MEKWUNYE V LOTUS CAPITAL LIMITED & ORS

MEKWUNYE V LOTUS CAPITAL LIMITED & ORS


IN THE COURT OF APPEAL
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS

ON FRIDAY, 20TH APRIL, 2018


Suit No: CA/L/1349/2016

CITATION:

Before Their Lordships:

TIJJANI ABUBAKAR, JCA

BIOBELE ABRAHAM GEORGEWILL, JCA

JAMILU YAMMAMA TUKUR, JCA


BETWEEN

DR. CHARLES D. MEKWUNYE
(APPELLANT)

AND

LOTUS CAPITAL LIMITED
STANBIC IBTC ASSET MANAGEMENT LIMITED
MTN NIGERIA COMMUNICATIONS LIMITED
HIS HOLDING LIMITED
INT. TOWERS LIMITED
(RESPONDENTS)


PRONOUNCEMENT


A. ARBITRATION AND CONCILIATION
1. Arbitration – Matters that are arbitrable

It is undisputed that before a matter can be referred to arbitration, same must first be seen to be arbitrable. The dispute must not relate or cover matters which by law, are not permitted to be settled by other dispute resolution mechanisms other than in Court, the Arbitration and Conciliation Act, Cap A18, does not demarcate between disputes that are arbitrable or otherwise, it has however been judicially recognized as a matter of public policy that matters relating to crime, matrimonial causes, winding up of a company or bankruptcy are of such nature that cannot be settled by arbitration. See: BCC Tropical (Nig.) Ltd v. Government Of Yobe State Of Nigeria & Anor (2011) LPELR-9230 (CA).
As the argument of the counsel in this appeal shows, arbitrability of fraud is one of the contentious issues in arbitration, particularly as it involves questions of what type of issue can and cannot be submitted to arbitration. It has always been the case that where fraud and serious malpractices are alleged in a dispute, same cannot be referred to an arbitrator for resolution. The jurisdiction of the regular Court on this issue is iron-clad, as fraud, financial malpractice and collusion are allegations with criminal consequences and therefore reserved for the Courts, and an arbitral tribunal, being a creature of contract, is not endowed with general and wide jurisdiction, bestowed upon regular Courts, which are equipped to adjudicate in complex issues and are competent to offer wider range of reliefs to the parties in dispute. See: Alipak Banerjee & Vyapak Desai on “Is Fraud Open To Arbitration.”
In the instant appeal, it is undisputed that the Appellant pleaded fraud with the particulars thereof, particularly at paragraph 45 of the Appellant’s Statement of Claim alleging that the 1st Respondent’s Telecoms Private Equity Fund Investment Agreement is a Ponzi Scheme and an instrument of fraud, used by the Respondents to defraud unsuspecting Nigerians including the Appellant. It is in this regard that the Appellant sought a declaration that the 1st Respondent’s Telecom Private Equity Fund is a Ponzi Scheme used by the 1st Respondent to defraud the Appellant. Appellant holds the view that the issue of fraud alleged in the instant case cannot be resolved by arbitration. The learned Counsel for the 1st Respondent contended otherwise that the principal claim of the Appellant is for breach of Agreement and that the use of “fraud” by the Appellant in this case does not refer to any form of criminal offence, but is at best contractual misrepresentation. I am not aware of any decision of the Superior Courts in this country where the instant issue was considered and pronounced upon. I therefore take solace in decisions in other jurisdictions, which though are of persuasive authority, but are nevertheless applicable to the issues herein. See the decisions in Swiss Timing Ltd v. Organising Committee, Common Wealth Games 2010 (2014) 6 SCC 677; World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) PTE Ltd in Civil Appeal No. 895 of 2014.

In World Sport Group (Mauritius) Ltd (Supra), the parties entered into a partnership deed on 1st April 1994 for running a hotel. While the Appellant was entrusted with administration, the Respondents alleged that the Appellant had failed to make regular deposits of money into the common operating bank account and had fraudulently siphoned off an amount of INR 10,00,050. In a separate raid conducted by the Law Enforcement Agents (CBI) on premises of the Appellant’s relative, an amount of INR 45,00,000 was seized and alleged to have been given by the Appellant for business of the hotel. The Respondents
filed a civil suit seeking right of administration of the hotel. The Appellant sought reference of the dispute to arbitration under Indian Arbitration Act. The High Court rejected the Appellant’s application on the ground that the dispute involved allegations of fraud. Aggrieved by the decision, the Appellant preferred an appeal before the Supreme Court. It was the contention of the Respondents in that case, just as the one before this Court that, where allegations of fraud are involved civil Courts are the appropriate forum for adjudication. The Supreme Court of India rejected the general notion that elements of criminal wrongdoing detracted from the jurisdiction of arbitral tribunal. Referring to the Indian Arbitration Legislation and the New York Convention, the Court considered that the allegations of fraud did not impact on the validity of the arbitration agreement; the fact that fraud was alleged did not render the agreement inoperative or incapable of being performed.
The foregoing decisions of the Indian Supreme Court are instructive and I must say the reasoning therein is compelling. It is my view, that to accept the Appellant’s contention to the effect that arbitration should be shut out, merely on the basis of allegation of fraud, which has not been subject to proof, would undoubtedly destroy the very purpose for which the parties had agreed by contract to submit to arbitration. In as much as the allegation of fraud does not relate to the validity of the substantive contract, which is even separable from the Arbitration clause, I am of the opinion that the Court ought to act with caution and circumspection as the allegations of fraud in the circumstances of this case, can be duly considered by an Arbitrator or Arbitral Tribunal. The allegation of fraud by the Appellant herein is not directed, at the arbitration agreement, thereby impeaching same and the resultant arbitration, nor is it directed at the main contract; I am therefore unable to accept the submissions of learned Counsel for the Appellant that mere allegation of fraud renders the dispute herein un-arbitrable.

I am mindful of the fact that Appellant relied on the decision of this Court in B. J. Export & Chemical Company Ltd v. Kaduna Refining & Petro-Chemical Company Ltd (Supra), particularly the dictum of MOHAMMED, JCA at page 36, paras. B-G; thus:

“It is trite that the disputes which the subject of an arbitration agreement must be arbitrable. In other words, the agreement must not cover matters which by the law of the State are not allowed to be settled privately or by arbitration usually because this will be contrary to the public policy. Thus, a criminal matter, like the allegation of fraud raised by the Respondent in this case, does not admit of settlement by arbitration as was clearly stated by the Supreme Court in Kano State Urban Development Board v. Fanz Constru Tion Ltd. (1990) 4 NWLR (Pt. 142) 1 at 32-33. This position of the law appears to have been further stated under the Arbitration and Conciliation Act, CAP 19 Laws of Federation….”

I must say that decision of this Court in the above case is inapplicable to the instant case. The dispute between the parties in that case arose out of an agreement entered between the parties by which the Appellant hired four ISO Tanks from the Respondent for shipment of petroleum products on a rental charge of N10,000.00 for each tank for a period of 8 weeks. The Appellant took delivery of the tanks and used same to ship petroleum products to Europe. At the expiry of the 8 weeks period of lease of the tanks, the Appellant failed to return them to the Respondent as agreed. When the Respondent demanded for the return of the tanks, the Appellants attributed its failure to return same to the uncertainty in the political situation in Nigeria, due to the crisis relating to the June 12, 1993 election, and subsequently the industrial action at the Lagos Port but finally returned them in September 1993 in clean condition along with the payment of N80,000.00 rental charges. However, nearly three months thereafter, the Appellant raised problems encountered with the tanks by its Agent in Europe who claimed the sum of $85,016.00 from the Respondent being alleged expenses incurred on account of unsuitability of the tanks, etc. When the Appellant’s claim was resisted by the Respondent, the Appellant proposed the appointment of an arbitrator to resolve the dispute and this was accepted by the Respondent, whereupon the parties jointly appointed the arbitrator. When the parties appeared before the arbitrator, instead of the earlier claim of $85,016.00, the Appellant filed a claim of $400,000.00 before the arbitrator. Rather than responding to the Appellant’s claim before the Arbitrator, the Respondent commenced an action before the Kaduna State High Court vide an Originating Summons seeking

(1) A declaration that the Appellant’s claim against the Respondent upon which reference was made to the Arbitrator is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement; and

(2) Leave to revoke the arbitration agreement and the arbitrator’s authority upon the said ground.

It is obvious the situation and circumstance of the instant case are not consistent with the one in B. J. Export & Chemical Company Ltd where the Respondent’s allegation of fraud goes to the root of the Arbitration Agreement. In the instant case, it does not and I am therefore unable to reach similar conclusion as reached by this Court therein. At any rate, the ratio in that case supports the position earlier expressed that where the allegation of fraud affects the validity of the substantive contract and/or the Arbitration Agreement, same cannot be determined by an Arbitrator; only regular Courts have jurisdiction to consider and pronounce on such issue. In the instant case, the allegation of fraud does not affect or relate to the validity or otherwise of the contract between the parties or the Arbitration Agreement; therefore the reasoning expressed in decision of this Court in B.J. Export & Chemical Company Ltd cannot be adopted here, where the allegation of fraud is in relation to the performance of obligations under the contract. In that case, the allegation of fraud affects the contract, or at best, the arbitration agreement and goes to the root of the relationship between the parties. The position of the law stated by this Court in the said case remains potent but qualified to the effect only the Court can adjudicate on allegation of fraud which affects the validity of an arbitration agreement. Per ABUBAKAR, JCA. read in context

2. Arbitration – How there can be more than one party to arbitration emanating under contract where parties submit to arbitration

The other question under this issue relates to the Appellant’s contention that since the parties in the instant suit are more than two, the dispute cannot be arbitrable. The Appellant copiously referred to the view expressed by the learned authors, J. O. Orojo and M. A. Ajomo, “Law and Practice of Arbitration and Conciliation in Nigeria”, Lagos: 1999, 62 that “as a general rule, there are two parties to an arbitration since an arbitration agreement is usually bilateral and so an arbitration proceeding under one contract cannot, without agreement of the parties, be used to resolve disputes under another contract. Nor can a third party make himself a party to that arbitration.”

I must say that the Appellant’s argument on this ground is misconceived. From the submissions made by the Appellant, it is conceded that there can be more than one party to an arbitration proceedings emanating under one contract, in so far as the parties involved consent to submit to arbitration. There is nothing on record showing that the parties concerned do (or will) not consent to arbitration. It is speculative to say the least. I am in agreement with the learned counsel for the 1st Respondent that the pivotal dispute as apparent from the reliefs sought by the Appellant herein, is between the Appellant and the 1st to 3rd Respondents. As a matter of fact, the reliefs sought against the 4th and 5th Respondents, who are not parties to the arbitration agreement nor agents or privies of the parties thereto, are consequential and ancillary to the principal reliefs sought by the Appellant. As a matter of fact, Reliefs J, Q and U are declaratory and injunctive reliefs geared towards invalidating the contract purportedly executed by the 1st to 5th Respondents, towards changing the “character and form of the Appellant’s investment in the MTN Linked Unit.” These reliefs are undoubtedly hinged on the principal claim sought by the Appellant. The only conclusion is that the addition or status of the 4th and 5th Respondent is insufficient to warrant the conclusion urged on us by the Appellant. Appellant’s argument on this issue is therefore misconceived. Per ABUBAKAR, JCA. read in context

3. Arbitration Clause – How agreement to submit a matter to arbitration doesn’t oust the jurisdiction of the Court

The grievance of the Appellant under this issue is that the learned trial judge refused to follow the decisions in Obembe v. Wemabod Estate (Supra) and K.S.U.D.B. v. Fanz Ltd (Supra) and I must say that the Appellant’s complaint is unfounded having had the benefit of studying the decisions referenced. In Obembe, the Supreme Court, per FATAYI-WILLIAMS, JSC held as follows:

“As we have pointed out earlier, any agreement to submit a dispute to arbitration, such as the one referred to above, does not oust the jurisdiction of the Court. Therefore, either party to such an agreement may, before a submission to arbitration or an award is made, commence legal proceedings in respect of any claim or cause of action included in the submission. At common law, the Court has no jurisdiction to stay such proceedings. Where, however, there is provision in the agreement, as in Exhibit 3, for submission to arbitration, the Court had jurisdiction to stay proceedings by virtue of its power under Section 5 of the Arbitration Act (Cap 73 of the Laws of the Federation)… No stay was asked for by the defendants/Respondents after they were served with the writ of summons. On the contrary, they accepted service of the statement of claim, filed their own statement of defence, testified in their defence and took part in the proceedings until judgment was delivered. In order to get a stay, a party to o submission must have taken NO step in the proceedings. A party who makes any application whatsoever to the Court, even though it be merely an application for extension of time takes a step in the proceedings. Delivery of a statement of defence is also a step in the proceedings… Moreover, if the Court has refused to stay an action, or if the defendant has abstained, as in the case in hand, from asking it to do so, the Court has seizing of the dispute, and it is by its decision and by its decision alone, that the right of the parties are settled….”

In K.S.U.D.B. (Supra), the Supreme Court similarly held as follows:

“Both the decision in Doleman & Sons v. Ossett Corporation (supra) and that of this Court Obembe v. Wemabod Estates Ltd. (supra) recognize it that the Court alone has not only the jurisdiction but also the duty to settle the dispute between the parties if called upon to do so. These cases also recognize it that under the relevant section of the arbitration low, upon the application of the defendant to an action brought in breach of agreement to proceed by arbitration the Court has power to stay the proceedings. In other words, under the provisions of the Arbitration law, the Court had power to refuse to entertain proceedings brought before it in breach of an agreement to decide the matter by arbitration. However the defendant is not given by the law a carte blanche as to when to apply for the stay of proceedings….”

