Lagos State Development And Property Corporation V. Adold Stamm International (Nigeria) Limited (1994)

LawGlobal-Hub Lead Judgment Report

OGWUEGBU, J.S.C. 

This is an appeal against the decision of the Court of Appeal, Lagos Division delivered on 24/9/90. The appeal arose from an arbitration proceedings between the parties.

By a deed of agreement dated 22/2/80, the Lagos State Development and Property Corporation employed Adold Stamm International (Nigeria) Ltd. to construct a specific number of housing units for the former on a cost plus fee basis. The plans and specifications were made part of the agreement.

The agreement provided in its Clause 17 that any dispute or difference in relation to the contract which might arise between the parties and which could not be amicably settled should be referred to a single arbitrator in accordance with the provisions of the Arbitration Law of Lagos State or any statutory modification thereof for the time being in force.

Differences arose and the contract was terminated. Adold/Stamm International Nigeria Ltd. applied to the High Court of Lagos State, Ikeja Judicial Division for an order that Dr. G.B.A. Coker, a retired Justice of The Supreme Court of Nigeria or some other fit and proper person be appointed to act as arbitrator under Clause 17 of the said agreement. The Lagos State Development and Property Corporation was the respondent in the said application.

On 22/2/82, Balogun, J. pursuant to Section 6(1) and (2) of the Arbitration Law Cap. 10, Laws of Lagos State 1973 and Order 42 of the High Court of Lagos State (Civil Procedure) Rules Cap. 52 appointed Dr. G.B.A. Coker to act as an Arbitrator.

The learned counsel Mr. Shade who appeared for the respondent – Lagos State Development and Property Corporation had no objection to Dr. G.B.A. Coker being appointed Arbitrator.

Both parties and their counsel held a preliminary meeting with the Arbitrator in his Chambers on 23/7/82. Mr. Ogundipe from the Chambers of Chief F.R.A. Williams S.A.N. appeared for the appellant (Adold/Stamm) and, a Legal Adviser to Lagos State Development and Property Corporation appeared for the respondent (L.S.D.P.C.) Each counsel outlined his case at this meeting and the terms of reference were formulated and settled by both counsel.

Hearing was fixed for 25th and 26th of August, 1982 with the agreement of both parties. The Arbitrator made an order respecting the filing of the respective papers and the deposit of N10,000.00 by each party towards the fees of the Arbitrator and the costs of the arbitration.

The applicant (Adold/Stamm) filed its own paper (Points of Claim) within time and claimed a total of N5,666,122.91. It also claimed interest on the above amount at the rate of 10% per annum from 10/3/81 until the date of payment. The applicant also paid its own deposit. The respondent (L.S.D.P.C.) neither filed its papers nor paid the deposit.

A day before the date fixed for hearing, the respondent’s counsel (L.S.D.P.C.) wrote a letter to the applicant’s counsel intimating him that they were not satisfied with the nomination of Dr. G.B.A. Coker as Arbitrator and that they were exploring the possibility of effecting a change. A copy of this letter was sent to the Arbitrator on the morning of 25:8:82 the day Arbitrator was to sit.

Counsel for both parties arrived at the venue of the arbitration and addressed the Arbitrator on the contents of the letter. This time, it was Mrs. A. A. Olagbende who appeared for the respondent. She also wrote the letter. She did not come with her witnesses.

After hearing arguments from both learned counsel, the Arbitrator ruled that since he had no materials of substance at the material time disentitling him from holding the arbitration and unless as could be otherwise advised or directed, the arbitration should go on. He adjourned the hearing to the next day 26/8/82 to enable Mrs. Olagbende bring her witnesses or make any further application or applications. He warned that in the absence of such application on explanation, the hearing would proceed.

The hearing proceeded on 26/8/82 as the respondent and its counsel did not put up appearance or make any application. The Arbitrator concluded hearing and adjourned sine die to make his award. On 18/10/82, he awarded consequential damages in favour of the applicant (Adold/Stamm) and fixed the cost of the arbitration at N2,500.00 payable by L.S.D.P.C.- the respondent. In addition, he fixed his fees at N25,000.00 to be paid by both parties in the proportion of N12,500 by each side. The notice of the award was sent to the parties on the same day.