the arbitration agreement and goes to the root of the
relationship between the parties. The position of the law
stated by this Court in the said case remains potent but
qualified to the effect only the Court can adjudicate on
allegation of fraud which affects the validity of an
arbitration agreement.
The other question under this issue relates to the
Appellant's contention that since the parties in the instant
suit are more than two, the dispute cannot be arbitrable.
34
(201
8) LP
ELR-45
546(
CA)
The Appellant copiously referred to the view expressed by
the learned authors, J. O. Orojo and M. A. Ajomo, "Law and
Practice of Arbitration and Conciliation in Nigeria", Lagos:
1999, 62 that "as a general rule, there are two parties to an
arbitration since an arbitration agreement is usually
bilateral and so an arbitration proceeding under one
contract cannot, without agreement of the parties, be used
to resolve disputes under another contract. Nor can a third
party make himself a party to that arbitration."
I must say that the Appellant's argument on this ground is
misconceived. From the submissions made by the
Appellant, it is conceded that there can be more than one
party to an arbitration proceedings emanating under one
contract, in so far as the parties involved consent to submit
to arbitration. There is nothing on record showing that the
parties concerned do (or will) not consent to arbitration. It
is speculative to say the least.
I am in agreement with the learned counsel for the 1st
Respondent that the pivotal dispute as apparent from the
reliefs sought by the Appellant herein, is between the
35
(201
8) LP
ELR-45
546(
CA)
Appellant and the 1st to 3rd Respondents. As a matter of
fact, the reliefs sought against the 4th and 5th
Respondents, who are not parties to the arbitration
agreement nor agents or privies of the parties thereto, are
consequential and ancillary to the principal reliefs sought
by the Appellant. As a matter of fact, Reliefs J, Q and U are
declaratory and injunctive reliefs geared towards
invalidating the contract purportedly executed by the 1st to
5th Respondents, towards changing the "character and
form of the Appellant's investment in the MTN Linked
Unit." These reliefs are undoubtedly hinged on the
principal claim sought by the Appellant. The only
conclusion is that the addition or status of the 4th and 5th
Respondent is insufficient to warrant the conclusion urged
on us by the Appellant. Appellant's argument on this issue
is therefore misconceived. This issue is resolved in favor of
the 1st Respondent.
ISSUE THREE
The third issue is "Whether the trial Court was right in
refusing to follow the established principle of law as
enunciated by the Supreme Court in the case of OBEMBE
v. WEMABOD ESTATE (1977) 5 SC 115 at 137 and
36
(201
8) LP
ELR-45
546(
CA)
K.S.U.D.B. v. FANZ LTD (1986) 5 NWLR (Pt. 39) Pg.
74 at 86 which is in tandem with the instant case and
which is binding on the Court as per the principle of stare
decisis"; On this issue, learned counsel referred to
CHUKWUMA OGWE & ANOR v. I.G. OF POLICE &
ORS (2015) LPELR-24322 (SC) Pg. 17-18, Paras. C-A
and Pg. 24-25, Paras. F-C; L.A.C. v. A.A.N. LTD [2006]
2 NWLR (Pt. 963) Pg. 49 where the cases of N.V.
SCHEEP v. MV'S ARAZ (Supra); OBEMBE v.
WEMABOD ESTATE (Supra) and K.S.U.D.B v. FANZ
LTD (Supra) were relied upon. Counsel argued that
contrary to the principle of stare decisis, the trial Court
refused to be bound by these authorities which were
brought before it without any reason for its departure from
the established principle of law as stated in the referred
authorities.
Learned counsel submitted that the lower Court failed to
appreciate that the reliefs sought by the Appellant include
declarative equitable reliefs which an arbitrator cannot
grant. Counsel urged this Court to resolve this issue in
favor of the Appellant.
On issue No. 3 learned counsel for the 1st Respondent
37
(201
8) LP
ELR-45
546(
CA)
relied on YAMPA & ORS v. BABAREKE & ANOR (2015)
LPELR-41212 (CA) to argue that the principle of stare
decisis does not imply that a Court must apply the decision
of the higher Court in the previous case to the case before
it where the two cases do not have common underlying
attributes and factual basis. Counsel argued that the cases
of OBEMBE v. WEMABOD ESTATE (1977) 5 SC 15 at
131 and K.S.U.D.B. v. FANZ LTD [1986] 5 NWLR (Pt.
39) Pg. 74 at 86-87, Paras. C-D relied on by the
Appellants were cited out of context and in a manner that is
completely irrelevant to the facts and circumstances of the
present case.
Counsel argued further that unlike the facts in OBEMBE v.
WEMABOD ESTATE (Supra) and K.S.U.D.B. v. FANZ
LTD (Supra), the 1st Respondent in the instant case had
not taken any step in the proceedings at the lower Court
before filing its application for stay of proceedings. It was
further argued by learned counsel for the 1st Respondent
that the lower Court did not make any decision that its
jurisdiction was ousted by the arbitration agreement.
Counsel urged this Court to resolve this issue in favor of
38
(201
8) LP
ELR-45
546(
CA)
the 1st Respondent against the Appellant.
The learned counsel for the Appellant in the Reply Brief
referred to AKYEN & ANOR v. MU'AZU & ORS. (2009)
(Supra) to submit that the facts in a case relied upon need
not be the same where there exists a situation where the
principle in the former case can be applied in the latter.
