Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Home » Nigerian Cases » Court of Appeal » Compagnie Generale De Geophysique V. Dr. Jackson D. Etuk (2003) LLJR-CA

Compagnie Generale De Geophysique V. Dr. Jackson D. Etuk (2003) LLJR-CA

Compagnie Generale De Geophysique V. Dr. Jackson D. Etuk (2003)

LawGlobal-Hub Lead Judgment Report

SIMEON OSUJI EKPE, J.C.A. 

This is an appeal by the defendant against the ruling of Okon, J., delivered at Eket High Court of Akwa Ibom State in Suit No. HEK/45/94 on the 5th day of April, 2000.

The plaintiff in paragraph 17 of the statement of claim in the suit, claimed from the defendant the following reliefs:

(a) Payment of the sum of N104,038.60 (One hundred and four thousand and thirty eight naira, sixty kobo) being the cost of rehabilitating the (plaintiff’s) building and putting same in tenantable condition as stipulated under the Tenancy Agreement.

(b) General aggravated damages at the sum of N 195,961.40 for breach of tenancy agreement.

And the plaintiff claims the total sum of N300,000.00 (three hundred thousand Naira).

According to the statement of claim filed by the plaintiff in the suit, the plaintiff was the owner of a building and premises situate at No.5 Akpanodok Street, Usung Inyang, Eket, within the jurisdiction of the court. The defendant, a limited liability company incorporated in Nigeria under the laws of Nigeria, rented the plaintiff’s said building and premises on the 13th day of March, 1992, for residential purpose for two years period at a yearly rent of N30,000.00 (thirty thousand naira) and paid the sum of N60,000.00 for the two years.

The parties (i.e. the plaintiff and the defendant) entered into a tenancy agreement dated 13th March, 1992 in respect of the rented building and premises.

Clause 6 of the Tenancy Agreement provides as follows:

All disputes, differences and questions which may at any time arise between the parties hereto or their respective (sic) or assigns touching or arising out or in respect of this agreement shall be referred to an arbitration comprising of two independent estate valuers to be agreed upon between the parties, and the decision of such arbitration shall be final and binding on both parties.

Nothing in this section/paragraph affects rent as agreed upon which remains same throughout the period of tenancy and subject to re-negotiation and changes only after the termination of the aforesaid tenancy period.”

Sometimes during the period of the tenancy, a dispute arose between the parties. The plaintiff had the impression that the defendant had packed out of the premises and was unwilling to give up possession of the building and premises by returning the keys thereto. This was followed by some correspondences between both counsel for the parties on the matter. Eventually, after the defendant had given up the possession of the premises by returning the keys of the building to the plaintiff, the plaintiff on the 25th of January, 1994 entered into the building and premises in the company of some people. There the plaintiff discovered extensive state of utter disrepair and damage to the building. The plaintiff then engaged the services of one Mr. Ime Ubah, a building contractor who prepared and submitted to the plaintiff an estimated cost for the rehabilitation of the building amounting to the sum of N104,038.60.

On the 10th of March, 1994 the plaintiff filed a writ of summons dated 9th March, 1994, in the court below against the defendant.

In paragraph 17 of the statement of claim, the plaintiff claimed the reliefs as already set out above. On 14th April, 1994, the defendant entered a conditional appearance in the suit. Thereafter, the defendant on 31st May 1994, filed a motion on notice in the court below for stay of proceedings in the suit pending arbitration. On 29th May, 1995, the trial court delivered its ruling and granted the motion. It ordered for a stay of proceedings in the suit pending arbitration in accordance with clause 6 of the tenancy agreement.

In his own words, Idiong, J., (as he then was) who delivered the ruling stated at page 79 of the record of appeal thus:

The application is accordingly granted and suit No. HEK/45/94 stayed until the parties to the tenancy agreement, exhibit attached to the supporting affidavit go to and return from arbitration in accordance with clause 6 of the said tenancy agreement.

As it appeared later, the case was far from being settled amicably through arbitration as provided in clause 6 of the tenancy agreement executed by the parties. The intractable problem of appointment of the arbitrators came into full play. Counsel on both sides engaged themselves in exchange of inconclusive correspondences on the issue of appointment of the arbitrators. The plaintiff was the first to appoint his own arbitrator and communicated the same to the defendant who in a letter to the plaintiff objected, and in the same letter appointed its own arbitrator. The plaintiff in turn in a letter to the defendant appointed another arbitrator as a substitute in view of the defendant’s objection to his earlier appointment, and also in the said letter objected to the arbitrator appointed by the defendant.

According to the plaintiff, there was no reply from the defendant to his said letter of appointment of the new or substituted arbitrator and his rejection of the defendant’s own appointment. After six months of inaction, the plaintiff on 23/7/96 filed in the court below notice of appointment of sole arbitrator consequent upon the defendant’s failure to appoint its own arbitrator and served the notice on the defendant’s counsel through a court bailiff at Port Harcourt.

