(2018) lpelr-45108(ca)lawpavilionpersonal.com/ipad/books/45108.pdf · 2018. 11. 15. · econet...
TRANSCRIPT
TRANSOCEAN SHIPPING VENTURES PRIVATELTD v. MT SEA STERLING
CITATION: (2018) LPELR-45108(CA)
In the Court of AppealIn the Lagos Judicial Division
Holden at Lagos
ON THURSDAY, 24TH MAY, 2018Suit No: CA/L/22/2018
Before Their Lordships:
YARGATA BYENCHIT NIMPAR Justice, Court of AppealUGOCHUKWU ANTHONY OGAKWU Justice, Court of AppealABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice, Court of Appeal
BetweenTRANSOCEAN SHIPPING VENTURES PRIVATE LIMITED - Appellant(s)
AndMT SEA STERLING - Respondent(s)
RATIO DECIDENDI1. APPEAL - RECORD OF APPEAL: Whether parties and the appellate
courts are bound by the record of appeal"It is settled law that both the Court and the parties are bound bythe Records of Appeal and the Court cannot depart therefrom. SeeGARUBA vs. OMOKHODION (2011) 15 NWLR (PT 1269) 145 at 180,ARUM vs. NWOBODO (2013) 10 NWLR (PT 1362) 374 and F. H. A. vs.OLAYEMI (2017) LPELR (43376) 1 at 38-39."Per OGAKWU, J.C.A. (P. 9,Paras. C-E) - read in context
(201
8) LP
ELR-45
108(
CA)
2. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE:Whether an agreement to submit a dispute to arbitration ousts thejurisdiction of Court"Properly contextualized, the Respondent's contention at the lowerCourt was that because of the arbitration clause in the ShipManagement Agreement, the contract between the parties, theAppellant's action was premature and the Court did not have thejurisdiction to entertain a premature action. The pristine questionhowever is whether an arbitration clause ousts the jurisdiction ofCourt. The law seems to be ensconced that an arbitration clausedoes not oust the jurisdiction of a Court. In OBEMBE vs. WEMABODESTATE (1977) LPELR (2161), the apex Court held that anyagreement to submit a dispute to arbitration does not oust thejurisdiction of the Court. Equally in MESSRS NV SCHEEP vs. MV 'S.ARAZ' (2000) 12 SC (PT 1) 164 at 213, the Supreme Court held thatan arbitration clause does not seek to oust the jurisdiction of a Courtas all it does is to allow the parties the avenue and possibilities ofsettling disputes amicably out of Court. In CELTEL NIGERIA B.V. vs.ECONET WIRELESS LTD (2014) LPELR (22430) 1 at 58 this Court perIkyegh, JCA held as follows: "Arbitration does not remove thejurisdiction of the regular Courts. It is only a stop-gap process tosettle the disputes. See Magbagbeola v. Sanni (2002)4 NWLR (pt.756) 193 at 205 following Confidence Insurance Ltd v. Trustees ofthe Ondo State College of Education (1999)2 NWLR (pt. 591) 373 at386. It follows that a dispute referred to arbitration merely has theeffect of staying proceedings in the regular Court in respect of apending suit over the same subject matter." See also MOBILPRODUCING NIG UNLTD vs. SUFFOLK PETROLEUM SERVICES LTD(2017) LPELR (41734) 1 at 33-35 and EAGLEWOOD INTEGRATEDRESOURCES LTD vs. ORLEANS INVESTMENT HOLDINGS LTD (2017)LPELR (43542) 1 at 19-20. In the light of the legal position that anarbitration clause does not oust the jurisdiction of a Court, theprovisions of Section 20 of the Admiralty Jurisdiction Act whichrenders null and void an agreement that seeks to oust thejurisdiction of the Court does not come into play in this matter."PerOGAKWU, J.C.A. (Pp. 23-25, Paras. D-C) - read in context
(201
8) LP
ELR-45
108(
CA)
3. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE:Classification of arbitration clauses"Howbeit, the procedure to follow where there is a dispute equallydepends on the nature of the arbitration clause. In OBEMBE vs.WEMABOD (supra) at 16-17, Fatayi- Williams, JSC (as then was laterCJN) stated as follows: "...arbitration clauses, speaking generally, fallinto two classes. One class is where the provision for arbitration is amere matter of procedure for ascertaining the rights of the partieswith nothing in it to exclude a right of action on the contract itself,but leaving it to the party against whom an action may be brought toapply to the discretionary power of the Court to stay proceedings inthe action in order that the parties may resort to that procedure towhich they have agreed. The other class is where arbitrationfollowed by an award is a condition precedent to any otherproceedings being taken, any further proceedings then being, strictlyspeaking, not upon the original contract but upon the award madeunder the arbitration clause. Such provisions in an agreement aresometimes termed "Scott v. Avery" clauses, so named after thedecision in Scott v. Avery (1856) 5 H. L. Cas. 811, the facts of whichare as follows: An insurance company inserted in all its policies acondition that, when a loss occurred, the suffering member shouldgive in his claim and pursue his loss before a committee of membersappointed to settle the amount; that if a difference thereon arosebetween the committee and the suffering member, the mattershould be referred to arbitration, and that no action should bebrought except on the award of the arbitrators. In considering thescope of these provisions, the Court held that this condition was notillegal as ousting the jurisdiction of the Courts." See also CITYENGINEERING (NIG) LTD vs. FHA (1997) LPELR (868) 1 at 23-24(SC)."Per OGAKWU, J.C.A. (Pp. 25-26, Paras. C-F) - read in context(2
018)
LPELR
-4510
8(CA)
4. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE:Duty of Court to give effect to arbitration clause in an agreement"...The provision for arbitration is a mere matter of procedure forascertaining the rights of the parties. There is nothing therein thatexcludes a right of action on the contract. But a party against whoman action has been brought may apply to the discretionary power ofthe Court to stay proceedings in the action so that the parties mayresort to the procedure they have agreed upon. See OBEMBE vs.WEMABOD ESTATES LTD (supra) and CITY ENGINEERING (NIG) LTDvs. FHA (supra). In THE OWNERS OF THE MV LUPEX vs. NIGERIAOVERSEAS CHARTERING AND SHIPPING LTD (2003) LPELR (3195) 1at 23-24, Iguh, JSC stated: "The law is also settled that the mere factthat a dispute is of a nature eminently suitable for trial in a Court isnot a sufficient ground for refusing to give effect to what the partieshave, by contract, expressly agreed to. See Re: An Application by thePhoenix Timber Company Ltd. (Appeal of V/O Sovfracht) (1958) 1Lloyd's Rep. 305 at 308. So long as an arbitration clause is retainedin a contract that is valid and the dispute is within the contemplationof the clause, the Court ought to give due regard to the voluntarycontract of the parties by enforcing the arbitration clause as agreedto by them. See Heyman and Another v. Darwins Ltd. (1942) Vol. 72Lloyd's Rep. 65." See also NEURAL PROPRIETARY LTD vs. UNICINSURANCE PLC 2015 LPELR (40998) 1 at 9-10. The rudimentaryprinciple of law in respect of contracts and agreements is expressedin the Latinism pacta conventa qua neque contro leges neque dolomalo inita sunt omni modo observanda sunt, more commonlyexpressed as pacta sunt servanda, meaning that agreements whichare neither contrary to the law nor fraudulently entered into shouldbe adhered to in every manner and in every detail. See SONNAR NIGLTD vs. NORDWIND (1987) LPELR 1 at 44, A-G NASARAWA vs. A-GPLATEAU (2012) LPELR (9730) 1 at 29 and BLUENEST HOTELS LTDvs. AEROBELL NIGERIA LTD (2018) LPELR (43568) 1 at 22. Havingestablished that the arbitration clause does not oust the jurisdictionof a Court and that the Court has a duty to give effect to thearbitration clause in the contract between the parties, not by strikingout the action, but by staying proceedings in the action so thatparties can be held to their bargain of resolving their disputes byarbitration; it becomes translucent that the lower Court erred when itstruck out the Appellant's action for want of jurisdiction."PerOGAKWU, J.C.A. (Pp. 28-31, Paras. F-A) - read in context
