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Home » Nigerian Cases » Supreme Court » Comptoir Commercial & Ind. S.p.r. Ltd V. Ogun State Water Corporation (2002) LLJR-SC

Comptoir Commercial & Ind. S.p.r. Ltd V. Ogun State Water Corporation (2002) LLJR-SC

Comptoir Commercial & Ind. S.p.r. Ltd V. Ogun State Water Corporation (2002)

LAWGLOBAL HUB Lead Judgment Report

E. O. AYOOLA, JSC

The appellant Comptoir Commercial & Ind. SPRL being dissatisfied with the award made on 23rd December, 1986 by the arbitrator in the dispute between it and the respondent, the Ogun State Water Corporation, appealed to the High Court of Oyo State to have the award set aside. PAGE 2 The grounds of the application were that the arbitrator had misconducted himself; that the award did not deal with the matter referred to the arbitrator; and that the award was bad on the face of it. By an agreement dated January 31st 1982, the parties agreed that the appellant would supply to the respondent and install 10 units of water treatment plants as “Turn key” projects. Any question, dispute or difference arising from the contract was to be referred to the arbitration of a person to be agreed upon by the parties.

A dispute having arisen in that the appellant claimed that under the agreement it was entitled to be paid in addition to “base contract price” variation in prices pursuant to clause 40(iii) of the contract and maintenance cost whereas the respondent insisted that is was a lump sum contract, a reference was made. The questions that arose were: (i) whether the appellant was entitled to what was described as “escalation cost” and, (ii) whether it was entitled to 5% of final contract cost as maintenance cost. The arbitrator proceeding on the footing that terms of the contract of the parties have been embodied in several documents, held that reading clause 40 of the document on which the appellant relied with those other documents to discern the intention of the parties led to the conclusion that it could not have been intended by the parties that the contract price was subject to variation. He found that: “On the first issue of the applicability of Clause 40, I hold that the contract for the supply of the water treatment plants was intended by the parties for a lump sum and that Clause 40 was not intended to be applicable.” In regard to the second question, he found that the appellant had not established any basis for its claim for maintenance cost at 5% of the contract price per annum.

On the matter coming before the High Court on the appellant’s application to set aside the award, Aderemi, J., (as he then was) held that: “…before there can be escalation of the contract price or before the contract can be construed as a variable one there must be evidence, in writing, that the Contractor was so authorized by the Engineer of the respondent to alter anything. In fact, authorization in writing is the only condition precedent to involving Clause 40 of Exhibit 1.” He dismissed the application. On the appeal to the Court of Appeal from that decision counsel who then appeared for the appellant, but is not the appellant’s counsel on this appeal, abandoned the ground and issue arising therefrom which would have been the crux of the appeal. The issue that was abandoned was whether or not there was an error on the face of the award. The position being thus, Salami, JCA., who delivered the leading judgment of the Court of Appeal was of the view, in effect, that as a result of the election by counsel who then represented the appellant, there being no contention that the award was erroneous on the face of it, the finding of the High Court became conclusive. However, out of abundance of caution, he considered the remaining issue in the appeal wherein it was contented that the arbitrator misconducted himself by wrongful admission of evidence. In the opinion of the learned Justice of the Court of Appeal the only document to which the argument of counsel for the appellant could be said to relate was Exhibit F. In regard to that exhibit relying on Olukade v. Alade (1976) 2 SC 183 he held that the document having been admitted without objection, it was within the competence of the arbitrator to have acted upon it. He applied the same consideration to Exhibits O, P and Q. The Court of Appeal (per Salami, JCA.,) held that the High court was in “serious error” in considering exhibit 1 as well as exhibits F, O, P, Q since the entire transaction had been recorded in Exhibit I. Notwithstanding that critical view the court, nevertheless, concluded that: “The admission of exhibits F, O, P and Q without resistance is fatal to the appellant’s case.

