IPCO (W.A.) Holding Ltd & Anor. V. Sembcorp Eng. Ptel Ltd (2011)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

M. DATTIJO MUHAMMAD, J.C.A (Delivering the Leading Judgment)

On the 10th June 1999, the Respondent in this appeal commenced suit No.NHC/109/99 at the Nchia division of the High court of Rivers state claiming the outstanding sum of US $4,733,183.62 with accrued interest against the Appellants as defendants. The two parties had, on 19th December 1995, entered into an agreement for the supply of various forms of equipments to the Bonny Export Terminal in Rivers state owned by the Nigerian National Petroleum corporation. The Plaintiff/Respondent is, under the agreement, the supplier of the equipments, the total cost of which is US$7,778,875.00.

The action from which the instant appeal arose is for the recovery of the outstanding balance of the cost of the contract after the Appellant had persistently refused to pay the sum inspite of Respondent’s repeated demands allegedly agreed and approved the payment of the sum of US $837,725.00 the to Respondent- Having entered appearance, the Appellants by an application, filed on 18th October 1999, prayed the lower court that the matter be referred to arbitration as provided for by clause 26 of the contract, Exhibit A. They also asked that further proceedings into the ratter be stayed pending the arbitration.

Upon receipt of Appellant’s application, the Respondent filed a motion seeking the court’s order for judgment against the Appellants in the sum of US $837,725.00 which sum had been admitted and thence not within the subject matter of arbitration’ Annexed to Respondent’s application, are the invoices bearing Appellants’ purported admission of the sum in respect of which judgment was being urged.

Arguments in respect of the two applications were heard jointly by the court on 27th March 2000. In a considered ruling, dated 14th November 2000, the court having found that Appellants had admitted Respondents claim to the tune of us $837.725.00, accordingly entered judgment for the Respondent on the grounds that the sum does not form the subject matter of Arbitration. The court otherwise granted Appellants’ application and referred the matter to arbitration’ Aggrieved with the court’s ruling, the defendant has appealed against same on a notice containing four grounds.

Parties have filed and exchanged briefs of arguments and same, including Appellants’ reply brief have been adopted and relied upon at the hearing of the appeal.

The two issues formulated by the Appellants at paragraph 3.01 0f their brief as calling for determination in the appeal read:-

(i) whether the learned trial judge was right in granting judgment final whilst considering an application or jurisdiction. (Distilled from Grounds 1 and 2 of the Grounds of Appeal)

(ii) In the alternative, whether the learned trial judge was right in holding that there was an admission of liability to the tune of Us $937,725.00 (Eight Hundred and Thirty-seven thousand, seven Hundred and Twenty-five US- Dollars) by the Defendants/Appellants. (Distilled from Grounds 3 and4 of the Grounds of Appeal.

The two issues the Respondent distilled from the grounds of Appeal for determination are:-

1. Whether the learned trial judge was right in entertaining and granting an application for judgment on admission whilst considering an application seeking a reference to arbitration?
2. whether the learned trial judge was right in holding that there was an admission of liability to the tune of US $837 ,725.00 (Eight Hundred and Thirty seven Thousand seven Hundred and Twenty five Dollars) by the Defendants/Appellants.

On Appellants first issue, their learned counsel submits that the motion before the lower court as indicated at page 235 lines 15-30 0f the record of appeal is theirs filed on 18 – 10 – 99. The motion challenges the lower court’s jurisdiction and prays that the matter before the court be referred to arbitration as required by the contract agreement between the parties. The court’s failure to consider whether the condition precedent to the exercise of its jurisdiction, whether the matter is one for arbitration or not, is a grave error. Learned counsel cited the decisions in Nokoprise Intermark Company Limited & ors. v. Dobest Trading corporation Inc. & ors. (1997) 9 NWLR (pt.520) 334 at 336 and Gabriel Madukolu and Ors. V. Johnson Nkemdilim (1962) 2 ANLR 581 at 590.

Learned Appellants’ counsel further contends that the only motion before the court is Appellants application and none other. The law is settled, it is argued, that a court must restrict itself to the prayers contained in the application before it. The court has no jurisdiction to do otherwise. The lower court’s order giving final judgment to the Plaintiff/Respondent as prayed for in an application that is not before the court is a nullity since same has proceeded without the necessary jurisdiction. Reliance is placed by counsel on App & ORS v. Professor Arbert F. Ogunsola (2002) 5 NWLR (pt.761) 484 at 503, and Union Bank of Nigeria plc v. Ekuro arms Ltd. & Anor (2001) FWLR (Pt. 67) 1019 at 1031.

Concluding his argument under the issue, learned Appellant’s counsel submits that because the lower courts’ order entering judgment for the Plaintiff/Respondent in respect of the sum allegedly admitted by the Appellants is a violation of the latter’s right to fair hearing, same should be set aside. The case of Pius okeke & 9 ors. v. Iche otika Nwohoye & 3 ors. (1999) 13 NWLR (Pt-635) 495, counsel contends, buttresses their stand.

Under Appellant’s 2nd issue, which learned Appellant counsel argues in the alternative, he asks that it be taken without being conceded that the lower court has the jurisdiction to consider plaintiff Respondent’s application for the order the court made entering judgment for the sum the Appellants allegedly admitted. The court’s conclusion that the Appellants have admitted the sum, it is argued, is manifestly wrong. Appellants have, in opposition to Plaintiff/Respondent affidavit in support of the application for judgment, filed a counter – affidavit on 17 – 3 – 2000. By paragraphs 9, 10, 11 and 12 of the counter affidavit as well as Exhibit “INJ” annexed to the counter-affidavit, Appellants indebtedness has not only been strongly denied, Respondent is averred to have been overpaid to the tune of US $367,056,89. The lower court’s finding that the Appellants have admitted owing the Respondent the sum of US &837,725.00 as part of the latter’s claim at page 241 lines 15 -25, learned Appellants counsel contends, results from the court’s improper evaluation of the affidavit evidence of the two sides. The basis of the finding has not been explained by the court. A decision such as that inspite of the persisting conflict of the sworn affidavits of parties is perverse. The court is under duty to resolve the conflict in the evidence before it can validly determine the issue in controversy. Relying on the case of E.O. Falola v. Union Bank of Nigeria Plc. (2005) 7 NWLR (Pt. 924) 405 at 408, learned counsel urges that the issue as well as the appeal be resolved in favour of the Appellants.