Counsel argued that the principles of law in OBEMBE v.
WEMABOD ESTATE (Supra) and K.S.U.D.B v. FANZ
LTD (Supra) are relevant to and apply to the instant case.
Learned counsel referred to pages 1-199 of the Additional
Records of Appeal to submit that contrary to the 1st
Respondent's submission, the 2nd Respondent filed
processes and joined issues with the Appellant at the lower
Court thereby severing the arbitration agreement by
submitting to the jurisdiction of the lower Court. Counsel
cited GAMJI FERTILIZER COMPANY LTD & ANOR v.
FRANCE APPRO (2016) LPELR-41245 (CA) Pg.25-17,
Paras. F-F and submitted that arbitration is not suitable
for a multi-party proceedings as this.
RESOLUTION
It is a cardinal principle of law under the doctrine of stare
39
(201
8) LP
ELR-45
546(
CA)
decisis that every inferior Court is bound by the decision of
a Superior Court; and it is not the place of an inferior Court
to say that the decision of the Superior Court was wrongly
decided. See: N.E.P.A. v. ONAH (1997) LPELR-1959
(SC); PDP v. ORANEZI (2017) LPELR-43471 (SC). It
must be said however that, by the doctrine of stare decisis,
inferior Courts are only mandated to follow previous
decisions of Superior Courts where the case before them
involves similar facts or issues. See: ANEKWE v. STATE
(2014) LPELR-22881 (SC). The Supreme Court of
Nigeria stated the settled position of the law regarding the
meaning and nature of stare decisis in ADETOUN
OLADEJI (NIG.) LTD v. NIGERIAN BREWERIES PLC
(2007) LPELR-150 (SC), where TOBI, JSC (of blessed
memory) said:
"Factual distinctions or differences in cases only avail
a party when they are germane or material to the
stare decisis of the case. I say this because stare
decisis which means to abide or adhere to decided
cases, as policy of Courts to stand by precedent is
based on a certain state of facts which are
substantially the same and here the word is
substantially. This means that the facts
40
(201
8) LP
ELR-45
546(
CA)
that give rise to the principle of stare decisis are
material facts, devoid of or without the unimportant
details. This also means that the facts need not be on
all fours in the sense of exactness or exactitude... One
major criterion in the determination of the matter is
that the facts of the previous case are major,
substantial and material to the facts of the current
case begging for the application of the previous case.
Before the application of the previous case, the Judge
should ask a question: Could the Court have arrived
at the decision but for particular facts or could the
Court have arrived at a different decision in the
absence of the particular facts? An unequivocal
answer to the above double barrel question will pave
the way for the applicability or inapplicability of the
doctrine...."
The grievance of the Appellant under this issue is that the
learned trial judge refused to follow the decisions in
OBEMBE v. WEMABOD ESTATE (supra) and
K.S.U.D.B. v. FANZ LTD (supra) and I must say that the
Appellant's complaint is unfounded having had the benefit
of studying the decisions referenced. In OBEMBE, the
Supreme Court,
41
(201
8) LP
ELR-45
546(
CA)
per FATAYI-WILLIAMS, JSC held as follows:
"As we have pointed out earlier, 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.
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 had jurisdiction to stay
proceedings by virtue of its power under Section 5 of
the Arbitration Act (Cap 73 of the Laws of the
Federation)...
No stay was asked for by the defendants/respondents
after they were served with the writ of summons. On
the contrary, they accepted service of the statement
of claim, filed their own statement of defence,
testified in their defence and took part in the
proceedings until judgment was delivered. In order to
get a stay, a party to o submission must have taken
NO step in the proceedings. A party who makes
42
(201
8) LP
ELR-45
546(
CA)
any application whatsoever to the Court, even though
it be merely an application for extension of time takes
a step in the proceedings. Delivery of a statement of
defence is also a step in the proceedings... Moreover,
if the Court has refused to stay an action, or if the
defendant has abstained, as in the case in hand, from
asking it to do so, the Court has seizing of the
dispute, and it is by its decision and by its decision
alone, that the right of the parties are settled...."
In K.S.U.D.B. (supra), the Supreme Court similarly held
as follows:
"Both the decision in Doleman & Sons v. Ossett
Corporation (supra) and that of this Court Obembe v.
Wemabod Estates Ltd. (supra) recognize it that the
Court alone has not only the jurisdiction but also the
duty to settle the dispute between the parties if called
upon to do so. These cases also recognize it that
under the relevant section of the arbitration law,
upon the application of the defendant to an action
brought in breach of agreement to proceed by
arbitration the Court has power to stay the
proceedings. In other words, under the provisions of
43
(201
8) LP
ELR-45
546(
CA)
the Arbitration law, the Court had power to refuse to
entertain proceedings brought before it in breach of
an agreement to decide the matter by arbitration.
However the defendant is not given by the law a carte
blanche as to when to apply for the stay of
proceedings... ."
Learned Counsel for the 1st Respondent argued that the
decision in the case under reference is not relevant to the
facts of the case at hand, and I agree with learned counsel.
