Adeoye Magbagbeola V. Temitope Sanni (2001)

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ADEREMI, J.C.A. 

The respondent who was the claimant in the court below, (High Court Lagos, Lagos Division) Coram Rhodes – Vivour, J. had brought an application pursuant to section 7 (2) (b) of the Arbitration and Conciliation Act, Cap. 19, Laws of the Federation of Nigeria, 1990 for the appointment of a sole arbitrator pursuant to clause 17 of the Partnership Agreement dated 7th November, 1999, which is in the following terms:

“All disputes between the partners in relation to any matter whatsoever touching the partnership affairs or the construction of this agreement whether before or after the determination of the partnership shall be referred to an arbitrator.”

The appellant who was the respondent in that court filed a notice of preliminary objection on 22nd May, 2000 challenging the jurisdiction of the court below to entertain the suit on the ground, according to him, that the dispute concerned the running of a company incorporated under CAMA 1990 and that the court lacked the jurisdiction to entertain matters touching the running and sharing of profits of such a company. On the 14th of July, 2000 the learned trial Judge, in a considered ruling dismissed the preliminary objection upholding the contention of the claimant/respondent that the court has jurisdiction to hear and determine the claim. In the course of his ruling the learned trial Judge held:

“In this preliminary objection arguments of counsel call for the examination of the provisions of sections 251(1)(e) and 272(1) of the Constitution of the Federal Republic of Nigeria, 1999.

In the substantive suit the applicant seeks by way of originating summons an order of this court that some fit and proper person be appointed to act as Sole Arbitrator pursuant to section 17 of the agreement between the parties dated 7/11/99″…

Now section 251 (e) of the Constitution states that:-

‘Notwithstanding, anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes or matters arising from the operation of the Companies and Allied Matters Act or any other enactment replacing that Act or regulating the operation of companies incorporated under the Companies and Allied Matters Act.”

While section 272(1) supra states that:-

“Subject to the provisions of section 251 and other provisions of the Constitution the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue…”

there is nothing in the above or any legislation which says that the Federal High Court has exclusive jurisdiction to appoint an Arbitrator. The substantive claim seeks the appointment of Arbitrator and a State High Court or Federal High Court has jurisdiction to appoint an Arbitrator. See Arbitration and Conciliation Act, Cap. 19, Laws of the Federation of Nigeria, 1990, particularly its interpretation section. Section 857 with reference to the appointment of an Arbitrator “court” means the High Court of a State or the Federal High Court while “Judge” means Judge of the High Court of a State or a Judge of the Federal High Court.

In the light of the above this court has jurisdiction to hear and determine the applicant’s claim. Accordingly, the preliminary objection is hereby dismissed.

Aggrieved, the respondent/appellant filed an appeal, the notice of which carries two grounds. Distilled from the two grounds are two issues for determination. Set out in the appellant’s brief they are in the following terms:

(1) Whether from the facts of this case, particularly the partnership agreement dated 7th November, 1999 there is nothing in Section 251 (e) and Section 272 (1) of the Constitution of the Federal Republic of Nigeria 1999 to oust the jurisdiction of the Lagos High Court in this suit.

(2) Whether the learned trial Judge of the lower court was right to use the definition of a court in the Arbitration and Conciliation Act, Cap. 19, Laws of the Federation, 1990 to hold that the Lagos High Court has jurisdiction over this suit without regards to the facts of this suit and the provision of the Constitution of the Federal Republic of Nigeria, 1999.

For his part, the respondent raised only one issue, which as contained in his brief of argument, is as follows:-

“whether the learned trial Judge was right in holding that nothing in Section 251(1)(e) of the 1999 Constitution vests the Federal High Court with exclusive jurisdiction to appoint an Arbitrator”.