Learned Counsel for the 1st Respondent argued that the decision in the case under reference is not relevant to the facts of the case at hand, and I agree with learned counsel. In the instant case, the learned trial judge held at pages 474 to 475 of the Records of Appeal as follows and I quote:

“I have examined the claim put forward by the Plaintiff which was commenced by Writ of Summons asking the Court to enforce all the Terms set out in the Telecoms Private Equity Fund Investment Agreement dated 21st of August, 2008. Amongst other reliefs sought is for the Court to hold that the 2nd Defendant is a party to the said agreement. Definitely from the reliefs sought a dispute has occurred. I found from the claim that the Plaintiff acknowledges the agreement entered into and in particular when he sought that the 2nd Defendant should be declared a party to the agreement. He believes that the 3rd, 4th and 5th Defendants have one thing or the other to do with the transaction which he entered into with the 1st Defendant. An Arbitration clause where embedded in a document voluntarily entered into by parties must of necessity be honored in good faith in the absence of fraud or mistake. The Court must not engage in rewriting agreement for parties… I believe that once an arbitration clause is retained in a contract which is valid and subsisting and the dispute is within the contemplation of the Clause, the Court should give regard to the contract by enforcing the Arbitration Clause…. In the present case if the Plaintiff is not happy with the outcome of the Agreement he ought to have gone to Arbitration and exhaust all the mechanism put in place within the Agreement before approaching… Failure to do so tantamount to not fulfilling the condition precedent to adjudication. As long as this situation exists the Court cannot be said to have the jurisdiction and competence to examine this matter and all other applications before it…”

I am unable to, in the peculiar circumstances of the instant case, hold the view that the learned trial judge failed to follow the decision of the Supreme Court referred to by the Appellant. It is undisputed that contrary to the situation in OBEMBE, the 1st Respondent herein sought for an order for stay of proceedings pending arbitration. From the records before us, it ought not be disputed that the 1st Respondent had taken no step in the proceedings in the suit at the lower Court. In the Appellant’s Reply, it was submitted that the 2nd Respondent filed several processes and joined issues with the Appellant and these steps taken by the 2nd Respondent amount to submitting to the jurisdiction of the lower Court.

Granted that it is obvious that the 2nd Respondent had taken steps in the proceedings at the lower Court, and is therefore precluded from enjoying the privilege of being granted an order of stay pending arbitration, pursuant to Section 5 of the Arbitration and Conciliation Act, I am unable to accept the submissions of the Appellant that the steps taken by the 2nd Respondent amount to submission to the jurisdiction of the lower court by the other parties, or the 1st Respondent herein in particular. The decision of the Supreme Court is clear on the position that it is only a party who has taken a step in the proceedings in Court that is estopped from asking the Court for a stay to refer the matter to arbitration in accordance with Section 5(1) of the Arbitration and Conciliation Act. Here, it will be unconscionable and therefore wrong to ascribe the steps taken by the 2nd Respondent with respect to the proceedings as those of the 1st Respondent, as the Appellant has urged. The record bear witness, the Appellant conceded that the 1st Respondent had taken no step in the proceedings at the lower Court. This is sufficient on this issue as it relates to Section 5(1) of the Arbitration and Conciliation Act.

Nevertheless, it is certainly also not the contention of the Appellant that the learned trial judge erred when she held that, considering the circumstances of the instant case, where parties have by agreement agreed to arbitrate any dispute arising from the contract executed by them, recourse to arbitration is a condition precedent to the exercise of the jurisdiction of the Court. Arbitration clause is not a magic wand used to forestall the exercise of jurisdiction of the Court; rather it is only a mechanism built into a contract to enable the parties, in the event of dispute, to first explore the option of settling same out of Court failing which they can proceed to Court. See: Messrs NV Scheep v. MV’S Araz (2000) 12 SC (Pt. 10) 154 at 213 where it was held:

“In any event, the arbitration clause did not seek to oust the jurisdiction of the Court as all it did was to allow parties the avenue and possibilities of settling disputes amicably out of Court. The position of the law is that an arbitration clause in agreement generally does not oust the jurisdiction of the Court or prevent the parties from having recourse to the Court in respect of dispute arising therefore. A party to an agreement with an arbitration clause has the option to either submit to arbitration or to have the dispute decided by the Court….”

Therefore, the reasoning of the learned trial judge earlier reproduced does not in my view, run contrary to the decision in Obembe (Supra). Appellant’s submission on this issue is therefore misconceived. Per ABUBAKAR, JCA. read in context

4. Arbitration – The principle of the law on when a Court may make an order staying proceedings in arbitration

Under this issue Appellant’s complain is that the learned trial judge ignored the provisions Section 5(2) of the Arbitration and Conciliation Act as well as the decisions in M.V. Parnomos Bay v. Olam (Nig.) Plc (Supra) and Uba v. Trident Consulting Limited (Supra). Section 5 of the Arbitration and Conciliation Act reads as follows:

(1) If any party to an arbitration agreement commences any action in any Court with respect to any matter which is the subject of an arbitration agreement, any party to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay the proceedings.

(2) A Court to which an application is made under Subsection (1) of this section may, if it is satisfied –

(a) That there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and

(b) That the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, make an order staying the proceedings.”

The power donated to the lower Court under the above section is no doubt discretionary and with all the discretionary powers, the appellate Court is always loath to interfere with the way a Court exercises its discretion unless where the discretion was wrongly exercised; or tainted with some irregularity, or in other instances where the Court sees any reason to interfere with same. See UNILAG v. Aigoro (1985) 1 NWLR (Pt. 1) 143; Ajuwa & Anor v. SPDC Nig. Ltd (2011) LPELR-8243 (SC). It must therefore be stated that the competing rights of the parties to justice in the case must be considered; where such exercise of discretion is motivated by some ulterior considerations in favor of an applicant without adequately taking into account the Respondent’s equal right, the discretion will not be said to have been judicially and judiciously exercised. See N.N.P.C. v. Famfa Oil Ltd & Anor (2009) LPELR-2023 (SC).

As I earlier stated, it is the Appellant’s complaint that the learned trial judge ignored the provisions of Section 5(2) of the Arbitration and Conciliation Act in reaching the conclusion that the suit be stayed pending reference to arbitration. Clearly, the purport of Section 5(2) is that a Court may make an order staying proceedings if it is satisfied that there is no sufficient reason(s) why the matter should not be referred to arbitration and that the Applicant was at the time when the action was commenced, willing and ready to do all things necessary for the conduct of the arbitration.

Appellant cited the decision in M.V. Panormos-Bay v. Olam (Nig.) Plc (Supra) where this Court, per GALADIMA, JCA (as he then was) held that it is the party praying for arbitration as an ‘applicant’ that has the duty to comply with Section 5(2)(b) of the Act by commencing the proceedings. To the contrary, it is the contention of learned Counsel for the 1st Respondent that the decision in that case was overruled by this Court in Onward Enterprises Limited v. MV. “Matrix” & Ors (2008) LPELR-4789 (CA) at Pages 29 to 30, Paras. D to C, where this Court, per MSHELIA, JCA held:

“… It is a basic principle of law that where parties to a contract have under the terms thereof agreed to submit to arbitration if there is any dispute arising from the contract between them a defendant who has not taken any steps in the proceedings commenced by the other party, may apply to the Court for stay of proceedings of the action to enable parties to go to arbitration as contracted. Once an arbitration clause is retained in a contract which is valid and the dispute is within the contemplation of the clause, the Court should give regard to the contract by enforcing the arbitration clause… It is therefore the general policy of the Court to hold parties to the bargain into which they had entered unless there was a strong, compelling and justifiable reason to hold otherwise or interfere. In the instant case, Appellant who had the onus to advance compelling reason as to why this Court should interfere with the discretionary power of the trial Judge had failed to do so. There is nothing to show that the arbitration agreement was imposed on the Appellant. Since both parties voluntarily entered into the agreement same should therefore be binding on them….”

I have had the benefit of reading the decision of the Court in Onward Enterprises Limited (Supra) and I agree with the submissions of learned Counsel for the 1st Respondent that the decision in M.V. Panormos Bay (Supra) cannot stand as authority on the issue at hand. This is apparent from the reasoning expressed by my learned brother MSHELIA, JCA at Pages 26 to 28, Paras. F to G, as follows:

“I am mindful of the decision of this Court in M.V. Panormos Bay v. Olam (Nig.) Plc supra referred to us by Respondent’s counsel. In that case this Court declared null and void an arbitration agreement which states that disputes between parties shall be referred to Arbitration in London on the ground that Section 20 of the Admiralty Jurisdiction Act 1991 is a statutory limitation to the enforcement of the arbitration agreement in the bills of lading. The reason is that such agreement would deny the Nigerian Courts temporarily of jurisdiction. As rightly observed by Respondent’s counsel the Court was not called upon to consider the Supreme Court decision in M.V. Lupex v. N.O.C. & S Ltd supra as well as Section 10 of the Admiralty Jurisdiction Act 1991.
In M.V. Lupex v. N.O.C. & S Ltd Supra the Appellant requested the trial Federal High Court to stay proceedings of the action filed by the Respondent in view of the agreement the two parties entered in clause 7 of the Charter-Party which reads:
“7 That parties agreed inter alia on arbitration in London under English Law in the event of dispute,”

The Federal High Court refused the stay of proceedings and on appeal this Court affirmed the decision of the trial Court. On further appeal to the Supreme Court, the appeal was allowed and stay of proceedings was ordered. The apex Court held among other things that where parties have agreed to refer their dispute to arbitration in a contract, it behoves the Court to lean towards ordering a stay of proceedings. By this decision it is clear that stay of proceedings, could be granted pending reference to arbitration in a foreign country in deserving cases. I wish to note that Section 20 of the Admiralty Jurisdiction Act was not discussed in that case….”

It is therefore clear that the decision in M.V. Panormos Bay (Supra) does not reflect the position of the law in this regard and same cannot be relied upon successfully by the Appellant in support of his contention that no order of stay should be granted by the lower Court pending arbitration. For the avoidance of doubt, the reasoning in that decision does not accord with the decision of the Supreme Court in M.V. Lupex, it cannot be relied upon.

Appellant’s counsel also made reference to Uba v. Trident Consulting Limited (Supra), where the facts show that the Respondent entered into a contract with the Appellant for the implementation of automated Customer Relationship Management (C.R.M.) software for certain aspects of her banking business. There was an arbitration clause in the contract executed by the parties. When dispute subsequently arose in respect of some outstanding payments to the credit of the Respondent, the Appellant terminated the contract and the Respondent then commenced an action at the High Court of Lagos State on sundry reliefs. The Appellant filed an application for stay of proceedings pending arbitration and the application was refused. On appeal to this Court, it was held that for an application for stay of proceedings pending arbitration to succeed, the Applicant must adduce documentary evidence showing the steps he has taken in respect of the commencement of the arbitration. According to my learned brother IKYEGH, JCA:

“Before a stay may be granted pending arbitration, the party applying for a stay must demonstrate unequivocally by documentary and/or other visible means that he is willing to arbitrate. He does it satisfactorily by notifying the other party in writing of his intention of referring the matter to arbitration and by proposing in writing an arbitrator or arbitrators for the arbitration. In the instant case, the only paragraph of the affidavit evidence of the Appellant relevant to the matter deposed in paragraph 8 thereof that:
‘I was informed by Mr. Ugochukwu Okwesili, a Legal Officer in the applicant Bank in a meeting in our office at 57, Marina, Lagos on the 13th day of May, 2009 at about 2:30pm while reviewing this matter and I verily believe him that the parties are unable to resolve the matter amicably and that the applicant is ready to do everything necessary to the proper conduct of the Arbitration in respect of the dispute alleged to have arisen between the parties.’
The deposition above is not enough. There must be documentary evidence showing the applicant wrote to the Respondent notifying her of the willingness to resort to arbitration over the dispute and also, specifying in the letter or correspondence an arbitrator or arbitrators proposed to be appointed for the arbitration for the ratification or approval of the party.”

It is settled that the duty of the Court is to give effect to the clear and unambiguous provision of the law and not distort same. See: Nigercare Development Company Ltd v. Adamawa State Water Board & Ors (2008) 9 NWLR (Pt. 1093) 498 SC. In Aromolaran v. Agoro (2014) LPELR-24037 (SC), the Apex Court, per GALADIMA, JSC held:

“I must say that the duty of the Court is to interpret the words contained in the statute and not to go outside the clear words in searching of an interpretation which is convenient to the Court or to the parties in the process of interpretation. The Court will not embark on a voyage of discovery. Where a statute is clear and unambiguous, as in this case. This Court will follow the literal rule of interpretation where the provision of the statute is clear and no more.”

I have earlier made reference to and copiously reproduced Section 5(2) of the Arbitration and Conciliation Act. For emphasis, by that section the lower Court has a discretionary power to grant an order of stay pending arbitration if it is satisfied that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement and the party making application for stay is ready and willing to do all things necessary to the proper conduct of the arbitration. The view expressed by this Court in Uba v. Trident Consulting Limited (Supra) is to the effect that it is not enough for the Applicant to merely depose that he is ready and willing to ensure the proper conduct of the arbitration, he must show same through documentary evidence. It is my view with all due respect that placing the burden of presenting documentary evidence to support an application for stay of proceedings pending arbitration constitutes a departure from the plain provisions of Section 5( ) of the Act, particularly in cases where the Applicant has deposed to facts in that regard. Section 5 of the Arbitration and Conciliation Act does not make it a condition precedent before an order of stay pending arbitration can be granted, a Court will be expected to be careful in granting an order staying proceedings pending reference to arbitration where the Applicant has not taken any steps in the proceedings, and the Court is satisfied that there is no sufficient reason that the matter should not be referred to arbitration and where the Applicant has been able to show that he is ready and willing to do all things necessary for the proper conduct of arbitration.

