Nigerian National Petroleum Corporation V. Roven Shipping Ltd (Owners Of ?mt Venturer?) & Anor (2011)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

CLARA BATA OGUNBIYI, J.C.A (Delivering the Leading Judgment)

The background genesis of the facts leading to this appeal arose from a dispute between the appellant and the respondents as to the proper construction of certain clauses in a time charterparty entered into by the parties in November 1995.

The Respondents who are the owners of a tanker vessel named MT Venturer hired same to the appellant for the carriage of petroleum products from refineries overseas to ports within Nigeria and Nigeria from to other locations named by the appellant in several other ports of the world. The Charter party was to regulate the relationship between the parties.

The Charterparty was to expire on 31st February extended by a letter 1996 but was of 1st February 1996 on a month basis, By an Addendum dated 2nd December 1996 the said Charterparty concerning “MT Venturer was amended by substituting the “MT Venturer” with, MT Dignity” and the effective date for the substitution was the 1st day of August 1996. Upon the determination of the Charterparty the respondents submitted their final invoices which included claims for interest on hire payments, which interest they alleged began to accrue after 90 days from the due date of payment, at the rate of 126% per annum.

The Appellant disputes the Respondents’ entitlement to interest in view of the provisions of Rider clause 15 of the charterparty. The respondents contend that they are entitled to interest payments under clause 18 of the charterparty. In consequence of this dispute, the parties agreed to refer the matter to arbitration.

Three arbitrators, namely Prof Kumado from Ghana, Mrs. Funke Adekoya sAN and Mr Babatunde Fagbohungbe were appointed to determine the dispute and thereafter the issue of the respondents, entitlement to claim interest, based on a construction of the relevant provisions of the charterparty, was put to them as a preliminary issue for determination.

on 31st March 2004 a Partial Award was made by the Arbitrators though the reasons for the Award were given only on 23rd June 2004. A perusal of the reasons given for the Award revealed that the Award was a split decision of 2-1 whereby the majority arbitrators upheld the claimants/Respondents contention that interest was payable on delayed of payment of hire fees. The Reasons for the Award did nor the minority arbitrator nor did it contain the terms of the minority or dissenting opinion. Also no dissenting opinion was attached to the majority Award.

Being dissatisfied with the terms of the partial appellants Award, they applied to the Federal High court to set aside the said Award. The application was predicated on the fact that the arbitrators had misconstrued the provisions of the charterparty by adopting principles of construction which the law does not countenance, that the construction put on the Charterparty was tantamount to rewriting the contract for the parties and that this had occasioned a miscarriage of justice. A page 3 – 6 of the record is in evidence.

The court however dismissed the application: in a Ruling delivered on 6th February 2006 by Justice G.C. Okeke, the trial judge took the view that once specific questions of law are referred to an arbitrator and he decides it, the court cannot intervene notwithstanding that the court itself may have come to a different conclusion. A page 91-102 of the record is in reference.

Again the appellant was dissatisfied with the Ruling of the Federal High court, and hence the filing of a Notice of Appeal against same which is the subject Matter now before us.

The said Notice and grounds of appeal as well as their particulars are contained at pages 105 – L07 of the record of appeal which same was filed on the 4th May, 2006 and containing four grounds of appeal. The appeal was entered in this court on the 12th July, 2006. The notice of appeal with leave of this court sought and obtained was, on 15th March 2008 amended and parties in accordance with the Rules of court did file their respective briefs of arguments.

On the 19th January 2011 counsel were invited to address the court on the competency or not of the Notice of appeal which at pages 105 – 107 was signed by MESSRS’ SEYI SOWEMIMO & Co., as the appellant’s counsel. Before us on the 1st June 2011 respective counsel submitted their arguments as directed by the court. Also on the application by the senior counsel Mr. Babatunde Koku, SAN, representing the respondents, leave was granted by this court that the substantive appeal be argued following the submission the competence on or not of the notice of appeal.

This’ the learned senior counsel argued is convenient as it will serve a prelude to allow the taking of the competence of the notice of appeal first as a preliminary issue serving as the gateway for the determination and disposal of the entire appear. The procedure the learned senior counsel further affirmed is in consonance with the decision in the case of Tanko v U.B.A. Plc (2010) 17 NWLR (Pt. 1221) 80.

I have considered the foregoing authority wherein their Lordships of the apex court approved the duty on this court while deciding appear on preliminary point of jurisdiction to proceed in the alternative to decide the appeal on the merit. In other words and as rightly sought by the learned senior counsel Mr. Koku, it is within reason that the appeal was argued even while the competence of the notice of appeal was hanging in the balance and yet to be determined.