(201
8) LP
ELR-45
108(
CA)
5. CASE LAW - JUDICIAL PRECEDENT/STARE DECISIS:Circumstances when Court is not bound by the doctrine of staredecisis"By the doctrine of stare decisis, the decision of this Court isgenerally binding on this Court until overruled by the Supreme Court.There are however some exceptions. These are:1) A Court will refuse to follow a decision of its own which althoughnot expressly overruled cannot in its opinion stand with a decision ofthe Supreme Court.2) A Court is not bound to follow a decision of its own if given perincuriam.3) The Court is entitled to decide which of two conflicting decisionsof its own it will follow.See CAMPTEL INT'L SPA vs. DEXSON LTD (1996) 7 NWLR (PT 459)170 at 184 and DISU vs. AJILOWURA (2001) 4 NWLR (PT 702) 76 at90. In the instant case, having regard to the facts and circumstancesof the case, I am inclined to follow the decisions of the apex Court inOBEMBE vs. WEMABOD ESTATES LTD (supra), MESSRS B. V. SCHEEPvs. M. V. 'S ARAZ' and CITY ENGINEERING vs. FHA (supra) because bynecessary implication, the decision of this Court in MV PANORMOSBAY vs. OLAM cannot stand as regards the point that an arbitrationClause ousts the jurisdiction of a Court as agreed by the parties intheir Agreement."Per OGAKWU, J.C.A. (Pp. 36-37, Paras. A-A) - readin context
6. CONSTITUTIONAL LAW - RIGHT TO FAIR HEARING: Nature ofthe right to fair hearing"Fair hearing within the context of Section 36 of the 1999Constitution, has been said to be a trial which ought to be conductedin accordance with all the legal norms designed to ensure thatjustice is done at all cost to all parties. The principle of fair hearing isthat both sides must be given an opportunity to present theirrespective cases. The Courts must observe the fundamentalprinciples of fair hearing as any breach vitiates the entire process,see OVUNWO & ANOR V WOKO & ORS (2011) LPELR - 2841 (SC)."PerNIMPAR, J.C.A. (P. 38, Paras. A-D) - read in context
7. COURT - JURISDICTION: Importance of jurisdiction in the processof adjudication"The importance of jurisdiction in the adjudicatory process cannot beover-emphasised. Jurisdiction is a fundamental pre-requisite in theadjudication of any matter. It is the fons et origo, the threshold ofjudicial power and judicialism. It is the bloodline, lifeline, livewire andindeed spinal cord of a Court of law: A-G OYO STATE vs. NLC (2003)8 NWLR (PT 821) 1 at 26 and ODEDO vs. INEC (2008) 17 NWLR (PT1117) 544."Per OGAKWU, J.C.A. (P. 16, Paras. A-C) - read in context
(201
8) LP
ELR-45
108(
CA)
8. COURT - JURISDICTION: Importance of jurisdiction; whether theissue of jurisdiction must be resolved as a matter of priority"The next question that will arise is whether both sides were givenan opportunity to present their case which was looked into by theCourt? Definitely. The lower Court heard both the Appellant andRespondent's applications but decided to determine theRespondent's application challenging jurisdiction first consideringthe fact that if it does not have jurisdiction, any other step it takes inthe matter will be an exercise in futility, see NWANKWO V YAR'ADUA(2010) 12 NWLR (PT 1209) 518 SC. In any case, like my learnedbrother, OGAKWU, JCA pointed out, it is trite that a challenge tojurisdiction can be raised at any time and in any manner.Consequently, the lower Court was right in determining theRespondent's application first and having found that it had nojurisdiction, it will be an academic exercise to further determine theAppellant's application. Consequently, the lower Court wasempowered to act in the manner it did and I also find the allegationthat there was a breach of fair hearing not made out."Per NIMPAR,J.C.A. (Pp. 38-39, Paras. D-C) - read in context
(201
8) LP
ELR-45
108(
CA)
9. PRACTICE AND PROCEDURE - STAY OF PROCEEDINGS: Positionof the law on the grant of stay of proceeding pending an arbitration"The question however is whether the facts and circumstancesbefore the lower Court were such that the lower Court could haveexercised jurisdiction in favour of granting stay of proceedings.Section 5 of the Arbitration and Conciliation Act preserves the powerof the Court to stay proceedings in order for a matter to be referredto arbitration, provided that the party applying has not delivered anypleadings or taken any other steps in the proceedings. The Appellantcontends that the Respondent has taken steps because herapplication by which it sought to enforce the bargain of the partiesfor resolution of their dispute by arbitration included prayers forsecurity for costs and solicitors fees. I am unable to agree. TheRespondent's application in its true purport and essence was toenforce the arbitral clause which the parties had agreed as theavenue for the resolution of any dispute. This remains sonotwithstanding that the Respondent contended that the effect ofthe provisions for arbitration not being followed was divesting theCourt of jurisdiction, which the lower Court erroneously agreed with.In ONWARD ENTERPRISES LTD vs. MV MATRIX (supra) at 21, Mshelia,JCA stated that it is only acts done in furtherance of the prosecutionof the defence that could be said to amount to taking steps in theproceedings. See SINO-AFRIC AGRICULTURE & IND COMPANY LTD vs.MINISTRY OF FINANCE INCORPORATION (supra) at 36 and MOBILPRODUCING (NIG) UNLTD vs. SUFFOLK PETROLEUM SERVICES LTD(supra) at 30. Since the Respondent had not taken any steps in theproceedings, the lower Court ought to have exercised discretion bystaying proceedings in the matter instead of striking out the action.The diacritical circumstances of the matter called for the invocationof the provisions of Section 5 of the Arbitration and Conciliation Actto stay proceedings. See NIGER PROGRESS LTD vs. NORTH EASTLINE CORPORATION (1989) 3 NWLR (PT 107) 68 at 91 and OWNERSOF THE M. V. LUPEX VS. NIGERIAN OVERSEAS CHARTERING ANDSHIPPING LTD (supra) at 21."Per OGAKWU, J.C.A. (Pp. 31-32, Paras.A-E) - read in context
10. PRACTICE AND PROCEDURE - ACADEMIC OR HYPOTHETICALQUESTION(S)/ISSUES/SUIT/EXERCISE: Duty of Court not todecide on or engage in academic/speculative questions or issues"...It is rudimentary law that Courts do not engage in academicissues/exercise but only deal with live issues. See DANIEL vs. INEC(2015) LPELR (24566) 1 at 34, K. R. K. HOLDINGS (NIG) LTD vs. FBN(2016) LPELR (41463) 1 at 26-27 and CPC vs. INEC (2011) LPELR(8257) 1 at 78-79."Per OGAKWU, J.C.A. (Pp. 11-12, Paras. F-A) - readin context
(201
8) LP
ELR-45
108(
CA)
11. PRACTICE AND PROCEDURE - ISSUE OF JURISDICTION: Duty ofCourt when the issue of jurisdiction is raised"It is rudimentary law that the issue of jurisdiction is fundamentaland should be determined at the earliest opportunity. The businessof a Court once its jurisdiction is questioned in a matter is to assumejurisdiction to enquire into and determine whether it has jurisdiction.See ODOM vs. PDP (2015) LPELR (24351) 1 at 52 and BARCLAYSBANK vs. CBN (1976) LPELR (751) 1 at 15. In FBN vs. T. S. A. IND.LTD (2010) LPELR (1283) 1 at 12-13, Adekeye, JSC stated as follows:"Usually where a Court's jurisdiction is challenged by the defence, itis better to settle the issue one way or the other before proceedingto hearing of the case on the merits. Any failure by the Court todetermine any preliminary objection or any form of challenge to itsjurisdiction is a fundamental breach which renders any further steptaken in the proceedings a nullity."Per OGAKWU, J.C.A. (Pp. 15-16,Paras. C-A) - read in context