In the instant case, the learned trial judge held at pages
474 to 475 of the Records of Appeal as follows and I quote:
"I have examined the claim put forward by the
Plaintiff which was commenced by Writ of Summons
asking the Court to enforce all the Terms set out in
the Telecoms Private Equity Fund Investment
Agreement dated 21st of August, 2008. Amongst
other reliefs sought is for the Court to hold that the
2nd Defendant is a party to the said agreement.
Definitely from the reliefs sought a dispute has
occurred.
I found from the c la im that the Pla int i f f
acknowledges the agreement entered into and in
particular when he sought that the 2nd Defendant
44
(201
8) LP
ELR-45
546(
CA)
should be declared a party to the agreement. He
believes that the 3rd, 4th and 5th Defendants have
one thing or the other to do with the transaction
which he entered into with the 1st Defendant.
An Arbitration clause where embedded in a document
voluntarily entered into by parties must of necessity
be honored in good faith in the absence of fraud or
mistake. The Court must not engage in rewriting
agreement for parties...
I believe that once an arbitration clause is retained in
a contract which is valid and subsisting and the
dispute is within the contemplation of the Clause, the
Court should give regard to the contract by enforcing
the Arbitration Clause....
In the present case if the Plaintiff is not happy with
the outcome of the Agreement he ought to have gone
to Arbitration and exhaust all the mechanism put in
place within the Agreement before approaching...
Failure to do so tantamount to not fulfilling the
condition precedent to adjudication.
45
(201
8) LP
ELR-45
546(
CA)
As long as this situation exists the Court cannot be
said to have the jurisdiction and competence to
examine this matter and all other applications before
it…"
I am unable to, in the peculiar circumstances of the instant
case, hold the view that the learned trial judge failed to
follow the decision of the Supreme Court referred to by the
Appellant. It is undisputed that contrary to the situation in
OBEMBE, the 1st Respondent herein sought for an order
for stay of proceedings pending arbitration. From the
records before us, it ought not be disputed that the 1st
Respondent had taken no step in the proceedings in the
suit at the lower Court. In the Appellant's Reply, it was
submitted that the 2nd Respondent filed several processes
and joined issues with the Appellant and these steps taken
by the 2nd Respondent amount to submitting to the
jurisdiction of the lower Court.
Granted that it is obvious that the 2nd Respondent had
taken steps in the proceedings at the lower Court, and is
therefore precluded from enjoying the privilege of being
granted an order of stay pending arbitration, pursuant to
46
(201
8) LP
ELR-45
546(
CA)
Section 5 of the Arbitration and Conciliation Act, I am
unable to accept the submissions of the Appellant that the
steps taken by the 2nd Respondent amount to submission
to the jurisdiction of the lower court by the other parties, or
the 1st Respondent herein in particular. The decision of the
Supreme Court is clear on the position that it is only a
party who has taken a step in the proceedings in Court that
is estopped from asking the Court for a stay to refer the
matter to arbitration in accordance with Section 5(1) of the
Arbitration and Conciliation Act. Here, it will be
unconscionable and therefore wrong to ascribe the steps
taken by the 2nd Respondent with respect to the
proceedings as those of the 1st Respondent, as the
Appellant has urged. The record bear witness, the
Appellant conceded that the 1st Respondent had taken no
step in the proceedings at the lower Court. This is sufficient
on this issue as it relates to Section 5(1) of the Arbitration
and Conciliation Act.
Nevertheless, it is certainly also not the contention of the
Appellant that the learned trial judge erred when she held
that, considering the circumstances of the instant case,
47
(201
8) LP
ELR-45
546(
CA)
where parties have by agreement agreed to arbitrate any
dispute arising from the contract executed by them,
recourse to arbitration is a condition precedent to the
exercise of the jurisdiction of the Court. Arbitration clause
is not a magic wand used to forestall the exercise of
jurisdiction of the Court; rather it is only a mechanism built
into a contract to enable the parties, in the event of
dispute, to first explore the option of settling same out of
Court failing which they can proceed to Court. See:
MESSRS NV SCHEEP v. MV'S ARAZ (2000) 12 SC (Pt.
10) 154 at 213 where it was held:
"In any event, the arbitration clause did not seek to
oust the jurisdiction of the Court as all it did was to
allow parties the avenue and possibilities of settling
disputes amicably out of Court. The position of the
law is that an arbitration clause in agreement
generally does not oust the jurisdiction of the Court
or prevent the parties from having recourse to the
Court in respect of dispute arising therefore. A party
to an agreement with an arbitration clause has the
option to either submit to arbitration or to have the
dispute decided by the Court...."
48
(201
8) LP
ELR-45
546(
CA)
Therefore, the reasoning of the learned trial judge earlier
reproduced does not in my view, run contrary to the
decision in OBEMBE (supra). Appellant's submission on
this issue is therefore misconceived. This issue is therefore
resolved in favor of the Respondent.