In the notice, the defendant was given seven days within which to appoint her own arbitrator, failing which, the new or substituted arbitrator appointed by the plaintiff would act as sole arbitrator and make his award which should be binding on both parties. Yet, there was no reaction by the defendant. On 18/2/97, the plaintiff wrote his arbitrator and formally appointed him as the sole arbitrator, with the direction to make his own award in writing within three months after entering on the reference. The sole arbitrator then swung into action and invited both parties to make representations to him. The defendant did not make any representation while the plaintiff made.

However, on 17/11/97, the Sole Arbitrator made an award of N198,700.00 in favour of the plaintiff to be paid by the defendant.

Consequent upon the award by the Sole Arbitrator, the plaintiff brought a motion on notice dated 20/6/98 and filed on 20/10/98 praying the court below for the following:

(a) AN ORDER to enforce the award of the arbitrator dated 17th November, 1997 and filed in this court as a judgment or order to the same effect.

(b) AN ORDER for payment of interest on the total amount awarded and found due at 10% per annum with effect from November, 1993 till the amount due is finally liquidated.”

The motion was supported by an 18 paragraph affidavit with exhibits ‘A’ to “GG1” annexed thereto. Upon the service of the motion on the defendant, the defendant filed a counter affidavit of 14 paragraphs against the motion.

The defendant in turn by a motion on notice dated 1/12/98 and filed on 3/12/98 prayed the court below for the following:

“(1) AN ORDER extending the time within which to set aside the arbitration award filed on 20/10/98 in this suit

(2) AN ORDER setting aside the said arbitration award.”

The motion to set aside the arbitration award was predicated on three grounds, viz:

(i) The arbitration was convened and conducted contrary to the rules of court.

(ii) The said arbitrator was not agreed upon by both parties.

(iii) The arbitration was conducted in the absence of the defendant without due notice.

That motion was supported by a 12 paragraph affidavit. The plaintiff also filed a counter affidavit of 21 paragraphs with exhibits AA to GG – GG1 annexed thereto.

The two motions were consolidated and heard together by the learned trial Judge, Okon, J. who in a lengthy and well considered ruling dated 5/4/2000 dismissed the defendant’s motion to set aside the arbitration award, but granted the plaintiff’s motion to enforce the said award with payment of interest at the rate of 10 per centum per annum on the said sum of N198,700.00 awarded to the plaintiff by the Sole Arbitrator, with effect from 5/4/2000, the date of the ruling. Costs of N750.00 was also awarded against the defendant in favour of the plaintiff. Being dissatisfied with the decision, the defendant has appealed to this court.

The defendant now appellant filed a notice of appeal predicated on 9 grounds of appeal with their particulars. The appellant later filed the appellant’s brief of argument.

In the appellant’s brief of argument, five issues were framed for the determination of the appeal, namely:

“(i) Whether Order 19 of the High Court Rules and section 59(1) of the High Court Law are not applicable to an arbitration which emanates from an agreement.

(ii) Whether (the) respondent acted properly and reasonably in the circumstances in appointing a sole arbitrator and whether same could be done without recourse to the court.

(iii) Whether (the) appellant had due notice of the arbitration proceedings and the subsequent award and has failed to act timeously.

(iv) Whether the court acted properly in delivering its decision when still pending was appellant’s motion to set aside the court’s earlier order foreclosing appellant from delivering final reply on points of law.

(v) Whether the arbitration award ought not be set aside.”

The plaintiff now respondent filed the respondent’s brief of argument in which five issues were also formulated for the determination of the appeal. They read:

“(1) Whether the applicable laws to the arbitration emanating from the agreement are not; (i)The High Court Laws, Cap. 51, Laws of Cross River State as applicable in Akwa Ibom State; (ii) Arbitration Law, Cap. 12, Laws of Cross River State of Nigeria as applicable in Akwa Ibom State; (iii) Akwa Ibom State High Court (Civil Procedure) Rules, 1989.

(2) Whether the respondent was not right in the circumstances of this case to have appointed a sole arbitrator pursuant to section 7(1)(b) of the Arbitration Law, Cap. 12, Laws of Cross River State as applicable in Akwa Ibom State.

(3) Whether the appellant was not given sufficient notice of the arbitration.

(4) Whether the court was not right in delivering its ruling in the circumstances of this case.

(5) Whether it will be proper in the circumstances of this case to set aside the arbitration award.

The appellant also filed the appellant’s reply brief in reply to the issues or points raised in the respondent’s brief of argument.

I have closely examined the two sets of issues as framed by the parties in their briefs of argument and I am of the view that the two sets of issues are the same in substance irrespective of the wording.

