City Engineering Nigeria Ltd. V (Nig) Ltd V Nigerian Airport Authority (1999)
LAWGLOBAL HUB Lead Judgment Report
KUTIGI, J.S.C.
In the High Court of Lagos State the Applicant by an originating summons dated the 4th day of November, 1982, filed its application for-
(a) An order that the Respondent in this matter shall submit to arbitration in accordance with Section 19 of the General Conditions of the contract entered into between the Applicant and the Respondent on the 3rd day of January, 1980.
(b) An order to appoint an Arbitrator to arbitrate in this matter of the contract entered into between the Applicant and the Respondent on the 3rd day of January, 1980.
(c) An order compelling the Respondent to submit to such Arbitration.
(d) An order directing that the Respondent do pay the cost of this application.
The application was supported by an affidavit to which there were ten (10) annexure marked Exhibits AOS1 to AOS10. The affidavit evidence showed that the Applicant was awarded a contract by the Respondent for the construction of the Interim Measures Building and Utility Services and External works at the Kaduna Airport, Kaduna, as per their Contract Agreement Exhibit” AOS10″ dated 3rd January, 1980. The Respondent by its letter dated 9th June, 1982 (Exhhibit AOS3) unilaterally terminated the contract between the parties for alleged poor performance in the execution of the contract. The Applicant’s reply was dated 16th June, 1982 (Exhibit AOS4) wherein it was made clear that the termination was a breach of contract and as a result a dispute had arisen between the parties within the meaning of clause or section 19 of the Contract Agreement or specifically the general Conditions of Contract (Exh. AOS. 1 or Exh. AOS2).
In short, clause or section 19 provides for a preliminary procedure for the settlement of disputes to proceed on eventual submission to arbitration within the meaning of the Arbitration Law of Lagos State. It was as a result of the failure by the parties to agree on the appointment of an arbitrator that led to the filing of the application before the High Court relying on Section 6(1)(a) and Section 6(2) of the Arbitration Law of Lagos State. The Respondent filed a counter affidavit in opposition to the application the main thrust of which was that the applicant did not meet the requirement or condition imposed on it by clause or section 19 of the Contract Agreement, the General Conditions of Contract, by its failure to comply with the preliminary procedure for the settlement of dispute. It was also contended that the Applicant had also failed to give mandatory seven (7) days notice to the Respondent before filing the application contrary to Section 6(2) of the Arbitration Law above.
After the learned trial Judge had carefully reviewed the affidavit evidence and submissions of counsel before him, he concluded his ruling thus:-
“The sum total of this application, having regard to the averments in the affidavit and counter affidavit, with all the annexure exhibited on the affidavit and the counter-affidavit, the arguments advanced by both counsel and my observations, the application advanced by both counsel and my observations, the application fails on the ground of the non-compliance with subsection 2 of section 6 of the Arbitration Law of Lagos State, the notice to concur was not given before the filing of this action, the application fails and it is hereby dismissed.”
Aggrieved by the Ruling of the trial High Court, the Applicant appealed to the Court of Appeal, holden at Lagos. One of the main issues contested in that Court was whether or not the learned trial judge was right in holding that the application failed because of non-compliance with Section 6(2) of the Arbitration Law of Lagos State. The Court of Appeal in an unanimous judgment delivered on the 22nd day of February, 1989 upheld the Ruling of the learned trial judge and dismissed the appeal with costs in favour of the Respondent.
Still dissatisfied with the judgment of the Court of Appeal, the Applicant has further appealed to this court.
In obedience to the Rules of Court, the parties filed and exchanged briefs of argument. At the hearing of the appeal on 29th March, 1999, only the Respondent was represented by counsel, the Applicant was not. Dr. Onejeme learned counsel for the Respondent adopted his brief and urged the court to dismiss the appeal.
