Continental Sales Limited V. R. Shipping Inc (2012)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

HELEN MORONKEJI OGUNWUMIJU, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the ruling of Honourable Justice A. O. Ajakaiye of the Federal High Court sitting in Lagos delivered on 12th July 2010. The undisputed facts that led to this appeal are as follows:

The Appellant entered into a time-charter agreement with the Respondent dated the 10th July 2009. The charter provided that the relations between the parties should be determined in accordance with the Laws of England and disputes referred to arbitration in London in accordance with the Arbitration act 1996. By a further agreement dated the 11th August 2009, the Appellant admitted that it was in breach of the charter agreement and acknowledged the lawful termination of the charter and the Respondent’s entitlement to recover damages as stipulated in the said agreement.

The agreement of 11th August 2009 also incorporated the arbitral provision as contained in the original charter party agreement between the parties. The agreed recoverable damage was US $729,000.00 together with costs. When the Appellant failed to pay the admitted damages, the Respondent referred the matter to arbitration as stipulated in the charter agreement.

The Appellant was given notice of arbitration by an e-mail dated the 31st August 2009 sent by the Respondent and invited to nominate its own arbitrator. It acknowledged the invitation but did not participate. The arbitrator appointed by the Respondent, David Aikman Esq. having accepted to act as the Sole Arbitrator invited the parties to make submissions.

The sole Arbitrator subsequently found in favour of the Respondent and awarded damages to the Respondent in the sum of US $729,000.00 [as agreed in the Agreement of the 11th August 2009) together with interest at the rate of 2.5% from 24th August 2009 until payment and US $2,070 as costs of the arbitration plus interest at the rate of 4% per annum.

The Respondent, through its counsel, applied ex parte to the Federal High Court on the 15th December 2009 to register the arbitral award. On the 15th January 2010, the court granted an interim application ex parte to register the award but gave the Appellant time within which to apply to set aside the registration. Pursuant to the court’s order, the Respondent filed an undertaking as to damages on the 21st January 2010 and service of the court processes was effected on the Appellant thereafter.

The Appellant brought an application to set aside the order of registration by the trial court, on the basis that it was not notified of the London Arbitration Proceedings.

In his ruling delivered on the 12th July 2010, Ajakaiye J. dismissed the Appellant’s application to set aside registration of the aforesaid arbitral award and confirmed his earlier order for registration.

The Appellant has appealed against the confirmation of the registration of the Arbitral award.

Learned Appellant’s counsel filed brief dated and filed on 17th September 2010. The learned Respondent’s counsel filed brief dated 13th October 2010 and filed on 15th October 2010.

The Appellant identified two issues for determination as follows:

a. whether the lower court (Federal High court Lagos) was right in recognizing and registering in Nigeria, the Arbitral award dated 20th November 2009 delivered by the Respondent’s Arbitrator David Aikman Esq. in London, United Kingdom.

b. whether the learned trial judge’s ruling of 12th July 2010 is in compliance and conformity with section 52 (2) (a) (iii) of the Arbitration Act of Nigeria 1990.