Daewoo Nigeria Ltd. V. Project Masters (Nig) Ltd. (2010)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ISTIFANUS THOMAS, J.C.A (Delivering the Leading Judgment)

The appeal is against the decision of the Federal High Court sitting at Port Harcourt delivered on 28th June, 2005, in which it dismissed the appellant’s application to set aside the Arbitral Award earlier made on 7th July, 2004. The lower court also granted leave to the respondent to enforce the said Arbitral Award.

The brief fact of the case is that, on 2nd June, 2003 the appellant entered into a sub-contract agreement with the respondent for spool fabrication, non-destructive examination and post weld heat treatment. By the clear terms of the sub-contracts agreement, any dispute arising from the execution and enforcement of the sub-contract would be resolved terminally by the Arbitration. Before the completion of the sub-contract, a dispute arose between the parties when the appellant, issued the respondent with a Notice of completion of work, titled “Demobilization Notice” which determined the agreement of the sub-contract between the parties. The appellant paid to the respondent a sum of money which it thought was adequate for the work carried out by the respondent. Not satisfied with the money paid, the respondent served the appellant with a request for Arbitration. Since both parties had agreed to resolve any dispute by pleading and appearing before a mutually accepted Arbitration Panel, the respondent filed the following reliefs against the appellant as follows:-

‘(e) That the claim is for payment of Financial Exposure incurred by the Claimant in the course of performance of the Subcontract as follows:

(i) Cost of manpower committed by Respondent for July,August and September 2003. N4,317,951.00

(ii) Cost of equipment and logistics committed by Respondent for July,August and September 2003 N7,285,710.00

(iii) Cost of Manpower committed by Respondent For October, 2003 N3,650,000.00

(iv) Cost of equipment committed by Respondent For October, 2003 N5,800,000.00

TOTAL N21,053,661.00

(See letters PM/DW/03/012 of 19.9.03, PM/DW/03/018 of 18.10.03 and DW/OO-L-/138 of 29.8.03 and minutes of meeting of 01.7.03 respectively)

(v) Interest on the total claim of N21,053,053,661.00 at the rate of 25.5% (Bank charge on loan sourced for the exposure. See letter PM/DW/03/007 of 10.7.03) per annum from October 18,2003 until the debt is liquated.

(f) That the relief sought is an Award directing the Respondent to pay the sum of N21, 053,661.00 plus interest thereon, to the Claimant forthwith.

(g) That the claimant has appointed the First Arbitrator namely: H.A. BELLO, Esq. KSM, Legal Practitioner of H.A. BELLO & Co., Suite 413,4th Floor, P.A.B. Building, Azikiwe Road, Port Harcourt.

(h) That you are to appoint the Second Arbitrator within thirty (30) days after your receipt of this Notice.”