CASE TITLE: OIL & INDUSTRIAL SERVICES LTD v. HEMPEL PAINTS (SOUTH AFRICA) PTY LTD (2025) LPELR-81602(CA)
JUDGMENT DATE: 24TH JANUARY, 2025
JUSTICES: ELFRIEDA OLUWAYEMISI WILLIAMS-DAWODU, J.C.A.
YUSUF ALHAJI BASHIR, J.C.A.
HANNATU AZUMI LAJA-BALOGUN, J.C.A.
PRACTICE AREA: ARBITRATION
FACTS:
This appeal borders on Enforcement/Setting Aside of an Arbitral Award.
This is an appeal against the judgment of the Rivers State High Court delivered by Hon. Justice B. G. Diepiri on January 27th 2020.
The Respondent who was the Applicant at the trial Court vide an Originating Summons sought to enforce an arbitral award by the London Court of International Arbitration.
The Appellant on its part vide an Originating Motion before the trial Court in Suit No. PHC/2062/2018 sought to set aside the arbitral award delivered on December 22nd 2017 by the Sole Arbitrator, Kathleen Paisley, in an Arbitration proceeding involving the two parties. Suits PHC/445/2018 and No. PHC/2062/2018 were consolidated by the consent of the parties and heard together and judgment as aforesaid was entered in favour of the Respondent. With respect to Suit No. PHC/2062/2018, the Court held that the Rivers State High Court had no jurisdiction to entertain an application which seeks to set aside an arbitral award made by the London Court of International Arbitration, it dismissed the motion and went ahead to determine the matter on merit and held to the effect that the Sole Arbitrator did not misconduct herself in the arbitral dispute. The Court granted the reliefs sought in Suit PHC/445/2018.
Being dissatisfied with the judgment, the Appellant approached the Court of Appeal.
ISSUES FOR DETERMINATION:
The Court determined the appeal on these issues, thus:
“1. Whether the lower Court had the requisite jurisdiction, in view of relevant constitutional and statutory provisions as well as judicial authorities, to entertain an application to set aside an arbitral award delivered by the London Court of International Arbitration.
2. Whether the learned trial Judge was right when he held that the Sole Arbitrator had not misconducted herself in the arbitral proceedings which produced the arbitral award subject matter of the suit at the lower Court.
3. Whether the learned trial Judge was right when it went ahead to determine the Appellant’s application on its merit and dismissing same despite having originally declined jurisdiction to hear the application.”
COUNSEL SUBMISSIONS:
The learned Appellant’s Counsel submitted that the general position, and as found by the apex Court, is that arbitral awards should not be touched or tampered with once delivered by the arbitral panel as, amongst other reasons, the awards are products of dispute resolution mechanism voluntarily agreed upon by the parties and therefore should not be disturbed. That there are cases where a Court would go outside the aforesaid principle to set aside an arbitral award for lack of fairness, justice and misconduct from the arbitrator, all of which qualify for the award to be nullified. In support, he referred to Sections 29, 30 and 48 of the Arbitration and Conciliation Act and the cases of TRIANA LTD V. U.T.B. PLC. 2009 12 NWLR PT. 1155 313, T. E. S. T INC. V. CHEVRON NIG. LTD 2017 11 NWLR PT. 1576, BAKER MARINE NIG. LTD V. CHEVRON NIG. LTD 2000 12 NWLR PT. 681 393 and TAYLOR WOODROW NIG. LTD V. SEGMBH 1993 4 NWLR PT. 286 127. He submitted further that the Court was wrong with its position as it grossly misinterpreted the Arbitration and Conciliation Act which makes no distinction between international and domestic awards, international conventions and judicial authorities on the subject matter. The learned Counsel further contended that the Court was wrong to have ousted or limited its jurisdiction by international norms of reciprocity and that Nigeria’s act of sovereignty ensures that matters are decided according to its domestic laws. And that the Court should have jealously protected its jurisdiction.
It was argued for the Appellant that the Court was wrong when it went ahead to make findings to the effect that the Sole Arbitrator did not misconduct herself when it had found that it lacked jurisdiction. He argued that the Sole Administrator was wrong to have failed to decide the issue of frustration of contract between the parties. In support he cited the cases of CRICKWOOD PROPERTY & INVESTMENT TRUST LTD. V. LEIGHTON’S INVESTMENT TRUST LTD. 1945 AC 221 and OBAYUWA V. GOVERNOR, BENDEL STATE 1982 12 SC 147. Further, that the act of the Respondent could also be interpreted as constructive fraud if it was not deliberate. Therefore, the Sole Arbitrator misconducted herself, he submitted.
He submitted further that the Court was wrong to have proceeded to consider the application on its merit when it declined jurisdiction. That the Court cannot be allowed to approbate and reprobate and should have struck out the matter and not an order of dismissal and cited the case of BUKOYE V. ADEYEMO 2017 1 NWLR PT. 1546. In conclusion, he urged that the decision of the Court below be set aside.
