Does an Arbitral Award Have the Same Binding Force/Operate as a Court Judgment?

CASE TITLE: BPE & ANOR v. MESSRS. U. MADUKA ENTERPRISES (NIG.) LTD. & ANOR (2025) LPELR-80698(SC)
JUDGMENT DATE: 7TH MARCH, 2025
PRACTICE AREA: ARBITRATION
LEAD JUDGMENT: CHIDI NWAOMA UWA, J.S.C.

SUMMARY OF JUDGMENT:

INTRODUCTION:
This appeal and cross-appeal border on company law.

FACTS:

The appeal is against the judgment of the Court of Appeal sitting in Enugu Division delivered on 24th June 2019.

The brief facts leading up to this appeal are that the Federal Ministry of Communications engaged the services of the 1st Respondent (Applicant in the trial Court) via an agreement dated the 15th day of August 1978, for the purpose of building (among other things) P & T School, Agbani, Enugu, for consideration of N6,077,871.39 (Six Million Seventy-Seven Thousand, Eight Hundred and Seventy-One Naira Thirty-Nine Kobo).

In 1985, Nigerian Telecommunication Plc (hereinafter referred to as NITEL PLC) was established and became a beneficiary of the contract between the Federal Ministry of Communication and the 1st Respondent via an addendum to the primary contract dated 7th December 1988. From the commencement of the contract, the Federal Government of Nigeria at all material times paid the sums due and payable to the 1st Respondent with the NITEL PLC as the beneficiary. At various times during the construction process, various payments were made due to fluctuations and the depreciation of the naira.

A dispute arose between the parties regarding payment and the parties were unable to settle. The 1st Respondent triggered the arbitration clause in the agreement, and both parties, through their respective counsel, referred the dispute to a sole Arbitrator for arbitration. On the 6th of February 2006, the sum of N60,981,226.60 (Sixty Million, Nine Hundred and Eighty-one Thousand, Two Hundred and Twenty-Six Naira Sixty Kobo) was awarded in favour of the 1st Respondent by the Arbitrator.

The 1st Respondent in seeking to enforce the Arbitral Award, filed a Motion on Notice dated 18th April 2011 at the trial Court.

NITEL PLC, the then respondent, filed a counter-affidavit in opposition to the motion on notice stating that the award was statute-barred. The trial Court found in favour of NITEL PLC and dismissed the application for the enforcement of the award on the ground of being statute-barred, among other grounds.

Aggrieved by the decision, the 1st Respondent appealed to the Court of Appeal. While the appeal was pending, the Federal High Court sitting in Abuja Division pursuant to a winding-up petition brought before it concerning NITEL PLC (in liquidation), made an order on 14th March 2014 appointing the 2nd Appellant as Liquidator of NITEL PLC. Following the order, the 1st Respondent brought an application at the Court of Appeal for an order substituting the 1st and 2nd Appellants and 2nd Respondent as 1st, 2nd, and 3rd Respondents respectively, for NITEL PLC. The application for substitution was granted accordingly. The 1st and 2nd Appellants brought a preliminary objection at the Court of Appeal on the ground that the proper party (i.e., NITEL PLC in Liquidation) was not before the Court. The Court dismissed the preliminary objection and set aside the decision of the trial Court.

Dissatisfied, the Appellants appealed to the Supreme Court. Respondents cross-appealed.

ISSUES FOR DETERMINATION:

For the appeal, the Court considered:

a. Whether, having regard to the Record and the circumstances of this case, the lower Court was right to have held that the 1st and 2nd Appellants were proper parties to the appeal before it.

b. Whether, having regard to the record and the circumstances of this case, the lower Court was right to have set aside the decision of the Federal High Court in suit number FHC/EN/70/2011 in holding that time for enforcement of the arbitral award begins to run for the purpose of the statute of limitations from the date of the accrual of the causes of action, but such time freezes from the moment arbitration is commenced.

For the cross-appeal, the Court considered whether issue one is a fresh issue and, if it is, whether the leave of the Court was sought and obtained in raising it.

DECISION/HELD:
The appeal and cross-appeal were both dismissed.

RATIOS:
• ACTION- PROPER PARTIES: Principles of law on proper parties
• ACTION- NECESSARY PARTY(IES): Who is a necessary party and persons who ought to be joined as necessary parties to a suit
• ACTION- STATUTE BARRED ACTION: How to determine whether an action is statute-barred
• APPEAL- FRESH POINT(S) ON APPEAL: Whether leave of Court is required to raise fresh issue(s) on appeal at the Supreme Court
• ARBITRATION AND CONCILIATION- ARBITRAL AWARD: Whether an arbitral award has the same binding force as a judgment/operates as a judgment
• ARBITRATION AND CONCILIATION- ARBITRAL AWARD: Binding effect of an arbitral award
• COMPANY LAW- APPOINTMENT OF A LIQUIDATOR: Legal effect of the appointment of a liquidator
• LIMITATION LAW- LIMITATION PERIOD: Whether the period between the commencement of an arbitration and the date of the award is excluded in determining the limitation period for enforcement of an arbitral award

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