I shall therefore adopt and consider the issues framed by the appellant for the determination of the appeal.

Arguing issue No.1 in the appellant’s brief of argument, the appellant referred to sections 58 and 59(1) of the High Court Law, Laws of Eastern Nigeria 1963 (applicable to Akwa Ibom State) and Order 19 of the High Court Rules of Akwa Ibom State, 1989 and submitted that these are the relevant and applicable laws to this case since the consent of the parties herein can clearly be deduced from clause 6 of the Tenancy Agreement. It was therefore contended that the lower court ought to have strictly complied with Order 19 rule 3 of Akwa Ibom State High Court Rules, 1989, before the arbitration tribunal could be said to have been properly constituted because compliance with Order 19 should have been complied with to enable the lower court appoint the arbitrators in view of the obvious disagreement between the parties on the appointment of the arbitrators. It was further submitted that every arbitration by consent originates in an agreement of reference. Reference was made to Halsbury’s Laws of England, 3rd Edition, Volume 2 at page 3.

See also  Mrs. Eva Anike Akomolafe & Anor V. Guardian Press Ltd. (Printers) & Ors (2003) LLJR-CA

The respondent in his brief on the issue, contended that the applicable laws are the provisions of the Arbitration Law, Cap. 12, Laws of Cross River State of Nigeria (Applicable in Akwa Ibom State) and the Akwa Ibom State High Court (Civil Procedure) Rules, 1989, especially Order 19, because the transaction giving rise to the lis was purely contractual and involved two entities, viz, one being a natural person and the other a legal personality; the contract was consummated in Eket within Akwa Ibom State; the subject matter is within the state and the respondent resides in the State. Therefore, it was submitted that the laws of Akwa Ibom State should govern the transaction and not any other law. Further more, the respondent submitted that arbitration is a matter in the concurrent legislative list and that both the State and the Federal Governments are competent to legislate upon it, and where there is no conflict, the law made by the State Government will govern and regulate the transaction and bind the parties. The respondent debunked the submission of the appellant that the High Court Law of Eastern Nigeria 1963 is applicable to the case. He urged the court to take judicial notice of the laws existing in the states inter se and those of the Federation Government and referred to section 74(1) of the Evidence Act 1990 and the case of Benson v. Ashiru (1967) 1 All NLR 184; (1967) NMLR 363.

On issue No.2, the appellant in her brief of argument submitted that the circumstances of the case do not call for the appointment of a sole arbitrator. It was submitted that clause 6 of the tenancy agreement provides for the appointment of two independent arbitrators to be agreed upon between the parties, but since no specific procedure was agreed upon previously for the appointment of arbitrators, the situation ought to be regulated by section 7(2)(a)(i) of the Arbitration and Conciliation Act, Cap. 19, Laws of the Federation, 1990. It was strongly contended that since the appellant failed to reply to the respondent’s letter appointing the respondent’s arbitrator, the proper thing to do in the circumstance was for the respondent, after the expiration of thirty days, to apply to the court below to appoint the second arbitrator for the appellant and not for the respondent to unilaterally appoint a sole arbitrator to carry out the arbitration and make the award. It was submitted that under section 7(5) of the Arbitration And Conciliation Act, Cap. 19, Laws of the Federal Republic of Nigeria, 1990, the procedure for appointment of arbitrator by the court is to enable the court appoint an unbiased person whose independence and impartiality are guaranteed.

Sections 8(1) and 9 of the Arbitration and Conciliation Act, 1990 and Article 11 of the Arbitration and Conciliation Rules, 1990 were also referred to: The appellant stressed that there were no grounds for the appointment of a sole arbitrator by the respondent when the relevant tenancy agreement stipulated for the appointment of two independent arbitrators. It was contended that the appointment of the sole arbitrator by the respondent was improper, since it was unilaterally done without due recourse to the court and thus the whole procedure adopted by the respondent was tainted with bias or a likelihood of bias on the part of the sole arbitrator who was unilaterally appointed by the respondent and as such cannot give credibility to the resultant award. References were made to Article 6 of the Arbitration and Conciliation Rules, 1990 and the Law and Practice of Arbitration in Nigeria by J. O. Orojo and M. A. Ajomo at pages 119 to 120.