(201
8) LP
ELR-45
108(
CA)
12. PRACTICE AND PROCEDURE - ISSUE OF JURISDICTION: Whenan objection to the jurisdiction of Court can be raised"It is trite law that the issue of jurisdiction being threshold in naturecan be raised at any time, even for the first time on appeal at theapex Court. The authorities are legion. I will mention a few. SeeOWIE vs. IGHIWI (2005) LPELR (2846) 1 at 28, ONI vs. CADBURY NIGPLC (2016) LPELR (26061) 1 at 25 and AWUSE vs. ODILI (2003)LPELR (666) 1 at 50. Recently in OLIYIDE & SONS LTD vs. O.A.U ILE-IFE (2018) LPELR (43711) 1 at 9, Ogunbiyi, JSC stated: "An issue ofjurisdiction (like the one at hand) is not a fresh issue and it is settledlaw that such can be raised at anytime by various means even vivavoce for the first time on appeal in this Court." See also ANYANWUvs. OGUNEWE (2014) LPELR (22184) 1 at 31, OBIUWEUBI vs. CBN(2011) 7 NWLR (PT 1247) 465 at 494 and PETROJESSICAENTERPRISES LTD vs. LEVENTIS TECH. CO. LTD (1992) 5 NWLR (PT244) 675. Let me iterate that the Appellant's challenge to thecompetence of the Respondent's Motion is on the basis that theRespondent filed her Memorandum of Appearance out of time andthat the application was not filed in a timely manner. In the light ofthe settled state of the law that an issue of jurisdiction can be raisedat any time, even viva voce, it becomes of no moment whether aMemorandum of Appearance and/or the application was filed in atimely manner. In the circumstances, the consideration andresolution of the Respondent's Motion trumped the considerationand resolution of the Appellant's Motion. The lower Court wastherefore right when it considered and resolved the Respondent'smotion first. This issue number two is therefore resolved against theAppellant."Per OGAKWU, J.C.A. (Pp. 16-17, Paras. D-F) - read incontext
(201
8) LP
ELR-45
108(
CA)
UGOCHUKWU ANTHONY OGAKWU, J.C.A. (Delivering
the Leading Judgment): The Appellant instituted
proceedings at the Federal High Court, Lagos Division in
respect of outstanding payment due to it for goods and
services it supplied and rendered to the Respondent for her
operation and maintenance. The action was in SUIT NO.
FHC/L/CS/1160/2017: TRANSOCEAN SHIPPING
VENTURES PRIVATE LTD vs. “MT SEA STERLING”. Upon
being served the Court processes, the Respondent filed an
application challenging the jurisdiction of the Court and
urging the Court to strike out the suit. The Appellant filed
processes in opposition to the Respondent’s motion and
further filed an application wherein it urged the Court to
strike out the processes filed by the Respondent for being
incompetent.
The Respondent opposed the Appellant’s application. The
lower Court took argument on both applications together.
It first determined the Respondent’s application which it
granted, holding that it does not have jurisdiction. Based on
the decision that it did not have jurisdiction the lower Court
held that it would be an academic exercise in futility to
1
(201
8) LP
ELR-45
108(
CA)
delve into the Appellant’s motion. The Court then
proceeded to strike out the action.
The Appellant was dissatisfied with the decision of the
lower Court and appealed against the same. The extant
Notice of Appeal on which the appeal was argued is the
Amended Notice of Appeal filed on 23rd January 2018, but
deemed as properly filed on 12th February 2018. The
chafed Ruling of the lower Court is at pages 241-251 of the
Records. Upon the compilation and transmission of the
Records of Appeal, the parties filed and exchanged briefs of
argument. The Appellant’s Brief was filed on 23rd January
2018 but deemed as properly filed on 12th February 2018.
The Appellant further filed a Reply Brief on 16th February
2018. The Respondent’s Brief was filed on 12th February
2018. At the hearing of the appeal, the learned counsel for
the parties urged the Court to uphold their respective
submissions in the determination of the appeal.
The Appellant distilled two issues for determination as
follows:
“1. Whether the learned trial judge was right when he
held that the Court lacks jurisdiction to entertain
2
(201
8) LP
ELR-45
108(
CA)
the Appellant’s claim and released the Respondent
from arrest as a result of the arbitration clause
contained in the Ship Management Agreement.
2. Whether the learned trial judge’s refusal to
determine the Appellant’s Motion on Notice dated the
8th November, 2017 does not amount to breach of the
Appellant’s right to fair hearing.”
The Respondent equally formulated two issues for
determination, namely:
“i. Whether the lower Court was right when it found
that it lacks jurisdiction to entertain the matter,
hence leading to the striking out of the matter at the
lower Court.
ii. Whether the refusal of the lower Court to
determine the Appellant motion dated 8th November
2017 at the lower Court amounted to lack of fair
hearing.”
The issues nominated for determination by the parties are
the same in every material particular. I will therefore
proceed to resolve this appeal based on the issues as
formulated by the Appellant. I would however reorder the
sequence of the issues by considering issue number two
first and thereafter consider issue number one.
3
(201
8) LP
ELR-45
108(
CA)
ISSUES FOR DETERMINATION
ISSUE NUMBER TWO
Whether the learned trial judge’s refusal to
determine the Appellant’s Motion on Notice dated the
8th November, 2017 does not amount to breach of the
Appellant’s right to fair hearing.
SUBMISSIONS OF THE APPELLANT’S COUNSEL
The Appellant submits that its motion challenged the
jurisdiction of the lower Court to take cognizance of the
processes filed by the Respondent and so the Court ought
to have taken its application and determine the same
before proceeding with the Respondent’s application. It
was contended that the failure of the lower Court to
determine its application was a violation of the right to fair
hearing and occasioned a miscarriage of justice since a
Court must hear and determine every application before it.
The cases of DINGYADI vs. INEC (No.1) (2010) 8
NWLR (PT 1224) 1 at 53, MOBIL OIL (NIG) UNLTD
vs. MONOKPO (2003) 18 NWLR (PT 852) 346 at
413-414 and 431 and AMOO vs. ALABI (2003) 15
NSCQR 132 at 144 were referred to.
The Appellant maintained that the jurisdiction of a Court is
dependent on the competence of the Court. That being an
admiralty matter, the Admiralty Jurisdiction Procedure
4
(201
8) LP
ELR-45
108(
CA)
Rules, 2011 apply and that the Federal High Court (Civil
Procedure) Rules will only apply subject to the Admiralty
Jurisdiction Procedure Rules. The Appellant contended that
the Respondent having filed her Memorandum of
Appearance out of time without any application to
regularize the same, all subsequent processes filed by the
Respondent were incompetent. It was posited that the
condition precedent to challenge, defend or file any
processes in an action is the filing of a competent
Memorandum of Appearance and that where a condition
precedent has not been compiled with every other action
taken will be null and void. The cases of MADUKOLU vs.
NKEMDILIM (1962) 1 NLR 587 , ORAKUL
RESOURCES LTD vs. NCC (2007) 16 NWLR (PT 1060)
270 at 302, ONYEDEBELU vs. NWANERI (2008)
LPELR – 4793 at 25 among other cases were cited in
support.
SUBMISSIONS OF THE RESPONDENT’S COUNSEL
The Respondent contends that there was no lack of fair
hearing in the refusal of the lower Court to delve into the
Appellant’s Motion. It was stated that the issue of
jurisdiction of a Court is to be determined first and that
once a Court holds that it has no jurisdiction, the want of
5
(201
8) LP
ELR-45
108(
CA)
jurisdiction disposes of any other application as any further
step taken will be a nullity. The cases of FBN PLC vs.