It cannot be disputed that the purpose of an Applicant deposing to an affidavit is to provide oral and for documentary evidence to support an application filed in Court. It is used to provide evidence to prove a material point(s) in argument. See: Hon. Justice Garba Abdullahi v. The Executive Governor Of Kano State & Ors (2014) LPELR-23079 (CA); Agu & Ors v. Idu (2013) LPELR-19992 (CA). As a matter of fact therefore affidavit constitutes evidence. See: Nwosu v. Imo State Environment Sanitation Authority & Ors (1990) SCNJ 97; Anoka v. Ikpo (2013) LPELR- 20419 (CA). Even though I am mindful that the absence of counter-affidavit or contradictory depositions by a Respondent is not a free pass to judgment in favour of an applicant especially in cases where the depositions are self-contradictory, it is especially true beyond citing authorities that depositions in affidavit which are not countered or controverted are deemed to have been admitted. See Ugwuanyi v. Nicon Insurance Plc (2013) LPELR-20092 (SC); Akinsete v. Akindutire (1966) LPELR-5416 (SC). Thus in Okoebor v. Police Council & Ors (2003) LPELR-2458 (SC) it was held as follows:

“The attitude of the Courts to unchallenged evidence is not in doubt and it has been stated and reinstated in a plethora of cases. In Iriri v. Erhurhobara (1991) 2 NWLR (Pt. 173) 252 of 255, it was held that where the evidence of a witness is not inadmissible in law, uncontradicted and unchallenged, a court of law can act on it and accept it as a true version of the case it seeks to support. In the same vein, it was decided that wherever any evidence whether affidavit or oral stands uncontradicted, unless the evidence is patently incredible, the Court ought to regard the matter to proved by that evidence as admitted by the adverse party….”

Therefore, unchallenged evidence is deemed to be correct and can be acted upon by the Court. In Inegbedion v. Selo-Ojemen & Anor (2013) LPELR-19769 (SC), the Court held:

“It is trite law that any unchallenged and uncontradicted fact in an affidavit remains undisputed and is deemed admitted by the adversary and the Court will so hold. However, it is also the law that any such unchallenged and uncontradicted facts which are deemed admitted in the affidavit must be capable of proving and supporting the applicant relying on such facts. In other words, it has been held that the affidavit evidence must necessarily be cogent and strong enough to sustain the case of the applicant….”

In the instant case, just as in Uba v. Trident Consulting Limited (Supra), at page 259 of the record of appeal, the Applicant/1st Respondent herein deposed at paragraph 8 of its application for stay as follows:

“The 1st Defendant/Applicant confirms its willingness to participate in arbitration proceedings in respect of any alleged dispute arising out of or pursuant to the Telecoms Private Equity Investment Agreement.”

The above deposition was not countered by the Appellant in his Counter Affidavit found at pages 309 to 311 of the record of appeal. By the reasoning expressed in Uba v. Trident Consulting Limited (Supra), the above deposition is not enough, the 1st Respondent is still required to present documentary evidence in support. Considering the circumstances of the instant case, I am unable to subscribe to the reasoning in the light of the express provisions of Section 5(2) of the Act. Contrariwise, it is my humble view that unless such deposition is controverted by the adverse party, a Court is at liberty to act upon deposition by an applicant that he is willing and ready to ensure that the arbitration is properly conducted, thereby fulfilling the requirement in Section 5(2)(b). I totally agree that the reasoning in Uba v. Trident Consulting Limited (Supra) is only potent and tenable in instances where the Applicant’s deposition in the Affidavit in support of the Application for stay is challenged and/or contradicted by the Respondent. In such cases, it will be necessary for the Applicant to provide further evidence in support of his deposition in that regard which is not the case in the instant appeal. Where, as in the instant case, the Appellant did not challenge the 1st Respondent’s deposition that the latter is willing to participate in arbitration proceedings in respect of the dispute arising from the Agreement executed by the parties, and there is no sufficient reason to why the matter should not be referred to arbitration, I am unable to interfere with the exercise of the lower Court’s discretion granting an order staying proceedings pending reference to arbitration. Per ABUBAKAR, JCA. read in context

B. CASE LAW
5. Stare Decisis – The meaning of the principle of stare decisis

It is a cardinal principle of law under the doctrine of stare decisis that every inferior Court is bound by the decision of a Superior Court; and it is not the place of an inferior Court to say that the decision of the Superior Court was wrongly decided. See: N.E.P.A. v. Onah (1997) LPELR-1959 (SC); PDP v. Oranezi (2017) LPELR-43471 (SC). It must be said however that, by the doctrine of stare decisis, inferior Courts are only mandated to follow previous decisions of Superior Courts where the case before them involves similar facts or issues. See: Anekwe v. State (2014) LPELR-22881 (SC). The Supreme Court of Nigeria stated the settled position of the law regarding the meaning and nature of stare decisis in Adetoun Oladeji (Nig.) Ltd v. Nigerian Breweries Plc (2007) LPELR-150 (SC), where TOBI, JSC (of blessed memory) said:

“Factual distinctions or differences in cases only avail a party when they are germane or material to the stare decisis of the case. I say this because stare decisis which means to abide or adhere to decided cases, as policy of Courts to stand by precedent is based on a certain state of facts which are substantially the same and here the word is substantially. This means that the facts that give rise to the principle of stare decisis are material facts, devoid of or without the unimportant details. This also means that the facts need not be on all fours in the sense of exactness or exactitude… One major criterion in the determination of the matter is that the facts of the previous case are major, substantial and material to the facts of the current case begging for the application of the previous case. Before the application of the previous case, the Judge should ask a question: Could the Court have arrived at the decision but for particular facts or could the Court have arrived at a different decision in the absence of the particular facts? An unequivocal answer to the above double barrel question will pave the way for the applicability or inapplicability of the doctrine….” Per ABUBAKAR, JCA. read in context

C. COURT
6. Duty of Court – The established principle of how the Court must pronounce on all issues joined by parties before it

The law is well settled that every Court must consider and pronounce on all issues joined by the parties before it. See Irolo v. Uka (2002) 14 NWLR (Pt. 786) 195 at 225, paras. D-F, the Supreme Court of Nigeria held that:

“It is the duty of a Court, whether of first instance or appellate to consider all the issues that have been joined by parties and raised before it for determination. If the Court failed to do so, without a valid reason, then it has certainly failed in its duty; for in our judicial system, it is a fundamental principle of administration of justice that every Court has a duty to hear, determine and resolve such questions….”

In Okonji & Ors v. Njokanma & Ors (1991) LPELR-2476 (SC) the Court held that when a party submits an issue to the Court for determination, the Court must make a pronouncement on that issue except where the issue is subsumed into another issue. See also Bamgboye v. UNILORIN & Anor (1999) LPELR-737 (SC). It was the contention of learned Counsel for the Appellant that the learned trial judge failed/neglected to pronounce on issues joined by the Appellant and the 2nd to 5th Respondents respectively but rather erroneously chose to consider and determine the issues joined between the Appellant and the 1st Respondent. The Appellant who was the Plaintiff filed this suit against the 1st-5th Respondents; all the Respondents filed differing objections challenging the competence of the Appellant’s suit. In his Ruling on the pending applications and objections, the learned trial Judge stated at page 473 that:

“The jurisdiction of the Court has been challenged in various forms. When the jurisdiction of a Court is challenged, the Court cannot proceed to make any order in this case until it has ruled on the issue of jurisdiction, one way or the other… in the circumstances of the various challenges, the most crucial is whether this matter should be referred to Arbitration or attended to by this Court.”

It is apparent that the learned trial judge adopted the approach of picking out the “most crucial” issue relating to the jurisdiction of the lower Court, which has been raised by the respective parties before it. The learned judge merely considered and pronounced upon the single issue relating to the question as to whether the matter before him should be referred to Arbitration or not, which is one of the several issues canvassed and argued by the parties before it, particularly the Appellant and the 1st Respondent. This approach is seemingly in conflict with the settled position of the law that a Court must consider and pronounce upon every issue properly placed before it for consideration and determination. I must be quick to add that, the foregoing position permits certain recognized exception which have been accepted as constituting basis for doing away with the settled practice, let me start by inching into the decision in Udo v. Ekpo & Anor (2016) LPELR-41383 (CA), Where this Court held as follows and I quote:

“The general rule which is now settled is that a Court be it first or appellate, has a duty to consider all the issues pleaded before it. Howbeit, where it is of the view that a consideration of one issue is enough to dispose of the matter, the said Court is not under any obligation to consider all the other issues posed by the parties. See 7UP Bottling Coy Ltd v. Abiola & Sons Bottling Co. Ltd. (2001) 13 NWLR (Pt. 730) 469 at 499. Consequently, where a party submits an issue for determination, that Court must make a pronouncement on the issue except where the issue is subsumed in another and where that happens, there shall no longer be the necessity of making a separate pronouncement on the issue or issues subsumed….” (Underlining mine)

Where a Court determines that a consideration of a single issue can dispose of the matter, the Court is not bound by the general position of the law to consider and pronounce on every issue submitted to it by parties on record, the Court is also not bound to consider every issue where the other issues are adequately covered by a consideration of a single issue. See: Adebayo v. A-G, Ogun State (2008) LPELR-80 (SC) where the Supreme Court held that a Court must make a pronouncement on every issue properly before it “except where the issue is subsumed in another issue.” Here, while concluding on the sole issue being considered, the learned trial judge held at page 475 of the records of appeal that as long as the condition precedent was not fulfilled, “the Court cannot be said to have the jurisdiction and competence to examine the Appellant’s matter and all other applications before it.”

I believe the Appellant’s counsel knows too well that without jurisdiction, the lower Court is stripped of the adjudicatory competence to consider and pronounce on any application. See Madukolu v. Nkemdilim (1962) LPELR-24023 (SC). Even though a Court is bound to consider all the issues properly before it, the failure to do so is not necessarily fatal to the judgment since the failure to do so had not occasioned a miscarriage of justice. In Bamaiyi v. State & Ors (2001) LPELR-731 (SC), the Supreme Court of Nigeria held as follows and I quote:

“Failure to consider and pronounce on all issues submitted to a Court or tribunal will not, per se, amount to a denial of a right to fair hearing having regard to the judicial decisions on the principle. In some cases, it may occasion failure of justice which amounts to denial of fair hearing and in others as is the case in the present proceedings, it will not….”

See: also Okotie-Eboh v. Manager & Ors (2004) LPELR-2502 (SC). There is nothing on record before us, particularly as it relates to the failure of the lower Court to pronounce on all the issues joined by the parties, showing that the failure has occasioned a miscarriage of justice. It is obviously of no relevance, considering the peculiar situation in the instant case, to expect the lower Court to pronounce on other issues, when it had already held the view that it does not have any jurisdiction to entertain the matter. Per ABUBAKAR, JCA. read in context

D. PRACTICE AND PROCEDURE
7. Interlocutory Matters – How the Court cannot make pronouncement on substantive maters in an interlocutory proceeding

The learned trial judge had at pages 474 to 475 of the record of appeal held as follows:

“I have no evidence of fraud which at any rate must be established beyond reasonable doubt and there is no evidence of a mistake.”

It is undisputed that the proceedings at the lower Court leading to the instant appeal were still at the interlocutory stage and the Ruling being appealed against, wherein the above findings were expressed by the learned trial judge was interlocutory, at which time no evidence had been called or presented before the Court on the issues at stake in the suit. The law is well settled that a Court must not comment or make pronouncement on substantive matters in an interlocutory proceeding. In a Ruling on an interlocutory application, the Court must shy away and/or refrain from making any observation that might appear to prejudge the main issue in contention by the parties. See: Nwankwo & Ors v. Yar’adua & Ors (2010) LPELR-2109 (SC); Okotie-Eboh v. Manager (2004) LPELR -2502 (SC). The learned trial judge in the instant case made observations and/or findings that there was no evidence of fraud or mistake by the Appellant. Needless to state that the proof of the allegation of fraud or mistake by the Appellant can only be done during substantive trial and not at the interlocutory stage of the proceedings; I therefore have no hesitation in reaching the conclusion that the learned trial judge with all due respect erred. Per ABUBAKAR, JCA. read in context


LEAD JUDGMENT DELIVERED BY ABUBAKAR, JCA


This is an appeal against the Ruling of the Federal High Court, sitting in the Lagos Judicial Division delivered by C.M.A. Olatoregun J. on the 18th day of October, 2016 in Suit No: FHC/CS/354/2015 as found at pages 255-264 of the Records of Appeal. The suit was commenced at the lower Court by the Appellant against the Respondents via a Writ of Summons dated the 27th day of March, 2015 and other accompanying processes found at pages 1- 249 of the Records of Appeal. In response, the 1st Respondent filed a Motion on Notice on the 24th April, 2015 found at pages 256-264 of the Records of Appeal seeking to stay proceedings pending reference to and determination of the dispute by arbitration as contained in the agreement binding the parties. The 2nd Respondent filed a Motion on Notice alongside its Statement of Defense dated 10th June, 2015 contained at pages 355-376 of the Records of Appeal seeking an order to strike out the suit for misjoinder and failure to disclose reasonable cause of action.

The 3rd Respondent filed a Notice of Preliminary Objection dated 27th April, 2015 contained at pages 265-291 of the Records of Appeal seeking for an order dismissing and/or striking out the suit for reasons of incompetence and abuse of Court process. Also, the 4th and 5th Respondents jointly filed a Notice of Preliminary objection dated 7th May, 2015 found at pages 338-355 of the Records of Appeal seeking for an order dismissing and/or striking out the suit for failure to disclose reasonable cause of action and for want of jurisdiction.