The Applicant in its brief has submitted only one issue for determination by this Court. It reads thus:
“The issue for determination in this appeal is whether the required Notice was given by the Appellant to the Respondent before applying to the Court to appoint an arbitrator as required by section 6(1)(a) and 6(2) of the Arbitration Law of Lagos, 1972.”
It was contended in the brief that for the purposes of Section 6(1)(a) and Section 6(2) of the Arbitration Law. Exhibit AOS9 a letter dated 26th July, 1982 from Applicant/Plaintiff’s Solicitor to the Respondent/Defendant’s Managing Director was a valid and sufficient notice in the circumstances of the case particularly when both the trial High Court and the Court of Appeal had properly found that a dispute had arisen between the parties on the Contract Agreement and that the preliminary step of making the submission first to an Engineer had failed.
That the Respondent was served with a written notice Exhibit AOS9, to which it reacted by denying the existence of a dispute and refusing any reference to arbitration vide Respondent’s letter to the Applicant’s Solicitor dated 8th September, 1982 (exhibit AOS10) whereby the Applicant took out the originating summons on 4th November, 1982. That a person has a notice of a fact if he knows the fact has reason to know it, should know it or has been given notification of it. That the Court of Appeal having acknowledged the fact that an arbitration notice has no prescribed format. Exhibit AOS9 was a valid notice which had served its purpose, the originating summons having been issued long after the expiration of seven (7) days. The Respondent must in the circumstances also be deemed to have waived any irregularity in the said notice when it wrote Exhibit AOS10 herein.
The following cases were cited in support: Ariori & Ors. v. Elemo & Ors. (1989) 1 SCNLR 1; (1983) 1 S.C. 13 United Calabar Company v. Elder Dempster Lines Ltd. (1972) 1 All NLR (Part 11) 244, Royal Exchange Assurance v. Bentworth Finance (Nig.) Ltd. (1976) 6 ECSLR 443.
The Court was urged to allow the appeal and order the Lagos High Court to appoint an arbitrator to arbitrate in the dispute between the parties herein.
The Respondent on the other hand submitted that the Applicant’s Exhibit AOS9 did not constitute a valid notice under Section 6(1)(a) & (2) of the Arbitration Law of Lagos State 1973 merely because it was sent to the Respondent before its application to the Court for the appointment of an arbitrator. It was contended that it was clear from the language of Section 6 that the notice required is “a written notice to appoint an arbitrator.” And not a written notice that simply declared the existence of a dispute and calling for arbitration as Exhibit AOS9 did in this case. That to satisfy the section the notice must clearly call on the other party to appoint or concur in the appointment of an arbitrator. It must be such as to initiate the procedure for the appointment of an arbitrator by the court, being a notice to the Respondent to agree or concur in the appointment of an arbitrator even without suggesting or naming any person. That Exhibit AOS9 merely identified the dispute and did not request the Respondent to appoint or concur in the appointment of any arbitrator.
It was also submitted that the lower courts having properly held that Exhibit AOS9 did not amount to notice pursuant to Section 6(1)(a) & (2) of the Arbitration Law, this court should not disturb the concurrent findings unless exceptional circumstances were shown which the Applicant herein had failed to show. The case of Omoboriowo v. Ajasin (1984) 1 SCNLR 108 and Enang & Ors. v. Fidelis Adu (1981) 11 – 12 SC 25 were cited in support. It was further submitted that the High Court has no inherent power or jurisdiction to appoint an arbitrator, and that the power to do so is statutory only; and that the statutory requirement of notice is a condition precedent. We were referred to Halsbury’s Laws of England, 4th Edition Vol. 2 para. 571; Page 296. That the Applicant having failed to give the statutory seven (7) days notice before action was commenced, we should uphold the judgment of the court below and dismiss the appeal.