ISSUE FOUR
Issues No. 4 is "Whether the trial Court was right to have
ignored the S.5 (2) (b) of the Arbitration and Conciliation
Act and the decisions of M.V. PARNOMS BAY v. OLAM
(NIG.) PLC (2004) 5 NWLR (Pt. 865) Pg. 1 at 16,
Paras. C-D and UBA v. TRIDENT CONSULTING
LIMITED [2013] 4 CLRN 119 which were cited to the
Court by the Appellant"; Under this issue, counsel for the
Appellant argued that the lower Court refused to be bound
by the decision in the case of UBA v. TRIDENT
CONSULTING LIMITED (2013) 4 CLRN 119 which was
also brought before it without any reason for its refusal to
be bound by the authority. Counsel again referred to
Section 5(2)(b) of the Arbitration Act; M.V. PARNOMS
BAY v. OLAM (NIG.) PLC (Supra) to submit that parties
seeking Stay of proceedings pending arbitration are
enjoined to commence or initiate the arbitral
49
(201
8) LP
ELR-45
546(
CA)
process before making the application for Stay to the Court
and that the lower Court ought not to have granted the 1st
Respondent's Application for stay of proceedings pending
arbitration because the 1st Respondent failed to show by its
affidavit evidence that it had commenced the arbitral
process in compliance with Section 5(2)(b) of the
Arbitration Act. Learned counsel referred to DR.
ERASTUS AKINGBOLA v. F.R.N. & ANOR (2014)
LPELR-24258 (CA) Pg. 43-44, Paras. D-D to submit that
the lower Court against the principle of stare decisis,
refused without any reason to be bound by the decisions of
this Court and the Apex Court cited before it in the instant
case.
On issue No. 4, learned counsel for the 1st Respondent
referred to Section 5(2)(b) of the Arbitration and
Conciliation Act; paragraph 8 of the Affidavit in support of
the 1st Respondent's Application for Stay of proceedings at
page 259 of the Records and the Appellant's Counter-
Affidavit filed at page 309-311 of the Records of Appeal.
Counsel then relied on ALHAJI MUJAHID DOKUBO-
ASARI v. F.R.N. (2007) LPELR-958 (SC); ADESINA v.
OSOGBO
50
(201
8) LP
ELR-45
546(
CA)
(1996) 4 SCNJ 111; A.G. ANAMBRA STATE v. OKEKE
[2002] 5 SC (Pt. II) Pg.58 and STEPHEN LAWSON-
JACK v. THE SHELL PETROLEUM DEVELOPMENT
COMPANY OF NIGERIA LTD. (2002) 7 SC (Pt. II) Pg.
112 to submit that facts not controverted are deemed
admitted and that the Appellant did not controvert the 1st
Respondent's willingness to participate in the arbitration
proceeding.
Learned counsel submitted that the Appellant cannot be
heard to argue on appeal that the 1st Respondent did not
fulfill the condition under Section 5(2)(b) of the Arbitration
and Conciliation Act. Counsel argued that the cases of M.V.
PARNOMOS BAY v. OLAM (NIG.) PLC (Supra) and
UBA v. TRIDENT CONSULTING LIMITED (Supra) are
different from the present case wherein the willingness of
the 1st Respondent is not in issue. Counsel further
submitted that this Court overruled the decision in M.V.
PARNOMOS BAY v. OLAM (NIG.) PLC (Supra) in the
latter decision inONWARD ENTERPRISES LIMITED v.
MV "MATRIX" & ORS (2008) LPELR-4789 (CA) Pg.
29-30, Paras. D-C. Learned counsel urged this Court to
hold that the Appellant's argument that the 1st Respondent
failed to comply
51
(201
8) LP
ELR-45
546(
CA)
Section 5(2)(b) of the Arbitration and Conciliation Act or
should have initiated the arbitration process is an
afterthought. Counsel further urged this Court to resolve
this issue in favor of the 1st Respondent favour and against
the Appellant.
On issue No. 4, learned counsel for the Appellant in the
Reply Brief submitted that the provisions of Section 5(2)(b)
of the Arbitration Act was affirmed in the cases of M.V.
PARNOMOS BAY v. OLAM (NIG.) PLC (Supra) and
UBA v. TRIDENT CONSULTING LIMITED (Supra) and
therefore binding on the parties and the Court. Counsel
argued that he 1st Respondent failed to fulfill the condition
precedent to an order for Stay of proceedings pending
arbitration. Learned counsel argued that there is no
conflict between the decisions in M.V. PARNOMOS BAY
v. OLAM (NIG.) PLC (Supra) and ONWARD
ENTERPRISES LIMITED v. MV "MATRIX" & ORS
(Supra).
Learned counsel for the Appellant further submitted that
the Appellant argued in the Written Address in opposition
to the Application for Stay before the trial Court at page
316 of the Records of Appeal that the 1st Respondent
52
(201
8) LP
ELR-45
546(
CA)
failed to comply with the provisions of Section 5(2)(b) of the
Arbitration and Conciliation Act and therefore similar
submission in the Appellant's Brief is not an after thought
as argued by the 1st Respondent. Counsel cited SIFAX
NIGERIA LTD & ORS v. MIGFO NIGERIA LTD & ANOR
(2015) LPELR-24655 (CA) to submit that the trial Court
should have considered all the issues placed before it.
Learned counsel urged this Court to discountenance the
submissions of the 1st Respondent on this issue.
RESOLUTION
Under this issue Appellant's complain is that the learned
trial judge ignored the provisions Section 5(2) of the
Arbitration and Conciliation Act as well as the decisions in
M.V. PARNOMOS BAY v. OLAM (NIG.) PLC (supra)
and UBA v. TRIDENT CONSULTING LIMITED (supra).