The Appellant filed Counter-Affidavits against all the Motions and Preliminary Objections as found at pages 309-320; 414-450; 292-308 and 377-413 of the Records of Appeal. The 1st Respondent filed a Further-Affidavit on the 8th May, 2015 in support of its Motion as contained at pages 327-337 of the Records of Appeal; while the 3rd Respondent filed a Reply on Points of Law on 26th January, 2016 found at pages 463-467 of the Records of Appeal. The lower Court heard the applications and delivered its Ruling on the 18th day of October, 2016 contained at pages 468-476 of the Records of Appeal wherein the Court found in favour of the Respondents to the effect that the Appellant’s suit cannot be heard until reference has been made to arbitration and exhausted as contained in the agreement which is a condition precedent to its exercise of jurisdiction.

Peeved by the decision of the lower Court, the Appellant filed a Notice of Appeal dated 28th October, 2016, which is contained at pages 471-485 of the Record of Appeal. The Appellants’ Brief of Argument was settled by the Appellant in person and was filed on the 28th day of December, 2016 but deemed as properly filed and served on the 24th day of January, 2018. The 1st Respondent’s Brief on the other hand was filed on the 26th day of July, 2017 through learned counsel, Chinedum Umeche, Esq.; same was deemed as properly filed and served on the 24th day of January, 2018. The Appellant also filed a Reply to the 1st Respondent Brief on the 22nd day of December, 2017. The Reply Brief was deemed as properly filed and served on the 24th day of January, 2018. The 2nd-5th Respondents filed no Brief. Learned counsel for the Appellant formulated six (6) issues for determination, the issues are reproduced as follows:

1. Whether the trial Court breached the fair hearing right of the Appellant by its failure and/or refusal to consider all the issues brought before it for adjudication as contained in the processes filed by the Appellant.

2. Whether the trial Court’s failure to appreciate that in the circumstances of this instant case with so much bearing on the several issues therein that it is impracticable to resolve these issues by arbitration, the said issues having not been within the Appellant and the 1st and 2nd Respondents pursuant to Clause 9.3 of the Telecoms Private Equity Investment Agreement of May 21, 2008?

3. Whether the trial Court was right in refusing to follow the established principle of law as enunciated by the Supreme Court in the case of Obembe v. Wemabod Estate (1977) 5 SC 115 at 131 and K.S.U.D.B v. Fanz Ltd (1986) 5 NWLR (Pt. 39) pg.74 at 86 which is in tandem with the instant case and which is binding on the Court as per the principle of stare decisis.

4. Whether the trial Court was right to have ignored the S.5(2)(b) of the Arbitration and Conciliation Act and the decisions of M. V. Parnoms v. Olam (Nig.) Plc [2004] 5 NWLR (Pt. 865) Pg. 1 at 16, Paras. C – D and Uba v. Trident Consulting Limited [2013] 4 CLRN 119 which were cited to the Court by the Appellant.

5. Whether the trial Court was right to have held that there was no evidence of fraud at the preliminary stage without averting its mind to the Appellant’s Statement of Claim decision and the case of NIMASA v. ODEY (2013) LPELR-21402 (CA).

6. Whether the Honorable trial Judge erred in law when it failed to determine the other issues of jurisdiction raised by parties in this matter, and which have a direct bearing as to whether or not the matter as presently constituted can be referred to Arbitration or not.

The 1st Respondent equally nominated six (6) issues for determination also reproduced as follows:

1. Whether the lower Court breached the fair hearing right of the Appellant in respect of issues raised by the 2nd-5th Respondents when all parties were allowed equal opportunities?

2. Whether the lower Court was right when it held that the case presented by the Applicant was within the contemplation of the Arbitration Agreement contained in Clause 9.3 of the Telecoms Private Equity Investment Agreement of May 27, 2008?

3. Whether the lower Court ought to have followed the decisions in the cases of Obembe v. Wemabod Estate (1977) 5 SC 115 at 131 and K.S.U.D.B v. Fanz Ltd (1986) 5 NWLR (Pt. 39) Pg. 74 at 86 which are not relevant to the facts and circumstances of this case.

4. Was the lower Court right to have stayed proceedings in view of the provisions of Section 5(2)(b) of the Arbitration and Conciliation Act?

5. Whether the decision in the case of Nimasa v. Odey (2013) LPELR-21402 (CA) is relevant to the facts and circumstances of the present case in view of the Appellant’s averments in paragraphs 45 and 46 of his Statement of Claim filed at the lower Court?

6. Whether the lower Court was right to have decided the issue of reference to arbitration first, considering the duty/discretion of the lower Court under Section 5 of the Arbitration Act and Conciliation Act on reference to Arbitration and Stay of Proceedings pending Arbitration?

SUBMISSIONS OF COUNSEL

As already stated, the Appellant and the 1st Respondent both crafted six issues each for determination. I have carefully considered all these issues and I am of the undoubted view that the 1st Respondent’s issues are the same with the Appellant’s issues except for the terminologies employed to dilute the apparent similarities. I shall therefore consider the submissions of counsel on the issues and the reply. I must be quick to state that the 2nd-5th Respondents did not file any process in this appeal.

Before the substantive issues, learned counsel for the 1st Respondent raised and argued preliminary points essentially arising from the Appellant’s brief, the contention of the Appellant is that the lower Court failed or refused to decide some of the issues raised by the 2nd-5th Respondents and that the said 2nd-5th Respondents did not challenge the decision of the lower Court. Counsel submitted that the Appellant cannot complain on behalf of the 2nd-5th Respondents and therefore, this appeal is academic and that precious judicial time cannot be committed to answer academic questions.

Learned counsel further referred to paragraphs 45 and 46 of the Statement of Claim at pages 17-18 of the Records of Appeal to argue that the Appellant’s case at the lower Court was for alleged fraud and misrepresentation but that the Appellant changed its case to fraud alone in the Appellant’s Brief. Counsel referred to Agbeotu v. Brisibe [2005] 10 NWLR (Pt. 932) Pg. 1 at 19, 36 (CA) to argue that parties are bound by the records of the Court and that a party cannot change its case on appeal. Counsel further submitted that arguments contained in a party’s brief, no matter how brilliant, cannot substitute the Record of Appeal. Learned counsel further referred to a circular dated 26th May, 2017 and issued by the Chief Justice of Nigeria to the effect that heads of Courts should put measures in place to enforce arbitration agreements contained in commercial contracts.

In response to the foregoing preliminary argument, learned counsel for the Appellant submitted that the Appellant joined issues with the 2nd-5th Respondents at the lower Court. Counsel referred to Marine Management Associates Inc. & Anor v. National Maritime Authority (2012) LPELR-20618 (SC) pg. 27, paras. D – E and UNILORIN v. Akinola (2014) LPELR-23275 (SC) Pg. 36, paras. E-G and submitted that the 1st Respondent’s contention that it is only the 2nd-5th Respondents that can complain of breach of fair hearing is not the law and therefore not tenable.

I believe the argument canvassed by the learned counsel for the 1st Respondent here is unsustainable. It is definitely not disputed that the Appellants joined issues with the 2nd to 5th Respondents on the issues raised by the latter. As a result, the Appellant is not precluded from appealing on such issues or on the failure by the learned trial judge to consider and/or pronounce on the issues raised by the 2nd to 5th Respondent. I am in agreement with the Appellant that the contention of the 1st Respondent here is untenable and same is hereby discountenanced.

ISSUE ONE

On issue No. which is, “Whether the trial Court breached the fair hearing right of the Appellant by its failure and/or refusal to consider all the issues brought before it for adjudication as contained in the processes filed by the Appellant”, learned counsel for the Appellant referred to X.S. (Nig.) Ltd v. Taisei (2006) 15 NWLR (Pt. 1003) pg. 558, Paras. C-D and Ikechukwu v. F.R.N. & Ors (2015) LPELR-24445 (SC) Pg. 21-22, Paras. G-B to submit that it is the duty of trial Courts to pronounce on all issues raised or brought to their notice by the parties and not to restrict themselves to one or more issues which in their opinion disposes of the case. Counsel argued that the parties submitted several issues for determination before the lower Court but that the lower Court refused and/or failed and/or neglected to rule on issues joined between the Appellant and the 2nd, 3rd, 4th & 5th Respondents and only chose to determine the issues joined between the Appellant and the 1st Respondent.

Learned counsel argued that the lower Court totally failed to appreciate that there was no way the issue of stay of proceedings pending arbitration could have been determined judicially or judiciously without considering and determining the issue of joinder of parties, reasonable cause of action, abuse of Court processes and defective commencement of action which were all before the lower Court. Counsel further argued that the lower Court failed to consider the issues raised in the Appellant’s Written Address in response to the 1st Respondent’s Application for stay of proceedings and the facts contained in the Counter-Affidavits to the 2nd Respondent’s Motion and the 3rd and 4th & 5th Respondents’ Notices of preliminary objection.

Learned counsel cited Odetayo v. Bamidele (2007) Vol. 35 WRN pg. 1 it 5, Lines 5-10 (sc) and Obionwu & Ors v. I.N.E.C. (2013) LPELR-22573 (CA) Pg. 43-44, Paras. D-D to argue that the trial ourt should have considered the live issues before it. Counsel cited Bureau Of Public Enterprise v. Reinsurance Acquisition Group Ltd & Ors (2008) LPELR-8560 (CA) to which the lower Court was referred to on the issue of jurisdiction but ignored. Counsel referred to Nyesom v. Peterside & Ors (2016) LPELR-40036 (SC); APC & Ors v. In Re: CPC & Ors (2014) LPELR-24036 (SC) Pg. 55-55, Paras. D-E and concluded that the trial Court breached the Appellant’s right to fair hearing by ignoring and failing to consider and determine all the issues raised by the Appellant before it thereby occasioned a miscarriage of justice.

On this first issue, learned counsel for the 1st Respondent referred to S.C.E.N. v. Nwosu [2008] All FWLR (Pt. 413) pg. 1399 at 1421, paras. E-F (CA) to contend that the lower Court gave equal opportunity to all the parties to be heard on all the issues raised by all the Respondents and came to the conclusion at page 475 of the Records of Appeal that its jurisdiction to proceed with the matter was yet to be activated because of the failure of the Appellant to exhaust the dispute resolution mechanism agreed in the contract prior to the commencement of the suit.

Learned counsel relied on Egharevba v. F.R.N. (2016) LPELR-40045 (SC); Ikechukwu v. F.R.N. & Ors (Supra) to argue that as an exception to the general rule, a Court needs not pronounce on all issues where the pronouncement would negate the adjudicatory process, prejudice the process or pervert the cause of justice of the matter. Counsel reiterated that the trial Court did not deny the Appellant any fair hearing and that the lower Court having resolved that its jurisdiction was yet to be activated was not bound by the general rule of making pronouncement on all issues before it. Counsel urged this Court to resolve this issue in favor of the 1st Respondent against the Appellant.

Learned counsel for the Appellant in the Reply Brief reiterated his submissions under issue No. 1 in the Appellant’s Brief and further referred to Newswatch Communications Ltd v. Atta [2006] 4 SCNJ (Pt. 1003] Pg. 282 at 299-300 to argue that the trial Court breached the Appellant’s right to fair hearing by choosing to determine only the issues joined by the Appellant and 1st Respondent and neglecting the issues raised and joined by the Appellant and the other Respondents thereby visiting miscarriage of justice on the Appellant. Counsel referred to Akyen & Anor v . Mu’azu & Ors (2009) LPELR-3697 (CA) Pg. 49, Paras. B-F to submit that 1st Respondent in contending that the case of Ikechukwu v. F.R.N. & Ors (Supra) is inapplicable, the 1st Respondent has not denied the principle that a Court must pronounce on all issues raised by the parties before it which was the decision in Ikechukwu v. F.R.N. & Ors.

RESOLUTION

The law is well settled that every Court must consider and pronounce on all issues joined by the parties before it. See Irolo v. Uka (2002) 14 NWLR (Pt. 786) 195 at 225, paras. D-F, the Supreme Court of Nigeria held that:

“It is the duty of a Court, whether of first instance or appellate to consider all the issues that have been joined by parties and raised before it for determination. If the Court failed to do so, without a valid reason, then it has certainly failed in its duty; for in our judicial system, it is a fundamental principle of administration of justice that every Court has a duty to hear, determine and resolve such questions….”

In Okonji & Ors v. Njokanma & Ors (1991) LPELR-2476 (SC) the Court held that when a party submits an issue to the Court for determination, the Court must make a pronouncement on that issue except where the issue is subsumed into another issue. See also Bamgboye v. UNILORIN & Anor (1999) LPELR-737 (SC).

It was the contention of learned Counsel for the Appellant that the learned trial judge failed/neglected to pronounce on issues joined by the Appellant and the 2nd to 5th Respondents respectively but rather erroneously chose to consider and determine the issues joined between the Appellant and the 1st Respondent. The Appellant who was the Plaintiff filed this suit against the 1st-5th Respondents; all the Respondents filed differing objections challenging the competence of the Appellant’s suit. In his Ruling on the pending applications and objections, the learned trial Judge stated at page 473 that:

“The jurisdiction of the Court has been challenged in various forms. When the jurisdiction of a Court is challenged, the Court cannot proceed to make any order in this case until it has ruled on the issue of jurisdiction, one way or the other… in the circumstances of the various challenges, the most crucial is whether this matter should be referred to Arbitration or attended to by this Court.”

It is apparent that the learned trial judge adopted the approach of picking out the “most crucial” issue relating to the jurisdiction of the lower Court, which has been raised by the respective parties before it. The learned judge merely considered and pronounced upon the single issue relating to the question as to whether the matter before him should be referred to Arbitration or not, which is one of the several issues canvassed and argued by the parties before it, particularly the Appellant and the 1st Respondent. This approach is seemingly in conflict with the settled position of the law that a Court must consider and pronounce upon every issue properly placed before it for consideration and determination.