The Respondent in opposition to the Appellant argued as follows:
That the Rivers State High Court was right when it held that it lacked jurisdiction to set aside the Final Award in the arbitral proceedings between the parties with its seat in London England and that it is the English Court with supervisory jurisdiction over the arbitration that should entertain the application for setting aside and cited in support Article V(1)(e) and Article VI of the Convention on the Recognition and Enforcement of Foreign Awards 1958, otherwise known as the New York Convention (the Convention). He argued that the Appellant made its application for an order setting aside the award before a wrong authority, the High Court of Rivers State, when it should have been before an English Court. Further that the provisions of Sections 30 and 48 of the Arbitration and Conciliation Act (ACA) which appear to be incompatible must yield to the provisions of Article V(1)(e) of the Convention, as domesticated in Section 54 of the ACA, which grants jurisdiction to set aside awards such as in the instant appeal to the Courts of the country or seat of the arbitration and cited in support the cases of SANI ABACHA & 3 ORS V. CHIEF GANI FAWEHINMI 2000 6 NWLR PT. 660 228 and TULIP NIGERIA LTD. V. NOLEGGIOE TRANSPORT MARITIME SAS 2011 4 NWLR PT. 1237 254. He submitted that the window opened to the Appellant in the instant situation is to resist recognition and enforcement of the arbitral award in Nigeria, under Section 52 of the ACA, ranging from fundamental procedural irregularities, arbitral proceedings tainted with fraud and public policy considerations.
On the Respondent’s issue no. 2, it was argued that the Appellant failed to establish misconduct on the part of the Sole Arbitrator in the course of handling the arbitration proceedings. That apart from fundamental irregularities touching on fair hearing, none of the parties can object to an arbitral award either upon the law or the facts as long as the award is prima facie good on the face of it. And cited in support the cases of TAYLOR WOODROW NIG. LTD V. S.E. GMBH 1993 4 NWLR PT. 286 127, KANO STATE URBAN DEVELOPMENT BOARD V. FANZ CONSTRUCTION COMPANY LIMITED 1990 4 NWLR PT. 142 IC and TRIANA LTD. V. UNIVERSAL TRUST BANK PLC. 2009 12 NWLR PT. 1155 313. He argued that the decision against cross-examination of witnesses was by both sides and therefore, the Appellant could not raise the issue of lack of fair hearing in that regard and that the Sole Arbitrator’s treatment of evidence was impeccable.
He submitted that the Court below was right to have proceeded to determine the application on its merit even after it declined jurisdiction. In conclusion, the learned Counsel urged that the appeal be dismissed.
DECISION/HELD:
In the final analysis, the Court dismissed the appeal.
RATIO:
ARBITRATION AND CONCILIATION- ARBITRAL AWARD: Whether a Court which declines jurisdiction to set aside a foreign arbitral award can allow an application to enforce same
“The Respondent herein sought recognition and enforcement of the arbitral award, which was rendered by the London Court of International Arbitration, pursuant to the said arbitration clause in their Agreement. In opposition, the Appellant, as earlier stated, filed an application to set aside the award. The two applications by the agreement of the parties were consolidated and heard together. The Court dismissed the Appellant’s application which sought the setting aside of the arbitral award and granted the Respondent’s and ordered payment to the Respondent of its claims. The Court held that it had no supervisory jurisdiction over the arbitration as it was held in London and therefore a Court in London would be the primary jurisdiction not a Nigerian Court. That, it had jurisdiction in respect of order for enforcement of the award. It considered and correctly the provision of Section 30 of the Arbitration and Conciliation Act Cap A18 of Laws of the Federation, 2004 which provides as follows: Section 30 (1) “Where an arbitrator has misconducted himself or where the arbitral proceedings, or award, has been improperly procured, the Court may on application of a party set aside the award. (2) an arbitrator who has misconducted himself may on the application of any party be removed by the Court. Recognition and Enforcement of Award. Section 31. (1) An arbitral award shall be recognised as binding and subject to this Section 32 of this Act, upon application in writing to the Court, be enforced by the Court. In my considered view, the Court below did not refuse to consider the application in itself but declined the jurisdiction to set aside the arbitral award which are two different things. Indeed, the Court would not have extended time for the Appellant to still file its application which sought to set aside the arbitral award, the application which the Court granted as on page 494 of the Record thus: “I have not seen anything expressly in the statute, not even in ACA itself or even case law that says that the Court in appropriate cases upon due application cannot extend time for a Party to file an application to set aside an arbitral award… and I think they deserve to have the discretion of this Court exercised in their favour. I hold therefore that there is merit in this application. It therefore succeeds. Consequently, time is hereby extended up to today within which the Applicant may file and serve the Originating motion to set aside the arbitral award …” It is important to note that the Appellant saw nothing wrong with pushing to have before the Court its application which sought to set aside the award and of course could not have complained against its grant when time was extended in respect thereof for it to be filed because it suited its purpose. The Appellant opposed vehemently the application for enforcement which it had a right to do. As I stated, to consider the application was a different matter from its grant. It is necessary to state that the Court was on terra firma when it considered the application and properly ruled one way or the other and did not detract from its jurisdiction to allow enforcement of the order. In that wise, the Court cannot be said to be approbating and reprobating.” Per WILLIAMS-DAWODU, J.C.A.
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