Section 5 of the Arbitration and Conciliation Act
reads as follows:
(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
53
(201
8) LP
ELR-45
546(
CA)
delivering any pleadings or taking any other steps in
the proceedings, apply 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."
The power donated to the lower Court under the above
section is no doubt discretionary and with all the
discretionary powers, the appellate Court is always loath to
interfere with the way a Court exercises its discretion
unless where the discretion was wrongly exercised; or
tainted with some irregularity, or in other instances where
the Court sees any reason to interfere with same. See
UNILAG v. AIGORO (1985) 1 NWLR (Pt. 1) 143;
AJUWA & ANOR v . SPDC NIG. LTD (2011)
LPELR-8243 (SC). It must therefore be stated that the
competing rights of the
54
(201
8) LP
ELR-45
546(
CA)
parties to justice in the case must be considered; where
such exercise of discretion is motivated by some ulterior
considerations in favor of an applicant without adequately
taking into account the Respondent's equal right, the
discretion will not be said to have been judicially and
judiciously exercised. See N.N.P.C. v. FAMFA OIL LTD &
ANOR (2009) LPELR-2023 (SC).
As I earlier stated, it is the Appellant's complaint that the
learned trial judge ignored the provisions of Section 5(2) of
the Arbitration and Conciliation Act in reaching the
conclusion that the suit be stayed pending reference to
arbitration. Clearly, the purport of Section 5(2) is that a
Court may make an order staying proceedings if it is
satisfied that there is no sufficient reason(s) why the matter
should not be referred to arbitration and that the Applicant
was at the time when the action was commenced, willing
and ready to do all things necessary for the conduct of the
arbitration.
Appellant cited the decision in M.V. PANORMOS-BAY v.
OLAM (NIG.) PLC (supra) where this Court, per
GALADIMA, JCA (as he then was) held that it is the party
55
(201
8) LP
ELR-45
546(
CA)
praying for arbitration as an 'applicant' that has the duty to
comply with Section 5(2)(b) of the Act by commencing the
proceedings. To the contrary, it is the contention of learned
Counsel for the 1st Respondent that the decision in that
case was overruled by this Court in ONWARD
ENTERPRISES LIMITED v. MV. "MATRIX" & ORS
(2008) LPELR-4789 (CA) at Pages 29 to 30, Paras. D
to C, where this Court, per MSHELIA, JCA held:
"... It is a basic principle of law that where parties to a
contract have under the terms thereof agreed to
submit to arbitration if there is any dispute arising
from the contract between them a defendant who has
not taken any steps in the proceedings commenced by
the other party, may apply to the Court for stay of
proceedings of the action to enable parties to go to
arbitration as contracted.
Once an arbitration clause is retained in a contract
which is valid and the dispute is within the
contemplation of the clause, the Court should give
regard to the contract by enforcing the arbitration
clause... It is therefore the general policy of the Court
to hold parties to the bargain into which they had
56
(201
8) LP
ELR-45
546(
CA)
entered unless there was a strong, compelling and
justifiable reason to hold otherwise or interfere. In
the instant case, appellant who had the onus to
advance compelling reason as to why this Court
should interfere with the discretionary power of the
trial Judge had failed to do so. There is nothing to
show that the arbitration agreement was imposed on
the appellant. Since both parties voluntarily entered
into the agreement same should therefore be binding
on them...."
I have had the benefit of reading the decision of the Court
in ONWARD ENTERPRISES LIMITED (supra) and I
agree with the submissions of learned Counsel for the 1st
Respondent that the decision in M.V. PANORMOS BAY
(supra) cannot stand as authority on the issue at hand. This
is apparent from the reasoning expressed by my learned
brother MSHELIA, JCA at Pages 26 to 28, Paras. F to G, as
follows:
"I am mindful of the decision of this Court in M.V.
Panormos Bay v. Olam (Nig.) Plc supra referred to us
by respondent's counsel. In that case this Court
declared null and void an arbitration agreement
which states that disputes between parties shall be
57
(201
8) LP
ELR-45
546(
CA)
referred to Arbitration in London on the ground that
Section 20 of the Admiralty Jurisdiction Act 1991 is a
statutory limitation to the enforcement of the
arbitration agreement in the bills of lading.
The reason is that such agreement would deny the
Nigerian Courts temporarily of jurisdiction. As rightly
observed by respondent's counsel the Court was not
called upon to consider the Supreme Court decision
in M.V. Lupex v. N.O.C. & S Ltd supra as well as
Section 10 of the Admiralty Jurisdiction Act 1991.
In M.V. Lupex v. N.O.C. & S Ltd Supra the appellant
requested the trial Federal High Court to stay
proceedings of the action filed by the respondent in
view of the agreement the two parties entered in
clause 7 of the Charter-Party which reads:
"7 That parties agreed inter alia on arbitration in
London under English Law in the event of dispute,"
The Federal High Court refused the stay of
proceedings and on appeal this Court affirmed the
decision of the trial Court. On further appeal to the
Supreme Court, the appeal was allowed and stay of
58
(201
8) LP
ELR-45
546(
CA)
proceedings was ordered. The apex Court held among
other things that where parties have agreed to refer
their dispute to arbitration in a contract, it behoves
the Court to lean towards ordering a stay of
proceedings. By this decision it is clear that stay of
proceedings, could be granted pending reference to
arbitration in a foreign country in deserving cases. I
wish to note that Section 20 of the Admiralty
Jurisdiction Act was not discussed in that case...."