I must be quick to add that, the foregoing position permits certain recognized exception which have been accepted as constituting basis for doing away with the settled practice, let me start by inching into the decision in Udo v. Ekpo & Anor (2016) LPELR-41383 (CA), Where this Court held as follows and I quote:

“The general rule which is now settled is that a Court be it first or appellate, has a duty to consider all the issues pleaded before it. Howbeit, where it is of the view that a consideration of one issue is enough to dispose of the matter, the said Court is not under any obligation to consider all the other issues posed by the parties. See 7UP Bottling Coy Ltd v. Abiola & Sons Bottling Co. Ltd. (2001) 13 NWLR (Pt. 730) 469 at 499. Consequently, where a party submits an issue for determination, that Court must make a pronouncement on the issue except where the issue is subsumed in another and where that happens, there shall no longer be the necessity of making a separate pronouncement on the issue or issues subsumed….” (Underlining mine)

Where a Court determines that a consideration of a single issue can dispose of the matter, the Court is not bound by the general position of the law to consider and pronounce on every issue submitted to it by parties on record, the Court is also not bound to consider every issue where the other issues are adequately covered by a consideration of a single issue. See: Adebayo v. A-G, Ogun State (2008) LPELR-80 (SC) where the Supreme Court held that a Court must make a pronouncement on every issue properly before it “except where the issue is subsumed in another issue.” Here, while concluding on the sole issue being considered, the learned trial judge held at page 475 of the records of appeal that as long as the condition precedent was not fulfilled, “the Court cannot be said to have the jurisdiction and competence to examine the Appellant’s matter and all other applications before it.” I believe the Appellant’s counsel knows too well that without jurisdiction, the lower Court is stripped of the adjudicatory competence to consider and pronounce on any application. See Madukolu v. Nkemdilim (1962) LPELR-24023 (SC). Even though a Court is bound to consider all the issues properly before it, the failure to do so is not necessarily fatal to the judgment since the failure to do so had not occasioned a miscarriage of justice. In BAMAIYI v. STATE & ORS (2001) LPELR-731 (SC), the Supreme Court of Nigeria held as follows and I quote:

“Failure to consider and pronounce on all issues submitted to a Court or tribunal will not, per se, amount to a denial of a right to fair hearing having regard to the judicial decisions on the principle. In some cases, it may occasion failure of justice which amounts to denial of fair hearing and in others as is the case in the present proceedings, it will not….” See: also Okotie-Eboh v. Manager & Ors (2004) LPELR-2502 (SC).

There is nothing on record before us, particularly as it relates to the failure of the lower Court to pronounce on all the issues joined by the parties, showing that the failure has occasioned a miscarriage of justice. It is obviously of no relevance, considering the peculiar situation in the instant case, to expect the lower Court to pronounce on other issues, when it had already held the view that it does not have any jurisdiction to entertain the matter. To this extent therefore, this issue is resolved in favor of the 1st Respondent.

ISSUE TWO

On the second issue, which is, “Whether the trial Court’s failure to appreciate that in the circumstances of this instant case with so much bearing on the several issues therein that it is impracticable to resolve these issues by arbitration, the said issues having not been within the Appellant and the 1st and 2nd Respondents pursuant to Clause 9.3 of the Telecoms Private Equity Investment Agreement of May 21, 2008?” Learned counsel placed reliance on Nika Fishing Co. Ltd v. Lavina Corporation [2008] 16 NWLR (Pt. 114) 509 and Halilu Akilu v. Chief Gani Fawehinmi (No. 2) [1989] NWLR (Pt. 102) 122 to submit that an application for stay of proceedings is not granted as a matter of course; but that the applicant must place before the Court sufficient grounds that will sway the exercise of the Court’s discretion in its direction. Counsel argued that arbitration agreement is usually bilateral and therefore, arbitration proceedings under one contract cannot, without agreement of the parties, be used to resolve disputes under another contract nor can a third party make himself a party to an arbitration.

Learned counsel referred to Lignes Aeriennes Congolaises v. Air Atlantic Nigeria Limited [2006] 2 NWLR (Pt. 903) pg. 49; N.V. Scheep v. MV’S Araz [2000] 15 ( t. 691) Pg, 22; Obembe v. Wemabod Estate [1977] 5 SC 15 at 131 and K.S.U.D.B. v. FANZ LTD (1986) 5 NWLR (Pt. 39) Pg.74 at 86-87, Paras. C-D to submit that an arbitration clause does not oust the jurisdiction of the Court or prevent parties from having recourse to the Court. Counsel relied on Ogunwale v. Syrian Arab Republic [2002] 9 NWLR (Pt. 771) Pg. 127 to submit that not all the issues between the parties herein can be determined by arbitration because most of the reliefs being sought by the Appellant in this matter are equitable reliefs which only the trial Court can hear and determine.

Learned counsel for the Appellant also referred to Section 5(2)(b) of the Arbitration Act; M.V. Parnoms By v. Olam (Nig.) Plc [2004] 5 NWLR (Pt. 865) Pg. 1 at 16, Paras. C-D to submit that parties seeking Stay of proceedings pending arbitration are enjoined to commence or initiate the arbitral process before making the application for Stay to the Court and that the 1st Respondent in the instant case had opportunity to initiate the arbitration proceedings but failed to do so. Counsel further referred to Mouktar Mohammed & Usman Dantata Jnr. (2012) 11 NWLR (Pt. 1310) Pg. 47-48,

Paras. H-A to contend and urge this Court to hold that the 3rd, 4th & 5th Respondents, not being parties thereto, are not privy to the Agreement dated 21st May, 2008 between the 1st Respondent; 2nd Respondent and the Appellant.

Learned counsel further submitted that fraud was pleaded with particulars in the instant case and therefore, it cannot be within the contemplation of the Arbitration agreement. Counsel cited J. Export & Chemical Company Ltd v. Kaduna Refining & Petro-Chemical Company Ltd (2002) LPELR-12175 (CA) and urged this Court to resolve this issue in favor of the Appellant.

On this second issue, learned counsel for the 1st Respondent submitted that the Appellant did not deny the Agreement and the fact that parties agreed to be bound by arbitration. Counsel submitted that the Appellant and the 1st-3rd Respondents are bound by the arbitration clause in the agreement dated 21st May, 2008 and that there is no mutually exclusive claim against the 4th & 5th Respondents. Learned counsel submitted that the use of the word fraud in the context of this case does not refer to any criminal offence and that a civil claim does not automatically transform into criminal proceedings incapable of being resolved by arbitration merely because a party made an allegation of fraud, whether rightly or wrongly.

Learned counsel submitted that the case of Okoli v. Morecab Finance (Nig.) Ltd (Supra) does not support the Appellant, the present suit which is not a criminal case and that the allegation of fraud made by the Appellant at the lower Court is that of contractual or civil impropriety which is capable of being resolved in line with the agreement of the parties. Counsel placed reliance on the case of A Ayyasamy v. A Paramasivam & Ors (CA Nos. 8245-8245 OF 2016) decided by the Supreme Court of India where it was held that allegations of fraud are no impediments for arbitration proceedings unless the allegation is very serious in nature or in relation to the arbitration agreement itself. Learned counsel submitted that Ogunwale v. Syrian Arab Republic (Supra) and J. Export & Chemical Company Ltd v. Kaduna Refining & Petro-Chemical Company Ltd (Supra) do not support the case of the Appellant and that the lower Court was right to have held that the case presented by the Appellant was within the contemplation of the arbitration agreement. Counsel urged this Court to resolve this issue in favor of the 1st Respondent against the Appellant.

The response of learned counsel to the Appellant on the second issue is that contrary to the Respondent’s contention, the Appellant had specific claims against the 4th & 5th Respondents as contained at paragraphs J, U and V at pages 3-4 of the Records of Appeal. Learned counsel further referred to Umanah v. Attah [2006] 17 NWLR (Pt. 1009) Pg. 503 to submit that the 1st Respondent did not deny the issue of fraud and/or fraudulent misrepresentation raised by the Appellant and that fraud is fraud whether in civil or criminal proceeding as long as it is pleaded and particulars of the said fraud are furnished as done in the instant case at pages 310-311 of the Records of Appeal.

Learned counsel for the Appellant further submitted that the instant case is not to be determined by arbitration and that the lower Court has a duty to determine the allegation of crime. Counsel argued and referred to A Ayyasamy v. A Paramasivam & Ors (Supra) to contend that the Appellant can bring action not only against parties to the Agreement dated 21st May, 2008 but also against all persons in the world. Learned counsel referred to pages 7- 24 of the Records of Appeal to submit that the allegation of crime against the 1st Respondent goes to the root of the Agreement dated 21st May, 2008 and involves several thousands of dollars and voluminous evidence and therefore essential for a Court to determine the said issue. Counsel again referred to Ogunwale v. Syrian Arab Republic (Supra) and J. Export & Chemical Company Ltd v. Kaduna Refining & Petro-Chemical Company Ltd (Supra).

RESOLUTION

The plank of the Appellant’s submission under this issue is that the subject matter giving rise to the present appeal does not fall within matters that should be subject to arbitration, on the ground that issues before the Court involve more than one party and that fraud is alleged by the Appellant in his statement of claim.

It is undisputed that before a matter can be referred to arbitration, same must first be seen to be arbitrable. The dispute must not relate or cover matters which by law, are not permitted to be settled by other dispute resolution mechanisms other than in Court, the Arbitration and Conciliation Act, Cap A18, does not demarcate between disputes that are arbitrable or otherwise, it has however been judicially recognized as a matter of public policy that matters relating to crime, matrimonial causes, winding up of a company or bankruptcy are of such nature that cannot be settled by arbitration. See: BCC Tropical (Nig.) Ltd v. Government Of Yobe State Of Nigeria & Anor (2011) LPELR-9230 (CA).

As the argument of the counsel in this appeal shows, arbitrability of fraud is one of the contentious issues in arbitration, particularly as it involves questions of what type of issue can and cannot be submitted to arbitration. It has always been the case that where fraud and serious malpractices are alleged in a dispute, same cannot be referred to an arbitrator for resolution. The jurisdiction of the regular Court on this issue is iron-clad, as fraud, financial malpractice and collusion are allegations with criminal consequences and therefore reserved for the Courts, and an arbitral tribunal, being a creature of contract, is not endowed with general and wide jurisdiction, bestowed upon regular Courts, which are equipped to adjudicate in complex issues and are competent to offer wider range of reliefs to the parties in dispute. See: Alipak Banerjee & Vyapak Desai on “Is Fraud Open To Arbitration.”

In the instant appeal, it is undisputed that the Appellant pleaded fraud with the particulars thereof, particularly at paragraph 45 of the Appellant’s Statement of Claim alleging that the 1st Respondent’s Telecoms Private Equity Fund Investment Agreement is a Ponzi Scheme and an instrument of fraud, used by the Respondents to defraud unsuspecting Nigerians including the Appellant. It is in this regard that the Appellant sought a declaration that the 1st Respondent’s Telecom Private Equity Fund is a Ponzi Scheme used by the 1st Respondent to defraud the Appellant. Appellant holds the view that the issue of fraud alleged in the instant case cannot be resolved by arbitration. The learned Counsel for the 1st Respondent contended otherwise that the principal claim of the Appellant is for breach of Agreement and that the use of “fraud” by the Appellant in this case does not refer to any form of criminal offence, but is at best contractual misrepresentation.

I am not aware of any decision of the Superior Courts in this country where the instant issue was considered and pronounced upon. I therefore take solace in decisions in other jurisdictions, which though are of persuasive authority, but are nevertheless applicable to the issues herein. See the decisions in Swiss Timing Ltd v. Organising Committee, Common Wealth Games 2010 (2014) 6 SCC 677; World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) PTE Ltd in Civil Appeal No. 895 of 2014.

In World Sport Group (Mauritius) Ltd (Supra), the parties entered into a partnership deed on 1st April 1994 for running a hotel. While the Appellant was entrusted with administration, the Respondents alleged that the Appellant had failed to make regular deposits of money into the common operating bank account and had fraudulently siphoned off an amount of INR 10,00,050. In a separate raid conducted by the Law Enforcement Agents (CBI) on premises of the Appellant’s relative, an amount of INR 45,00,000 was seized and alleged to have been given by the Appellant for business of the hotel. The Respondents filed a civil suit seeking right of administration of the hotel. The Appellant sought reference of the dispute to arbitration under Indian Arbitration Act. The High Court rejected the Appellant’s application on the ground that the dispute involved allegations of fraud. Aggrieved by the decision, the Appellant preferred an appeal before the Supreme Court. It was the contention of the Respondents in that case, just as the one before this Court that, where allegations of fraud are involved civil Courts are the appropriate forum for adjudication. The Supreme Court of India rejected the general notion that elements of criminal wrongdoing detracted from the jurisdiction of arbitral tribunal. Referring to the Indian Arbitration Legislation and the New York Convention, the Court considered that the allegations of fraud did not impact on the validity of the arbitration agreement; the fact that fraud was alleged did not render the agreement inoperative or incapable of being performed.

The foregoing decisions of the Indian Supreme Court are instructive and I must say the reasoning therein is compelling. It is my view, that to accept the Appellant’s contention to the effect that arbitration should be shut out, merely on the basis of allegation of fraud, which has not been subject to proof, would undoubtedly destroy the very purpose for which the parties had agreed by contract to submit to arbitration. In as much as the allegation of fraud does not relate to the validity of the substantive contract, which is even separable from the Arbitration clause, I am of the opinion that the Court ought to act with caution and circumspection as the allegations of fraud in the circumstances of this case, can be duly considered by an Arbitrator or Arbitral Tribunal. The allegation of fraud by the Appellant herein is not directed, at the arbitration agreement, thereby impeaching same and the resultant arbitration, nor is it directed at the main contract; I am therefore unable to accept the submissions of learned Counsel for the Appellant that mere allegation of fraud renders the dispute herein un-arbitrable.