On his part, the respondent in his brief of argument stoutly contended that the Arbitration and Conciliation Act 1990 cited and relied upon by the appellant does not apply in this case, as the applicable law is the Arbitration Law of Cross River State (applicable in Akwa Ibom State) a stand which the respondent had earlier taken and canvassed under issue No. 1. He further contended that even if the Arbitration and Conciliation Act, 1990 applies, that section 7(2)(a)(i) of the Act is inapplicable as that section contemplates the appointment of three arbitrators and not two as agreed upon by the parties in the tenancy agreement. The respondent specifically referred to section 7(1)(b) of the Arbitration Law of Cross River State Cap. 12 (applicable to Akwa Ibom State) and contended that the section was contemplated by the parties in this case, as the procedure allows for the appointment of two arbitrators of which one was to be appointed by each party, but one party (the appellant) failed to appoint his own arbitrator and thereby entitling the other party (the respondent) to appoint a sole arbitrator. It is the contention of the respondent that section 7 of the Arbitration Law of Cross River State, Cap. 12 (applicable to Akwa Ibom State) does not require a recourse to the court for the appointment of a sole arbitrator.

In respect of issue No.3, the appellant in her brief of argument contended that the respondent failed to put her on notice in all the issues or matters surrounding the commencement of the arbitration and the award. The appellant contended that she was not served with the respondent’s notice of appointment of the sole arbitrator as the service of the said notice was effected on the secretary to the solicitor of the appellant by the bailiff; vide the bailiff’s affidavit of service at page 42 of the record of appeal and this did not meet the requirement of the law on service of process and cited Ranco Trading Co. Ltd. v. U.B.N Ltd. (1998) 4 NWLR (Pt. 547) 566. It was submitted that the bailiff’s affidavit of service is a mere prima facie proof of service and not a conclusive proof of service: Bello v. National Bank of (Nig) Ltd. (1992) 6 NWLR (Pt. 246) 206. And the appellant having denied in a counter-affidavit the service of the notice of appointment of the sole arbitrator; vide page 47 of the record of appeal, the court below ought to have called oral evidence to resolve the conflict in respect of the said service before deciding the issue against the appellant: N.N.S.C. Ltd. v. Sabana (1988) 2 NWLR (Pt. 74) 23; Momah v. V.A.B. Petroleum Inc. (2000) 4 NWLR (Pt. 654) 534 at 557. The appellant submitted that it is trite law that a party to an arbitration ought to have notice that an arbitration will proceed ex parte if he does not attend as happened in this case and alluded to L.S.P.D.C. v. Adold/Stamm Int. (1994) 7 – 8 SCNJ (Pt. 111) 624 at 664; (1994) 7 NWLR (Pt. 358) 545 at 564. Finally, it was submitted that the appellant had no due notice of the arbitral proceedings until one year later when it received the respondent’s motion to enforce the arbitral award and it reacted timeousely by filing the application to set aside the said award.

In response to issue No.3, the respondent gave an account of the steps taken by him which culminated in the appointment of the sole arbitrator who eventually made the arbitrator award. He submitted that the notice given to the appellant and the award made by the arbitrator were sufficient and adequate enough, but the appellant deliberately refused to participate in the exercise in order to frustrate the respondent and have the award set aside.

Arguing issue No.4, the appellant stated that as at 5/4/2000 when the court below delivered the ruling appealed against, the appellant had already as at 30/3/2000 filed an application to set aside the lower court’s earlier order of 2/3/2000, which foreclosed the appellant from making final reply on points of law; vide pages 60 to 62 of the record of appeal. The appellant further stated that without first disposing of the said pending application, the learned trial Judge went ahead and delivered his ruling of 5/4/2000, even though counsel for the appellant was ready and willing to argue the said application.

It was therefore submitted for the appellant that this attitude of the trial Judge was improper in law and amounted to a breach of the appellant’s right to fair hearing guaranteed by the 1999 constitution of the Federal Republic of Nigeria: Reliance was placed on General Oil v. Ogunyade (1997) 4 NWLR (Pt. 501) 613 at 622. The appellant contended that the court below ought to have disposed of the application before it one way or the other before embarking on the ruling of 5/4/2000.

The respondent in reply denied that there was such an application as stated by the appellant, but in the alternative contended that even if there was such application, it was not necessary and there was no need for it as it was brought to further delay the proceedings in the matter. He contended that the appellant had all the time in the world to make her rejoinder on points of law but refused to do so on flimsy and bogus excuses. It was further contended that the court below gave the appellant ample opportunity to rejoin on points of law but the appellant neglected to utilise the opportunity and therefore the learned trial Judge was right in delivering its ruling on 5/4/2000.

As regards issue No.5, the appellant submitted that there are several grounds on which an arbitral award can be set aside, and these include where an arbitrator has misconducted himself, or where the arbitral proceedings or the award had been improperly procured.