The crucial issue for determination in this appeal is whether the State High Court has the jurisdictional power or not to order the appointment of a sole arbitrator for the resolution of a dispute between the appellant and the respondent. The two issues raised by the appellant in his brief of argument and the only issue identified by the respondent point to that crucial issue. I shall therefore take together all the issues so identified for determination. In taking off, I wish to observe that an arbitration clause is only procedural in that a provision whereby the parties agree that any disputes should be submitted to arbitration does not exclude or limit rights or remedies but simply stipulates a procedure under which the parties may settle their differences. I have reproduced, above, the arbitration clause, see (1) Royal Exchange Assurance v. Bentworth Finance (Nig.) Ltd. (1976) 11 SC 183; (2) Obembe v. Wemabod Estates Ltd. (1977) 5 SC 115. The appellant had argued in his brief that since, according to him the dispute in this case involves the incorporation, running and sharing of profits of a company duly incorporated under CAMA the court that can, in law entertain the suit is the Federal High Court, reliance was placed on the decision in Ceramic Mfg. Nig. Plc. v. NIDB (1999) 11 NWLR (Pt.627) 383. In this case, the appellant took a loan from the respondent. It executed a deed of mortgage in favour of the respondent as a security for the loan it took. There was a default. In the exercise of its power to appoint a receiver under clause 42 of the deed of mortgage, the respondent appointed a receiver and then applied to the Federal High Court claiming some reliefs. I stop here and say that the appointment of a receiver is a prelude to putting an end to the life of the incorporated body. That involves the running of the company and under CAMA the court that is seised with the jurisdictional power to entertain the suit is Federal High Court. In the instant case, it is the determination of what the right of each of the two partners (the appellant and respondent) in the partnership business that has led to the bringing of the originating summons. Put simply, the dispute is inter se the appellant and the respondent. It entails the determination of what each is entitled to in the business of Commerce Lords Nigeria Ltd. of which both are partners. Strictly, speaking, it does not relate to the running of Commerce Lords Nigeria Ltd. so as to bring it under the watchful eyes of CAMA. I have had a deep study of the provisions of Section 251(1) and 272 (1) of the Constitution of the Federal Republic 1999 cited by the appellant it is my view that they are not applicable to this case. The breach complained of is as to the partnership agreement, the sharing of the proceeds therefrom. In the case of Confidence Insurance Ltd. v. Trustees of the Ondo State College of Education Staff Pension (1999) 2 NWLR (Pt.591) 373 explaining the effect of arbitration clause in an agreement, this court (Benin Division, per the judgment of Achike J.C.A.) (as he then was) observed at page 386:

“Today, it is common place for parties to a contract to incorporate an arbitration clause in their agreement. It should be noted that the inclusion in an agreement to submit a dispute to arbitration does not generate the heat of ouster of jurisdiction of the court.”

The appointment of an arbitrator in conformity with the agreement of the parties where there is a dispute a matter that is regulated by the Arbitration and Conciliation Act, Cap. 19, Laws of the Federal Republic of Nigeria, 1990. Section 7 (2) (b) of the Arbitration and Conciliation Act provides as follows:

“where no procedure is specified under sub-section (2) of this section:-

(b) in the case of an arbitration with one arbitrator, where the parties fail to agree on the arbitrator, the appointment shall be made by the court on the application of any party to the arbitration agreement made within thirty days of such disagreement. ”

And for what are the definition of “Court” and “Judge”; section 57 says:

“Court means the High Court of a State, the High Court of the Federal Capital Territory, Abuja or the Federal High Court: and “Judge means a Judge of the High court of a State, the High Court of the Federal Capital Territory, Abuja or the Federal High Court.” Viewed from the above definitions the contention of the appellant cannot be sustained. Before I conclude this judgment I wish to say that the High Court of Lagos State being a superior court of record and a creature of statute the law is now well settled that no cause or matter is prima facie deemed to be beyond its jurisdiction unless it is specially or expressly shown to be so. see Anakwenze v. Aneke & Ors. (1985) 1 NWLR (Pt.4) 771, (1985) 6 SC 41. There is nothing in the Arbitration and Conciliation Act which puts beyond the High Court of Lagos State the entertainment of an originating summons praying for the appointment of an arbitrator in the circumstances of this case. Issue No.1 in the appellant’s brief must be answered in the affirmative and I so do. There is nothing in the provisions of sections 251(e) and 272 (1) of the 1999 Constitution ousting the jurisdiction of the Lagos State High Court. Issue No.2 in the same brief is answered in the affirmative. The facts of the case dictate the application of the definition section of the Arbitration and Reconciliation Act. Of course, the only issue identified by the respondent in his brief of argument is answered in the affirmative.

The result of all I have been saying is that this appeal is devoid of merit. It must be dismissed and it is accordingly dismissed. The ruling of Rhodes-Vivour, J. delivered on 14th July, 2000 is hereby affirmed. The respondent is entitled to the cost of this appeal which I adjudge in his favour at N5,000.00.

Other Citations: (2001)LCN/1041(CA)