ASUBOP & CO (NIG) LTD (2003) 13 NWR Vol. 1 (PT
836) CA 1 at 8 and ADIGUN vs. OSAKA (2003) 5
NWLR (PT 812) 95 were relied upon. It was opined that
the lower Court was right to consider and determine
whether it had jurisdiction first.
It is the further contention of the Respondent that by the
provisions of Order 46 Rule 6 of the Federal High Court
(Civil Procedure) Rules, 2009, time for filing and service of
pleadings and delivery of judgments does not run during
the vacation of the Court. It was stated that the Court
processes were served on the Respondent on 29th July
2017 during the vacation of the Court and that since time
did not run, the Respondent’s application filed on 7th
September 2017 was not filed out of time.
APPELLANT’S REPLY ON LAW
In the Reply Brief the Appellant argues that its application
raised a jurisdictional issue which the lower Court ought to
have resolved first before delving into the Respondent’s
preliminary objection. It was maintained that the provision
of Order 46 Rule 6 of the Federal High Court (Civil
6
(201
8) LP
ELR-45
108(
CA)
Procedure) Rules relates only to pleadings, rulings and
judgments and does not apply to the filing of Memorandum
of Appearance and therefore the Respondent’s time started
running from 29th July 2017 when she was served the
originating processes.
It is the further submission of the Appellant that the
Respondent’s application is incompetent for having been
filed outside the period provided under Order 29 of the
Federal High Court (Civil Procedure) Rule, 2009, which
provided that such an application shall be made within
twenty-one days of service of the originating processes. It
was asserted that the Respondent’s application was
incompetent. The cases of NATIONAL INSURANCE
COMMISSION vs. FIDELITY BOND OF NIG LTD
(2016) LPELR – 41427 (CA) and NJC vs. AGUMAGU
(2015) – 24503 (CA) were called in aid.
RESOLUTION OF ISSUE NUMBER TWO
It is imperative to streamline the submissions of learned
counsel relative to the complaint in ground two of the
Amended Notice of Appeal from which the issue has been
distilled. The said Ground Two of the Amended Grounds of
Appeal reads as follows:
7
(201
8) LP
ELR-45
108(
CA)
“GROUND TWO
The learned trial judge erred in law and breached the
Appellant’s right to fair hearing when he struck out
the Appellant’s suit without determining the
Appellant’s Motion on Notice dated the 8th
November, 2017 thereby occasioning a miscarriage of
justice
Particulars of error
1. The learned trial failed to determine the
Appellant’s application challenging the competence
of the Memorandum of Appearance and Motion on
Notice filed by the Respondent first.
2. The Appellant’s application challenged the
jurisdiction of the lower Court to take cognizance of
the processes filed by the Respondent before it.
3. The lower Court breached the Appellant’s right to
fairing [sic] by its refusal to determine the
Appellant’s Motion on Notice dated the 8th
November, 2018.”
An integral construction of the ground with its particulars:
OBATOYINBO vs. OSHATOBA (1996) LPELR (2156) 1
at 33 and NWADIKE vs. IBEKWE (1987) 4 NWLR (PT
67) 718; makes it evident that the complaint in the said
ground is that the failure and refusal of the lower Court to
hear and determine the Appellant’s application was a
breach of the
8
(201
8) LP
ELR-45
108(
CA)
Appellant’s right to fair hearing which occasioned a
miscarriage of justice. Therefore, properly contextualized
the submissions of learned counsel on whether the
Respondent’s application complained about was filed within
time or not does not arise. Accordingly, in the resolution of
this issue, I will be guided by the complaint in the ground
of appeal.
Innate in the disceptation in this issue are the failure of the
lower Court to hear and determine the Appellant’s
application and the order of hearing applications pending
in Court. It is settled law that both the Court and the
parties are bound by the Records of Appeal and the Court
canno t depar t there f rom. See GARUBA vs .
OMOKHODION (2011) 15 NWLR (PT 1269) 145 at
180, ARUM vs. NWOBODO (2013) 10 NWLR (PT 1362)
374 and F. H. A. vs. OLAYEMI (2017) LPELR (43376)
1 at 38-39.
The Appellant’s Motion which it complains that the lower
Court did not hear and determine is dated 8th November
2017 but filed on 10th November 2017. It is at pages
210-218 of the Records. The Court proceedings of 16th
November 2017 which is at pages 236-238 of the Records,
9
(201
8) LP
ELR-45
108(
CA)
shows that the lower Court heard the Appellant’s Motion
dated 8th November 2017. The Appellant having duly
moved the said Motion as borne out by the Records, cannot
be heard to contend on appeal that the lower Court did not
hear the application.
Now, as lucent from the Records, it was after the lower
Court had heard the Appellant’s Motion that it then heard
the Respondent’s application which is dated 7th September
2017. See page 239 of the Records. The lower Court having
heard both pending applications on the said 16th
November 2017 adjourned the matter to 11th December
2017 for Ruling. See page 239 of the Records.
The Ruling of the lower Court is at pages 241-251 of the
Records. The opening sentence of the said Ruling on page
241 reads:
“This Ruling is predicated on both parties Motion on
Notice dated 7th of September 2017 and 8th
November, 2017 respectively.”
From the outset it is clear that the Ruling is in respect of
the Appellants Motion dated 8th November 2017. The
lower Court in clarifying the order of determining the
applications stated thus on the same page 241 of the
Records:
“I will first consider the Motion on Notice dated
10
(201
8) LP
ELR-45
108(
CA)
the 7th of September, 2017 as it affects the
jurisdiction of this Court.”
We will still find out in the course of this judgment if the
lower Court was right in the order in which it resolved the
applications subject of the Ruling of 11th December 2017.
The next poser is whether the lower Court reached a
decision on the Appellant’s Motion in the said Ruling which
it had stated was in respect of “both parties Motion on
Notice dated 7th of September 2017 and 8th of November
2017 respectively.” We turn to the Records. At page 251 of
the Records the lower Court held:
“At this point it would be merely an academic
exercise in futility, to delve into the Plaintiff’s Motion
on Notice dated 8th November, 2017 since I have
declined jurisdiction and this Suit had been struck
out.”
So the decision of the lower Court on the Appellant’s
Motion is that the Motion had become academic exercise
since the Court did not have jurisdiction to entertain the
action. It is rudimentary law that Courts do not engage in
academic issues/exercise but only deal with live issues. See
DANIEL vs. INEC (2015) LPELR (24566) 1 at 34,
11
(201
8) LP
ELR-45
108(
CA)
K. R. K. HOLDINGS (NIG) LTD vs. FBN (2016) LPELR
(41463) 1 at 26-27 and CPC vs. INEC (2011) LPELR
(8257) 1 at 78-79. So from the Records, the lower Court
determined the Appellant’s Motion and the decision of the
Court is that the Motion was academic since the Court did
not have jurisdiction. Whether it is the correct decision is a
different matter but the lower Court decided the
application. There is therefore no basis for the Appellant’s
contention that the lower Court infringed its right to fair
hearing by failure and refusal to hear and determine its
Motion. As has been demonstrated, the Records of Appeal
bear out that the lower Court heard and determined the
Appellant’s Motion dated 8th November 2017.
The other aspect of this issue is whether the lower Court
should have considered and resolved the Appellant’s
Motion first instead of the Respondent’s Motion. I have
already reproduced page 241 of the Records where the
lower Court stated that it would first consider the
Respondent’s Motion. The relief sought on the Appellant’s
Motion is for:
“An Order of this Honourable Court striking out the
12
(201
8) LP
ELR-45
108(
CA)
Memorandum of Appearance and Motion on Notice
dated the 7th day of September filed by the Defendant
in this suit.”
(See page 210 of the Records)
The grounds upon which the Appellant brought its
application as set out in the Motion are:
“a. The Memorandum of Appearance filed by the
Defendant is incompetent as same was filed out of the
prescribed period stipulated by the rules of this
Honourable Court.
b. That the Defendant’s application dated the 7th day
of September 2017 is incompetent.
c. The Court has no jurisdiction to entertain
incompetent processes.”