I am mindful of the fact that Appellant relied on the decision of this Court in B. J. Export & Chemical Company Ltd v. Kaduna Refining & Petro-Chemical Company Ltd (Supra), particularly the dictum of MOHAMMED, JCA at page 36, paras. B-G; thus:

“It is trite that the disputes which the subject of an arbitration agreement must be arbitrable. In other words, the agreement must not cover matters which by the law of the State are not allowed to be settled privately or by arbitration usually because this will be contrary to the public policy. Thus, a criminal matter, like the allegation of fraud raised by the Respondent in this case, does not admit of settlement by arbitration as was clearly stated by the Supreme Court in Kano State Urban Development Board v. Fanz Construction Ltd. (1990) 4 NWLR (Pt. 142) 1 at 32-33. This position of the law appears to have been further stated under the Arbitration and Conciliation Act, CAP 19 Laws of Federation….”

I must say that decision of this Court in the above case is inapplicable to the instant case. The dispute between the parties in that case arose out of an agreement entered between the parties by which the Appellant hired four ISO Tanks from the Respondent for shipment of petroleum products on a rental charge of N10,000.00 for each tank for a period of 8 weeks. The Appellant took delivery of the tanks and used same to ship petroleum products to Europe. At the expiry of the 8 weeks period of lease of the tanks, the Appellant failed to return them to the Respondent as agreed.

When the Respondent demanded for the return of the tanks, the Appellants attributed its failure to return same to the uncertainty in the political situation in Nigeria, due to the crisis relating to the June 12, 1993 election, and subsequently the industrial action at the Lagos Port but finally returned them in September 1993 in clean condition along with the payment of N80,000.00 rental charges. However, nearly three months thereafter, the Appellant raised problems encountered with the tanks by its Agent in Europe who claimed the sum of $85,016.00 from the Respondent being alleged expenses incurred on account of unsuitability of the tanks, etc. When the Appellant’s claim was resisted by the Respondent, the Appellant proposed the appointment of an arbitrator to resolve the dispute and this was accepted by the Respondent, whereupon the parties jointly appointed the arbitrator. When the parties appeared before the arbitrator, instead of the earlier claim of $85,016.00, the Appellant filed a claim of $400,000.00 before the arbitrator. Rather than responding to the Appellant’s claim before the Arbitrator, the Respondent commenced an action before the Kaduna State High Court vide an Originating Summons seeking (1) A declaration that the Appellant’s claim against the Respondent upon which reference was made to the Arbitrator is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement; and (2) Leave to revoke the arbitration agreement and the arbitrator’s authority upon the said ground.

It is obvious the situation and circumstance of the instant case are not consistent with the one in B. J. Export & Chemical Company Ltd where the Respondent’s allegation of fraud goes to the root of the Arbitration Agreement. In the instant case, it does not and I am therefore unable to reach similar conclusion as reached by this Court therein. At any rate, the ratio in that case supports the position earlier expressed that where the allegation of fraud affects the validity of the substantive contract and/or the Arbitration Agreement, same cannot be determined by an Arbitrator; only regular Courts have jurisdiction to consider and pronounce on such issue. In the instant case, the allegation of fraud does not affect or relate to the validity or otherwise of the contract between the parties or the Arbitration Agreement; therefore the reasoning expressed in decision of this Court in B.J. Export & Chemical Company Ltd cannot be adopted here, where the allegation of fraud is in relation to the performance of obligations under the contract. In that case, the allegation of fraud affects the contract, or at best, the arbitration agreement and goes to the root of the relationship between the parties. The position of the law stated by this Court in the said case remains potent but qualified to the effect only the Court can adjudicate on allegation of fraud which affects the validity of an arbitration agreement.

The other question under this issue relates to the Appellant’s contention that since the parties in the instant suit are more than two, the dispute cannot be arbitrable.

The Appellant copiously referred to the view expressed by the learned authors, J. O. Orojo and M. A. Ajomo, “Law and Practice of Arbitration and Conciliation in Nigeria”, Lagos: 1999, 62 that “as a general rule, there are two parties to an arbitration since an arbitration agreement is usually bilateral and so an arbitration proceeding under one contract cannot, without agreement of the parties, be used to resolve disputes under another contract. Nor can a third party make himself a party to that arbitration.”

I must say that the Appellant’s argument on this ground is misconceived. From the submissions made by the Appellant, it is conceded that there can be more than one party to an arbitration proceedings emanating under one contract, in so far as the parties involved consent to submit to arbitration. There is nothing on record showing that the parties concerned do (or will) not consent to arbitration. It is speculative to say the least.

I am in agreement with the learned counsel for the 1st Respondent that the pivotal dispute as apparent from the reliefs sought by the Appellant herein, is between the Appellant and the 1st to 3rd Respondents. As a matter of fact, the reliefs sought against the 4th and 5th Respondents, who are not parties to the arbitration agreement nor agents or privies of the parties thereto, are consequential and ancillary to the principal reliefs sought by the Appellant. As a matter of fact, Reliefs J, Q and U are declaratory and injunctive reliefs geared towards invalidating the contract purportedly executed by the 1st to 5th Respondents, towards changing the “character and form of the Appellant’s investment in the MTN Linked Unit.” These reliefs are undoubtedly hinged on the principal claim sought by the Appellant. The only conclusion is that the addition or status of the 4th and 5th Respondent is insufficient to warrant the conclusion urged on us by the Appellant. Appellant’s argument on this issue is therefore misconceived. This issue is resolved in favor of the 1st Respondent.

ISSUE THREE

The third issue is “Whether the trial Court was right in refusing to follow the established principle of law as enunciated by the Supreme Court in the case of Obembe v. Wemabod Estate (1977) 5 SC 115 at 137 and K.S.U.D.B. v. Fanz Ltd (1986) 5 NWLR (Pt. 39) Pg. 74 at 86 which is in tandem with the instant case and which is binding on the Court as per the principle of stare decisis”; On this issue, learned counsel referred to Chukwuma Ogwe & Anor v. I.G. Of Police & Ors (2015) LPELR-24322 (SC) Pg. 17-18, Paras. C-A and Pg. 24-25, Paras. F-C; L.A.C. v. A.A.N. Ltd [2006] 2 NWLR (Pt. 963) Pg. 49 where the cases of N.V. Scheep v. MV’S Araz (Supra); Obembe v. Wemabod Estate (Supra) and K.S.U.D.B v. Fanz Ltd (Supra) were relied upon. Counsel argued that contrary to the principle of stare decisis, the trial Court refused to be bound by these authorities which were brought before it without any reason for its departure from the established principle of law as stated in the referred authorities.

Learned counsel submitted that the lower Court failed to appreciate that the reliefs sought by the Appellant include declarative equitable reliefs which an arbitrator cannot grant. Counsel urged this Court to resolve this issue in favor of the Appellant.

On issue No. 3 learned counsel for the 1st Respondent relied on Yampa & Ors v. Babareke & Anor (2015) LPELR-41212 (CA) to argue that the principle of stare decisis does not imply that a Court must apply the decision of the higher Court in the previous case to the case before it where the two cases do not have common underlying attributes and factual basis. Counsel argued that the cases of Obembe v. Wemabod Estate (1977) 5 SC 15 at 131 and K.S.U.D.B. v. Fanz Ltd [1986] 5 NWLR (Pt. 39) Pg. 74 at 86-87, Paras. C-D relied on by the Appellants were cited out of context and in a manner that is completely irrelevant to the facts and circumstances of the present case.

Counsel argued further that unlike the facts in Obembe v. Wemabod Estate (Supra) and K.S.U.D.B. v. Fanz Ltd (Supra), the 1st Respondent in the instant case had not taken any step in the proceedings at the lower Court before filing its application for stay of proceedings. It was further argued by learned counsel for the 1st Respondent that the lower Court did not make any decision that its jurisdiction was ousted by the arbitration agreement. Counsel urged this Court to resolve this issue in favor of the 1st Respondent against the Appellant.

The learned counsel for the Appellant in the Reply Brief referred to Akyen & Anor v. Mu’azu & Ors. (2009) (Supra) to submit that the facts in a case relied upon need not be the same where there exists a situation where the principle in the former case can be applied in the latter. Counsel argued that the principles of law in Obembe v. Wemabod Estate (Supra) and K.S.U.D.B v. Fanz Ltd (Supra) are relevant to and apply to the instant case. Learned counsel referred to pages 1-199 of the Additional Records of Appeal to submit that contrary to the 1st Respondent’s submission, the 2nd Respondent filed processes and joined issues with the Appellant at the lower Court thereby severing the arbitration agreement by submitting to the jurisdiction of the lower Court. Counsel cited Gamji Ferti Izer Company Ltd & Anor v. France Appro (2016) LPELR-41245 (CA) Pg.25-17, Paras. F-F and submitted that arbitration is not suitable for a multi-party proceedings as this.

RESOLUTION

It is a cardinal principle of law under the doctrine of stare decisis that every inferior Court is bound by the decision of a Superior Court; and it is not the place of an inferior Court to say that the decision of the Superior Court was wrongly decided. See: N.E.P.A. v. Onah (1997) LPELR-1959 (SC); PDP v. Oranezi (2017) LPELR-43471 (SC). It must be said however that, by the doctrine of stare decisis, inferior Courts are only mandated to follow previous decisions of Superior Courts where the case before them involves similar facts or issues. See: Anekwe v. State (2014) LPELR-22881 (SC). The Supreme Court of Nigeria stated the settled position of the law regarding the meaning and nature of stare decisis in Adetoun Oladeji (Nig.) Ltd v. Nigerian Breweries Plc (2007) LPELR-150 (SC), where TOBI, JSC (of blessed memory) said:

“Factual distinctions or differences in cases only avail a party when they are germane or material to the stare decisis of the case. I say this because stare decisis which means to abide or adhere to decided cases, as policy of Courts to stand by precedent is based on a certain state of facts which are substantially the same and here the word is substantially. This means that the facts that give rise to the principle of stare decisis are material facts, devoid of or without the unimportant details. This also means that the facts need not be on all fours in the sense of exactness or exactitude… One major criterion in the determination of the matter is that the facts of the previous case are major, substantial and material to the facts of the current case begging for the application of the previous case. Before the application of the previous case, the Judge should ask a question: Could the Court have arrived at the decision but for particular facts or could the Court have arrived at a different decision in the absence of the particular facts? An unequivocal answer to the above double barrel question will pave the way for the applicability or inapplicability of the doctrine….”

The grievance of the Appellant under this issue is that the learned trial judge refused to follow the decisions in Obembe v. Wemabod Estate (Supra) and K.S.U.D.B. v. Fanz Ltd (supra) and I must say that the Appellant’s complaint is unfounded having had the benefit of studying the decisions referenced. In Obembe, the Supreme Court, per FATAYI-WILLIAMS, JSC held as follows:

“As we have pointed out earlier, any agreement to submit a dispute to arbitration, such as the one referred to above, does not oust the jurisdiction of the Court. Therefore, either party to such an agreement may, before a submission to arbitration or an award is made, commence legal proceedings in respect of any claim or cause of action included in the submission. At common law, the Court has no jurisdiction to stay such proceedings. Where, however, there is provision in the agreement, as in Exhibit 3, for submission to arbitration, the Court had jurisdiction to stay proceedings by virtue of its power under Section 5 of the Arbitration Act (Cap 73 of the Laws of the Federation)…

No stay was asked for by the defendants/Respondents after they were served with the writ of summons. On the contrary, they accepted service of the statement of claim, filed their own statement of defence, testified in their defence and took part in the proceedings until judgment was delivered. In order to get a stay, a party to o submission must have taken NO step in the proceedings. A party who makes any application whatsoever to the Court, even though it be merely an application for extension of time takes a step in the proceedings. Delivery of a statement of defence is also a step in the proceedings… Moreover, if the Court has refused to stay an action, or if the defendant has abstained, as in the case in hand, from asking it to do so, the Court has seizing of the dispute, and it is by its decision and by its decision alone, that the right of the parties are settled….”

In K.S.U.D.B. (Supra), the Supreme Court similarly held as follows:

“Both the decision in Doleman & Sons v. Ossett Corporation (supra) and that of this Court Obembe v. Wemabod Estates Ltd. (supra) recognize it that the Court alone has not only the jurisdiction but also the duty to settle the dispute between the parties if called upon to do so. These cases also recognize it that under the relevant section of the arbitration law, upon the application of the defendant to an action brought in breach of agreement to proceed by arbitration the Court has power to stay the proceedings. In other words, under the provisions of the Arbitration law, the Court had power to refuse to entertain proceedings brought before it in breach of an agreement to decide the matter by arbitration. However the defendant is not given by the law a carte blanche as to when to apply for the stay of proceedings….”

Learned Counsel for the 1st Respondent argued that the decision in the case under reference is not relevant to the facts of the case at hand, and I agree with learned counsel. In the instant case, the learned trial judge held at pages 474 to 475 of the Records of Appeal as follows and I quote:

“I have examined the claim put forward by the Plaintiff which was commenced by Writ of Summons asking the Court to enforce all the Terms set out in the Telecoms Private Equity Fund Investment Agreement dated 21st of August, 2008. Amongst other reliefs sought is for the Court to hold that the 2nd Defendant is a party to the said agreement. Definitely from the reliefs sought a dispute has occurred.