It was mainly responsible for producing or tendering exhibit F in evidence. Exhibits O, P and Q were admitted without its objection timeously or immediately; and the arbitrator took them all into consideration in coming to his decision. It is rather late in the day for the appellant to cry over or complain upon a situation its neglect greatly assisted in creating.” Having considered some other issues raised before it, which are not of significance in this appeal, the court below dismissed the appeal. This is an appeal from the decision of the Court of Appeal given on 7th July 1992. Surprisingly, it took five years for this appeal to be entered in this court and it has taken further five years for it to reach this stage of determination. For this delay the parties were largely responsible. The appellant’s brief was not filed until 13th October, 1999 and the respondents’ brief dated 7th January 2002 was only deemed to be filed on that day upon the respondent’s application for extension of time within which to file it.

Three issues were submitted for determination by the appellant as follows: (i) should the Court of Appeal not have considered on its own motion the correct interpretation of Clause 40 of Exhibit 1 notwithstanding that the appellant had abandoned the ground of appeal and the issue formulated thereon whereby the finding of the trial court on the interpretation of the said clause could have been challenged; (ii) was that court right when it held that it was too late for the appellant to complain about the admissibility of certain documents, the admissibility of which it did not object to at the trial; (iii) was that court correct when it held that the Arbitrator did not rely on those documents? The question whether a party who has abandoned an issue can complain if the court failed to consider that issue seems to me a novel one. Mr Ojo, learned counsel for the appellant, with thoroughness, industry and ingenuity went to great lengths to try to persuade us that he could. The candour with which he cited authorities which are against his contention is commendable. He cited cases such as Chief Ebba v. Chief Ogodo & Anor (1984) 4 SC 84 112; Ejowhomu v. Edok- Eter Mandillas Ltd., (1986) 5 NWLR (part 39) 1, 15; and Iyayi v. Eyigebe (1987) 3 NWLR (part 61) 523. All these cases show, in a nutshell, that an appellate court should confine itself to determination of issues raised and argued before it. Without asking us to depart from these decisions, learned counsel for the appellant argues that notwithstanding what he acknowledged to be a “well established principle of law” the Court of Appeal is by statute empowered to go beyond the grounds of appeal and issues raised by the parties in the determination of the appeal. For this argument he relies on section 16 of the Court of Appeal Act, order 1 rule 20 (4) and (5) and order 3 rule 23, of the Court of Appeal Rules.

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Section 16 of the Court of Appeal Act gives the Court of Appeal a general power “to make any order necessary for determining the real question in controversy in the appeal.” Order 1 rule 20 (5) empowers the Court of Appeal to exercise the powers of the Court that may be exercised order 1 rule 20 (1) – (4) notwithstanding (i) that no notice of appeal or respondent’s notice has been given in respect of any particular part of the decision or by any particular party to the proceeding or, (ii) that any ground for allowing the appeal or affirming or varying the decision of that court is not specified in such notice. The court of Appeal by virtue of that rule has power to make any order to ensure the determination on the merits of the real question in controversy between the parties. In substance, the general powers conferred on the Court of Appeal pursuant to order 1 rule 20 (1), (3) and (4) are those which emanated from the fact that appeals in civil cases in that court are by way of rehearing. Thus, the court has “ all the powers and duties as to amendment and otherwise of the High Court”: (r. 20(1); to receive further evidence on question of fact: (r.20(3); to draw inferences of fact and to give any judgment and make any order which ought to have been given or made: (r.20(4). Nothing in order 1 rule 20(1), (3) and (4) which contain the “foregoing provisions” referred to in r. 20 (5) empowers the Court of Appeal to descend into the arena, so to say, and take over the conduct of the appeal from the parties. The general powers of the Court of Appeal both under section 16 and Order 1 rule 20(5) to ensure the determination on the merits of the real question in controversy were designed to enable the court to clear whatever technical mistake or obstacles may be in the way of a fair determination of the appeal. The real questions in controversy in an appeal are the questions which arise from the grounds of appeal.