It is therefore clear that the decision in M.V. PANORMOS
BAY (supra) does not reflect the position of the law in this
regard and same cannot be relied upon successfully by the
Appellant in support of his contention that no order of stay
should be granted by the lower Court pending arbitration.
For the avoidance of doubt, the reasoning in that decision
does not accord with the decision of the Supreme Court in
M.V. LUPEX, it cannot be relied upon.
Appellant's counsel also made reference to UBA v.
TRIDENT CONSULTING LIMITED (supra), where the
facts show that the Respondent entered into a contract
with the
59
(201
8) LP
ELR-45
546(
CA)
Appellant for the implementation of automated Customer
Relationship Management (C.R.M.) software for certain
aspects of her banking business. There was an arbitration
clause in the contract executed by the parties. When
dispute subsequently arose in respect of some outstanding
payments to the credit of the Respondent, the Appellant
terminated the contract and the Respondent then
commenced an action at the High Court of Lagos State on
sundry reliefs. The Appellant filed an application for stay of
proceedings pending arbitration and the application was
refused. On appeal to this Court, it was held that for an
application for stay of proceedings pending arbitration to
succeed, the Applicant must adduce documentary evidence
showing the steps he has taken in respect of the
commencement of the arbitration. According to my learned
brother IKYEGH, JCA:
"Before a stay may be granted pending arbitration,
the party applying for a stay must demonstrate
unequivocally by documentary and/or other visible
means that he is willing to arbitrate. He does it
satisfactorily by notifying the other party in writing of
his intention of referring the matter to arbitration
and by proposing in writing an arbitrator
60
(201
8) LP
ELR-45
546(
CA)
or arbitrators for the arbitration. In the instant case,
the only paragraph of the affidavit evidence of the
appellant relevant to the matter deposed in
paragraph 8 thereof that:
'I was informed by Mr. Ugochukwu Okwesili, a Legal
Officer in the applicant Bank in a meeting in our
office at 57, Marina, Lagos on the 13th day of May,
2009 at about 2:30pm while reviewing this matter and
I verily believe him that the parties are unable to
resolve the matter amicably and that the applicant is
ready to do everything necessary to the proper
conduct of the Arbitration in respect of the dispute
alleged to have arisen between the parties.'
The deposition above is not enough. There must be
documentary evidence showing the applicant wrote to
the respondent notifying her of the willingness to
resort to arbitration over the dispute and also,
specifying in the letter or correspondence an
arbitrator or arbitrators proposed to be appointed for
the arbitration for the ratification or approval of the
party."
It is settled that the duty of the Court is to give effect to
61
(201
8) LP
ELR-45
546(
CA)
the clear and unambiguous provision of the law and not
distort same. See: NIGERCARE DEVELOPMENT
COMPANY LTD v. ADAMAWA STATE WATER BOARD
& ORS (2008) 9 NWLR (Pt. 1093) 498 SC . In
AROMOLARAN v. AGORO (2014) LPELR-24037 (SC),
the Apex Court, per GALADIMA, JSC held:
"I must say that the duty of the Court is to interpret
the words contained in the statute and not to go
outside the clear words in searching of an
interpretation which is convenient to the Court or to
the parties in the process of interpretation. The Court
will not embark on a voyage of discovery. Where a
statute is clear and unambiguous, as in this case. This
Court will follow the literal rule of interpretation
where the provision of the statute is clear and no
more."
I have earlier made reference to and copiously reproduced
Section 5(2) of the Arbitration and Conciliation Act. For
emphasis, by that section the lower Court has a
discretionary power to grant an order of stay pending
arbitration if it is satisfied that there is no sufficient reason
why the matter should not be referred to arbitration in
accordance with the arbitration agreement and the party
62
(201
8) LP
ELR-45
546(
CA)
making application for stay is ready and willing to do all
things necessary to the proper conduct of the arbitration.
The view expressed by this Court in UBA v. TRIDENT
CONSULTING LIMITED (supra) is to the effect that it is
not enough for the Applicant to merely depose that he is
ready and willing to ensure the proper conduct of the
arbitration, he must show same through documentary
evidence.
It is my view with all due respect that placing the burden of
presenting documentary evidence to support an application
for stay of proceedings pending arbitration constitutes a
departure from the plain provisions of Section 5(2) of the
Act, particularly in cases where the Applicant has deposed
to facts in that regard. Section 5 of the Arbitration and
Conciliation Act does not make it a condition precedent
before an order of stay pending arbitration can be granted,
a Court will be expected to be careful in granting an order
staying proceedings pending reference to arbitration where
the Applicant has not taken any steps in the proceedings,
and the Court is satisfied that there is no sufficient reason
that the matter should
63
(201
8) LP
ELR-45
546(
CA)
not be referred to arbitration and where the Applicant has
been able to show that he is ready and willing to do all
things necessary for the proper conduct of arbitration.