I found from the claim that the Plaintiff acknowledges the agreement entered into and in particular when he sought that the 2nd Defendant should be declared a party to the agreement. He believes that the 3rd, 4th and 5th Defendants have one thing or the other to do with the transaction which he entered into with the 1st Defendant.

An Arbitration clause where embedded in a document voluntarily entered into by parties must of necessity be honored in good faith in the absence of fraud or mistake. The Court must not engage in rewriting agreement for parties…

I believe that once an arbitration clause is retained in a contract which is valid and subsisting and the dispute is within the contemplation of the Clause, the Court should give regard to the contract by enforcing the Arbitration Clause….

In the present case if the Plaintiff is not happy with the outcome of the Agreement he ought to have gone to Arbitration and exhaust all the mechanism put in place within the Agreement before approaching…

Failure to do so tantamount to not fulfilling the condition precedent to adjudication.

As long as this situation exists the Court cannot be said to have the jurisdiction and competence to examine this matter and all other applications before it…”

I am unable to, in the peculiar circumstances of the instant case, hold the view that the learned trial judge failed to follow the decision of the Supreme Court referred to by the Appellant. It is undisputed that contrary to the situation in OBEMBE, the 1st Respondent herein sought for an order for stay of proceedings pending arbitration. From the records before us, it ought not be disputed that the 1st Respondent had taken no step in the proceedings in the suit at the lower Court. In the Appellant’s Reply, it was submitted that the 2nd Respondent filed several processes and joined issues with the Appellant and these steps taken by the 2nd Respondent amount to submitting to the jurisdiction of the lower Court.

Granted that it is obvious that the 2nd Respondent had taken steps in the proceedings at the lower Court, and is therefore precluded from enjoying the privilege of being granted an order of stay pending arbitration, pursuant to Section 5 of the Arbitration and Conciliation Act, I am unable to accept the submissions of the Appellant that the steps taken by the 2nd Respondent amount to submission to the jurisdiction of the lower court by the other parties, or the 1st Respondent herein in particular. The decision of the Supreme Court is clear on the position that it is only a party who has taken a step in the proceedings in Court that is estopped from asking the Court for a stay to refer the matter to arbitration in accordance with Section 5(1) of the Arbitration and Conciliation Act. Here, it will be unconscionable and therefore wrong to ascribe the steps taken by the 2nd Respondent with respect to the proceedings as those of the 1st Respondent, as the Appellant has urged. The record bear witness, the Appellant conceded that the 1st Respondent had taken no step in the proceedings at the lower Court. This is sufficient on this issue as it relates to Section 5(1) of the Arbitration and Conciliation Act.

Nevertheless, it is certainly also not the contention of the Appellant that the learned trial judge erred when she held that, considering the circumstances of the instant case, where parties have by agreement agreed to arbitrate any dispute arising from the contract executed by them, recourse to arbitration is a condition precedent to the exercise of the jurisdiction of the Court. Arbitration clause is not a magic wand used to forestall the exercise of jurisdiction of the Court; rather it is only a mechanism built into a contract to enable the parties, in the event of dispute, to first explore the option of settling same out of Court failing which they can proceed to Court. See: Messrs NV Scheep v. MV’S Araz (2000) 12 SC (Pt. 10) 154 at 213 where it was held:

“In any event, the arbitration clause did not seek to oust the jurisdiction of the Court as all it did was to allow parties the avenue and possibilities of settling disputes amicably out of Court. The position of the law is that an arbitration clause in agreement generally does not oust the jurisdiction of the Court or prevent the parties from having recourse to the Court in respect of dispute arising therefore. A party to an agreement with an arbitration clause has the option to either submit to arbitration or to have the dispute decided by the Court….”

Therefore, the reasoning of the learned trial judge earlier reproduced does not in my view, run contrary to the decision in Obembe (Supra). Appellant’s submission on this issue is therefore misconceived. This issue is therefore resolved in favor of the Respondent.

ISSUE FOUR

Issues No. 4 is “Whether the trial Court was right to have ignored the S.5 (2) (b) of the Arbitration and Conciliation Act and the decisions of M.V. Parnoms Bay v. Olam (Nig.) Plc (2004) 5 NWLR (Pt. 865) Pg. 1 at 16, Paras. C-D and UBA v. Trident Consulting Limited [2013] 4 CLRN 119 which were cited to the Court by the Appellant”; Under this issue, counsel for the Appellant argued that the lower Court refused to be bound by the decision in the case of UBA v. Trident Consulting Limited (2013) 4 CLRN 119 which was also brought before it without any reason for its refusal to be bound by the authority. Counsel again referred to Section 5(2)(b) of the Arbitration Act; M.V. Parnoms Bay v. Olam (Nig.) Plc (Supra) to submit that parties seeking Stay of proceedings pending arbitration are enjoined to commence or initiate the arbitral process before making the application for Stay to the Court and that the lower Court ought not to have granted the 1st Respondent’s Application for stay of proceedings pending arbitration because the 1st Respondent failed to show by its affidavit evidence that it had commenced the arbitral process in compliance with Section 5(2)(b) of the Arbitration Act. Learned counsel referred to Dr. Erastus Akingbola v. F.R.N. & Anor (2014) LPELR-24258 (CA) Pg. 43-44, Paras. D-D to submit that the lower Court against the principle of stare decisis, refused without any reason to be bound by the decisions of this Court and the Apex Court cited before it in the instant case.

On issue No. 4, learned counsel for the 1st Respondent referred to Section 5(2)(b) of the Arbitration and Conciliation Act; paragraph 8 of the Affidavit in support of the 1st Respondent’s Application for Stay of proceedings at page 259 of the Records and the Appellant’s Counter-Affidavit filed at page 309-311 of the Records of Appeal. Counsel then relied on Alhaji Mujahid Dokubo-Asari v. F.R.N. (2007) LPELR-958 (SC); Adesina v. Osogbo (1996) 4 SCNJ 111; A.G. Anambra State v. Okeke [2002] 5 SC (Pt. II) Pg.58 and Stephen Lawson-Jack v. The Shell Petroleum Development Company Of Nigeria Ltd. (2002) 7 SC (Pt. II) Pg. 112 to submit that facts not controverted are deemed admitted and that the Appellant did not controvert the 1st Respondent’s willingness to participate in the arbitration proceeding.

Learned counsel submitted that the Appellant cannot be heard to argue on appeal that the 1st Respondent did not fulfill the condition under Section 5(2)(b) of the Arbitration and Conciliation Act. Counsel argued that the cases of M.V. Parnomos Bay v. Olam (Nig.) Plc (Supra) and UBA v. Trident Consulting Limited (Supra) are different from the present case wherein the willingness of the 1st Respondent is not in issue. Counsel further submitted that this Court overruled the decision in M.V.
Parnomos Bay v. Olam (Nig.) Plc (Supra) in the latter decision in Onward Enterprises Limited v. MV “Matrix” & Ors (2008) LPELR-4789 (CA) Pg. 29-30, Paras. D-C. Learned counsel urged this Court to hold that the Appellant’s argument that the 1st Respondent failed to comply Section 5(2)(b) of the Arbitration and Conciliation Act or should have initiated the arbitration process is an afterthought. Counsel further urged this Court to resolve this issue in favor of the 1st Respondent favour and against the Appellant.

On issue No. 4, learned counsel for the Appellant in the Reply Brief submitted that the provisions of Section 5(2)(b) of the Arbitration Act was affirmed in the cases of M.V. Parnomos Bay v. Olam (Nig.) Plc (Supra) and UBA v. Trident Consulting Limited (Supra) and therefore binding on the parties and the Court. Counsel argued that he 1st Respondent failed to fulfill the condition precedent to an order for Stay of proceedings pending arbitration. Learned counsel argued that there is no conflict between the decisions in M.V. Parnomos Bay v. Olam (Nig.) Plc (Supra) and Onward Enterprises Limited v. MV “Matrix” & Ors (Supra).

Learned counsel for the Appellant further submitted that the Appellant argued in the Written Address in opposition to the Application for Stay before the trial Court at page 316 of the Records of Appeal that the 1st Respondent failed to comply with the provisions of Section 5(2)(b) of the Arbitration and Conciliation Act and therefore similar submission in the Appellant’s Brief is not an after thought as argued by the 1st Respondent. Counsel cited Sifax Nigeria Ltd & Ors v. Migfo Nigeria Ltd & Anor (2015) LPELR-24655 (CA) to submit that the trial Court should have considered all the issues placed before it. Learned counsel urged this Court to discountenance the submissions of the 1st Respondent on this issue.

RESOLUTION

Under this issue Appellant’s complain is that the learned trial judge ignored the provisions Section 5(2) of the Arbitration and Conciliation Act as well as the decisions in M.V. Parnomos Bay v. Olam (Nig.) Plc (Supra) and UBA v. Trident Consulting Limited (Supra). Section 5 of the Arbitration and Conciliation Act reads as follows:

(1) If any party to an arbitration agreement commences any action in any Court with respect to any matter which is the subject of an arbitration agreement, any party to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay the proceedings.

(2) A Court to which an application is made under Subsection (1) of this section may, if it is satisfied –
(a) That there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and

(b) That the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, make an order staying the proceedings.”

The power donated to the lower Court under the above section is no doubt discretionary and with all the discretionary powers, the appellate Court is always loath to interfere with the way a Court exercises its discretion unless where the discretion was wrongly exercised; or tainted with some irregularity, or in other instances where the Court sees any reason to interfere with same. See UNILAG v. Aigoro (1985) 1 NWLR (Pt. 1) 143; Ajuwa & Anor v . SPDC Nig . Ltd (2011) LPELR-8243 (SC). It must therefore be stated that the competing rights of the parties to justice in the case must be considered; where such exercise of discretion is motivated by some ulterior considerations in favor of an applicant without adequately taking into account the Respondent’s equal right, the discretion will not be said to have been judicially and judiciously exercised. See N.N.P.C. v. Famfa Oil Ltd & Anor (2009) LPELR-2023 (SC).

As I earlier stated, it is the Appellant’s complaint that the learned trial judge ignored the provisions of Section 5(2) of the Arbitration and Conciliation Act in reaching the conclusion that the suit be stayed pending reference to arbitration. Clearly, the purport of Section 5(2) is that a Court may make an order staying proceedings if it is satisfied that there is no sufficient reason(s) why the matter should not be referred to arbitration and that the Applicant was at the time when the action was commenced, willing and ready to do all things necessary for the conduct of the arbitration.

Appellant cited the decision in M.V. Panormos-Bay v. Olam (Nig.) Plc (Supra) where this Court, per GALADIMA, JCA (as he then was) held that it is the party praying for arbitration as an ‘applicant’ that has the duty to comply with Section 5(2)(b) of the Act by commencing the proceedings. To the contrary, it is the contention of learned Counsel for the 1st Respondent that the decision in that case was overruled by this Court in Onward Enterprises Limited v. MV. “Matrix” & Ors (2008) LPELR-4789 (CA) at Pages 29 to 30, Paras. D to C, where this Court, per MSHELIA, JCA held:

“… It is a basic principle of law that where parties to a contract have under the terms thereof agreed to submit to arbitration if there is any dispute arising from the contract between them a defendant who has not taken any steps in the proceedings commenced by the other party, may apply to the Court for stay of proceedings of the action to enable parties to go to arbitration as contracted.

Once an arbitration clause is retained in a contract which is valid and the dispute is within the contemplation of the clause, the Court should give regard to the contract by enforcing the arbitration clause… It is therefore the general policy of the Court to hold parties to the bargain into which they had entered unless there was a strong, compelling and justifiable reason to hold otherwise or interfere. In the instant case, Appellant who had the onus to advance compelling reason as to why this Court should interfere with the discretionary power of the trial Judge had failed to do so. There is nothing to show that the arbitration agreement was imposed on the Appellant. Since both parties voluntarily entered into the agreement same should therefore be binding on them….”

I have had the benefit of reading the decision of the Court in Onward Enterprises Limited (Supra) and I agree with the submissions of learned Counsel for the 1st Respondent that the decision in M.V. PANORMOS BAY (supra) cannot stand as authority on the issue at hand. This is apparent from the reasoning expressed by my learned brother MSHELIA, JCA at Pages 26 to 28, Paras. F to G, as follows:

“I am mindful of the decision of this Court in M.V. Panormos Bay v. Olam (Nig.) Plc supra referred to us by Respondent’s counsel. In that case this Court declared null and void an arbitration agreement which states that disputes between parties shall be referred to Arbitration in London on the ground that Section 20 of the Admiralty Jurisdiction Act 1991 is a statutory limitation to the enforcement of the arbitration agreement in the bills of lading.

The reason is that such agreement would deny the Nigerian Courts temporarily of jurisdiction. As rightly observed by Respondent’s counsel the Court was not called upon to consider the Supreme Court decision in M.V. Lupex v. N.O.C. & S Ltd supra as well as Section 10 of the Admiralty Jurisdiction Act 1991.

In M.V. Lupex v. N.O.C. & S Ltd Supra the Appellant requested the trial Federal High Court to stay proceedings of the action filed by the Respondent in view of the agreement the two parties entered in clause 7 of the Charter-Party which reads:

“7 That parties agreed inter alia on arbitration in London under English Law in the event of dispute,” The Federal High Court refused the stay of proceedings and on appeal this Court affirmed the decision of the trial Court. On further appeal to the Supreme Court, the appeal was allowed and stay of proceedings was ordered. The apex Court held among other things that where parties have agreed to refer their dispute to arbitration in a contract, it behoves the Court to lean towards ordering a stay of proceedings. By this decision it is clear that stay of proceedings, could be granted pending reference to arbitration in a foreign country in deserving cases. I wish to note that Section 20 of the Admiralty Jurisdiction Act was not discussed in that case….”