Sections 30 and 48 of the Arbitration and Conciliation Act 1990 were alluded to. The appellant contended that the failure of the arbitrator to give notice of the time and place of the meeting or of the sitting of the arbitral panel, amounted to an irregularity which constituted a misconduct as a ground for setting aside the arbitral award, and referred to Halsbury’s Laws of England, 3rd Edition, Vol. 2 at page 58. Misconduct in this context, the appellant submitted, is used in a technical sense as denoting irregularity and does not necessarily imply any moral turpitude. And the term covers any breach of the rules of natural justice, and any procedural irregularity which the court finds might, not necessarily must, have occasioned a substantial miscarriage of justice. See Practice and Procedure of the Supreme Court, and High Courts of Nigeria by T. A. Aguda, 2nd Edition, page 241; K.S.U.D.B v. Fanz Const. Ltd. (1990) 4 NWLR (Pt. 142) 1 at p. 37. It was further argued that the inability of the appellant to present her case and the fact that only one arbitrator, instead of two arbitrators as provided in the tenancy agreement that formed the arbitral panel and made the award, are other valid grounds to set aside the arbitral award. Sections 48(a)(iii) and (iv) of the Arbitration and Conciliation Act, 1990 were alluded to. Furthermore, the appellant contended that the arbitral tribunal or panel having been improperly constituted by a likely biased sole arbitrator not appointed by the court robbed the tribunal of the necessary jurisdiction leading to an improperly procured award.

See also  James Mtom Pever V. Woii Bernard Adaa (1998) LLJR-CA

Finally, it was argued for the appellant that the failure to follow the rules as highlighted above robbed the appellant of her fundamental right to fair hearing and therefore the award by the sole arbitrator in the circumstances is a nullity. Reference was made to the case of Okafor v. A-G., Anambra State (1991) 6 NWLR (Pt. 200) 659 at 678 where the Supreme Court observed thus:

“It is well settled that any breach of the provisions of the fundamental rights provisions renders the act subsequent to such breach a nullity”. See Adigun v. A-G., Oyo State.

Referring to Taylor Woodrow (Nig.) Ltd. v. S. E. GMBH (1993) 4 NWLR (Pt. 286) 127 at 142 and A. Savola Ltd. v. Sonubi (2000) 12 NWLR (Pt. 682) 539 at 547, the appellant submitted that breach of the rule of natural justice has been recognised as a misconduct capable of setting aside an order. The appellant therefore urged this court to allow the appeal and set aside the purported arbitral award.

The respondent in his brief reply in the brief of argument contended that the appellant has not made out any ground sufficient enough for setting aside the arbitral award as the arbitrator did not misconduct himself and the arbitral proceedings and the award were not improperly procured since due notice was given to the appellant about the appointment of the sole arbitrator, including the notice as to the time and place of the meeting, but the appellant refused to appear. He urged the court to dismiss the appeal and affirm the ruling of the trial court.

The appellant in the reply brief attacked issue No.1 formulated by the respondent in his brief of argument, contending that the issue was neither canvassed at the lower court nor did it flow from the ruling of the lower court on appeal. It was submitted that the Arbitration Law, Cap. 12 of the Laws of Cross River State (as applicable to Akwa Ibom State) which was extensively argued under issue No.1 in the respondent’s brief of argument was never an issue for contention. Therefore, it was contended that as a fresh issue in this court, the respondent ought to seek and obtain the leave of this court to raise and argue the said issue or point, but he did not do so.

Therefore, the respondent cannot be allowed by the court to argue the issue. See Okenwa v. Mil. Gov., Imo State (1996) 6 NWLR (Pt.455) 394, (1996) SCNJ 221; Oikherhe v. Inwanfero (1997) 7 NWLR (Pt. 512) 226. It was further contended that the applicability of the Arbitration Law, Cap. 12, Law of Cross River State (applicable to Akwa Ibom State) was not raised in any of the appellant’s grounds of appeal and the respondent cannot raise it without filing a cross appeal on it, which he did not do. Reference was made to the Supreme Court case of Adefulu v. Oyesile (1989) 5 NWLR (Pt. 122) 377 at page 417. It was the submission of the appellant that even if the applicability of the Arbitration Law of Cross River State was raised as an issue in this case, it would not have changed the legal position as to the applicability of the Arbitration and Conciliation Act, Cap. 19 of the Laws of the Federation, 1990, in view of the doctrine of covering the field in respect of a federal legislation vis-a -vis a state legislation-on the same subject-matter. The case of Gov., Ondo State v. Adewunmi (1988) 3 NWLR (Pt. 82) 280, (1988) 6SCNJ 151 was alluded to. Referring to the book on Civil Procedure in Nigeria, 1990 by F. Nwadialo, SAN, at page 872, the appellant submitted that the Arbitration and Conciliation Act 1990 applies throughout the Federation of Nigeria, of which Akwa Ibom State is a component part and cited section 58 of the said Act. Finally, the appellant submitted that section 7(1)(b) of the Cross River State Arbitration Law, Cap. 12 (applicable to Akwa Ibom State) is inconsistent with the Arbitration and Conciliation Act, 1990 and that law is therefore unconstitutional and void and should be so declared by the court.

