Osun State Government V. Estisione H. Nigeria Limited & Anor (2012)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

KUDIRAT MOTONMORI OLATOKUNBO KEKERE-EKUN, J.C.A. (Delivering the Leading Judgment)

This is an appeal against the judgment of the Osun State High Court, Osogbo Judicial Division delivered on 18/2/05. The judgment arose from two consolidated suits. The appellant herein and the respondents entered into a contract dated 10/3/99 for the construction of internal and external roads to the Federal Housing Authority Estate, New Oba Road, Osogbo. Clause 22 of the agreement (Exhibit A) provided as follows:

“If any dispute or difference shall arise between parties hereto concerning the construction of this agreement or the rights, duties, obligations or liabilities of the other party then and in every such case, the dispute or difference shall be referred to the decision of two Arbitrators to be appointed by the parties concerned in the dispute or difference and an umpire to be appointed by the Arbitrators in accordance with the Arbitration Law of Oyo State applicable in Osun State of Nigeria”.

A dispute arose between the parties, which was referred to an arbitral tribunal consisting of Hon. Justice Kayode Eso, C.O.N., LL.D, Engr. (Dr.) G.O. Adefolaju (Ph.D) and Engr, (Chief) T.A.O. Ashagidigbi, BSc.

After listening to the parties, the tribunal on 20/12/02 made an award in favour of the respondents in the sum of N85,505,788.00 plus interest at the rate of 25% per annum from the date of the award. The respondents subsequently filed an originating summons before the High Court of Osun State, Osogbo Judicial Division in suit no. HOS/MISC/3/2003 for leave to enforce the award in the same manner as a judgment of the court and for an order that the Respondent/Judgment Debtor (Appellant herein) do pay the costs of the application to be taxed. The appellant filed a notice of preliminary objection dated 21/2/2003 against the originating summons on the following grounds:

1. The Arbitration Law of Oyo State 1978 which was the law contemplated and expressed by parties to govern arbitration proceedings and which gave rise to this Award was not an existing law as at the time of reference to the Arbitral Tribunal.
2. The Applicant/Judgment creditor/respondent lack the locus standi to institute this action.

The appellant also filed a motion on notice dated 18/3/2003 praying the court to set aside the arbitral award on the grounds that it was based on a non-existent law and that the respondents lacked locus standi to institute the suit.

By a separate originating summons dated 18/7/2003 in Suit So.HOS/MISC/27/2003 the appellant herein sought among other reliefs the setting aside of the arbitral award. The respondent challenged the suit on the ground, inter alia, that it was statute barred.

The suits were consolidated. After listening to the submissions of the respective learned counsel in the consolidated suits, the learned trial Judge dismissed the appellant’s preliminary objection, declined to set aside the arbitral award and made the award the judgment of the court.

The appellant being dissatisfied with the decision filed a notice of appeal containing six grounds of appeal. It subsequently filed an amended notice of appeal dated and filed on 9/11/05 containing seven grounds of appeal. The parties duly filed and exchanged briefs of argument in compliance with the rules of this court. At the hearing of the appeal on 1/3/2012, OPEYEMI USIOLA ESQ., adopted and relied on the appellant’s brief dated and filed on 14/11/05 and the reply brief dated and filed on 1/6/06 but deemed properly filed on 9/11/06. Both briefs were prepared by Ayo Ajayi of F. O. Fagbohungbe & Co. He submitted that the main issues for determination in the appeal are:

1. Whether a High Court can affirm an arbitral award as its own judgment.
2. Whether a stranger to an agreement can enforce it.
3. Whether in the face of a unifying Arbitration and Conciliation Act made by the National Assembly for the entire country, a State Law can have effect.

He urged the court to allow the appeal and set aside the judgment of the lower court.

L. L. AKANBI ESQ., adopted and relied on the respondents’ brief prepared by Lateef O. Fagbemi, SAN dated and filed on 28/11/05 and urged the court to dismiss the appeal. He placed special emphasis on issue 4 formulated in his brief.

The appellant formulated six issues for determination as follows:

1. Did the lower court have jurisdiction to make the arbitral award of 20th December, 2002 the judgment of the lower court?
2. Is the Oyo State Arbitration Law of 1978 (applicable in Osun State) an existing and enforceable law that could validly and lawfully govern the establishment, proceedings and award made by the Arbitral Tribunal in favour of the respondents herein on 20th December, 2002?
3. Is Clause 22 of the agreement dated 10th March, 1998 executed between the appellant and M/S ESTENSIONE S. R. L. (which provided that any dispute or difference that arose out of the agreement “shall” be referred to arbitration in accordance with the Arbitration Law of Oyo State of 1978) valid and enforceable?
4. If questions 2 and 3 above are answered in the negative, are the entire proceedings of the Arbitral Tribunal, particularly the arbitral award made on 20th December, 2002, thereby, rendered invalid, null and void ab initio and incapable of being enforced by, or made the judgment of the lower court?
5. Were the respondents proper parties vested with locus standi to apply to the lower court for leave to enforce the award of the Arbitral Tribunal as if it were a judgment of the lower court?
6. Was the appellant’s motion on notice seeking an order setting aside the arbitral award statute-barred?

No issue was distilled from ground 6 of the amended notice of appeal. It is accordingly deemed abandoned.

The respondents formulated five issues for determination thus: