Arbico Nigeria Limited V. Nigeria Machine Tools Limited (2002)

LawGlobal-Hub Lead Judgment Report

CHUKWUMA-ENEH, J.C.A.

This appeal is against the ruling of the High Court of Lagos (Coram Olugbani, J.) delivered on 15/9/93 upon which the appellant’s application to set aside the arbitration award dated 26/9/90 was dismissed and the respondent’s application to enforce the award was granted.

By a contract dated 2/3/87 made between the respondent as the employer and the appellant as the contractor, both entered into a contract for the construction of a Heavy Parts Assembly Shop at its factory at Osogbo at the contract price of N7,100,000 out of which N3,000,000.00 was earmarked for the steel contractor. The appellant was to construct the foundation base of the building. During the execution of the contract a dispute arose and the respondent by notice dated 21/7/88 terminated the contract. The parties agreed to refer any matter to arbitration as was provided by clause 25 of the contract and appointed Hon. Dr. T. A. Aguda as the arbitrator. A summary of the respondent’s claim against the appellant is as follows:

1. N600,000 as advance payment received by the respondent (i.e. appellant) in respect of the execution of the contract in respect of which no corresponding work has been done.
2. N284,667.89: payments made on two certificates of work negligently executed with various defects and had to be condemned.
3. N4,252,980.89: being the difference between the old contract price and the new contract price on the re-award of the contract to another contractor.
4. N1,000,000 general damages.

The appellant after admitting the sums in (1) and (2) of the claim, counter-claimed in the sum of N3,306,619.31 later by order reduced to N2,916,033.82 on the appellant’s application. And it is this sum the appellant claimed in its counter claim.

The issue submitted by the parties to the arbitrator for determination is as follows:

“1. Whether either party is bound by the terms of the contract.

2. Whether either party committed a breach.
3. If either party is found to be in breach of anyone or more of the contract conditions, whether the other party is entitled to damages and if so in what amount.”?

The Arbitrator at the conclusion of his exercise upheld the claim of the (respondent herein), made the following awards at page 60 of the record:

“A (1) Both parties are bound by the terms of the contract dated March 2, 1987.

(2) The respondent committed breaches of some of the conditions laid down in clause 25 of the said contract.

(3) For such breaches the appellant (sic) is entitled to an award of damages, the quantum of which I have fixed at N1,134,667.89.

B. It is further adjudged and awarded as follows:

1. The respondent shall bear the full cost of the arbitrator fixed at N55,000.
2. The respondent shall pay reduced costs to the claims fixed at N2,000 but inclusive of the costs

of adjournment on June 14, 1990, then made costs in the course.”?

As I said earlier on the respondent applied to the High Court to enforce the award and the appellant by notice of motion sought leave to set the award aside. In the said ruling of 15/9/93 the High Court dismissed the application to set aside the award with costs of N1,500.00. However, it upheld the arbitrator’s award in favour of the claimant (i.e. the respondent in this appeal).

Aggrieved by the decision (the ruling of 15/9/93) dismissing the appellant’s application to set aside the award, the appellant has filed this appeal and has raised eight grounds of appeal. I think it is important to set forth the appellant’s grounds for seeking to set aside the award before this court. They are as contained at page 577 of the record and they are as follows without their particulars.