My starting point in the consideration of the issue raised in this appeal should be with issue No.1 in the appellant’s brief of argument.

This issue, for the sake of repetition, is whether Order 19 of the High Court Rules of Akwa Ibom State, 1989 and section 59(1) of the High Court Law are not applicable to an arbitration which emanates from an agreement, as in the instant case. As can be seen, issue No.1 formulated by the respondent tallies with issue No.1 of the appellant, except that the respondent went further to contend that the Arbitration Law of Cross River State, Cap. 12, (applicable to Akwa Ibom State) also applies to the arbitral agreement in the instant case. In the appellant’s reply brief it was contended that the issue as to the application of the Arbitration Law of Cross River State (applicable to Akwa Ibom State) was not raised in the court below and was never in contention between the parties and as such ought not to be raised and argued in this court as a fresh point or issue without the leave of this court having been sought and obtained by the respondent.

It is a settled principle of law that the Court of Appeal will not entertain a point which ought to have been raised at the lower court but was not so raised. See Beecham Group Ltd. v. Essdee Food Products (Nig.) Ltd. (1985) 3 NWLR (Pt. 11) 112. In Salami v. Mohammed (2000) 9 NWLR (Pt. 673) 469, the Supreme Court held that where a party wishes to raise on appeal a new issue not canvassed previously at the court below, leave of the appellate court is necessary to do so. Where grounds of appeal which raise new issues that were not canvassed at the court below, they are incompetent and should be struck out. See Omosowan v. Chiedozie (1998) 9 NWLR (Pt. 566) 477; F.M.B.N. v. N.D.I.C. (1999) 2 NWLR (Pt. 591) 333. I have closely perused the record of appeal in this case and I do not agree with the contention of the appellant that the application of the Arbitration Law of Cross River State (applicable to Akwa Ibom State) to this case was not raised at the court below.

Indeed, the respondent at the court below did canvass the issue or point now raised by the appellant in the reply brief. Section 7(1)(b) of the Cross River State Law, Cap. 12 aforesaid deals with the power of a party to appoint a sole arbitrator in the case of default by the other party to appoint his own arbitrator, where two arbitrators should be appointed to form the arbitral panel. The learned trial Judge in his judgment made copious references to that section of the law. At page 102 of the record of appeal he held the view that section 7(1)(b) of the said state law availed the respondent in appointing his arbitrator as the sole arbitrator. It is therefore unwholesome and in bad taste for the appellant’s counsel to mislead this court by arguing in the reply brief that the Arbitration Law of Cross River State, Cap. 12 (applicable to Akwa Ibom State) was neither raised nor considered at the court below. To that extent, the appellant’s reply brief is misleading, to say the least and should be discountenanced. Now, after a careful consideration of the submissions of the parties, on issue No.1, the crucial and fundamental matter to be firstly resolved in this appeal is that of the applicable law to the arbitration in this case, having regard to the Arbitration and Conciliation Act, Cap. 19, Laws of the Federation of Nigeria, 1990 on the one hand and the Arbitration Law of Cross River State, Cap. 12 (applicable to Akwa Ibom State) on the other hand.

The Arbitration and Conciliation Act, Cap. 19, Laws of the Federation of Nigeria, 1990, was promulgated by the Federal Military Government of Nigeria in 1988 as Decree No. 11 of 1988. The object or purpose of the Act by its long title is to provide a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation. Section 58 of the Act provides that the Act shall apply throughout the Federation of Nigeria.

The Act deals with domestic commercial arbitration as well as with international commercial arbitration.

Before the promulgation of the Act, there was no unified legal framework for settlement of commercial disputes by arbitration. The applicable law on arbitration in the then regions of Nigeria and later the states was the arbitration law of each state which derived its source and force from the Arbitration Ordinance of 1914. Thus, the Arbitration Law of Cross River State, Cap.12 (applicable to Akwa Ibom State) is derived from the Arbiration Law of the Former Eastern Region of Nigeria which in turn derived its origin from the Arbitration Ordinance of 1914. Again, it should be borne in mind that the Arbitration and Conciliation Act did not expressly repeal the arbitration laws of the federating states of Nigeria.

Undoubtedly, the Arbitration and Conciliation Act, 1990, and Cross River State Arbitration Law, Cap. 12 (applicable to Akwa Ibom State) are existing laws under our Constitution. But the vital question is which of them is applicable to the arbitration in the present case?

I wish to approach my answer to this question by referring to the doctrine of covering the field, which is a landmark principle of federalism.

