Nipol Limited Vs Bioku Investment And Property Co. Ltd. (1992)

LawGlobal-Hub Lead Judgment Report

O. I. AKPATA, J.S.C.

On 2nd March, 1992, the appeal of the appellant against the judgment of the Court of Appeal was allowed and the case was remitted to the Court of Appeal for the appeal of the respondent against the decision of the trial High Court to be heard on its merit. I indicated then that I would give my reasons today for allowing the appeal and for remitting the case to the Court of Appeal.

When our Rule of Court states that “the rule for the time being in force in England” shall apply, does the expression mean the rule in force in England when our Rule was made or any rule subsequently made in England after our Rule had been made This issue is the crux of this appeal.

There was a co-operation agreement dated 4th October, 1983 between Bioku Investment and Property Company Limited (hereinafter called the “Company”) on the one part, and Nipol Limited (hereinafter called the “Co-operator”) of the other part. It was agreed in the said agreement that “in case of any dispute as to the operation of this agreement, any such dispute arising therefrom shall be referred to an arbitrator agreed to by both parties. The arbitrator shall decide in accordance with Nigerian law and his decision shall be binding on both parties.”

Although the terms of the agreement are not relevant for my decision, it is necessary to state in a nutshell the contents of three of the Clauses in the agreement in order to appreciate the sequence of events leading to this appeal. Clause One is to the effect that the Company shall utilize the excess of its foreign exchange for the purchase of sixteen tons of raw materials for the production of Guinness crates for and on behalf of the Cooperator. Clause three provides for the hiring by the Cooperator of the Company’s Engel injection moulding machine for one year for the production of 50 cm, basins. Clause nine provides for the supply of raw materials by both parties.

A dispute arose between the parties when the Cooperator determined the whole contract after it had used the Engel machine for only about two months. The dispute was referred to Niyi Akintola Esq. the arbitrator agreed to by both parties. The arbitrator published his award on 4th September, 1984. In it he found that the Cooperator had committed a breach of the contract of hiring of the Engel machine and awarded as damages against the Cooperator a total sum of N285,884.40.

Dissatisfied with the award, the Cooperator filed in the High Court an application on 11th October, 1984, 37 days after the award, by way of motion on notice to set aside the award or remit it. The application was based on a number of grounds. The Company in opposing the application filed a counter-affidavit pointing out, amongst other things, that the application was filed out of time not having been filed within 21 days of the publication of the award and that the award had become binding and effective. Learned counsel for the company relied on the English Supreme Court Practice 1982. In his ruling on the issue the learned trial judge held on 10th December,1984, relying on Order 73 Rules of Supreme Court 1979, that an application to set aside an award may be made at any time within six weeks after the award has been made and published to the parties. He went on to say:

“Even if the application had been filed after the expiration of the period of six weeks as provided for under the rule of the Supreme Court, the court can still grant an extension of time within which to file an application to set aside an award if the Applicant is able to give sufficient reason for the delay in bringing the application. It is crystal clear therefore, having regard to the foregoing points that the objection raised by the plaintiff/respondents learned counsel is totally without any merit and it should be overruled and it is accordingly overruled.”

The learned trial Judge, after disposing of the preliminary objection, proceeded to hear argument on the application of the Cooperator that the award be set aside. In his ruling delivered on 8th March, 1985, the learned trial Judge was of the view that the use of the Company’s foreign exchange was illegal and that such illegality would no doubt affect the lawful performance of the whole contract. He held that the supply of the raw material affected a large portion of the contract, and that without the supply of the sixty tons of raw materials based on illegal contract, the Cooperator would not be able to make use of the Engel machine effectively. He was therefore of the view that the maxim ex turpi causa non orutur actio applied.

After considering and resolving other issues raised in the application of the Cooperator, the learned trial judge, Adekola, J., concluded thus:

“It seems to me that this is not the type of arbitration award which should be remitted in view of the illegality by which it was tainted. The awards made by the arbitrator are hereby set aside.

Before ending this judgment it is pertinent to say that I still hold to my view in my ruling of 10/12/84 that the time within which to apply to set aside an award is six weeks and not 21 days as claimed by the respondent’s counsel.”

The Company appealed to the Court of Appeal against the ruling of the learned trial judge. The notice of appeal contained eight grounds.The Cooperator filed a notice that it would contend at the hearing of the appeal that the decision of the trial court be affirmed on other grounds. However, as pointed out by the Court of Appeal, the notice was deemed to have been abandoned as the issue was not canvassed in the respondents brief of argument. It was accordingly struck out. In the Company/appellant’s brief three issues were formulated as arising from the eight grounds of appeal. The Cooperator/respondent formulated four issues. The Court of Appeal summarized the issues arising from the appeal thus:

“(1) Whether the learned Judge was in error in not dismissing the application to set aside the award on the ground that it was filed out of time.