As stated earlier in this judgment the narrow issue for determination in this appeal is whether or not a valid and proper notice was given by the Applicant to the Respondent before applying to the High Court for the appointment of an arbitrator as required by section 6 subsection (1)(a) and (2) of the Arbitration Law of Lagos State. Now Section 6(2)(a) and (2) of the Arbitration Law read as follows:-
“6 (1) In any of the following cases:-
(a) Where a submission provides that the reference shall be to a single arbitrator, and all the parties do not after differences have arisen concur in the appointment of an arbitrator;
(b) …(omitted)’
(c) … (omitted);
(d) … (omitted);
any party may serve the other parties or arbitrators, as the case may be with a written notice to appoint an arbitrator. ..
(2) If the appointment is not made within seven (7) clear days after the service of the notice, the court or judge may, on application by the party who gave the notice, appoint an arbitrator, umpire or third arbitrator, who shall have the like powers to act in the reference and make an award as if he had been appointed by consent of the parties.”
The relevant portion of Exhibit AOS9 dated 26th July, 1982, which the Applicant strongly contended constituted a valid and sufficient notice under the above law read thus:
“We cannot see any better example of a dispute as already stated in this matter. In any way the issue as to whether there is a dispute or not is not for your authority to decide, that is the issue that the arbitrator is called upon to decide.
In view of the explanation above it is our clients instruction that we should proceed with the setting up of the necessary machinery for submission to arbitration in this matter and please be informed that the same is in progress.”
It is plain to me on the face of the letter above that there was no request or suggestion that the Respondent should appoint or concur in the appointment of an arbitrator. If it gave Respondent notice of anything, it must be a notice that there was a dispute and that the applicant had instructed its solicitors to proceed with the setting up the machinery for arbitration. What section 6 subsections (1)(a) and (2) above requires is a written notice to appoint an arbitrator. Again, it was not disputed that the originating summons in this case was issued on 4th November, 1982 while Exhibit AOS9 above was written on 26th July, 1982. Exhibit AOS9 definitely cannot amount to a notice under Section 6 above, the letter having not called upon the Respondent to appoint an arbitrator.
On this issue of notice, the learned trial judge had this to say in his Ruling.
“Let me examine this issue of notice, the originating summons was taken out in 1982 when the necessary notice of seven (7) days must have been issued, in my view, this has not complied with the provisions of section 6(1)(a) and Subsection 2 of the Arbitration Law of Lagos State. The notice of 7 days must have been issued before the taking out of the originating summons of 1982. The notice of 1st April, 1985 cannot be said to be in support of the application.”
The Court of Appeal in its lead judgment on page 97 of the record also observed as follows:-
“On its own Exhibit AOS9 cannot amount to a notice pursuant to Section 6. By section 6 a party may serve the other party with a written notice to appoint an arbitrator. The letter Exhibit AOS9 has not called on the respondent to appoint an arbitrator. It is where the other party called upon to appoint an arbitrator fails to do so within 7 days that the party who gave the notice may apply to the court.”
I think both the High Court and the Court of Appeal were right.
The duty of the Court is to interpret the words the legislature has used. And it is a cardinal principle of interpretation that where in their ordinary meaning, the provisions are clear and unambiguous effect should be given to them as such (see for example Attorney-General of Bendel State v. Attorney-General of the Federation (1983) 1 SCNLR 293; (1981) 10 S.C. 1).
Having come to the conclusion that Exhibit AOS9 did not amount to a notice under the Law. I find it difficult to agree with learned Counsel for the Applicant that it was on irregular notice and that any irregularity arising therein should be regarded as waived or cured by the Respondent’s Exhibit AOS10.
I repeat again that what was required was a formal notice, a condition precedent, before taking out the originating summons and there was none. The defect was fundamental which could not have been cured or waived by Exhibit AOS10. The notice required cannot also in my view be equated with knowledge that the Respondent had known that the Applicant had instructed its solicitors to proceed with the setting up of machinery for submission to arbitration vide Exhibit AOS9.
The issue is therefore, resolved against the Applicants/Appellant. And the appeal fails. It is accordingly dismissed with N10,000.00 costs in favour of the Respondent.
SC.36/1993