THE SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED & ORS V CRESTAR INTERGRATED NATURAL RESOURCES LIMITED

THE SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED & ORS V CRESTAR INTERGRATED NATURAL RESOURCES LIMITED


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

ON MONDAY, 21ST DECEMBER, 2015


Appeal No: CA/L/331M/2015(R)

CITATION:

Before Their Lordships:

JOSEPH SHAGBAOR IKYEGH, JCA

TIJJANI ABUBAKAR, JCA

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, JCA


BETWEEN
THE SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED
TOTAL E & P NIGERIA LIMITED
NIGERIAN AGIP OIL COMPPANY LIMITED
(APPLICANTS)

AND

CRESTAR INTERGRATED NATURAL RESOURCES LIMITED
(RESPONDENT)


PRONOUNCEMENT


A. INTERPRETATION OF STATUTE
1. Section 34 of the Arbitration and Conciliation Act CAP A18 LFN 2004 – Interpretation of Section 34 of the Arbitration and Conciliation Act as regards jurisdiction of the Court to intervene in any matter governed by the Act

Let me proceed by stating that the starting point in the resolution of any matter bothering arbitral proceeding is governed by the provisions of the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria, 2004. It is the argument of the learned counsel for the Respondents under the Act, Nigerian Courts, including this Court do not have jurisdiction to grant anti-arbitration injunctions. He placed reliance on Section 34 of the Act which provides:

“A Court shall not intervene in any matter governed by this Act except where so provided in this Act”

The above provision has been subject to judicial interpretation by this Court in Statoil (NIG) LTD v N.N.P.C [2013] 14 NWLR (PT.1373) 1 and Nigerian Agip Exploration Limited & Anor v N.N.P.C (Unreported CA/A/628/2011). In STATOIL, this Court at Page 29 held:

“(The provisions of Section 34 of the Arbitration and Conciliation Act … is mandatory in that the word ‘shall’ is one that does not accommodate a flexible interpretation of the directives being given therein… from all the provisions therein, no enactment for the determination prematurely of the proceedings of an arbitral tribunal is provided … In the instant case, the issuance of ex-parte interim injunction does not fall under the exceptions to Section 34 of the Act. It is very clear from the intendment of the legislature that the Court cannot intervene in arbitral proceedings outside those specifically provided. Where there is no provision for intervention, this should not be done…”

Stressing the above position, the Court, Per TINE TUR, JCA, in Nigerian Agip Exploration Limited & Anor noted:

“I have scanned the entire pages of the Arbitration and Conciliation Act, Cap A 18, Laws of the Federation of Nigeria, 2004 but I am unable to find the Section that provides for the Federal High Court to exercise the powers of entertaining and granting exparte interim and interlocutory injunctions as the case may be to restrain arbitral proceedings from taking place or continuing to finality. The Federal High Court or any Court for that matter is not to exercise Jurisdiction in arbitral causes and matters (except, where so provided for in this Act) according to the provision of Section 34 of the Act”

It is apparent from the above decisions of this Court that generally, Nigerian Court shall not intervene by granting any injunction enjoining any arbitral proceedings brought pursuant to the provisions of the Arbitration Act.

However, pursuant to Section 34 of the Act, the Courts can grant, intervene only ‘where so provided in this Act.’ Examples of such instances (commendably highlighted by the Applicant’s counsel) include: Section 2 in respect of revocation of arbitration agreement by the Court; Section 7 in respect of appointment of arbitrator if the two arbitrators appointed by the parties fail to agree on the third arbitrator; Section 23 in relation to the power of the Court to order the attendance of witnesses; Section 30 dealing with the setting aside of award in case of misconduct by arbitrator; Section 31 and 32 in respect of recognition and enforcement of awards.
Furthermore, it is important to note that the provisions of Section 34 of the Arbitration Act, is only applicable to matters ‘governed by the Act’ so that if it is found in any proceeding, that the particular facts and circumstances does not come within the purview of the Act, the provisions of Section 34 cannot apply with full force. Per OBASEKI-ADEJUMO, JCA. read in context

B. ARBITRATION AND CONCILIATION
2. Arbitration – The domestic applicability of the Arbitration and Conciliation Act and what international arbitration entails
Application of the Arbitration and Conciliation Act as regards domestic and international arbitration

Section 58 of the Act prescribes the extent of the application of the Act. The Section is to the effect that the Act ‘may be cited as the Arbitration and Conciliation Act and shall apply throughout the Federation.’ Therefore, as earlier noted, the provision of the Act is only applicable in respect of arbitration which are ‘domestic’ in the country. Meanwhile, Section 57 (2) of the Act defines ‘international arbitration’ thus:

“An arbitration is international if –

(a) The parties to an arbitration agreement have, at the time of the conclusion of the agreement, their places of business in different countries; or
(b) One of the following places is situated outside the country in which the parties have their places of business –
(i) The place of arbitration if such place is determined in, or pursuant to the arbitration agreement,
(ii) Any place where a substantial part of the obligation of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or
(c) The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country; or
(d) The parties, despite the nature of the contract, expressly agree that any dispute arising from the commercial transaction shall be treated as an international arbitration.” Per OBASEKI-ADEJUMO, JCA. read in context

3. Arbitration – Approach of English Courts in respect of the powers of the Courts to make anti-arbitration injunction

…To this extent, I will examine the approach of English Courts in respect of the powers of the Courts to make anti-arbitration injunction being sought by the Applicant in the instant case. In Excalibur Ventures LLC v Texas Keystone Inc [2012] 1 ALL ER (Comm.) 933 at 947, the Queens Bench Division of the English Commercial Court, Per Gloster J, held:

“[54] It is clear that the English Courts have Jurisdiction under S37 of the 1981 Act to grant injunctions restraining arbitrations where the seat of the arbitration is a foreign jurisdiction, although it is a power that is only exercised in exceptional circumstances and with caution…”

Similarly in Clakon Engineering Services Ltd v TXM Olajes Gazkutato Kft (NO 2) (2011) ALL ER (Comm.) 128 at 136, the same Court, Per Hamblem J, held:

“[26] I am accordingly satisfied that I have jurisdiction to grant an injunction. That jurisdiction derives from S.37 of the Senior Courts Act 1981…[27] The grant of an anti-arbitration injunction is a matter of debate and controversy in international arbitration community…[28] It is nevertheless clear that the English Courts have jurisdiction to grant such injunctions…”

It is apparent that the English Court relied on Section 37 of the English Senior Courts Act to reach the conclusion that it can grant the anti-arbitration injunction. That section provides:

“(1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears in all cases to do so.
(2) Any such order may be made either unconditionally or on such terms and conditions as the Court thinks just…” Per OBASEKI-ADEJUMO, JCA. read in context

4. Arbitration – Statutory provisions that empower the Trial Court and the Appeal Court to grant an order of injunction enjoining a foreign arbitration proceeding
Whether the Court can grant an order of injunction enjoining a foreign arbitration proceeding

As counsel for the Applicant/Respondent noted, the provisions of Section 37 of the Senior Courts Act is im pari materia with Section 13 of the Federal High Court Act which provides:

“(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.(2) Any such order may be made either conditionally or on such terms and conditions as the Court thinks just….”