(See page 210 of the Records)
So the premise of the Appellant’s Motion is that the
Respondent’s Motion is incompetent.
The Respondent’s Motion is at pages 141-175 of the
Records. The orders prayed for by the Respondent include,
inter alia:
“1. AN ORDER declaring that this Honourable Court
has no jurisdiction and/or should not exercise any
jurisdiction to entertain the instant suit against the
Defendant.
2. AN ORDER of this Honourable Court striking out
this suit in its entirety against the Defendants
herein." (See page 141 of the Records)
(201
8) LP
ELR-45
108(
CA)
13
(201
8) LP
ELR-45
108(
CA)
The grounds upon which the Respondent sought the orders
include:
“i. The Court no [sic] Jurisdiction to entertain the
matter for failure of the Plaintiff to refer the dispute
herein to arbitration in compliance with the
provisions of Clause 21 of SHIPMAN 2009 (Standard
Ship Management Agreement) Part 1 and Clause 23
(BIMCO Dispute Resolution Clause) of SHIPMAN
2009 Part II setting forth the Terms and Conditions
governing the relation between the parties.
ii. Having regard to the true and proper intendment
of Clauses 21 of Shipman Part 1 and 23 of SHIPMAN
Part II governing the relations between the parties,
the Plaintiff has not fulfilled the condition precedent
for the institution of this action.
iii. The Plaintiff/Respondent’s suit is premature and
not maintainable.
iv. The condition precedent for the invocation of the
jurisdiction of the Honourable Court has not been
fulfilled.
v. The Plaintiff/Respondent has no right of action
against Defendant/Applicant.
vi. That in the circumstances, the suit as presently
constituted does not disclose any reasonable cause of
14
(201
8) LP
ELR-45
108(
CA)
action against the Defendants. Hence, the Plaintiff
has no locus standi to commence this action.
vii. The Federal High Court of Nigeria has absolutely
no jurisdiction in the present circumstances to
entertain this suit.
viii. The Writ of Summons is otherwise incompetent.”
(See page 142 of the Records)
It is effulgent that the Respondent’s Motion is a challenge
on the jurisdiction of the lower Court to entertain the
action. It is rudimentary law that the issue of jurisdiction is
fundamental and should be determined at the earliest
opportunity. The business of a Court once its jurisdiction is
questioned in a matter is to assume jurisdiction to enquire
into and determine whether it has jurisdiction. See ODOM
vs. PDP (2015) LPELR (24351) 1 at 52 and BARCLAYS
BANK vs. CBN (1976) LPELR (751) 1 at 15. In FBN vs.
T. S. A. IND. LTD (2010) LPELR (1283) 1 at 12-13,
Adekeye, JSC stated as follows:
“Usually where a Court’s jurisdiction is challenged by
the defence, it is better to settle the issue one way or
the other before proceeding to hearing of the case on
the merits. Any failure by the Court to determine any
15
(201
8) LP
ELR-45
108(
CA)
preliminary objection or any form of challenge to its
jurisdiction is a fundamental breach which renders
any further step taken in the proceedings a nullity.”
The importance of jurisdiction in the adjudicatory process
cannot be over-emphasised. Jurisdiction is a fundamental
pre-requisite in the adjudication of any matter. It is the fons
et origo, the threshold of judicial power and judicialism. It
is the bloodline, lifeline, livewire and indeed spinal cord of
a Court of law: A-G OYO STATE vs. NLC (2003) 8 NWLR
(PT 821) 1 at 26 and ODEDO vs. INEC (2008) 17
NWLR (PT 1117) 544.
It is trite law that the issue of jurisdiction being threshold
in nature can be raised at any time, even for the first time
on appeal at the apex Court. The authorities are legion. I
will mention a few. See OWIE vs. IGHIWI (2005) LPELR
(2846) 1 at 28, ONI vs. CADBURY NIG PLC (2016)
LPELR (26061) 1 at 25 and AWUSE vs. ODILI (2003)
LPELR (666) 1 at 50. Recently in OLIYIDE & SONS LTD
vs. O.A.U ILE-IFE (2018) LPELR (43711) 1 at 9,
Ogunbiyi, JSC stated:
“An issue of jurisdiction (like the one at hand) is not
a fresh issue and it is settled law that such can be
16
(201
8) LP
ELR-45
108(
CA)
raised at anytime by various means even viva voce for
the first time on appeal in this Court.”
See also ANYANWU vs. OGUNEWE (2014) LPELR
(22184) 1 at 31, OBIUWEUBI vs. CBN (2011) 7 NWLR
(PT 1247) 465 at 494 and PETROJESSICA
ENTERPRISES LTD vs. LEVENTIS TECH. CO. LTD
(1992) 5 NWLR (PT 244) 675.
Let me iterate that the Appellant’s challenge to the
competence of the Respondent’s Motion is on the basis that
the Respondent filed her Memorandum of Appearance out
of time and that the application was not filed in a timely
manner. In the light of the settled state of the law that an
issue of jurisdiction can be raised at any time, even viva
voce, it becomes of no moment whether a Memorandum of
Appearance and/or the application was filed in a timely
manner. In the circumstances, the consideration and
resolution of the Respondent’s Motion trumped the
consideration and resolution of the Appellant’s Motion. The
lower Court was therefore right when it considered and
resolved the Respondent’s motion first. This issue number
two is therefore resolved against the Appellant.
17
(201
8) LP
ELR-45
108(
CA)
ISSUE NUMBER ONE
Whether the learned trial judge was right when he
held that the Court lacks jurisdiction to entertain the
Appellant’s claim and released the Respondent from
arrest as a result of the arbitration clause contained
in the Ship Management Agreement.
SUBMISSIONS OF THE APPELLANT’S COUNSEL
The quiddity of the Appellant’s submission is that the claim
before the lower Court was an admiralty matter and that
the lower Court has jurisdiction to entertain admiralty
matters. The stipulations of Section 251 (1) (g) of the 1999
Constitution, Section 7 (1) (d) of the Federal High Court
Act, Section 1 (1) (a) of the Admiralty Jurisdiction Act, 1991
and the cases of ALRAINE SHIPPING NIG LTD vs.
ENDURA AUTO CHEMICALS (2001) 12 NWLR (PT
728) 759 and BRAWAL SHIP LTD vs. E. & C. S. (2001)
14 NWLR (PT 732) 172 were referred to.
It was posited that the Respondent’s contention was that
the lower Court lacked jurisdiction because the Ship
Management Agreement between the parties had an
arbitration clause. The Appellant submitted that Section 20
of the Admiralty Jurisdiction Act allows the Appellant to
institute an admiralty claim against the Respondent
18
(201
8) LP
ELR-45
108(
CA)
irrespective of the arbitration clause contained in the Ship
Management Agreement. The case of MV PANORMOS
BAY vs. OLAM (2004) 5 NWLR (PT 865) 1 was relied
upon. It was opined that the arbitration clause in the Ship
Management Agreement did not prohibit parties from
commencing legal proceedings until the dispute between
the parties is determined by arbitration. The cases of
KURUBO vs. ZACH MOTISON NIG LTD (1992) 5
NWLR (PT 239) 102, MAGBAGBEOLA vs. SANNI
(2002) 4 NWLR (PT 756) 193, LIGNES ARIENNES
CONGOLAISES vs. AIR ATLANTIC LTD (2006) 2
NWLR (PT 963) 49 and OBEMBE vs. WEMABOD
ESTATES (1977) 5 SC 70 were cited in support.