In the case of the A.-G., Ogun State v. A.-G., Federation (1982) 3 NCLR 166, (1982) 1-2 SC 13, Idigbe, JSC, restated the doctrine thus:

“Where under a federal set up both the Federal and the State Legislatures, each being empowered by the Constitution so to do, legislate on the same subject, then if it appears from the provision of the Federal Law on the subject that the Federal Legislature intends to cover the entire field of the subject matter and thus provides what the law on the subject should be for the entire federation, then the State Law on the subject is inconsistent with the Federal Law and the latter must prevail and the State Law on the subject is invalid. If no general intention to cover the entire filed on the subject can be gathered from the Federal law, then the mere concurrence of the two laws (i.e. the Federal and State Laws on the subject is not eo ipso an inconsistency although the detailed rules in the provisions of both laws may lead to different results on the same facts”.

See also  Dunlop Nigeria Plc V. Olubode Fadeyi (2002) LLJR-CA

See Lakanmi v. A-G., Western State(1970) 6 NSCC 143, (1971) UILR 201; (1974) 4 ECSLR 713 at 722; Gov. of Ondo State v. Adewumi (1988) 3 NWLR (Pt. 82) 280; (1988) 6 SCNJ 151. In A-G., Abia State & Ors. v. A-G., Federation (2002) 6 NWLR (Pt.763) 264, the Supreme Court revisited the doctrine of covering the field and emphasised the point at page 311 that where the doctrine applies, it is not necessary that there should be inconsistency between an act of the National Assembly and a law passed by a House of Assembly.

That the fact that the National Assembly has enacted a law on the subject is enough for such law to prevail over the law passed by a State House of Assembly, but where there is inconsistency, the State law is void to the extent of the inconsistency. See section 4(5) of the 1999 Constitution which is in pari materia with section 4(5) of the 1979 Constitution. In the instant case, I am of the opinion that the Arbitration and Conciliation Act, 1990, has covered the whole spectrum or field of arbitration and conciliation and should prevail over the Arbitration Law of Cross River State, Cap. 12 (applicable to Akwa Ibom State). In other words, I hold that the applicable law to the arbitration in the instant case is the Arbitration and Conciliation Act, 1990.

I now turn to issue No.2 in the appellant’s brief of argument.

The narrow point for determination here is whether the appointment of the sole arbitrator, as was done by the respondent, without recourse to the court, is justified in the circumstances of the case.

It is not in doubt that clause 6 of the Tenancy Agreement (Exhibit A) provides specifically for the appointment of two independent arbitrators (who must be estate valuers) to be agreed upon between the parties. It is crystal clear that the arbitration agreement (exhibit A) does not provide for a unilateral appointment of a sole arbitrator as was done by the respondent. In my view, therefore, the respondent’s act undoubtedly is contrary to the expressed intention of the parties in the arbitration agreement which never envisaged or contemplated the appointment of a sole arbitrator.

Section 7 of the Arbitration and Conciliation Act, 1990, covers the vexed issue of appointment of arbitrators.

Under section 7 subsection 2(a) and (b) of the Act, provision is made for the situation where there is no specified procedure in the arbitration agreement by the parties for the appointment of the arbitrator(s). While section 7(3) of the Act provides for the situation where there is agreed appointment procedure in the arbitration agreement.

It is pertinent that in the instant case, the arbitration agreement did not specify or provide for a clear procedure for the appointment of the two arbitrators. All that the arbitration agreement (exhibit A) has stated is that the appointment of the two independent arbitrators should be agreed upon between the parties. However, no such agreement was reached between the parties before the respondent unilaterally appointed the sole arbitrator, and that is the cause of this trouble.

Even in a situation where a sole arbitrator is to be appointed, but there is no specified procedure in the arbitration agreement for the appointment and the parties fail to reach an agreement on the appointment, one party cannot unilaterally appoint the sole arbitrator to the detriment of the other party without recourse to the court.

Section 7(2)(b) of the Arbitration and Conciliation Act, 1990, states thus:

“in the case of an arbitration with one arbitrator, where the parties fail to agree on the arbitrator, the appointment shall be made by the court on the application of any party to the arbitration agreement made within thirty days of such disagreement”.

The respondent in this case was bent on the appointment of a sole arbitrator even where the arbitration agreement did not so provide.

Even though section 7 of the Act which made provision for appointment of arbitrators is silent on the issue of appointment of two arbitrators, it seems to me that section 7(2)(b) of the Act can be used for the appointment of two arbitrators as in this case or the inherent jurisdiction of the court can be invoked to appoint two arbitrators in the absence of such provision on the Act. If section 7(2)(b) of the Act can be used for appointment of one arbitrator, I cannot see the reason why the same section cannot be used mutatis mutandis for the appointment of two arbitrators. It must be emphasised that in all cases of appointment of arbitrator(s) under section 7 of the Act, where there is disagreement between the parties to the arbitration agreement, it is the court that must be resorted to for such appointment. See section 7(5) of the Act. This is so, in order to ensure and secure the appointment of independent and impartial arbitrators. In the instant case, it cannot be assumed that by the appointment of the sole arbitrator the independence and impartiality of the sole arbitrator would be guaranteed. The unilateral appointment of the sole arbitrator by the respondent to arbitrate over the dispute between him and the appellant can be likened to one being a Judge in his own cause. The likelihood of bias on the part  of the sole arbitrator could not be ruled out. Consequently, the respondent, in my view, acted improperly and unreasonably in the circumstances by appointing a sole arbitrator without recourse to the court. Therefore, the unilateral appointment of the sole arbitrator by the respondent is invalid.