The implication of the foregoing is that pursuant to the provision of Section 15 of the Court of Appeal Act, this Court can exercise the powers conferred upon the Lower Court to grant injunction (anti-arbitration injunction in the instant case) under Section 13 of the Federal High Court Act. Section 15 of the Court of Appeal Act states thus:

“The Court of Appeal may, from time to time, make any order necessary for determining the real question in controversy in the appeal, and may amend any defect or error in the record of appeal, and may direct the Court below to inquire into and certify its findings on any question which the Court of Appeal thinks fit to determine before final Judgment in the appeal, and may direct any necessary inquiries or accounts to be made or taken, and, generally shall have full jurisdiction over the whole proceedings as if the proceedings had been instituted in the Court of Appeal as Court of first instance and may re-hear the case in whole or in part or may remit it to the Court below for the purposes of such re-hearing or may give such other directions as to the manner in which the Court below shall deal with the case in accordance with the powers of that Court, or, in the case of an appeal from the Court below, in that Court’s appellate Jurisdiction, order the case to be re-heard by a Court of competent jurisdiction.”

The purport of the above section has been enunciated by the Supreme Court, Per AgbaJe, JSC (of blessed memory) in the case of Okoya v Santili [1990] 2 NWLR (PT 130) 172 at 207 thus:

“By virtue of Section 16 of the Court of Appeal Act, the Lower Court has all the powers of the trial Court i.e. the powers the Federal High Court has in the matter before it which is now before us on appeal. So in my view, in order to settle completely and finally the matters in controversy between the parties to this appeal in the matter before the Lower Court and in order to avoid multiplicity of legal proceedings concerning any of those matters, can grant, such remedies as any of the parties may appear to be entitled to…”

The implication of the foregoing is that this Court, and indeed the Lower Court (that is the Federal High Court) can grant an order of injunction enjoining a foreign arbitration proceeding. Per OBASEKI-ADEJUMO, JCA. read in context

C. COURT
5. Duty of Court – The law on the duty of the Court in determination of issues
Duty of Court in the determination of applications

The law is settled as expressed in plethora of judicial authorities that a Court has a duty to ensure that it does not determine at the interlocutory stage, the issues that would arise for determination in the substantive suit. Reiterating on this position of the law, the Supreme Court in Akapto v. Hakeem Habeeb (supra) at 287, Per KARIBI-WHYTE, JSC held:

“It is of paramount importance to bear in mind the fact that the application before the Court is for a grant of interim injunction pending the determination of the substantive claim brought by the plaintiff. The duty of the Judge in that situation is to ensure that he did not in the determination of the application determine the same issues that would arise for determination in the substantive action.”

See also Adetona v Zenith International Bank Plc (2011) LPELR 8237 (SC), Per CHUKWUMA-ENEH, JSC; GROUP Danone v Voltic Nigeria Limited (supra), Per OGBUAGBU, JSC; Madubuike v Madubuike [2001) 9 NWLR (PT 719) 698 at 707; Duwin Pharm. and Chem. Co. Ltd v Beneks Pharmaceuttcal And Cosmetics Ltd & Ors [2008] 4 NWLR (PT.1077) 376 SC. Per OBASEKI-ADEJUMO, JCA. read in context

D. EQUITABLE REMEDY
6. Injunction – Conditions for the grant of an injunction

…there are certain conditions that must be satisfied by an applicant with respect to the injunction being sought has been established in a number of cases. See Obeya Memorial Hospital v. A-G Federation (supra); Akapo v. Hakeem-Habeeb & Ors (supra); Yalaju Amaye v A.R.E.C LTD [1990] 6 SC 157; Shitu Akinpelu V Ebunola Adegbore & Ors (2008) LPELR 354 (SC) 25. Some of these conditions are:

(a) The applicant must show that there is a serious question to be tried i.e. that the applicant has a real possibility of success at trial, notwithstanding the defendant’s technical defence (if any);
(b) The applicant must show that the balance of convenience is on his side, that is, more justice will result in granting the application than refusing it;
(c) That the applicant must show that damages cannot be an adequate compensation for his damage or injury, if he succeeds at the end of the day;
(d) The applicant must show that his conduct is not reprehensible for example that he is not guilty of any delay;
(e) No order should be made, for an interlocutory injunction should be made on notice unless the applicant gives a satisfactory undertaking as to damages save in recognized exceptions. Per OBASEKI-ADEJUMO, JCA. read in context

7. Injunction – Factors to be considered by the Court for the grant of an injunction

The HALSBURY’S LAWS OF ENGLAND, FOURTH EDITION, RE-ISSUE, VOL. 24, Page 853 states thus:

“On application for an injunction in aid of plaintiffs alleged right, the Court will usually wish to consider whether the case is so clear and free from objection on equitable grounds that it ought to preserve property without waiting for the right to be established. This depends upon a variety of circumstances, and it is impossible to lay down any general rule to be established…” Per OBASEKI-ADEJUMO, JCA. read in context

8. Injunction – What the applicant must prove in a grant for injunction to establish exceptional cases
How to establish exceptional circumstances that will warrant the grant of an anti-arbitration injunction

In CLAXTON’s case (supra) at Page 137, HAMBLEM J while restating that anti-arbitration injunction will generally only be granted in exceptional circumstance, held:

“In order to establish exceptional circumstances, it will usually be necessary, as a minimum; to establish that the applicant’s legal or equitable rights have been infringed or threatened by a continuation of the arbitration, or that its continuation will be vexatious, oppressive or unconscionable, these being the principles which govern the grant of injunctions to restrain proceedings in a foreign Court..”

Similar conclusion was reached in Excalibur Ventures (supra) at Page 947, GLOSTER J. Per OBASEKI-ADEJUMO, JCA. read in context

9. Interlocutory Injunction – The aim of an interlocutory injunction
Purpose of an interlocutory injunction

The case of Akinpelu v Adegbore (supra) at 27 is very relevant. There, the Supreme Court held:

“One factor for granting interlocutory injunction is for the preservation of the RES. It is the province of the law that the res should not be destroyed or annihilated before the Judgment of the Court.”

There is doubt that the issue before the Court in the appeal will be compromised if the arbitration is allowed to proceed to an award. See A.G & Comm for Justice Anambra State & Anor V Robert C Okafor & Ors (1992) NWLR (PT.224) 396, where OLATAWURA, JSC held:

“Interlocutory order pending the determination of a suit or an appeal must relate to the issue before the Court of trial or the appeal yet to be heard. It is wrong in law to stay an action not before the Court”

The Supreme Court, in the case of The Military Administrator, Federal Housing Authority & Anor v. Aro [1991) 1 NWLR (PT.168) 405; (1991 LPELR – 3185 (SC) at 9, Per BELGORE, JSC held thus:

“It is therefore appropriate here to state that interlocutory injunction is to mitigate the suffering of the party applying for it so that he will not be in unnecessary hardship during the pendency of the substantive suit. It is always good to prevent injustice that most invariably could not be cured properly at the end of the substantive case if it was not granted” Per OBASEKI-ADEJUMO, JCA. read in context

10. Interlocutory Injunction – Position of the law on undertaking to pay damages in an application for interlocutory injunction

On the issue of damages, the practice of undertaking for damages has been long endorsed by the Supreme Court where it has been applied where the plaintiff has not been guilty of misrepresentation, suppression or other default in obtaining the injunction vide IGUH, JSC at page 36 in Afro-Continental Nig Ltd v Ayantuyi & ORS SC.23/199O. Furthermore, in Oduntan v. General Oil Limited (1995) LPELR- 2249 (SC), OGWUEGBU, JSC at page 13, Per OGBWUEGBU, JSC held that:

“The Court on an application for damages makes use of its power to require undertaking of plaintiff himself or the defendant as the case may be, the purpose being to enable the Court if it thinks that the justice of the case requires it, to compensate a person who has been temporarily restrained should it turn out, that he was needlessly enjoined, for damages which he has suffered meanwhile. It is not in very case that an undertaking as to damages ought to be given”

Earlier at Page 10 – 11, the learned Justice of the Supreme Court held:

“The most usual basis for the grant of an interlocutory injunction is the need to protect the interest of the applicant by preserving the circumstances which are found to exist at the time of his application until the rights of the parties are able to be finally established by proper procedures. This is weighed against a pressing need of the defendant to be protected against injury resulting from his having been prevented from exercising his legal rights from which he could not be adequately compensated in damage if in the end the substantive case is resolved in his favour.” Per OBASEKI-ADEJUMO, JCA. read in context


LEAD JUDGMENT DELIVERED BY OBASEKI-ADEJUMO, JCA


This is an application by the Respondent/Applicant dated and filed on 19/5/15 following an appeal lodged against the Ruling of the Federal High Court delivered by Idris J. on 30/3/15 dismissing the motion challenging jurisdiction of the Lower Court as well as motion to stay proceedings and discharge Ex parte Orders.

The Applicant seeks for the following reliefs:

“AN ORDER of injunction restraining the Appellants/Respondent, whether by themselves, their management, servants, agents, privies, proxies, representatives, nominees or Solicitors or any other person howsoever called acting under or pursuant to their authority from proceeding or continuing with or taking any further steps In the Arbitration Proceedings with international Court of Arbitration (ICC) Number 21012/TO between

1. THE SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED.
2. TOTAL E & P NIGERIA LIMITED.
3. NIGERIAN AGIP OIL COMPANY LIMITED VS CRESTAR INTEGRATED NATURAL RESOURCES LIMITED which was commenced by Appellants in this appeal on 20th April 2015 vide REQUEST FOR ARBITRATION dated 20TH APRIL 2015 and issued by Appellant’s Solicitors Messrs CLIFFORD CHANCE LLP OF 10 Upper Bank Street Canary Wharf London E14 5JJ United kingdom, pending the final determination of this appeal which was brought by the Appellants AND for such further and/or other Order(s) as this Honourable Court may deem fit to make in the circumstances.”

The application was based on 14 grounds and an affidavit of 27 paragraphs in support and accompanied by exhibits CINRL 1 – CINRL 8; which are copies of the SPA executed by parties; termination letter; certified ruling of Lower Court enrolled order of Court; Respondent’s notice and notice of cross-appeal; Request for Arbitration by Respondents.

The Respondent/Applicant filed a further affidavit in support deposed by Temitope Ishola and filed on 23/6/2015 of 24 paragraphs and eleven exhibits, viz CINRL 10 – CINRL 11 accompanied by a written address in support of its motion filed on 8/7 /2015.

The Appellants/Respondents to the application filed a Counter Affidavit in opposition to the Respondent/Applicant’s application of 19/5/2015 deposed by Enobong Ozor of 52 paragraphs with exhibits EO-1 – EO-5 and a further affidavit of 24/7/2015 of (5) five paragraphs with 2 exhibits EO7- EO8 attached, together with a written address in opposition to the Respondent’s Application of 19/5/2015 by Babatunde Fagbohunlu SAN, Chukwuka Ikwuazom, Hamid Abdulkareem, Tosin Falaiye of Aluko Oyebode & Co; to which the Respondents/Applications filed a written address in Reply dated and filed 4/9/2015 deemed on 22/10/2015 and a Reply to Counter Affidavit on 25/6/15.

The Appellants/Respondents also filed a Notice of Preliminary Objection that the Court lacked jurisdiction to grant the relief sought by the Respondent on the ground that (1) the motion of 19/5/2015 seeks an injunction restraining the Appellants from taking any further steps in arbitral proceedings which they have commenced against the Respondent, to wit, ICC Arbitration Case 21012/TO, The Shell Petroleum Development Company, Total E & P Nigeria Limited and Nigerian Agip Oil Company Limited v. Crestar Integrated Natural Resources Limited. (2) By virtue of Section 34 of the Arbitration and Conciliation Act, Cap. A18, LFN 2004, the Honourable Court lacks jurisdiction to issue an injunction to restrain arbitral proceedings.

The Respondent’s issue for determination is “whether in the circumstances of this case this Court ought not to grant the prayers sought in the Applicant’s motion on Notice dated 19/5/2015.”

The Appellants/Respondents submitted three issues for determination are:

“1. Whether the Court has the Jurisdiction to issue an anti-arbitration injunction as sought by the applicants.

2. Whether this Court has the power to interfere with an arbitral tribunal’s power to determine its own Jurisdiction.

3. Assuming the Honourable Court has the power to grant the injunction sought whether the Application has satisfied the pre-conditions for the grant of an injunction.”

As noted, the Respondent to the Application filed a notice of preliminary objection which shall be determined first as it touches on the jurisdiction of the Court. This shall be addressed in issue one for determination. Therefore the issues that will be adopted in determining the application shall be:-

“i. Whether the Honourable Court has the jurisdiction to issue an anti arbitration injunction as sought by the applicants.

ii. If issue one is in the affirmative then whether the Court ought to grant the prayer in the light of the circumstance of this case.”

On issue one, Respondents’ counsel, Fagbohunlu SAN, referred to Section 34 of the Arbitration and Conciliation Act, Cap A18 LFN, 2004 (ACA) to contend that Nigerian Courts including the Court of Appeal do not have jurisdiction to grant anti-arbitration injunctions and that Section 34(a) of the Act stipulates that a Court shall not interfere in any matter governed by this Act except where so provided in the Act, therefore any intervention is prohibited. He relied on Statoil (Nig) Ltd v NNPC [2013] 14 NWLR (PT 1373] 1 at 29. Nigerian Agip Exploration Limited & Anor v NNPC (Unreported suit no. CA/A/628/2011 delivered on 25/2/2014 at page 6. He further referred to Section 16 of Court of Appeal Act to the effect that the Court may make an interim order or grant an injunction which the Court below is authorized to make or grant and since Federal High Court has no jurisdiction, it follows that the Court of Appeal lacks Jurisdiction to so grant.

He urged that the Court dismiss the Applicant’s Application for Anti-arbitration injunction in its entirety and uphold the Respondents’ Notice of preliminary objection. He argued that the authorities relied on by Applicant’s are inapplicable as they were decided under the English Arbitration Act, 1996 where there is no absolute prohibition of intervention in arbitral proceedings except in the manner permitted by the Act. He further submitted that Article 5 of Arbitration Model law of United Nation Conference on International Trade Law (UNCITRAL) is incorporated in Section 34 of ACA; that the use of ‘should’ has been interpreted by English Courts to be the basis upon which intervention which is not expressly provided for in the Act can be undertaken. He cited Vale Do Rio Doce Navega Cao Sa v Shangai Bao Steel Ocean Shipping Co. Limited (2000) 2 C.C.C. 1200 referred to by this Court in Statoil v. NNPC (supra) to the effect that basis upon which English Court issue anti-arbitration injunction is not available in Nigeria.

For better appreciation of the argument of Applicant’s counsel, I shall enumerate the submissions made by learned counsel in his written address in support of its motion as well as his reply address to the Respondents’ written address.