The Appellant further contended that the Respondent had
taken steps in the matter by the prayers in her Motion
dated 7th September 2017 and had waived her right to
insist on arbitration. The cases of KAYODE vs. ROYAL
EXCHANGE ASSURANCE (1953) WRNLR 154 at 158,
HARRIS vs. REYNOLDS (1845) 7 QB 71, ONWARD
ENTERPRISES LTD vs. MV “MATRIX” (2008) LPELR –
4789 (CA) and KANO STATE URBAN DEVELOPMENT
BOARD vs. FANZ CONSTRUCTION CO. LTD (1990) 6
SCNJ 77 at 92 and 115 were called in aid. The Appellant
conclusively submitted that if the lower Court was swayed
by the
19
(201
8) LP
ELR-45
108(
CA)
arbitral clause contained in the Ship Management
Agreement; rather than strike out the suit, it could have
stayed proceedings to abide arbitration in order to preserve
the security for the purpose of enforcement of an award.
Section 10 of the Admiralty Jurisdiction Act was referred to.
SUBMISSIONS OF THE RESPONDENT’S COUNSEL
The Respondent contends that a condition precedent to
instituting an action must be met before an action is
commenced since the condition precedent is a yardstick to
measure whether the Court has jurisdiction. The cases of
MADUKOLU vs. NKEMDILIM (1962) 2 SCNLR 341
and UGWUANYI vs. NICON INSURANCE PLC (2004)
15 NWLR (PT 897) 612 at 634 were relied upon. It was
submitted that commencing the action without referring
the same to arbitration robbed the lower Court of
jurisdiction. Clauses 21 and 23 of the Ship Management
Agreement were referred to and it was maintained that
failure to submit to arbitration first before going to Court
robbed the lower Court of jurisdiction. The failure to
comply with the condition precedent it was stated went to
the root of the matter and robbed the Court of jurisdiction.
The cases
20
(201
8) LP
ELR-45
108(
CA)
of MOHAMMED vs. OLAWUNMI (1990) 2 NWLR (PT
133) 458 at 475 and ZAKARI vs. NIGERIA ARMY
(2015) 5-6 SC 41 at 44 were cited in support.
The Respondent asserted that the arbitration clause
provided for arbitration in London and that based on the
doctrine of pacta sunt servanda, the agreement between
the parties is to be respected and effected, even if the
dispute is eminently suitable for trial in a Court. The cases
of AGBAREH vs. MIMRA (2008) 2 NWLR (PT 1071)
387 at 412-413, OWNERS OF THE M. V. LUPEX vs. N.
O. C. S. LTD (2003) 6 SC (PT II) 62 and SINO
AGRICULTURE & IND. CO. LTD vs. MINISTRY OF
FINANCE INCORPORATION (2013) LPELR 22370 CA
were called in aid.
The Respondent maintained that it had not waived her right
to arbitration as she had not taken any steps in the
proceedings as she had done nothing towards prosecution
of her defence. The cases of SINO AGRICULTURE & IND.
CO.LTD vs. MINISTRY OF FINANCE INCORPORATION
(supra) and ONWARD ENTERPRISE LTD vs. MV
‘MATRIX’ (2008) LPELR-4789 were referred to. The
Respondent conclusively submitted that any suit instituted
in contravention of the precondition provision is
21
(201
8) LP
ELR-45
108(
CA)
incompetent and a Court lacks jurisdiction to entertain the
same. The case of DINGYADI vs. INEC (2011) 4 SC (PT
II) 1 at 9 was relied upon.
APPELLANT’S REPLY ON LAW
In the Reply Brief the Appellant submits that the cases of
OWNERS OF THE MV LUPEX vs. N. O. C. S. LTD
(supra) and SINO AGRICULTURE & IND. LTD vs.
MINISTRY OF FINANCE INCORPORTATION (supra)
relied on by the Respondent do not support the
Respondent’s case as the said cases decided that an
arbitration clause does not oust the jurisdiction of the
Court to entertain a matter but that a defendant who has
not taken any steps in the proceedings may apply for stay
of proceedings.
The Appellant referred to Section 10 of the Admiralty
Jurisdiction Act as recognizing that the lower Court had the
jurisdiction to entertain the Appellant’s claim and that the
lower Court could have exercised its disciplinary powers
based on an appropriate application to stay further
proceedings in the matter. The lower Court it was posited
was wrong to have declined jurisdiction because of the
arbitration clause since the commencement of arbitration
was not a condition precedent to the institution of the
22
(201
8) LP
ELR-45
108(
CA)
Appellant’s claim. Section 20 of the Admiralty Jurisdiction
Act and the cases of MV PANORMOS BAY vs. OLAM
(supra) and LIGNES ARIENNES CONGOLAISES vs.
AIR ATLANTIC LTD (supra) were referred to. The
Appellant maintained that the Respondent had taken steps
in the proceedings to the extent that the reliefs sought on
her application included security for costs, solicitors fees
etc., thereby taking steps and waiving her right to
arbitration.
RESOLUTION
It is pertinent to state that there can be no confutation that
the Federal High Court has jurisdiction to entertain
admiralty matters. It equally cannot be confuted that the
Appellant’s claim before the lower Court was an admiralty
matter. Properly contextualized, the Respondent’s
contention at the lower Court was that because of the
arbitration clause in the Ship Management Agreement, the
contract between the parties, the Appellant’s action was
premature and the Court did not have the jurisdiction to
entertain a premature action. The pristine question
however is whether an arbitration clause ousts the
jurisdiction of Court.
The law seems to be ensconced that an arbitration
23
(201
8) LP
ELR-45
108(
CA)
clause does not oust the jurisdiction of a Court. In
OBEMBE vs. WEMABOD ESTATE (1977) LPELR
(2161), the apex Court held that any agreement to submit
a dispute to arbitration does not oust the jurisdiction of the
Court. Equally in MESSRS NV SCHEEP vs. MV ‘S.
ARAZ’ (2000) 12 SC (PT 1) 164 at 213, the Supreme
Court held that an arbitration clause does not seek to oust
the jurisdiction of a Court as all it does is to allow the
parties the avenue and possibilities of settling disputes
amicably out of Court. In CELTEL NIGERIA B.V. vs.
ECONET WIRELESS LTD (2014) LPELR (22430) 1 at
58 this Court per Ikyegh, JCA held as follows:
“Arbitration does not remove the jurisdiction of the
regular Courts. It is only a stop-gap process to settle
the disputes. See Magbagbeola v. Sanni (2002)4
NWLR (pt. 756) 193 at 205 following Confidence
Insurance Ltd v. Trustees of the Ondo State College of
Education (1999)2 NWLR (pt. 591) 373 at 386. It
follows that a dispute referred to arbitration merely
has the effect of staying proceedings in the regular
Court in respect of a pending suit over the same
subject matter.”
24
(201
8) LP
ELR-45
108(
CA)
See also MOBIL PRODUCING NIG UNLTD vs.
SUFFOLK PETROLEUM SERVICES LTD (2017) LPELR
(41734) 1 at 33-35 and EAGLEWOOD INTEGRATED
RESOURCES LTD vs. ORLEANS INVESTMENT
HOLDINGS LTD (2017) LPELR (43542) 1 at 19-20.
In the light of the legal position that an arbitration clause
does not oust the jurisdiction of a Court, the provisions of
Section 20 of the Admiralty Jurisdiction Act which renders
null and void an agreement that seeks to oust the
jurisdiction of the Court does not come into play in this
matter.