Lastly on this issue, I have to make a few comment about section 7(1)(b) of the Arbitration Law of Cross River State, Cap. 12 (applicable to Akwa Ibom State) which the respondent heavily relied on for support in his unilateral appointment of the sole arbitrator.

Section 7(1)(b) of the Arbitration Law of Cross River State, Cap. 12 (applicable to Akwa Ibom State) provides as follows:

(1) Where a submission provides that the reference shall be to two arbitrators, one to be appointed by each party, then, unless the submission expresses a contrary intention;

(b) if, on such a reference, one party fails to appoint an arbitrator, either originally or by way of substitution as aforesaid, for seven clear days after the other party, having appointed his arbitrator, has served the party making default with notice to make the appointment, the party who has appointed an arbitrator may appoint that arbitrator to act as sole arbitrator in the reference, and his award shall be binding on both parties as if he had been appointed by consent.

After a close perusal of section 7(1)(b) of the Cross River State Law, Cap. 12 (applicable to Akwa Ibom State) it is my view that the section is inconsistent with the Arbitration and Conciliation Act, 1990, which prevails over the State legislation. Therefore, section 7(1)(b) of the Cross River State Arbitration Law, Cap. 12 (applicable to Akwa Ibom State) being inconsistent with the Arbitration and conciliation Act, 1990, is hereby declared void by virtue of section 315(3) of the Constitution of the Federal Republic of Nigeria, 1999.

The learned trial Judge was in a serious error when he applied section 7(1)(b) of Cross River State Arbitration Law, Cap. 12 (applicable to Akwa Ibom State) to this case as it does not apply at all.

With regard to issue Nos. (iii) and (iv) in the appellant’s brief of argument, it is my considered opinion that in view of the conclusion I have reached on issue No. (ii), therefore, arguments on issue Nos. (iii) and (iv) are idle or at best are largely academic.

The last issue for consideration is issue No. (v) and it is whether the arbitration award ought not to be set aside. Generally speaking, the law is that if parties choose to have their disputes settled by arbitration, then subject to certain limited exceptions, the attitude of the court has been that the parties should take arbitration for better or worse. They have chosen their tribunal. See Gounter Henck v. Andre & Cie S. A. (1970) 1 Lloyd’s Report 236 at page 238. By virtue of section 30 of the Act, where an arbitrator has misconducted himself or where the arbitral proceedings or award was improperly procured, the court has power to interfere and set aside the award.

See Arbico (Nig.) Ltd. v. N.M.T. Ltd. (2000) 15 NWLR (Pt. 789) 1.

The question is whether the appellant has established the grounds on which the arbitral award can be set aside. The onus is on the appellant to do so. I agree with the appellant that the arbitral proceedings and the award were improperly procured. By the arbitration agreement in clause 6 of the tenancy agreement, two arbitrators were provided for, but the respondent unilaterally procured a sole arbitrator who presided and made the arbitral award under circumstances in which his independence and impartiality could not be assured. In conducting the arbitration proceedings and making the award, the appellant was denied fair hearing as the notice of hearing sent to the appellant in Port Harcourt by post was returned as unclaimed. Further more, there was no resort to the court by the respondent for the appointment of the arbitrators in view of the obvious disagreement between the parties. Indeed, a combined reading of sections 30 and 48(a)(iii) and (iv) of the Act provided ample grounds which have manifested in the instant case for setting aside the arbitral award. In the circumstances, therefore, the arbitral award by the sole arbitrator is invalid and should be set aside.

In the final analysis, therefore, I hold that this appeal is meritorious and should be allowed. I hereby allow it. The arbitral award is hereby set aside. The case is remitted to the Chief Justice of Akwa Ibom State for re-hearing by another High Court Judge in accordance with the Arbitration and Conciliation Act, 1990, i.e. the applicable law and the rules made thereunder.

I award the sum of N5, 000.00 costs to the appellant.


Other Citations: (2003)LCN/1363(CA)

More Posts

Facebook
Twitter
LinkedIn

Leave a Reply

Your email address will not be published. Required fields are marked *

LawGlobal Hub
LawGlobal Hub is your innovative global resource of law and more. We ensure easy accessibility to the laws of countries around the world, among others