It cannot be disputed that the purpose of an Applicant
deposing to an affidavit is to provide oral and for
documentary evidence to support an application filed in
Court. It is used to provide evidence to prove a material
point(s) in argument. See: HON. JUSTICE GARBA
ABDULLAHI v. THE EXECUTIVE GOVERNOR OF
KANO STATE & ORS (2014) LPELR-23079 (CA); AGU
& ORS v. IDU (2013) LPELR-19992 (CA). As a matter of
fact therefore affidavit constitutes evidence. See: NWOSU
v. IMO STATE ENVIRONMENT SANITATION
AUTHORITY & ORS (1990) SCNJ 97; ANOKA v. IKPO
(2013) LPELR- 20419 (CA). Even though I am mindful
that the absence of counter-affidavit or contradictory
depositions by a Respondent is not a free pass to judgment
in favour of an applicant especially in cases where the
depositions are self-contradictory, it is especially true
beyond citing authorities that depositions in affidavit which
are not countered or controverted are deemed to have been
admitted. See
64
(201
8) LP
ELR-45
546(
CA)
UGWUANYI v. NICON INSURANCE PLC (2013)
LPELR-20092 (SC); AKINSETE v. AKINDUTIRE (1966)
LPELR-25416 (SC). Thus in OKOEBOR v. POLICE
COUNCIL & ORS (2003) LPELR-2458 (SC) it was held
as follows:
"The attitude of the Courts to unchallenged evidence
is not in doubt and it has been stated and reinstated
in a plethora of cases. In Iriri v. Erhurhobara (1991) 2
NWLR (Pt. 173) 252 of 255, it was held that where the
evidence of a witness is not inadmissible in law,
uncontradicted and unchallenged, a court of law can
act on it and accept it as a true version of the case it
seeks to support. In the same vein, it was decided that
wherever any evidence whether affidavit or oral
stands uncontradicted, unless the evidence is patently
incredible, the Court ought to regard the matter to
proved by that evidence as admitted by the adverse
party...."
Therefore, unchallenged evidence is deemed to be correct
and can be acted upon by the Court. In INEGBEDION v.
SELO-OJEMEN & ANOR (2013) LPELR-19769 (SC), the
Court held:
"It is tr ite law that any unchallenged and
uncontradicted fact in an affidavit remains
undisputed and is deemed admitted by the adversary
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and the Court will so hold. However, it is also the law
that any such unchallenged and uncontradicted facts
which are deemed admitted in the affidavit must be
capable of proving and supporting the applicant
relying on such facts. In other words, it has been held
that the affidavit evidence must necessarily be cogent
and strong enough to sustain the case of the
applicant...."
In the instant case, just as in UBA v. TRIDENT
CONSULTING LIMITED (supra), at page 259 of the
record of appeal, the Applicant/1st Respondent herein
deposed at paragraph 8 of its application for stay as
follows:
"The 1st Defendant/Applicant confirms its willingness
to participate in arbitration proceedings in respect of
any alleged dispute arising out of or pursuant to the
Telecoms Private Equity Investment Agreement."
The above deposition was not countered by the Appellant in
his Counter Affidavit found at pages 309 to 311 of the
record of appeal. By the reasoning expressed in UBA v.
TRIDENT CONSULTING LIMITED (supra), the above
deposition is not enough, the 1st Respondent is still
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required to present documentary evidence in support.
Considering the circumstances of the instant case, I am
unable to subscribe to the reasoning in the light of the
express provisions of Section 5(2) of the Act. Contrariwise,
it is my humble view that unless such deposition is
controverted by the adverse party, a Court is at liberty to
act upon deposition by an applicant that he is willing and
ready to ensure that the arbitration is properly conducted,
thereby fulfilling the requirement in Section 5(2)(b). I
totally agree that the reasoning in UBA v. TRIDENT
CONSULTING LIMITED (supra) is only potent and
tenable in instances where the Applicant's deposition in the
Affidavit in support of the Application for stay is challenged
and/or contradicted by the Respondent. In such cases, it
will be necessary for the Applicant to provide further
evidence in support of his deposition in that regard which is
not the case in the instant appeal.
Where, as in the instant case, the Appellant did not
challenge the 1st Respondent's deposition that the latter is
willing to participate in arbitration proceedings in respect
of the dispute arising from the Agreement executed
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by the parties, and there is no sufficient reason to why the
matter should not be referred to arbitration, I am unable to
interfere with the exercise of the lower Court's discretion
granting an order staying proceedings pending reference to
arbitration. This issue is resolved in favor of the 1st
Respondent.
ISSUE FIVE
Learned counsel for the Appellant in his argument on issue
No. 5 which is "Whether the trial Court was right to have
held that there was no evidence of fraud at the preliminary
stage without averting its mind to the Appellant's
Statement of Claim decision and the case of NIMASA v.
ODEY (2013) LPELR-21402 (CA) made reference to the
decision of this Court in NIMASA v. ODEY (2013)
LPELR-21402 (CA) Pg. 49-50, Paras. A-G as to what
constitutes fraud and fraudulent act. Counsel referred to
pages 17-18 of the Records of Appeal to argue that fraud
was pleaded with particulars in the pleadings. Counsel also
referred to the Counter-affidavit at pages 310-311 of the
Records of Appeal to submit that some of the issues
between the parties cannot be decided on arbitration
because they contain allegations of fraud.
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Learned counsel submitted that the lower Court erred in
holding that the Appellant did not prove the allegation of
fraud in its pleadings at the preliminary stage and that
what is required of the Appellant was to plead fraud and
give particulars.