Similar purpose must be ascribed to section 16. The proper role of a court in our accusatorial model of procedure is to pronounce on and determine issues in controversy submitted to it. It is the parties who themselves play the primary role in the process, at the trial stage by the issues raised on their pleadings, where the case is tried on the pleadings, and, at the appellate stage, by issues arising from the grounds of appeal raised by the appellant. It is not for the judge to initiate controversy. His role in the accusatorial model is first and foremost that of an umpire and it is in that role than he offers assistance by directing proper focus to what the parties themselves may have articulated without sufficient clarity as the question in controversy.

There are the exceptional cases where it is permissible for the court to take an initiative to raise an issue on its own motion. Some of such instances are when the issue relates to its own jurisdiction: or, when both parties have ignored a statute which may have decisive bearing on the case; or, when on the face of the record serious question of the fairness of the proceedings is evident. The power of the court to make consequential orders as the justice of a case demands on its own motion though to be exercised with circumspection, also exists. The cases cited by learned counsel for the appellant such as Hanson v. Wearmonth (1939) 3 All E. R 47; Rutherford v. Richardson (1922) ALL E. R (Rep) 13; Abed v. Regional Tax Board (1966) NWLR 12; Re Whiston (1924) 1 Ch 122 and Williams v. Akintunde (1995) 3 NWLR (pt 381) 101 fall into one or the other of these categories. Notwithstanding the exceptions, the general rule is that when an issue is not placed before the court it had no business whatever to deal with it; Ebba v. Ogodo & Anor [1984] 15 NSCC 255, 266 (per Eso, J.S. C.). Is there anything to take this case out of that general rule? Counsel representing the appellant in the court below made a deliberate choice when he abandoned the issue that the award was bad on the face of it and left for the court to consider the following questions: (i) What were the issues before the sole arbitrator and the High Court? (ii) Can an award be set aside upon an application by one of the parties to arbitration agreement? And, (iii) Did the misconduct of the arbitrator alleged by the appellant amount to such as to warrant the award being set aside? Those were the real questions in controversy between parties. For an appellate court to insist than an appellant should argue which he has abandoned will not only be a clear departure from the role of the court but may also be embarrassing, for it could amount to insisting that counsel for the appellant should argue an issue which he himself probably considered to be lacking in substance.

Notwithstanding that the court may have doubted the wisdom of the appellant’s choice, it is not normally within its role to question and override such choice. Another counsel retained by the appellant on a further appeal may consider it mistaken and unwise that previous counsel abandoned an issue, but that will not evoke a responsibility in the court to insist on pronouncing on such abandoned issue.

A substantial portion of the argument of learned counsel for the appellant in his appeal is devoted to demonstrating the importance and merit of the issue abandoned. However, at the time when the matter was before the Court of Appeal counsel who then appeared for the appellant was obviously not of the opinion that that issue was worth canvassing. It is not known to be our law that it is proper for a court to enter into debate with counsel retained by a party over what issue he considers of importance to the merit of this client’s case. When an issue has been raised at and determined by a lower court the appellate court is entitled to assume that a party who has not complained about how such issue has been resolved is satisfied with the resolution of the issue. From the foregoing it is evident that there is no foundation in law for such general proposition put by learned counsel for the appellant that: “…Where an issue is material and fundamental to the determination of the questions in controversy between the parties to an appeal, the Court of Appeal has the duty to exercise its statutory power to take the issue or question suo motu and invite address on it from the parties…” Although the law permits a party to raise a fresh point not raised in the court below in his court, that has to be with leave of the court. It will probably be an uphill task for a party who has abandoned a point in the court below to convince this court to grant leave to raise such point as a fresh point. It will be invidious to permit the same result to be achieved by complaining of failure of the Court of Appeal to exercise a power of raising issues suo motu when no such power exists, and requesting this court to do what the court below should have done. In the result the first issue must be resolved against the appellant.