Howbeit, the procedure to follow where there is a dispute
equally depends on the nature of the arbitration clause. In
OBEMBE vs. WEMABOD (supra) at 16-17, Fatayi-
Williams, JSC (as then was later CJN) stated as follows:
"...arbitration clauses, speaking generally, fall into
two classes. One class is where the provision for
arbitration is a mere matter of procedure for
ascertaining the rights of the parties with nothing in
it to exclude a right of action on the contract itself,
but leaving it to the party against whom an action
may be brought to apply to the discretionary power of
the Court to stay proceedings in the action in order
that the parties may resort to that procedure to
25
(201
8) LP
ELR-45
108(
CA)
which they have agreed. The other class is where
arbitration followed by an award is a condition
precedent to any other proceedings being taken, any
further proceedings then being, strictly speaking, not
upon the original contract but upon the award made
under the arbitration clause. Such provisions in an
agreement are sometimes termed "Scott v. Avery"
clauses, so named after the decision in Scott v. Avery
(1856) 5 H. L. Cas. 811, the facts of which are as
follows: An insurance company inserted in all its
policies a condition that, when a loss occurred, the
suffering member should give in his claim and pursue
his loss before a committee of members appointed to
settle the amount; that if a difference thereon arose
between the committee and the suffering member,
the matter should be referred to arbitration, and that
no action should be brought except on the award of
the arbitrators. In considering the scope of these
provisions, the Court held that this condition was not
illegal as ousting the jurisdiction of the Courts."
See also CITY ENGINEERING (NIG) LTD vs. FHA
(1997) LPELR (868) 1 at 23-24 (SC).
What is the class of arbitration clause in this matter? The
26
(201
8) LP
ELR-45
108(
CA)
parties are agreed that the applicable arbitration clause
guiding them is Clause 23 (a) of the Standard Ship
Management Agreement. The said Agreement is
reproduced at pages 10-28 of the Records. The said Clause
23 (a) provides thus:
“23. BIMCO Dispute Resolution Clause
(a) This Agreement shall be governed by and
construed in accordance with English law and any
dispute arising out of or in connection with this
Agreement shall be referred to arbitration in London
in accordance with the Arbitration Act 1996 or any
statutory modification or re-enactment thereof save
to the extent necessary to give effect to the provisions
of this Clause.
The arbitration shall be conducted in accordance with
the London Maritime Arbitrators Association (LMAA)
Terms current at the time when the arbitration
proceedings are commenced.
The reference shall be to three arbitrators. A party
wishing to refer a dispute to arbitration shall appoint
its arbitrator and send notice of such appointment in
writing to the other party requiring the other party to
appoint its own arbitrator within 14 calendar days of
that notice and stating that it will appoint its
27
(201
8) LP
ELR-45
108(
CA)
arbitrators as sole arbitrator unless the other party
appoints its own arbitrator and give notice that it has
done so within the 14 days specified. If the other
party does not appoint its own arbitrator and give
notice that it has done so within the 14 days
specified, the party referring a dispute to arbitration
may, without the requirement of any further prior
notice to the other party, appoint its arbitrator as sole
arbitrator and shall advise the other party
accordingly. The award of a sole arbitrator shall be
binding on both parties as if he had been appointed
by agreement.
Nothing herein shall prevent agreeing in writing to
vary these provisions to provide for the appointment
of a sole arbitrator.
In cases where neither the c la im nor any
counterclaim exceeds the sum of USD50,000 (or such
other sum as the parties may agree) the arbitration
shall be conducted in accordance with the LMAA
Small Claims Procedure current at the time when the
arbitration proceedings are commenced.”
The above Clause is not the ‘Scott vs. Avery Clause.’ The
provision for arbitration is a mere matter of procedure for
ascertaining the rights of
28
(201
8) LP
ELR-45
108(
CA)
the parties. There is nothing therein that excludes a right of
action on the contract. But a party against whom an action
has been brought may apply to the discretionary power of
the Court to stay proceedings in the action so that the
parties may resort to the procedure they have agreed upon.
See OBEMBE vs. WEMABOD ESTATES LTD (supra)
and CITY ENGINEERING (NIG) LTD vs. FHA (supra).
In THE OWNERS OF THE MV LUPEX vs. NIGERIA
OVERSEAS CHARTERING AND SHIPPING LTD (2003)
LPELR (3195) 1 at 23-24, Iguh, JSC stated:
"The law is also settled that the mere fact that a
dispute is of a nature eminently suitable for trial in a
Court is not a sufficient ground for refusing to give
effect to what the parties have, by contract, expressly
agreed to. See Re: An Application by the Phoenix
Timber Company Ltd. (Appeal of V/O Sovfracht)
(1958) 1 Lloyd's Rep. 305 at 308. So long as an
arbitration clause is retained in a contract that is
valid and the dispute is within the contemplation of
the clause, the Court ought to give due regard to the
voluntary contract of the parties by enforcing the
arbitration clause as agreed to by them. See
Heyman and Another v. Darwins Ltd. (1942) Vol. 72
Lloyd's Rep. 65."
29
(201
8) LP
ELR-45
108(
CA)
See also NEURAL PROPRIETARY LTD vs. UNIC
INSURANCE PLC 2015 LPELR (40998) 1 at 9-10.
The rudimentary principle of law in respect of contracts
and agreements is expressed in the Latinism pacta
conventa qua neque contro leges neque dolo malo inita
sunt omni modo observanda sunt, more commonly
expressed as pacta sunt servanda, meaning that
agreements which are neither contrary to the law nor
fraudulently entered into should be adhered to in every
manner and in every detail. See SONNAR NIG LTD vs.
NORDWIND (1987) LPELR 1 at 44, A-G NASARAWA
vs. A-G PLATEAU (2012) LPELR (9730) 1 at 29 and
BLUENEST HOTELS LTD vs. AEROBELL NIGERIA
LTD (2018) LPELR (43568) 1 at 22.
Having established that the arbitration clause does not oust
the jurisdiction of a Court and that the Court has a duty to
give effect to the arbitration clause in the contract between
the parties, not by striking out the action, but by staying
proceedings in the action so that parties can be held to
their bargain of resolving their disputes by arbitration; it
becomes translucent that the lower Court erred when it
struck out the Appellant’s action for want of
30
(201
8) LP
ELR-45
108(
CA)
jurisdiction.
The question however is whether the facts and
circumstances before the lower Court were such that the
lower Court could have exercised jurisdiction in favour of
granting stay of proceedings. Section 5 of the Arbitration
and Conciliation Act preserves the power of the Court to
stay proceedings in order for a matter to be referred to
arbitration, provided that the party applying has not
delivered any pleadings or taken any other steps in the
proceedings. The Appellant contends that the Respondent
has taken steps because her application by which it sought
to enforce the bargain of the parties for resolution of their
dispute by arbitration included prayers for security for
costs and solicitors fees. I am unable to agree. The
Respondent’s application in its true purport and essence
was to enforce the arbitral clause which the parties had
agreed as the avenue for the resolution of any dispute. This
remains so notwithstanding that the Respondent contended
that the effect of the provisions for arbitration not being
followed was divesting the Court of jurisdiction, which the
lower Court erroneously agreed with.
31
(201
8) LP
ELR-45
108(
CA)
In ONWARD ENTERPRISES LTD vs. MV MATRIX
(supra) at 21, Mshelia, JCA stated that it is only acts done
in furtherance of the prosecution of the defence that could
be said to amount to taking steps in the proceedings. See
SINO–AFRIC AGRICULTURE & IND COMPANY LTD vs.
MINISTRY OF FINANCE INCORPORATION (supra) at
36 and MOBIL PRODUCING (NIG) UNLTD vs.
SUFFOLK PETROLEUM SERVICES LTD (supra) at 30.
Since the Respondent had not taken any steps in the
proceedings, the lower Court ought to have exercised
discretion by staying proceedings in the matter instead of
striking out the action. The diacritical circumstances of the
matter called for the invocation of the provisions of Section
5 of the Arbitration and Conciliation Act to stay
proceedings. See NIGER PROGRESS LTD vs. NORTH
EAST LINE CORPORATION (1989) 3 NWLR (PT 107)
68 at 91 and OWNERS OF THE M. V. LUPEX VS.
NIGERIAN OVERSEAS CHARTERING AND SHIPPING
LTD (supra) at 21.
It is at this point where it has been ascertained that the
lower Court was wrong to have struck out the action and
that the proper order to have made was to stay proceedings
that the provisions of Section 10 of the Admiralty
Jurisdiction Act become relevant.