Learned counsel, Tayo Oyetibo SAN submitted that the Applicant is seeking an order of injunction to restrain the Respondents from taking any further steps in respect of foreign arbitration proceedings commenced in respect of the same dispute currently pending before the Federal High Court and on appeal to this Court. Learned counsel submitted that the power of this Court to grant the injunction being sought is donated by Section 16 of the Court of Appeal Act and Section 13(1) of the Federal High Court Act. Counsel craved the indulgence of the Court to make reference to other common law jurisdictions where the power is not so infrequently exercised. Counsel referred to Claxton Engineering Services Ltd v Txm Olajes Gazkutato Kft (NO 2) [2011] EWHC 345 (COMM); Excalibur Ventures LLC v Texas Keystone Inc [2011] EWHC 1624 (COMM) 933; Oluwadare v Unilorin [2009] 17 NWLR (PT 1169) 1; [2007] 9 NWLR (PT 1040); Ndaba (Nig) Ltd v. UBN Plc [2004] 9 NWLR (PT 1040) 439.

In response to the Respondents’ written address, Applicant’s counsel Tayo Oyetibo SAN relied on the Applicant’s further affidavit of 23/6/2015 deposed by Temitope Ishola and affidavit in reply to Appellants/Respondents’ counter affidavit sworn to by Tomilade Shodimu and 25/6/2015. In his reply address, learned SAN on the preliminary objection submitted that the case of Statoil Nig. Ltd and Nigeria Agip Exploration Ltd respectively are not helpful in the light of peculiar facts and circumstances of these cases. He stated that Section 34 of ACA is im pari material with Article 5 of UNCITRAL Arbitration Model Law of 1985 which was adopted into Nigeria law on 14/3/98 and that in the absence of Nigerian case law, a proper understanding of the issues arising there from will be by reference to foreign authorities and literature on Article 5 of Model Law from which Section 34 of ACA was promulgated. Counsel referred to Section 57(2)(b)(i) of ACA, that the arbitration is an international arbitration and not a domestic arbitration. He therefore pointed out that the jurisdiction in domestic arbitration differs from that of international arbitration in that it has become settled principle in the light of the interpretation of Article 5 of Model Law that injunctions can be made in respect of International Arbitration. He referred to the text by Emmanuel Gaillard, ‘Anti-suit Injunctions in International Arbitration’, Page 111; Lord Mustill’s commentary on Article 5 of Model Law, UNCITRAL Secretariat’s note on Article 5 of the Model Law; UNION OF INDIA v DABHOL POWER CO. (Delhi High Court IA. No. 6663/2003 on similar interpretation under Sections 5 and 45 of India Arbitration and Conciliation Act. Counsel contended that the arbitration clause upon which foreign arbitration was commenced is null and void and unenforceable, by virtue of the fact that it violates the provision of Nigeria Oil & Gas Industry Content Development Act. Finally, he submitted that the English cases cited are relevant to the issues in this Application.

I have dispassionately considered albeit critically the submissions of learned counsel for the Applicant on this issue and the response of the learned counsel for the Respondents/Appellants. I have also considered the authorities relied upon by both counsel in support of their respective stands. No doubt, the crux of this issue is whether this Court can grant an anti-arbitration injunction enjoining a foreign arbitral proceeding having regards to the facts and circumstances of this case.

Let me proceed by stating that the starting point in the resolution of any matter bothering arbitral proceeding is governed by the provisions of the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria, 2004. It is the argument of the learned counsel for the Respondents under the Act, Nigerian Courts, including this Court do not have jurisdiction to grant anti-arbitration injunctions. He placed reliance on Section 34 of the Act which provides:

“A Court shall not intervene in any matter governed by this Act except where so provided in this Act”

The above provision has been subject to judicial interpretation by this Court in Statoil (Nig) Ltd v N.N.P.C [2013] 14 NWLR (PT.1373) 1 and Nigerian Agip Exploration Limited & Anor V N.N.P.C (Unreported CA/A/628/2011). In Statoil, this Court at Page 29 held:

“The provisions of Section 34 of the Arbitration and Conciliation Act … is mandatory in that the word ‘shall’ is one that does not accommodate a flexible interpretation of the directives being given therein… from all the provisions therein, no enactment for the determination prematurely of the proceedings of an arbitral tribunal is provided … In the instant case, the issuance of ex-parte interim injunction does not fall under the exceptions to Section 34 of the Act. It is very clear from the intendment of the legislature that the Court cannot intervene in arbitral proceedings outside those specifically provided. Where there is no provision for intervention, this should not be done…”

Stressing the above position, the Court, Per TINE TUR, JCA, in Nigerian Agip Exploration Limited & Anor noted:

“I have scanned the entire pages of the Arbitration and Conciliation Act, Cap A 18, Laws of the Federation of Nigeria, 2004 but I am unable to find the Section that provides for the Federal High Court to exercise the powers of entertaining and granting exparte interim and interlocutory injunctions as the case may be to restrain arbitral proceedings from taking place or continuing to finality. The Federal High Court or any Court for that matter is not to exercise Jurisdiction in arbitral causes and matters (except, where so provided for in this Act) according to the provision of Section 34 of the Act”

It is apparent from the above decisions of this Court that generally, Nigerian Court shall not intervene by granting any injunction enjoining any arbitral proceedings brought pursuant to the provisions of the Arbitration Act.

However, pursuant to Section 34 of the Act, the Courts can grant, intervene only ‘where so provided in this Act.’ Examples of such instances (commendably highlighted by the Applicant’s counsel) include: Section 2 in respect of revocation of arbitration agreement by the Court; Section 7 in respect of appointment of arbitrator if the two arbitrators appointed by the parties fail to agree on the third arbitrator; Section 23 in relation to the power of the Court to order the attendance of witnesses; Section 30 dealing with the setting aside of award in case of misconduct by arbitrator; Section 31 and 32 in respect of recognition and enforcement of awards.

Furthermore, it is important to note that the provisions of Section 34 of the Arbitration Act, is only applicable to matters ‘governed by the Act’ so that if it is found in any proceeding, that the particular facts and circumstances does not come within the purview of the Act, the provisions of Section 34 cannot apply with full force. The question then is: Is the instant matter governed by the Arbitration and Conciliation Act? Learned senior counsel for the Applicant argued that the arbitration concerned here is an international arbitration and not a domestic arbitration. Section 58 of the Act prescribes the extent of the application of the Act. The Section is to the effect that the Act ‘may be cited as the Arbitration and Conciliation Act and shall apply throughout the Federation.’ Therefore, as earlier noted, the provision of the Act is only applicable in respect of arbitration which are ‘domestic’ in the country. Meanwhile, Section 57 (2) of the Act defines ‘international arbitration’ thus:

“An arbitration is international if –

(a) The parties to an arbitration agreement have, at the time of the conclusion of the agreement, their places of business in different countries; or

(b) One of the following places is situated outside the country in which the parties have their places of business –

(i) The place of arbitration if such place is determined in, or pursuant to the arbitration agreement,
(ii) Any place where a substantial part of the obligation of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or

(c) The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country; or

(d) The parties, despite the nature of the contract, expressly agree that any dispute arising from the commercial transaction shall be treated as an international arbitration.”