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The second issue can be disposed of more quickly. It is common ground that no objection was raised to the admissibility of Exhibits F, O, P and Q which were admitted in the arbitral proceedings. Exh F, in fact, was tendered by the appellant. In the appellant’s brief in the court below, appellant’s counsel in summarizing his argument in advance of his full argument stated as one of the grounds of misconduct, that the arbitrator misconducted himself: “by wrongfully receiving and considering evidence which goes to the root of the question in dispute submitted to him for resolution.” Throughout the “elaboration of appellant’s argument by counsel who represented the appellant in the court below, which was long and strong on principles but was short and weak on application, there was a mere perfunctory mention of the inadmissibility of these documents. Although in the judgement it was said that “counsel contended further… that it amounts to legal misconduct for an arbitrator to wrongfully admit and act on evidence which goes to the root of the question submitted”, the ground of its wrongful admission was not specified. In the circumstances I proceed on the assumption that what was in issue was whether the documents were admissible for the purpose to which they were put. The Court of Appeal held that: “The admission of Exhibits F, O, P and Q without resistance is fatal to the appellant’s case…Exhibits O, P, and Q were admitted without objecting timeously or immediately; and the Arbitrator took them all into consideration in coming to his decision. It is rather late in the day for the appellant to cry over or complain upon a situation its neglect greatly assisted in creating.” The court below relied on the case of Olukade v. Alade (1976) 2SC 183. In that case this court said, per Idigbe, J. S. C: “A distinction must be drawn between those cases where the evidence complained of is in no circumstance admissible in law and where the evidence complained of is admissible under certain conditions. In the former class of cases the evidence cannot be acted upon even if parties admitted it by consent and the Court of Appeal will entertain a complaint on admissibility of such evidence by the lower court (although the evidence was admitted in the lower court without objection): in the latter class of cases, if the evidence was admitted in the lower court without objection or by consent of parties or was used by the opposite party (e. g. for the purpose of cross examination) then it would be within the competence of the trial court to act on it and the Court of Appeal will not entertain any complaint on the admissibility of such evidence.”

In Ipinlaye II v. Olukotun (1996) 6 NWLR (pt 453) 148 this court (per Iguh, J.SC.) was of the same view that: “…in cases where the evidence complained of is not by law and in all circumstances inadmissible, a party may by his own conduct at the trial be precluded from raising objection to such evidence on appeal. In this category of civil cases, if the evidence was admitted in the trial court without objection to such evidence or by the consent of the parties or was used by the opposite party (e.g. for the purpose of cross-examination) then it would be within the competence of the trial court to act on it and the Court of Appeal will not entertain any complaint on the admissibility of such evidence.” The passage was cited with approval in the leading judgment in Osho v. Ape (1998) 8 NWLR (pt 562) 492 S.C. Learned counsel for the appellant does not deny that the law is as stated above. However, he argues that exhibits F,O, P, and Q are documentary evidence that are legally and unconditionally inadmissible in law in the interpretation of clause 40 of exhibit 1 on the basis of the extrinsic evidence rule. The rule is that when a transaction has been reduced to, or recorded in, writing either by requirement of law, or agreement of the parties, the writing becomes, in general, the exclusive record thereof, and no evidence may be given to prove the terms of the transaction except the document itself or secondary evidence of its contents: Phipson on Evidence (15th Edition) para 42- 01; section 132 (2) Evidence Act; Union Bank of Nigeria Ltd v Ozigi (1994) 3 NWLR (part 333) 385. It follows from the parol evidence rule that if the documents exhibits F, O, P,Q were not incorporated in Exhibit 1 but were tendered for the purpose of proving the terms of the agreement of the parties or to contradict, alter, add to or vary the contents of the document Exhibit 1, those documents cannot be admitted for the purpose. In my judgment, in such circumstance it would not matter that the documents were not objected to when they were tendered or that they were even tendered with consent. It is at the stage when the purpose for which they were tendered emerged that the court should consider whether it was permissible in law for the documents to be used for that purpose.

