Optimum Construction & Property (Dev) Ltd V. Ake Shareholdings Ltd (2021)

LAWGLOBAL HUB Lead Judgment Report

EMMANUEL AKOMAYE AGIM, J.S.C.

The applicant and respondent entered into a sublease agreement dated 16-4-2007 and agreed to submit all disputes arising from it to arbitration. A dispute arose between them concerning the applicant’s performance of its obligations in the contract and the dispute was submitted to arbitration by a sole Arbitrator.

Following the conclusion of arbitral proceedings, the sole Arbitrator on 19-8-2011 made an Arbitral award titled “Final Arbitration award, in full and final settlement of the claims in the arbitration as follows:

“ACCORDINGLY, I DO HEREBY AWARD, DECLARE AND DIRECT IN FULL AND FINAL SETTLEMENT OF CLAIMS IN THIS ARBITRATION AS FOLLOWS:

1. The Claimant’s claim succeeds in part.
2. The Respondent shall within a period of six (6) months from the date of this award, hand over a copy of the Fire and General Insurance of the property to the Claimant and carry out the necessary repair works on the property as identified in Exhibit C7, the Minutes of the Joint Inspection meeting held on the 26th day of August, 2010 and Exhibits C6(i) and (ii) the reports of Ekcel Konsultants dated the 10th day of December, 2008 and February, 2011 respectively.
3. The Respondent is allowed relief from forfeiture on condition that within six (6) months from the date of this award in compliance with the sublease it hands over a copy of the Fire and General Insurance of the property to the Claimant and carry out the necessary repair works on the property as identified in Exhibit C7, the minutes of the joint inspection meeting held on the 26th day of August, 2010 and Exhibits C6(i) and (ii) the reports of Ekcel Konsultants dated the 10th day of December, 2008 and February, 2011 respectively.
4. The Respondent shall pay the claimants within 30 days of the date hereof the sum of N3,365,000.00 (Three Million, Three Hundred and Sixty-Five Thousand Naira) representing payment for replacement of marble tiles and Generator purchase/Installation/Servicing.
5. The Respondent shall pay the Claimant interest on the sum awarded in paragraph 4 above or any amount outstanding on same from the 30th day of this award at the rate of 2.5% per annum until final payment.
6. The Respondent shall pay to the Lagos Multi-door Courthouse the administrative fees and arbitration session fees, any amount paid by the Claimant shall be reimbursed by the Respondent to the Claimant forthwith and any amount remaining unpaid shall bear interest at the rate of 2.5% per annum from the 30th day of this Award.”

By a motion on notice filed on 3-5-2012, the respondent herein applied to the High Court of Lagos State for-

“1. Order granting leave to the Claimant/Applicant to enforce the Final Arbitration Award dated 19th August, 2011 of Mrs. Adedoyin Oyinkan Rhodes-Vivour (FCIArb) against the Defendant/Respondent in the same manner as a judgment of the Court to the same effect.

2. An order of the Court enforcing Clause 3 of the said Final Arbitration Award dated 19th day of August, 2011, forfeiture of the sublease agreement dated 16th April, 2007 against the Defendant/Respondent in the same manner as a judgment of the Court to the same effect.”

The grounds for the application stated on the motion read thusly- “The Respondent has failed to comply with Clause 2 of that part of the said Final Arbitration Award regarding the carrying out of “necessary repair works on the property as identified in Exhibit C7, the minutes of the joint inspection meeting held on 26th August, 2010 and Exhibits C6(i) and (ii) the Reports of Eckel Konsultants dated 10th December, 2008 and February, 2011 respectively as directed by the Arbitrator in the said Final Arbitration Award dated 19th August, 2011.”

On 4-7-2013, the High Court of Lagos State rendered its ruling and held that the arbitral award “was inconclusive as to Award No. 3 thereof and therefore, unenforceable” and struck out the application for being incompetent.

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Dissatisfied with the ruling of the High Court of Lagos State, the respondent herein, on 26-9-2013, filed a notice of appeal against the said ruling, commencing Appeal No. CA/L/990/2013 in the Court of Appeal sitting in Lagos.

On 6-3-2015, the Court of Appeal delivered its judgment in the appeal, holding inter alia thusly- “The arbitral award (supra) is clear, unequivocal or unambiguous. There is no complaint that it contains decisions on matters beyond the range of the submission to arbitrations There is also no indication that the sole arbitrator misconducted herself, nor was evidence put forward to suggest the arbitral proceedingsand/or the award has been improperly procured. None of the vitiating factors (supra) was made out.

The award itself is final and conclusive and is based on solid, persuasive, and tested expert evidence which is uncontroverted and bears weight and admissibility which persuaded the sole arbitrator, aright in my view, to base the award on the said one way expert evidence in Exhibit ASL/3 after close examination of it.

In addition, the arbitral award (supra) was accepted by the respondent and the appellant as binding on them without whimper of protest. Being a final/conclusive and crystal clear award the Court below should have enforced the arbitral award as judgment without ado, all the more so it did not offend the three preconditions in Sections 29 and 30 of the A.C.A. enumerated.

With deference to the Court below, the award (supra) is not doubtful on its face. It is valid, enforceable, and should have been enforced summarily for promptitude and convenience. Because the award had granted the relief from forfeiture of the sublease in favour of the respondent only on condition that the respondent within 6 (six) months of the award hands over acopy of the Fire and General Insurance of the demised property to the appellant and, in addition, the respondent carries out the necessary repair work on the demised property as identified and specified in the award which the respondent has breached, therefore the award (supra) is in that wise conclusive and enforceable, in my modest view. The respondent did not discharge the dual obligation placed on it by the final arbitral award (supra) as stipulated therein. The award (supra) became spent by the inactivity of the respondent. Having flouted the terms of the arbitral award (supra), the respondent lost the protection of the relief from forfeiture of the sublease. And it required an order of Court to formally terminate it.