It is obvious from the above provision that the instant case is an international arbitration which falls within the ambit of Paragraph (b) (i) of Section 57 (2) to the effect that the place of arbitration is situated outside Nigeria where the parties have their place of business. In the instant case, parties who are Nigerian Companies agreed that London in the United Kingdom shall be the place of arbitration pursuant to Clause 25 of the SPA executed by the parties. To this extent, the provision of 34 of the Act and the interpretation thereon by this Court in Statoil Nig Limited (supra) and Nigerian Agip Exploration Limited & Anor (supra) to the extent that Nigerian Courts cannot intervene in arbitral matters is not applicable herein.

Meanwhile, there is a consensus that when it comes to matters bothering on international commercial arbitration, the UNCITRAL Model law on International Arbitration of 1985 (the Model Law) becomes applicable. However, it is important to state here that Article 5 of the Model Law is im pari materia with the aforementioned Section 34 of the Arbitration and Conciliation Act. While we have interpreted the provisions of Section 34 of the Act as a mandatory provision which prohibits any form of intervention by the Court except as provided by the Act, the question then is: what is the interpretation of similar provision under Article 5 of the Model Law?

In answering this question, I am persuaded by several facts peculiar to the instant case. Firstly, it is apparent that from the provision of Clause 25 of the SPA, that parties herein agreed that the agreement shall be construed in accordance with English aw. Secondly, is the persuasive force of the Foreign Court, especially English Court’s interpretation of the provision of Article 5 of the Model Law as well as the commentaries of authors and writers thereon. Thirdly, the peculiar facts and circumstance of this case is vital to the conclusion to be reached thereon.

From the note of the UNCITRAL Secretariat on the provision of Article 5 of the Model Law, the following commentaries were made:

“Another important consideration in judging the impact of Article 5 is that the above necessity to list all instances of Court involvement in the model law applies only to matters “governed by this law.” The scope of Article 5 is, thus, narrower then the substantive scope of application of the model law i.e. “international commercial arbitration” (Article 1) in that, it is limited to those issues which are in fact regulated, whether expressly or impliedly, in the model law, Article 5 would, therefore, not exclude Court intervention in any matter not regulated in the model law.”

While defining the role of Courts in modern international commercial arbitration, Professor David AR Williams, QC, restated Lord Mustill’s commentary on Article 5 of the model law, where he echoed thus:

“It will thus be seen that, contrary to what might at first sight be assumed – namely that the code of intervention by a Court is to be found in the Model Law and nowhere else – the Commission (UNCITRAL) envisaged that in the field of International Commercial arbitration, two wholly distinct regimes of Judicial intervention would be in force at the same time. In ‘matters governed by this law’, the code takes effect, and no relief may be sought in any other circumstances… But in matters not governed by the law, the Courts of the enacting state may continue to offer all such remedies in all such circumstances as are available under existing law.”

Learned Author, Emmanuel Gaillard in his text, ‘Anti-Suit Injunctions in International Arbitration’, Juris Publishing Inc., 2005, p.111 stated:

“… It is important to point out that Article 5 of the Model Law, is only applicable if the arbitration is taking place where Judicial intervention is sought; the prohibition on Nigerian Agip Exploration Limited & Anor Judicial intervention not provided for in the Model Law is therefore not applicable in connection with an arbitration taking place abroad or an arbitration the place of which has yet to be determined. This limit to the scope of Article 5 (matters), because Courts in many common law Jurisdictions construe their injunctive powers as also allowing them to enjoin foreign arbitral proceedings.”

I have earlier mentioned that the choice of law stated by parties under Clause 25 of the SPA is English Law. See also Article 21 of the International Chamber of Commerce (ICC) Arbitration Rules. To this extent, I will examine the approach of English Courts in respect of the powers of the Courts to make anti-arbitration injunction being sought by the Applicant in the instant case. In Excalibur Ventures LLC v Texas Keystone Inc [2012] 1 ALL ER (Comm.) 933 at 947, the Queens Bench Division of the English Commercial Court, Per Gloster J, held:

“[54] It is clear that the English Courts have Jurisdiction under S 37 of the 1981 ct to grant injunctions restraining arbitrations where the seat of the arbitration is a foreign jurisdiction, although it is a power that is only exercised in exceptional circumstances and with caution…”

Similarly in Clakon Engineering Services Ltd v Txm Olajes Gazkutato Kft (NO 2) (2011) ALL ER (Comm.) 128 at 136, the same Court, Per Hamblem J, held:

“[26] I am accordingly satisfied that I have jurisdiction to grant an injunction. That jurisdiction derives from S.37 of the Senior Courts Act 1981…

[27] The grant of an anti-arbitration injunction is a matter of debate and controversy in international arbitration community…

[28] It is nevertheless clear that the English Courts have jurisdiction to grant such injunctions…”
It is apparent that the English Court relied on Section 37 of the English Senior Courts Act to reach the conclusion that it can grant the anti-arbitration injunction. That section provides:

“(1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears in all cases to do so.

( 2 ) Any such order may be made either unconditionally or on such terms and conditions as the Court thinks just…”

As counsel for the Applicant/Respondent noted, the provisions of Section 37 of the Senior Courts Act is im pari materia with Section 13 of the Federal High Court Act which provides:

“(1) The Court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do.

(2) Any such order may be made either conditionally or on such terms and conditions as the Court thinks just….”

The implication of the foregoing is that pursuant to the provision of Section 15 of the Court of Appeal Act, this Court can exercise the powers conferred upon the Lower Court to grant injunction (anti-arbitration injunction in the instant case) under Section 13 of the Federal High Court Act. Section 15 of the Court of Appeal Act states thus:

“The Court of Appeal may, from time to time, make any order necessary for determining the real question in controversy in the appeal, and may amend any defect or error in the record of appeal, and may direct the Court below to inquire into and certify its findings on any question which the Court of Appeal thinks fit to determine before final Judgment in the appeal, and may direct any necessary inquiries or accounts to be made or taken, and, generally shall have full jurisdiction over the whole proceedings as if the proceedings had been instituted in the Court of Appeal as Court of first instance and may re-hear the case in whole or in part or may remit it to the Court below for the purposes of such re-hearing or may give such other directions as to the manner in which the Court below shall deal with the case in accordance with the powers of that Court, or, in the case of an appeal from the Court below, in that Court’s appellate Jurisdiction, order the case to be re-heard by a Court of competent jurisdiction.”

The purport of the above section has been enunciated by the Supreme Court, Per AgbaJe, JSC (of blessed memory) in the case of Okoya v Santili [1990] 2 NWLR (PT 130) 172 at 207 thus:

“By virtue of Section 16 of the Court of Appeal Act, the Lower Court has all the powers of the trial Court i.e. the powers the Federal High Court has in the matter before it which is now before us on appeal. So in my view, in order to settle completely and finally the matters in controversy between the parties to this appeal in the matter before the Lower ourt and in order to avoid multiplicity of legal proceedings concerning any of those matters, can grant, such remedies as any of the parties may appear to be entitled to…”

The implication of the foregoing is that this Court, and indeed the Lower Court (that is the Federal High Court) can grant an order of injunction enjoining a foreign arbitration proceeding. To this extent, the preliminary objection of the Appellants/Respondents on this ground fails and same is hereby struck out.

As noted earlier, the second issue to be determined, having resolved the first issue affirmatively, whether this Court ought to grant the relief sought by the Applicant, having regards to the circumstances of this case?

