Knight Frank & Rutley (Nigeria) & Anor. V. Attorney-general Of Kano State (1998)

LAWGLOBAL HUB Lead Judgment Report

UWAIS, C.J.N.

By a written agreement entered into on the 10th day of November 1983 between the then Commissioner for Finance, Kano State, and the appellants the latter were to “prepare a valuation list of all rateable hereditaments for the collection of property rates in the area verged GREEN on the attached plan and the NEW EXTENSION (No Man’s Land) area of Kano State.” The agreement provides that the appointment of the appellants, by the Commissioner, who acted on behalf of Kano State Government, to prepare the valuation list should be deemed to have taken place retrospectively with effect from the 13th day of November, 1980.

Clause 12 of the agreement reads:

“ARBITRATION – Every dispute arising from this agreement shall be referred to an Arbitrator to be generally accepted by the parties: failure to agree on the appointment of an Arbitrator, either party may apply to the Chief Judge of the State for the appointment of an Arbitrator, in which case the provision of Arbitration Law of the Kano State of Nigeria shall apply.”

And clause 13 provides that the agreement may be determined by either party thereto on giving at least a month’s notice to the other in writing of the intention to terminate the agreement.

On the 9th day of December, 1987 the Commissioner for Finance wrote a letter to the appellants in which he stated in part that “the Government is left with no option than to rescind and determine the valuation contract entered with you.” The reason for this action being that the valuation of the hereditaments requested by the Government of Kano State fell within the responsibilities of Local Governments of the State and not the State Government.

The solicitors of the appellants – J. B. Majiyagbe & Co. wrote a letter on 25th January, 1988 demanding that the matter be referred to an arbitrator in accordance with the terms of the agreement stated in clause 12 therein. The solicitor of the Government (Acting Deputy Director of Civil Litigation) replied contending that the agreement between the parties was void since it was ultra vires the Government and therefore no valid arbitration could be conducted in the circumstance. The reply ended as follows:-

“‘The Government does however recognise the usefulness of the exercise and does not discountenance the possibility of the Local governments being interested in the project which falls entirely within their constitutional authority. If your clients are interested, it is possible to open discussion along these lines with the Local Governments concerned.

We look forward to your response on this please.”

As the proposition was not accepted by the appellants, their solicitors wrote a letter to the Chief Judge of Kano State on the 16th day of March, 1988 requesting him to appoint an arbitrator to look into the dispute between the parties. The Chief Judge appointed one Mrs. Fatima Kwaku, a private legal practitioner, as the arbitrator. The solicitor to the Government wrote a letter to Mrs. Kwaku on the 20th day of April, 1988, narrating to her the background to the dispute between the parties and drawing her attention to the fact that her appointment to arbitrate between the parties was improper and that she had no jurisdiction, even if she was validly appointed, to rule on the validity of the contract between the parties since she was to derive her authority from a contract that was void. The letter ended by advising that if Mrs. Kwaku was inclined to proceed with the arbitration the Government would on her first sitting request her to state these questions under section 15 of the Arbitration Law, Cap. 7 of the Laws of Northern Nigeria, 1963, applicable in Kano State, for the opinion of the High Court of Kano Stale. And so an originating summons was taken out of the High Court against the appellants by the respondent on the 7th day of July, 1988.

Meanwhile the respondent brought an application for an interim order to restrain Mrs. Kwaku from sitting as an arbitrator to the dispute between the parties. This was refused by the court as the learned trial Judge (Saka Yusuf, J.) felt that the application should have been brought against the appellants who asked for the arbitration and not the arbitrator.

Two reliefs were asked for by the respondent in the originating summons. The first was for the trial court to set aside the appointment of the arbitrator. The second was for the High Court to declare that the contract between the parties was null and void because the Commissioner for Finance who entered into the agreement with the appellants for and on behalf of the Government of Kano State lacked the capacity to do so. The first leg of the claim was regarded dealt with in the ruling given by the learned trial Judge on the respondent’s application for interim injunction to restrain the arbitrator from sitting. As the second relief was purely a legal question, no witness’ evidence was adduced. The trial court was simply addressed by counsel.

In his ruling, the learned trial Judge made the following findings:-

“It is clear from these various submissions, both counsels( sic) agreed that section 7 of the 1979 Constitution has created all Local Governments throughout this country while sub-section (5) assigned various functions to these Local Governments. It is necessary to examine these provisions to see to what extent are these functions. Section (1) (b) and (j) of Schedule 4 to the Constitution provide-