Learned counsel referred to OKOLI v. MORECAB
FINANCE (NIG.) LTD (2007) 14 NWLR (Pt. 1053)
Pg. 37 to submit that the lower Court had no jurisdiction to
make any findings relating to fraud or other substantive
matters raised in the pleadings at the preliminary stage
when it has not taken any evidence. Counsel further relied
on OTUKPO & v. JOHN & ANOR (2012) LPELR-20619
(SC) to submit that from the facts and pleadings of the
instant case, fraud can be deduced and that therefore it will
require a Court of competent jurisdiction to adjudicate on
the issues between the parties.
On the fifth issue learned counsel for the 1st Respondent
referred to paragraphs 45 and 46 of the Statement of Claim
at pages 17-18 of the Records of Appeal and the
submissions under issue No. 2 of the Respondent's Brief to
submit that the allegation of fraud raised by
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the Appellant goes to no issue because the said allegation
was made in the alternative with allegation of contractual
misrepresentation. Counsel argued that a determination of
the Appellant's allegation of contractual misrepresentation
by the Arbitrator(s) will completely resolve the dispute
without delving into the issue of fraud. Learned counsel
submitted that the case of NIMASA v. ODEY (Supra)
relied upon by the Appellant is not relevant to the facts and
circumstances of the present case in view of the Appellant's
averments at paragraphs 45 and 46 of the Statement of
Claim at pages 17-18. Counsel urged this Court to resolve
this issue in the 1st Respondent's favour and against the
Appellant.
Responding to the 1st Respondent's submission on the fifth
issue, learned counsel to the Appellant in the Reply Brief
referred to HOLBORN NIGERIA LTD v. O. C. CHRIS
ENTERPRISES LTD (2014) LPELR-23972 (CA) Pg.
36-37, Paras. A-C to submit that the trial Court ought to
consider the main claims before any attempt to delve into
the alternative claim and that alternative claims cannot
render the main claim impotent. Counsel submitted that
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the principle enunciated in NIMASA v. ODEY (Supra)
and OKOLI v. MORECAB FINANCE (NIG.) LTD
(Supra) applies to the instant case and that the allegation
of fraud in this case which was supported with the
particulars of fraud cannot be resolved by arbitration.
RESOLUTION
The learned trial judge had at pages 474 to 475 of the
record of appeal held as follows:
"I have no evidence of fraud which at any rate must
be established beyond reasonable doubt and there is
no evidence of a mistake."
It is undisputed that the proceedings at the lower Court
leading to the instant appeal were still at the interlocutory
stage and the Ruling being appealed against, wherein the
above findings were expressed by the learned trial judge
was interlocutory, at which time no evidence had been
called or presented before the Court on the issues at stake
in the suit. The law is well settled that a Court must not
comment or make pronouncement on substantive matters
in an interlocutory proceeding. In a Ruling on an
interlocutory application, the Court must shy away and/or
refrain from making any observation
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that might appear to prejudge the main issue in contention
by the parties. See: NWANKWO & ORS v. YAR'ADUA &
ORS (2010) LPELR-2109 (SC); OKOTIE-EBOH v.
MANAGER (2004) LPELR -2502 (SC).
The learned trial judge in the instant case made
observations and/or findings that there was no evidence of
fraud or mistake by the Appellant. Needless to state that
the proof of the allegation of fraud or mistake by the
Appellant can only be done during substantive trial and not
at the interlocutory stage of the proceedings; I therefore
have no hesitation in reaching the conclusion that the
learned trial judge with all due respect erred. I agree with
the Appellant on this point and I resolve the instant issue in
favor of the Appellant.
ISSUE SIX
I believe the sixth and last issue regarding the question as
to "Whether the Honorable Trial Judge erred in law when it
failed to determine the other issues of jurisdiction raised by
parties in this matter, and which have a direct bearing as to
whether or not the matter as presently constituted can be
referred to Arbitration or not"; has been
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adequately considered and dealt with under the first issue.
It has become academic and spent. I shall therefore refrain
from delving into it.
In the end therefore, having resolved the first to fourth
issues in favor of the 1st Respondent, the conclusion to be
reached is that the Appellant's appeal is not meritorious
and therefore deserves to be and is hereby dismissed. The
Ruling of C.M.A. OLATOREGUN, J., of the Federal High
Court delivered on the 18th day of October, 2016 is
affirmed.
Cost of N200,000.00 is awarded against the Appellant to
the 1st Respondent.
BIOBELE ABRAHAM GEORGEWILL, J.C.A.: I had the
privilege of a preview of the comprehensive lead judgment
just delivered by my learned brother Tijjani Abubakar, JCA.
I am in complete agreement with the lucid reasoning, the
profound statements of law and the impeccable conclusions
reached therein which I hereby adopt as mine. I have
nothing more useful to add.
JAMILU YAMMAMA TUKUR, J.C.A.: I read before today
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the lead judgment just delivered by my learned brother
TIJJANI ABUBAKAR, JCA.
I adopt the judgment as mine with nothing useful to add.
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Appearances:
Cyril Onyezazir with Abayomi Asorobi ForAppellant(s)
G. Ojodile Okafor with Abiiba Michael ForRespondent(s)
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8) LP
ELR-45
546(
CA)