Arguing this issue, Applicant’s counsel submitted that the common law principle is that an injunction of the sort, being sought herein will be granted where it will be vexatious, oppressive or unconscionable to allow the Respondent to continue with the arbitration. Relying on the foreign cases of Albon (T/A Na Carriage Co) v Naza Motor Trading SDN BHD [2007] EWCA Cry 1124; Glencore International v. Exeter Shipping [2002] 2 ALL ER (COMM.) 1; Claxton’s case (supra); Elektrim SA v Vivendi Holdings [2008] APP. L.R. 10/24; Black Clawson v Papierwerke [1981] 2 LLOYDS REP 446, counsel submitted that the circumstances and facts leading up to the Applicant bringing application are well set out in the supporting affidavit and further affidavit deposed to in support of this application. He referred to paragraphs 24 to 26 of the affidavit in support and paragraphs 12, 13, 15, 16, 17, 19, 21, 22 and 23 of the further Affidavit in support of its application, counsel made an analogy to the issue of illegality which raised by the Applicant in its Respondent’s Notice on the basis of Sections 1, 51(1) and 68 of the Nigerian Oil and Gas Industry Content Development Act, 2010.

Citing Sodipo v Leminikaimen [1989] 1 NWLR (PT 15) 220 at 222 – 223, he further submitted that once the issue of illegality is brought to the attention of the Court, same overrides all other procedural issues. He also referred to Governor of Lagos State v Ojukwu [1986] 1 NWLR (PT.18) 621. Submitting further, counsel noted that it will be vexatious, oppressive or unconscionable for the Appellant to be compelled to participate in the London Arbitration during the pendency of this appeal when it was the Respondents who brought this appeal and especially as the Applicant is challenging in this appeal, the legality of the Arbitrary proceedings having regard to the public policy of the Federal Government of Nigeria on the Oil and Gas Industry. Counsel also highlighted the surrounding circumstances of this case which makes this Court the most natural forum for the determination of the issue of legality or otherwise of the Arbitration Clause. Counsel commended the foreign cases of Naza Trading (supra) and Excalibur (supra) in support of his submission. It is also the submission of counsel that the Court has a duty to protect the rest of the appeal. Citing KIGO v HOLMAN (1980) 5-7 SC 60 at 73 and 76; Onuzulike v Commissioner For Special Duties, Anambra State [1990] 7 NWLR (PT 161) 252 at 260, counsel noted that although the rest is intangible, it is no less protectable and that the purpose of the injunction being sought is the prevention of the occurrence of an injury which would arise from the Applicant’s participation on an arbitral proceeding which it contends constitutes an infraction of Nigerian law. He contended that the continuation of the London arbitration by the Respondents will prejudice the jurisdiction of this Court to effectually and effectively adjudicate on the appeal and the Respondent’s Notice pursuant to Section 241 of the Constitution. He cited IN Re: Gm Boyo (1970) ALL NLR 114.

Submitting further, counsel noted that the balance of convenience is on the side of restraining the Respondents from taking any further steps in the London arbitration. He cited Braithwaite v Standard Chartered Bank Nigeria Limited [2012] 1 NWLR (PT.1281) 301 at 329 to submit inter alia, that the Applicant stands to lose significantly, if the Respondents are allowed to continue with the arbitration, while the latter has nothing to lose by the grant of this Application. Counsel finally urged this Court to grant this Application.

Responding, counsel submitted that the purport of the Respondent’s Notice is in relation to the alleged illegality of the arbitration clause; thus the Appellant is challenging the validity of the arbitration agreement between the parties herein. Counsel contended that a Court of law can only have jurisdiction after the issue of jurisdiction has been raised before the tribunal, and the tribunal has determined it. He referred to Section 12 of the Arbitration and Conciliation Act; NNPC v. Klifco [2011] 10 NWLR (PT 1255) 209 at 229. Counsel noted that the cases cited by the Applicant are inapplicable in this context. Citing Okoya v Santili (1991) 7 NWLR (PT 206) 753; Akhigbe v Ashimedua [2003] 6 NWLR (PT 817) 439; counsel submitted that the relief sought in an interlocutory application for injunction must relate to those sought in the main action.

On whether the Applicant has satisfied the preconditions for the grant of an injunction, counsel submitted that the Applicant is disentitled from the grant of the injunction because it has failed to satisfy the well established precondition for the grant of same. He placed reliance on Akapo v. Hakeem Habeeb (1992) 2 NSCC 3131 at 327 to submit that the Applicant must show that he has a legal right which is threatened and ought to be protected. He noted that the legal right the Applicant seeks to protect is the right not to be subjected to allegedly vexatious and oppressive arbitral proceedings but that it is settled law that injunctions are not granted to restrain the lawful enjoyment of legal right. He relied on AKIBU & ORS v ODUNTAN [1991] 1 SC 271. Citing Ogbonnaya v. Adapalm (Nig) Ltd [1993] 5 NWLR (PT.292) 147 at 157, counsel submitted that the Applicant’s Respondent Notice, which is the foundation of this application does not disclose serious legal issues to be tried. Submitting further in the light of Obeya Memorial Hospital & Anor v A.G Federation & Anor [1984 2 NSCC 961, counsel argued that the only averments made by the Applicant to demonstrate that the balance of convenience weighs in its favour are to the effect that participating in the Arbitration would result in needless expenditure which the Applicant cannot afford. Learned senior counsel contended that the injury being complained about is clearly financial and compensable by an award of damages. He noted that the injury to the Respondents, in the event that the Anti-Arbitration injunction is granted is more grievous. It is also the submission of counsel, while referring to Afro-Cont (Nig) Ltd v Ayantuyi [1995] 9 NWLR (Pt.420) 421, that the Applicant gave no undertaking as to damages but merely stated that it had meagre financial resources which prevented it from bearing the cost of participating in arbitral proceedings commenced pursuant to the SPA and that in what amount to a clear afterthought, the Applicant in its Reply Affidavit stated that it will pay damages if it is decided that the injunction sought ought not to have been granted. In this respect, counsel contended that an undertaking in damages made by a party who clearly has no means to fulfill the undertaking is worthless. He cited Ita v Nyong [1994] 1 NWLR (PT 318) 56 at 67 and C.G.C (Nig) Ltd v Baba (2004) 10 NWLR (PT.882) 658 at 678, 679 before finally submitting that the Applicant has fulfilled none of the conditions for the grant of the injunction been sought. He then urged this Court to dismiss the Applicant’s motion.

In its Reply Address, Applicant’s counsel argued that there is nothing in Section 12 or anywhere in the Arbitration and Conciliation Act which provides that the jurisdiction of the Court to determine the tribunal’s jurisdiction has been ousted. He placed reliance on Obembe v Wemabod Estates Ltd (1977) 5 SC 70. Learned senior counsel also referred to the decisions of Courts in other jurisdiction in respect of similar provisions of the law: Vikram Bashi v Mcdonalds India Pvt Ltd IA Nos. 6207/2014 IN CS (OS) NO.962/2 14; MSM Satelite (Singapore) PTE Ltd v World Sport Group (Mauritius) Ltd cited in MANU/MH/1112/2010; Nigel Blackbay et al, ‘Redfern and. Hunter on International Arbitration’, Oxford: Oxford University Press, 2009, 31.

Submitting further, counsel contended that this Court cannot decide the merit of the Respondent’s Notice at this interlocutory stage as this is what the Appellants/Respondents seek to make the Court do by their argument in this regard. He cited Group Dannone v Voltic Nigeria Limited [2008] LPELR 1341 (SC).