32
(201
8) LP
ELR-45
108(
CA)
From the Records, prior to the Ruling of the lower Court
subject of this appeal, the lower Court had made an order
for the arrest of the Respondent Vessel. (See pages
129-130 0f the Records). Upon making the order striking
out the action for want of jurisdiction, the lower Court
ordered for the release of the Respondent Vessel from
arrest. The concomitance of the holding the lower Court
was wrong in striking out the action for want of jurisdiction
is a restoration of the order of arrest of the Respondent
Vessel made by the lower Court on 27th July 2017. The said
Section 10 of the Admiralty Jurisdiction Act provides as
follows:
“10 (1) Without prejudice to any other power of the
Court –
(a) where it appears to the Court in which a
proceeding commenced under this Act is pending that
the proceeding should be stayed or dismissed on the
ground that the claim concerned should be
determined by arbitration (whether in Nigeria or
elsewhere) or by a Court of a foreign country; and
(b) where a ship or other property is under arrest in
the proceeding, the Court may, order that the
proceeding be stayed on condition that the arrest
33
(201
8) LP
ELR-45
108(
CA)
and detention of the ship or property shall stay or
satisfactory security for their release be given as
security for the satisfaction of any award or judgment
that may be made in the arbitration or in a
proceeding in the Court of the foreign country.
(2) The power of the Court to stay or dismiss a
proceeding commenced under this Act includes power
to impose any condition as is just and reasonable in
the circumstances, including a condition –
(a) with respect to the institution or prosecution of
the arbitration or proceeding in the Court of a foreign
country; and
(b) that equivalent security be provided for the
satisfaction of any award or judgment that may be
made in the arbitration or in the proceeding in the
Court of a foreign country.
(3) Where the Court has made an order under
Subsection (1) or (2) of this Section, the Court may
make such interim or supplementary orders as are
appropriate in relation to the ship or other property
for the purpose of preserving –
(a) the ship or other property; or
(b) the rights of a party or of a person interested in
the ship or other property.
(4) Where –
34
(201
8) LP
ELR-45
108(
CA)
(a) a ship or other property is under arrest in a
proceeding;
(b) an award or judgment as mentioned in Subsection
(1) of this section has been made in favour of a party;
and
(c) apart from this section, the award or judgment is
enforceable in Nigeria, then in addition to any other
proceeding that may be taken by the party to enforce
the award or judgment, the party may apply to the
Court in the stayed proceeding for an appropriate
order in relation to the ship or property to give effect
to the award or judgment.”
The conflating of all I have said thus far is that there is
merit in this appeal signified by the success of issue
number one which must be resolved in favour of the
Appellant. The lower Court was not right when it held that
it lacked jurisdiction to entertain the Appellant’s claim on
account of the arbitration clause contained in the Ship
Management Agreement, the contract between the parties.
The said order of the lower Court is hereby set aside and
the act ion f i led by the Appel lant in SUIT NO.
FHC/L/CS/1160/2017 is to be restored to the Cause List of
the lower Court.
Let me at this stage state that I considered the decision of
35
(201
8) LP
ELR-45
108(
CA)
this Court in MV PANORMOS BAY vs. OLAM (supra)
relied on by the Appellant. By the doctrine of stare decisis,
the decision of this Court is generally binding on this Court
until overruled by the Supreme Court. There are however
some exceptions. These are:
1) A Court will refuse to follow a decision of its own
which although not expressly overruled cannot in its
opinion stand with a decision of the Supreme Court.
2) A Court is not bound to follow a decision of its own
if given per incuriam.
3) The Court is entitled to decide which of two
conflicting decisions of its own it will follow.
See CAMPTEL INT’L SPA vs. DEXSON LTD (1996) 7
NWLR (PT 459) 170 at 184 and DISU vs. AJILOWURA
(2001) 4 NWLR (PT 702) 76 at 90. In the instant case,
having regard to the facts and circumstances of the case, I
am inclined to follow the decisions of the apex Court in
OBEMBE vs. WEMABOD ESTATES LTD (supra),
MESSRS B. V. SCHEEP vs. M. V. ‘S ARAZ’ and CITY
ENGINEERING vs. FHA (supra) because by necessary
implication, the decision of this Court in MV PANORMOS
BAY vs. OLAM cannot stand as regards the point that an
arbitration Clause ousts the
36
(201
8) LP
ELR-45
108(
CA)
jurisdiction of a Court as agreed by the parties in their
Agreement.
In exercise of the general powers of this Court under
Section 15 of the Court of Appeal Act and pursuant to the
provisions of Section 10 of the Admiralty Jurisdiction Act, a
s t a y o f p r o c e e d i n g s o f t h e s a i d S U I T N O .
FHC/L/CS/1160/2017 is hereby ordered pending arbitration
as agreed by the parties in their Agreement. The parties
are to take steps forthwith to commence the arbitration
proceedings in terms of Clause 23 (a) of their Agreement,
the Standard Ship Management Agreement. The
Respondent shall provide adequate security for the
satisfaction of any award that may be made in the
arbitration within thirty (30) days from even date, failing
which the Admiralty Marshall shall effect the restored
order of the lower Court for the arrest of the Respondent
Vessel. The parties are to bear their respective costs of this
appeal.
YARGATA BYENCHIT NIMPAR, J.C.A.: I had the
privilege of reading in advance the judgment just delivered
by UGOCHUKWU ANTHONY OGAKWU, JCA and I am in
complete agreement with the reasoning and conclusion
arrived therein.
37
(201
8) LP
ELR-45
108(
CA)
One of the main complaints of the Appellants border on the
fact that by failing to determine its application to strike out
the Respondent’s motion challenging jurisdiction, the lower
Court had breached its fundamental right to fair hearing.
Fair hearing within the context of Section 36 of the 1999
Constitution, has been said to be a trial which ought to be
conducted in accordance with all the legal norms designed
to ensure that justice is done at all cost to all parties. The
principle of fair hearing is that both sides must be given an
opportunity to present their respective cases. The Courts
must observe the fundamental principles of fair hearing as
any breach vitiates the entire process, see OVUNWO &
ANOR V WOKO & ORS (2011) LPELR — 2841 (SC).
The next question that will arise is whether both sides were
given an opportunity to present their case which was
looked into by the Court? Definitely. The lower Court heard
both the Appellant and Respondent’s applications but
decided to determine the Respondent’s application
challenging jurisdiction first considering the fact that if it
does not have jurisdiction, any other step it takes in the
38
(201
8) LP
ELR-45
108(
CA)
matter will be an exercise in futility, see NWANKWO V
YAR’ADUA (2010) 12 NWLR (PT 1209) 518 SC. In any
case, like my learned brother, OGAKWU, JCA pointed out, it
is trite that a challenge to jurisdiction can be raised at any
time and in any manner. Consequently, the lower Court was
right in determining the Respondent’s application first and
having found that it had no jurisdiction, it will be an
academic exercise to further determine the Appellant’s
application. Consequently, the lower Court was empowered
to act in the manner it did and I also find the allegation that
there was a breach of fair hearing not made out.
In all, I too see merit in the appeal for reasons of the fuller
consideration made in the lead judgment and also allow it. I
abide by the consequential orders made therein.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: I
have had the privilege of reading in draft, the leading
judgment just delivered by my learned brother,
UGOCHUKWU ANTHONY OGAKWU, JCA. I completely
agree with and endorse the reasons and conclusion reached
in the judgment which I hereby adopt as mine.
39
(201
8) LP
ELR-45
108(
CA)
Appearances:
Oluwafemi Adenitire, Esq. For Appellant(s)
A. O. Agbola, Esq. (with Ms. N. V. Chinwuba, S. T.Agbaje, Esq., Obiora Okechi, Esq. & Ms. DeborahOke) For Respondent(s)
(201
8) LP
ELR-45
108(
CA)