It is therefore clear that the decision in M.V. Panormos Bay (Supra) does not reflect the position of the law in this regard and same cannot be relied upon successfully by the Appellant in support of his contention that no order of stay should be granted by the lower Court pending arbitration. For the avoidance of doubt, the reasoning in that decision does not accord with the decision of the Supreme Court in M.V. Lupex, it cannot be relied upon.

Appellant’s counsel also made reference to UBA v. Trident Consulting Limited (Supra), where the facts show that the Respondent entered into a contract with the Appellant for the implementation of automated Customer Relationship Management (C.R.M.) software for certain aspects of her banking business. There was an arbitration clause in the contract executed by the parties. When dispute subsequently arose in respect of some outstanding payments to the credit of the Respondent, the Appellant terminated the contract and the Respondent then commenced an action at the High Court of Lagos State on sundry reliefs. The Appellant filed an application for stay of proceedings pending arbitration and the application was refused. On appeal to this Court, it was held that for an application for stay of proceedings pending arbitration to succeed, the Applicant must adduce documentary evidence showing the steps he has taken in respect of the commencement of the arbitration. According to my learned brother IKYEGH, JCA:

“Before a stay may be granted pending arbitration, the party applying for a stay must demonstrate unequivocally by documentary and/or other visible means that he is willing to arbitrate. He does it satisfactorily by notifying the other party in writing of his intention of referring the matter to arbitration and by proposing in writing an arbitrator or arbitrators for the arbitration. In the instant case, the only paragraph of the affidavit evidence of the Appellant relevant to the matter deposed in paragraph 8 thereof that:

‘I was informed by Mr. Ugochukwu Okwesili, a Legal Officer in the applicant Bank in a meeting in our office at 57, Marina, Lagos on the 13th day of May, 2009 at about 2:30pm while reviewing this matter and I verily believe him that the parties are unable to resolve the matter amicably and that the applicant is ready to do everything necessary to the proper conduct of the Arbitration in respect of the dispute alleged to have arisen between the parties.’

The deposition above is not enough. There must be documentary evidence showing the applicant wrote to the Respondent notifying her of the willingness to resort to arbitration over the dispute and also, specifying in the letter or correspondence an arbitrator or arbitrators proposed to be appointed for the arbitration for the ratification or approval of the party.”

It is settled that the duty of the Court is to give effect to the clear and unambiguous provision of the law and not distort same. See: Nigercare Development Company Ltd v. Adamawa State Water Board & Ors (2008) 9 NWLR (Pt. 1093) 498 SC. In Aromolaran v. Agoro (2014) LPELR-24037 (SC), the Apex Court, per GALADIMA, JSC held:

“I must say that the duty of the Court is to interpret the words contained in the statute and not to go outside the clear words in searching of an interpretation which is convenient to the Court or to the parties in the process of interpretation. The Court will not embark on a voyage of discovery. Where a statute is clear and unambiguous, as in this case. This Court will follow the literal rule of interpretation where the provision of the statute is clear and no more.”

I have earlier made reference to and copiously reproduced Section 5(2) of the Arbitration and Conciliation Act. For emphasis, by that section the lower Court has a discretionary power to grant an order of stay pending arbitration if it is satisfied that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement and the party making application for stay is ready and willing to do all things necessary to the proper conduct of the arbitration. The view expressed by this Court in UBA v. TRIDENT CONSULTING LIMITED (supra) is to the effect that it is not enough for the Applicant to merely depose that he is ready and willing to ensure the proper conduct of the arbitration, he must show same through documentary evidence.

It is my view with all due respect that placing the burden of presenting documentary evidence to support an application for stay of proceedings pending arbitration constitutes a departure from the plain provisions of Section 5(2) of the Act, particularly in cases where the Applicant has deposed to facts in that regard. Section 5 of the Arbitration and Conciliation Act does not make it a condition precedent before an order of stay pending arbitration can be granted, a Court will be expected to be careful in granting an order staying proceedings pending reference to arbitration where the Applicant has not taken any steps in the proceedings, and the Court is satisfied that there is no sufficient reason that the matter should not be referred to arbitration and where the Applicant has been able to show that he is ready and willing to do all things necessary for the proper conduct of arbitration.

It cannot be disputed that the purpose of an Applicant deposing to an affidavit is to provide oral and for documentary evidence to support an application filed in Court. It is used to provide evidence to prove a material point(s) in argument. See: Hon. Justice Garba Abdullahi v. The Executive Governor Of Kano State & Ors (2014) LPELR-23079 (CA); Agu & Ors v. Idu (2013) LPELR-19992 (CA). As a matter of fact therefore affidavit constitutes evidence. See: Nwosu v. Imo State Environment Sanitation Authority & Ors (1990) SCNJ 97; Anoka v. Ikpo (2013) LPELR- 20419 (CA). Even though I am mindful that the absence of counter-affidavit or contradictory depositions by a Respondent is not a free pass to judgment in favour of an applicant especially in cases where the depositions are self-contradictory, it is especially true beyond citing authorities that depositions in affidavit which are not countered or controverted are deemed to have been admitted. See Ugwuanyi v. Nicon Insurance Plc (2013) LPELR-20092 (SC); Akinsete v. Akindutire (1966) LPELR-25416 (SC). Thus in Okoebor v. Police Council & Ors (2003) LPELR-2458 (SC) it was held as follows:

“The attitude of the Courts to unchallenged evidence is not in doubt and it has been stated and reinstated in a plethora of cases. In Iriri v. Erhurhobara (1991) 2 NWLR (Pt. 173) 252 of 255, it was held that where the evidence of a witness is not inadmissible in law, uncontradicted and unchallenged, a court of law can act on it and accept it as a true version of the case it seeks to support. In the same vein, it was decided that wherever any evidence whether affidavit or oral stands uncontradicted, unless the evidence is patently incredible, the Court ought to regard the matter to proved by that evidence as admitted by the adverse party….”

Therefore, unchallenged evidence is deemed to be correct and can be acted upon by the Court. In Inegbedion v. Selo-Ojemen & Anor (2013) LPELR-19769 (SC), the Court held:

“It is trite law that any unchallenged and uncontradicted fact in an affidavit remains undisputed and is deemed admitted by the adversary and the Court will so hold. However, it is also the law that any such unchallenged and uncontradicted facts which are deemed admitted in the affidavit must be capable of proving and supporting the applicant relying on such facts. In other words, it has been held that the affidavit evidence must necessarily be cogent and strong enough to sustain the case of the applicant….”

In the instant case, just as in UBA v. Trident Consulting Limited (Supra), at page 259 of the record of appeal, the Applicant/1st Respondent herein deposed at paragraph 8 of its application for stay as follows:

“The 1st Defendant/Applicant confirms its willingness to participate in arbitration proceedings in respect of any alleged dispute arising out of or pursuant to the Telecoms Private Equity Investment Agreement.”

The above deposition was not countered by the Appellant in his Counter Affidavit found at pages 309 to 311 of the record of appeal. By the reasoning expressed in UBA v. Trident Consulting Limited (Supra), the above deposition is not enough, the 1st Respondent is still required to present documentary evidence in support. Considering the circumstances of the instant case, I am unable to subscribe to the reasoning in the light of the express provisions of Section 5(2) of the Act. Contrariwise, it is my humble view that unless such deposition is controverted by the adverse party, a Court is at liberty to act upon deposition by an applicant that he is willing and ready to ensure that the arbitration is properly conducted, thereby fulfilling the requirement in Section 5(2)(b). I totally agree that the reasoning in UBA v. Trident Consulting Limited (Supra) is only potent and tenable in instances where the Applicant’s deposition in the Affidavit in support of the Application for stay is challenged and/or contradicted by the Respondent. In such cases, it will be necessary for the Applicant to provide further evidence in support of his deposition in that regard which is not the case in the instant appeal.

Where, as in the instant case, the Appellant did not challenge the 1st Respondent’s deposition that the latter is willing to participate in arbitration proceedings in respect of the dispute arising from the Agreement executed by the parties, and there is no sufficient reason to why the matter should not be referred to arbitration, I am unable to interfere with the exercise of the lower Court’s discretion granting an order staying proceedings pending reference to arbitration. This issue is resolved in favor of the 1st Respondent.

ISSUE FIVE

Learned counsel for the Appellant in his argument on issue No. 5 which is “Whether the trial Court was right to have held that there was no evidence of fraud at the preliminary stage without averting its mind to the Appellant’s Statement of Claim decision and the case of NIMASA v. Odey (2013) LPELR-21402 (CA) made reference to the decision of this Court in NIMASA v. Odey (2013) LPELR-21402 (CA) g. 49-50, Paras. A-G as to what constitutes fraud and fraudulent act. Counsel referred to pages 17-18 of the Records of Appeal to argue that fraud was pleaded with particulars in the pleadings. Counsel also referred to the Counter-affidavit at pages 310-311 of the Records of Appeal to submit that some of the issues between the parties cannot be decided on arbitration because they contain allegations of fraud.

Learned counsel submitted that the lower Court erred in holding that the Appellant did not prove the allegation of fraud in its pleadings at the preliminary stage and that what is required of the Appellant was to plead fraud and give particulars.

Learned counsel referred to Okoli v. Morecab Finance (Nig.) Ltd (2007) 14 NWLR (Pt. 1053) Pg. 37 to submit that the lower Court had no jurisdiction to make any findings relating to fraud or other substantive matters raised in the pleadings at the preliminary stage when it has not taken any evidence. Counsel further relied on Otukpo & v. John & Anor (2012) LPELR-20619 (SC) to submit that from the facts and pleadings of the instant case, fraud can be deduced and that therefore it will require a Court of competent jurisdiction to adjudicate on the issues between the parties.

On the fifth issue learned counsel for the 1st Respondent referred to paragraphs 45 and 46 of the Statement of Claim at pages 17-18 of the Records of Appeal and the submissions under issue No. 2 of the Respondent’s Brief to submit that the allegation of fraud raised by the Appellant goes to no issue because the said allegation was made in the alternative with allegation of contractual misrepresentation. Counsel argued that a determination of the Appellant’s allegation of contractual misrepresentation by the Arbitrator(s) will completely resolve the dispute without delving into the issue of fraud. Learned counsel submitted that the case of NIMASA v. Odey (Supra) relied upon by the Appellant is not relevant to the facts and circumstances of the present case in view of the Appellant’s averments at paragraphs 45 and 46 of the Statement of Claim at pages 17-18. Counsel urged this ourt to resolve this issue in the 1st Respondent’s favour and against the Appellant.

Responding to the 1st Respondent’s submission on the fifth issue, learned counsel to the Appellant in the Reply Brief referred to Holborn Nigeria Ltd v. O. C. Chris Enterprises Ltd (2014) LPELR-23972 (CA) Pg. 36-37, Paras. A-C to submit that the trial Court ought to consider the main claims before any attempt to delve into the alternative claim and that alternative claims cannot render the main claim impotent. Counsel submitted that the principle enunciated in NIMASA v. Odey (Supra) and Okoli v. Morecab Finance (Nig.) Ltd (Supra) applies to the instant case and that the allegation of fraud in this case which was supported with the particulars of fraud cannot be resolved by arbitration.

RESOLUTION

The learned trial judge had at pages 474 to 475 of the record of appeal held as follows:

“I have no evidence of fraud which at any rate must be established beyond reasonable doubt and there is no evidence of a mistake.”

It is undisputed that the proceedings at the lower Court leading to the instant appeal were still at the interlocutory stage and the Ruling being appealed against, wherein the above findings were expressed by the learned trial judge was interlocutory, at which time no evidence had been called or presented before the Court on the issues at stake in the suit. The law is well settled that a Court must not comment or make pronouncement on substantive matters in an interlocutory proceeding. In a Ruling on an interlocutory application, the Court must shy away and/or refrain from making any observation that might appear to prejudge the main issue in contention by the parties. See: Nwankwo & Ors v. Yar’adua & Ors (2010) LPELR-2109 (SC); Okotie-Eboh v. Manager (2004) LPELR -2502 (SC).

The learned trial judge in the instant case made observations and/or findings that there was no evidence of fraud or mistake by the Appellant. Needless to state that the proof of the allegation of fraud or mistake by the Appellant can only be done during substantive trial and not at the interlocutory stage of the proceedings; I therefore have no hesitation in reaching the conclusion that the learned trial judge with all due respect erred. I agree with the Appellant on this point and I resolve the instant issue in favor of the Appellant.

ISSUE SIX

I believe the sixth and last issue regarding the question as to “Whether the Honorable Trial Judge erred in law when it failed to determine the other issues of jurisdiction raised by parties in this matter, and which have a direct bearing as to whether or not the matter as presently constituted can be referred to Arbitration or not”; has been adequately considered and dealt with under the first issue. It has become academic and spent. I shall therefore refrain from delving into it.

In the end therefore, having resolved the first to fourth issues in favor of the 1st Respondent, the conclusion to be reached is that the Appellant’s appeal is not meritorious and therefore deserves to be and is hereby dismissed. The Ruling of C.M.A. OLATOREGUN, J., of the Federal High Court delivered on the 18th day of October, 2016 is affirmed.

Cost of N200,000.00 is awarded against the Appellant to the 1st Respondent.

GEORGEWILL, JCA

I had the privilege of a preview of the comprehensive lead judgment just delivered by my learned brother Tijjani Abubakar, JCA. I am in complete agreement with the lucid reasoning, the profound statements of law and the impeccable conclusions reached therein which I hereby adopt as mine. I have nothing more useful to add.

TUKUR, JCA

I read before today the lead judgment just delivered by my learned brother TIJJANI ABUBAKAR, JCA.

I adopt the judgment as mine with nothing useful to add.

Appearances:

Cyril Onyezazir with Abayomi Asorobi For Appellant(s)

G. Ojodile Okafor with Abiiba Michael For Respondent(s)