Learned senior counsel noted that contrary to argument of the Respondents’ counsel that Excalibur and Albon cases are inapplicable; they are in the real sense insightful and persuasive in their reason with respect to the determination of the issues raised in this Application. Counsel noted that the Applicant has satisfied the conditions for the grant of the anti-arbitration injunction. He contended that injunctions are granted upon the judicious and judicial exercise of the discretion of the Court after taking into consideration the facts and circumstances of the case as well as the competing rights and interests of the parties. He referred to Obeya Memorial Hospital (supra) and Lafferi Nig. Ltd v Nal Merchant Bank Plc [2002] 1 NWLR (PT 748) 333. Counsel countered that the argument of the Appellants/Respondents should be rejected for lacking in merit.

Before determining whether the Applicant had in fact satisfied the conditions necessary for the grant of the injunction being sought as per its application, it is necessary that I address the issue raised by the learned senior counsel on behalf of the Appellants/Respondents to the effect that this Court lacks the power to interfere with an Arbitral Tribunal’s power to determine its own jurisdiction.

It is obvious that in relation to the matter at hand, the answer to the question is not far-fetched. As the Learned Senior Counsel rightly noted in his Reply Address on behalf of the Applicant which the Respondent’s counsel also appear to have admitted in his address, the foundation of the Applicant’s application is the Respondent’s Notice wherein the Applicant has challenged the jurisdiction of the London Tribunal, hence the basis of the main appeal. Therefore, it will be unconscionable for this Court to determine the main appeal at the stage of interlocutory proceedings as it is. The law is settled as expressed in plethora of judicial authorities that a Court has a duty to ensure that it does not determine at the interlocutory stage, the issues that would arise for determination in the substantive suit. Reiterating on this position of the law, the Supreme Court in Akapto v. Hakeem Habeeb (supra) at 287, Per KARIBI-WHYTE, JSC held:

“It is of paramount importance to bear in mind the fact that the application before the Court is for a grant of interim injunction pending the determination of the substantive claim brought by the plaintiff. The duty of the Judge in that situation is to ensure that he did not in the determination of the application determine the same issues that would arise for determination in the substantive action.”

See also Adetona v Zenith International Bank Plc (2011) LPELR 8237 (SC), Per CHUKWUMA-ENEH, JSC; GROUP Danone v Voltic Nigeria Limited (supra), Per OGBUAGBU, JSC; Madubuike v Madubuike [2001) 9 NWLR (PT 719) 698 at 707; Duwin Pharm. And Chem. Co. Ltd v Beneks Pharmaceuttcal And Cosmetics Ltd & ORS [2008] 4 NWLR (PT.1077) 376 SC.

It will therefore be prejudicial and ipso facto premature for this Court to go ahead and determine the live issue that will arise from the Respondent’s Notice.

Meanwhile, there are certain conditions that must be satisfied by an applicant with respect to the injunction being sought has been established in a number of cases. See Obeya Memorial Hospital v. A.G Federation (supra); Akapo v. Hakeem-Habeeb & Ors (supra); Yalaju Amaye v A.R.E.C Ltd [1990] 6 SC 157; Shitu Akinpelu v Ebunola Adegbore & Ors (2008) LPELR 354 (SC) 25. Some of these conditions are:

(a) The applicant must show that there is a serious question to be tried i.e. that the applicant has a real possibility of success at trial, notwithstanding the defendant’s technical defence (if any);

(b) The applicant must show that the balance of convenience is on his side, that is, more justice will result in granting the application than refusing it;
(c) that the applicant must show that damages cannot be an adequate compensation for his damage or injury, if he succeeds at the end of the day;
(d) the applicant must show that his conduct is not reprehensible for example that he is not guilty of any delay; (e) No order should be made, for an interlocutory injunction should be made on notice unless the applicant gives a satisfactory undertaking as to damages save in recognized exceptions.

Parties seem to be ad idem as to these conditions but it is whether the Applicant has satisfied these conditions that is the subject of controversy herein.

I must say here that the situation in the instant case is peculiar because injunction being sought by the Applicant is not merely an Anti-Arbitration injunction but one in which a foreign tribunal will be enjoined thereon. The need for caution in the grant of such injunctions in this respect cannot be over-emphasized. It is therefore imperative to note that this kind of injunction is not granted as a matter of course, but will generally only be granted in exceptional circumstances.

The HALSBURY’S LAWS OF ENGLAND, FOURTH EDITION, RE-ISSUE, VOL. 24, Page 853 states thus:

“On application for an injunction in aid of plaintiffs alleged right, the Court will usually wish to consider whether the case is so clear and free from objection on equitable grounds that it ought to preserve property without waiting for the right to be established. This depends upon a variety of circumstances, and it is impossible to lay down any general rule to be established…”

To this extent and contrary to the Respondents’ counsel argument that the foreign cases referred to by the Applicant’s counsel are inapplicable, I must say that those case are not only persuasive but also insightful in respect of the approaches to be adopted in the grant or otherwise of the peculiar form of injunction, that is the Anti-Arbitration injunction that is been sought by the Applicant. As earlier noted, this injunction is sought to enjoin a tribunal outside the jurisdiction of this Court but based on alleged illegality of the agreement that led to the commencement of the proceeding before the foreign tribunal.

In Claxton’s case (supra) at Page 137, HAMBLEM J while restating that anti-arbitration injunction will generally only be granted in exceptional circumstance, held:

“In order to establish exceptional circumstances, it will usually be necessary, as a minimum; to establish that the applicant’s legal or equitable rights have been infringed or threatened by a continuation of the arbitration, or that its continuation will be vexatious, oppressive or unconscionable, these being the principles which govern the grant of injunctions to restrain proceedings in a foreign Court..”

Similar conclusion was reached in Excalibur Ventures (supra) at Page 947, GLOSTER J.

In its Affidavit in support of the motion for the injunction deposed by one Temitope Ishola, the Applicant stated thus:

“20. I verily believe that the continuation of the Arbitration Proceeding Number 21012/TO during the pendency of this appeal will not only be vexatious and oppressive to the Applicant but also inequitable.

PARTICULARS

(a) The Respondents have taken several steps in the proceedings in Suit No.FHC/L/CS/52/15 after the dismissal, on 6 March, 2015, of their application seeking a stay of proceedings pending reference of the dispute between the parties to arbitration.

(b) The Respondents are presently seeking in the Lower Court a stay of proceedings pending the determination of their appeal against the Ruling of that Court given on 6 March, 2015 by reason of which the Respondents seek to stop the continuation of the Applicant’s Suit whilst they would, on the other hand, continue or proceed with their own Arbitration Proceedings Number 21912/TO.

(c) The Arbitration Proceeding Number 21912/TO was commenced by a foreign firm of Solicitors in apparent violation of the provisions of Section 51(1) of the Nigerian Oil and Gas Industry Content Development Act, 2010.

(d) If the Respondents are allowed to proceed or continue with the London Arbitration Proceedings during the pendency of this appeal, the Applicant would be constrained to incur considerable expenses and costs of

(i) The three Arbitrator who would conduct the arbitral proceedings, (which costs and expenses are initially usually shared by both parties),

(ii) Hiring a Legal Practitioner to appear for it and

(iii) passage to and from London which is the seat of the Arbitration, whereas this Court may ultimately hold that Clause 25 of the SPA pursuant to which the Arbitration Proceeding was commenced is illegal and or Arbitration Proceeding was commenced by the foreign firm of Solicitors is illegal or unlawful.

