Mobil Producing Nigeria Unlimited V. Suffolk Petroleum Services Limited (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

EJEMBI EKO, J.C.A. (Delivering the Leading Judgment)

On 14th August, 2013 the respondent, as the plaintiff, commenced the suit no FHC/PH/C/S/203/2013, that is now the subject of this appeal. In the suit the respondent sought a number of declarations and injunctive orders to restrain the appellant “from howsoever proceeding or further proceeding with the proposed arbitration billed to take place in London, United Kingdom, under contract No A2246515 for the MIPS Project”. The said arbitration proceeding was commenced on 26th October, 2011 by the appellant pursuant to Article 30 of the said contract No A2246515 between the appellant and the respondent.

The contract was for installation of major pipeline projects EPCM -1 Offshore Pipeline and Platform Tie-Ins. The parties to the contract are in dispute over some terms or aspects of the contract, particularly as regards the issue of the alleged breach of the Recovery Plan Heads of Agreement. The respondent alleged that the appellant refused to issue the compensatory scope of work to the respondent as agreed. The appellant and the respondent could not amicably resolve their dispute through “good faith negotiations”. By

letter dated 20″ October, 2011 the appellant wrote to the respondent that she “has decided to refer the on-going dispute to Arbitration under Article 30 [Governing Law and Dispute Resolution] of the said contract No A2246515.

It is common ground to all the parties herein that the appellant, bent on proceeding in the arbitration, appointed an arbitrator, one Dr. Robert Gaitskell, QC. On her part the respondent insisted that it would not participate in the arbitral proceedings on the grounds “that the conditions precedent thereto as enshrined in the contract agreement have not been met”. Thereafter, the appellant proceeded to write the Acting Secretary General of the Permanent Court of Arbitration at the Hague to constitute an appointing authority that will appoint an arbitrator for the Plaintiff/Respondent.

In what appears to be the ulterior motive for commencing this suit, the respondent in Paragraph 2.14 in the Respondent’s Brief says –

2.14: when it became clear that the Appellant was committed to going to the arbitration even though the conditions precedent to the invocation of the arbitration clause as contained in Article 30.2 of the Contract Agreement have

not been complied with, the Respondent was constrained to institute the suit which gave rise to this appeal by way of originating summons filed on 14th August, 2013 against the Appellant and its party-appointed arbitrator, Dr. Robert Gaitskell, QC in order for the Court below to interpret the contract Agreement viz-a-viz the conduct of the parties and ascertain whether or not the provisions of the said Article 30.2 have been complied with.

As it appears the suit was, in the first place, conceived and filed as a “gagging suit”. I will later to the point.

This is the convenient point to reproduce the provisions of Article 30.0 of the MIPS contract No A2246515, and it is herein below reproduced as follows:

“GOVERNING LAW AND DISPUTE RESOLUTION

30.1 The validity, interpretation and construction of SUBCONTRACT shall be governed by and construed in accordance with laws of the Federal Republic of Nigeria, without reference to its principles of conflict of law rules and expressly excluding the UN Convention on Contracts for the International Sale of Goods.

30.2 The parties shall use reasonable efforts to resolve all disputes arising out or relating to this SUB CONTRACT

through good faith negotiations. If negotiation within the PROJECT team fails to resolve the dispute, then each party shall nominate a senior representatives of its management to meet at any mutually agreed location to resolve the dispute. If such negotiation do not result in mutually acceptable resolution, the dispute shall be handled in accordance with article 30.3.