Even if they have been admitted without objection the court may still exclude them from consideration at that stage if it becomes obvious that they were tendered to prove the terms of the contract, contrary to the parol evidence rule. I am of the opinion that a waiver of the application of the parol evidence rule or an agreement not to insist on its application cannot be inferred merely from the failure of a party to object to the admissibility of a document, which on the face of it is admissible until the purpose of its being tendered is revealed. From what I have said, I come to the conclusion that the Court of Appeal was in error when it held that merely because the appellant did not object when exhibits F, O, P and Q were admitted it was rather late in the day for the appellant to complain that they were wrongfully admitted in evidence for the purpose for which they were used. However, learned counsel for the respondent argued that the question of wrongful admission of those documents has become inconsequential (i) because there was no challenge to the finding of the arbitrator that the contract was one for a lump sum; (ii) because, flowing from Kano State UDB v Franz Construction (1990) 2 NSCC (Vol. 21) 399, wrongful admission of evidence as in the circumstances of this case will not amount to misconduct of the arbitrator for which the award would be set aside; and (iii) because the Court of Appeal rightly held that the award was not based on Exhibits F,O,P and Q but rather on the interpretation of the contract document, Exhibit1, itself. I agree with learned counsel for the respondent. First I think this is a case in which it is apt to apply the principle in Kelantan Government v. Duff Development Co. Ltd . (1923) AC where Lord Cave said at p 409: “But where a question of construction is the very thing referred to arbitration, then the decision of the arbitrator upon that point cannot be set aside by the court only because the court would itself have come to a different conclusion.”

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There is also the opinion of Lord Wright in Absalom v. G. W. Garden Village Society (1933) All ER 616, 625 that: “It is equally clear that if a specific question of law is submitted to an arbitrator for decision, and he does decide it, the fact that the decision is erroneous does not make the award bad on its face so as to permit of its being set aside.” It is common ground that what was referred to the arbitration in this case was mainly a question of construction of agreement, Exhibit 1. He decided the matter referred to him. There is finality to that decision. It was not for the High Court or the court below to question that decision. Secondly, although as a general proposition receiving inadmissible evidence which goes to the root of the issue submitted to arbitration may amount to misconduct justifying the setting aside of the award, such proposition does not apply in this matter as the documents exhibits F, O, P, Q, in the opinion of the arbitrator, were among the several instruments that the agreement Exhibit 1 incorporated in itself.

It has not been argued in the court below that he proceeded on a wrong footing. When a contract is reduced to the form of document into which has been incorporated other documents, the documents incorporated cease to be extrinsic to the main document, but court below was in error in principle in the opinion that the appellant could not challenge the admission of the documents, Exhibits F, O, P, Q after they have been admitted without objection, the error in statement of principle has no practical effect in this case. The use made of the documents incorporated into the main agreement to be read as part thereof made the documents admissible. These observations really have taken care of the third issue raised by the appellant. There cannot be any doubt that the arbitrator made use of Exhibits O,P,Q (which were respectively 12, 13, and 14 before him) when he said: “From Exhibits 12, 13 and 14, the parties intended that the project was to be for a lump sum” However, as he had regarded those documents as incorporated into Exhibit 1, the main agreement. Reference to them was legitimate. For the reasons I have given this appeal must fail. However, before I make an order dismissing the appeal, I wish to observe that not withstanding the handicap faced by present solicitors for the appellant, (Afe Babalola & Co) which was certainly not of their own making but was a result of the manner in which the appellant’s case was presented in the court below, they have presented the appellant’s case before us with skill and industry. They have assisted me not only by citing cases which they accepted contain general principles against their contention, but have also usefully annexed to their brief a synopsis of some of the cases cited by them. Much assistance has been derived from the clarity of their presentation and from the concise and well-focused briefs of the parties. Be that as it may, this appeal fails. It is accordingly dismissed with N10, 000 costs to the respondents.


SC. 115/1997

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