(e) The Applicant is a fledging Nigerian Company with very limited resources whereas the three Respondents are very old multi-national oil and gas Companies with very large financial resources.

(f) Whilst the Respondents can afford to embark on a foreign arbitral proceeding, that might ultimately be declared by this Court to be illegal or unlawful, without any significant negative impact on its financial resources, the Applicant, on the other hand, cannot afford to indulge in such potentially needless expenditure.

21. If the Respondents continue with the London arbitral proceedings against the Applicant and it is ultimately decided by this Court that clause 25 of the SPA, upon which the arbitration is founded is invalid and unenforceable, and or that the Arbitration Proceeding Number 2012/TO commenced by the foreign Firm of Solicitors is illegal or unlawful, the Applicant would have unnecessarily expended time and resources on the arbitral proceedings and even any eventual award by the Arbitral Tribunal would be unenforceable in Nigeria and thereby become worthless.”

In its counter Affidavit dated 24th June, 2015, and deposed by one Enobong Ozor, the Respondent stated thus:

“17. In a Ruling delivered on 30th March 2015, the Lower Court rightly found that the dispute submitted by the Applicant is solely contractual. Nevertheless, the Lower Court dismissed the Appellants’ Motion challenging jurisdiction on the basis that the dispute:

(a) Involved an oil mining lease (OML 25), and (b) involved the actions of the NNPC and the Minister of Petroleum Resources (the “Minister”).

18. ……….

19. On 13th April 2015, the Respondents filed a Notice of Appeal challenging the Rulings delivered by the Lower Court on 6th and 30th March 2015 respectively.

20. On 20th April 2015, the Respondents referred the dispute with Respondent to arbitration pursuant to the arbitration agreement contained in Clause 25 of the SPA.”

From the above, it is apparent that the matter leading up to the instant proceeding was commenced before the request for arbitration was issued. Whereas, the proceedings before the Court has continued and even leading to the appeal before this Court, proceedings at the London Tribunal is at its preliminary stages. More so, this is a case in which the Applicant has shown from the above reproduced portion of its Affidavit in support, that it will be oppressive, vexatious or unconscionable to allow the arbitration proceeding to continue as same will not only involve the pplicant to engage in duplication of work and needless expense; but also expose them to risk a decision that they have submitted to the jurisdiction of the tribunal in relation to the substantive matter before it.

Considering the nature of the substantive appeal before this Court, particularly in respect of the Respondent’s Notice, it is apparent that it will be in the interest of the parties to resolve the issues which has been submitted to the Court in relation thereto, before continuing with the Arbitral proceeding, which in the end will have a substantial consequence with respect to the validity of the pending London Tribunal. Ipso facto, if at the end of the appeal, it is decided that the anti-arbitration injunction ought not to have been granted, the Applicant will be liable to pay such damages as may be assessed. In the meantime, it will be unconscionable for this Court not to grant the application sought by the Applicant having regards to the facts and circumstances of this case and the oppressive situation in making the Applicant to face two parallel proceedings in this respect.

Paragraph 21 and 22 of the Further Affidavit stands out. It states

“f. Subsequent to all of the foregoing by a request for Arbitration issued by the foreign firm of CLIFFORD CHANCE LLP the Respondent commenced Arbitration Reference 21012/TO in which only the Applicant and Respondent can participate to the exclusion of NNPC when the Lower Court proceedings which the parties and the NNPC can be heard.

g. The Applicant’s participation in Arbitral Reference 21012/TO will prejudice and jeopardise the Applicant’s position in the substantive appeal and also with respect to its Respondent’s Notice”

The case of Akinpelu v Adegbore (supra) at 27 is very relevant.

There, the Supreme Court held:

“One factor for granting interlocutory injunction is for the preservation of the RES. It is the province of the law that the res should not be destroyed or annihilated before the Judgment of the Court.
There is doubt that the issue before the Court in the appeal will be compromised if the arbitration is allowed to proceed to an award. See A.G & COmm For Justice Anambra State & Anor v Robert C Okafor & Ors (1992) NWLR (PT.224) 396, where OLATAWURA, JSC held:

“Interlocutory order pending the determination of a suit or an appeal must relate to the issue before the Court of trial or the appeal yet to be heard. It is wrong in law to stay an action not before the Court”

The Supreme Court, in the case of The Military Administrator, Federal Housing Authority & Anor v. Aro [1991) 1 NWLR (PT.168) 405; (1991 LPELR – 3185 (SC) at 9, Per BELGORE, JSC held thus:

“It is therefore appropriate here to state that interlocutory injunction is to mitigate the suffering of the party applying for it so that he will not be in unnecessary hardship during the pendency of the substantive suit. It is always good to prevent injustice that most invariably could not be cured properly at the end of the substantive case if it was not granted”

On the issue of damages, the practice of undertaking for damages has been long endorsed by the Supreme Court where it has been applied where the plaintiff has not been guilty of misrepresentation, suppression or other default in obtaining the injunction vide IGUH, JSC at page 36 in Afro-Continental Nig Ltd v Ayantuyi & Ors SC.23/199O. Furthermore, in Oduntan v. General Oil Limited (1995) LPELR-2249 (SC), OGWUEGBU, JSC at page 13, Per OGBWUEGBU, JSC held that:

“The Court on an application for damages makes use of its power to require undertaking of plaintiff himself or the defendant as the case may be, the purpose being to enable the Court if it thinks that the justice of the case requires it, to compensate a person who has been temporarily restrained should it turn out, that he was needlessly enjoined, for damages which he has suffered meanwhile. It is not in very case that an undertaking as to damages ought to be given”

Earlier at Page 10 – 11, the learned Justice of the Supreme Court held:

“The most usual basis for the grant of an interlocutory injunction is the need to protect the interest of the applicant by preserving the circumstances which are found to exist at the time of his application until the rights of the parties are able to be finally established by proper procedures. This is weighed against a pressing need of the defendant to be protected against injury resulting from his having been prevented from exercising his legal rights from which he could not be adequately compensated in damage if in the end the substantive case is resolved in his favour.”

In the application before us, I am of the view that an undertaking as to damages will not be appropriate in the circumstances of this case.

Having regard to the foregoing, I am inclined to grant the order sought by the Applicant in its motion dated 19th May 2015, to wit, and I so grant: an order of injunction restraining the Appellants/Respondent, whether by themselves, their management, servants, agents, privies, proxies, representatives, nominees or Solicitors or any other person howsoever called acting under or pursuant to their authority from proceeding or continuing with or taking any further steps in the Arbitration Proceedings with international Court of Arbitration (ICC) Number 21012/TO between

1. The Shell Petroleum Development Company Of Nigeria Limited.
2. Total E & P Nigeria Limited.
3. Nigerian Agip Oil Company Limited vs Crestar Integrated Natural Resources Limited which was commenced by Appellants in this appeal on 20th April 2015 vide REQUEST FOR ARBITRATION dated 20TH APRIL 2015 and issued by Appellant’s Solicitors Messrs CLIFFORD CH NCE LLP OF 10 Upper Bank Street Canary Wharf London E14 5JJ United Kingdom, pending the final determination of this appeal which was brought by the Appellants.

IKYEGH, JCA

I agree.

ABUBAKAR, JCA

I agree