Clement C. Ebokan V. Ekwenibe & Sons Trading Company (2000)

LawGlobal-Hub Lead Judgment Report

OGUNTADE, J.C.A.

The parties had commenced a relationship between them as business partners. The agreement of the parties was that profits of the business be shared on ratio 14 to 1 as between the appellant and the respondent respectively. The respondent in exercise of the options available to it under the partnership agreement decided to bring the relationship to an end. In reaction, the appellant called for an account of the business. When this was not forth coming, he brought an application before the lower Court for the appointment of an arbitrator to settle the issues between the parties. The arbitrators so appointed on 23/3/87, were Messrs. Uche Chigbo & Co. of No.4 Old Hospital Road, Onitsha.

The arbitrators made their award. In reaction, the respondent brought an application before the lower Court to set aside the award. The appellant filed another application to enforce the award. The lower Court on 26/7/90, struck out the two applications thus effectively leaving the parties in the same position they were before the arbitrators were appointed. In striking out the two applications, the lower Court reasoned thus:

“The whole exercise has been needed (?) up by the arbitrators. I have read the pieces of record of proceedings put together. It is my considered opinion that it could not even pass for a record of proceedings at all. The whole package was put together in untidy form. For my reasoning in this case, the logical conclusion in respect of the consolidated applications is that both applications failed. As I did not consider it necessary in the circumstances of the application to deal with the submissions of both counsel, I would strike out the two applications. To think for the parties and their counsel, it is obvious in the case that they may have to settle this matter out of court or to begin a new exercise afresh”.

Dissatisfied with the ruling of the lower court, the appellant has brought this appeal on 15 grounds of appeal. In the appellant’s brief filed, the issues for determination were identified as the following:

“1. Did the sitting of Mr. Reginald I. Ochiogu, A.C.A. of Uche Chigbo & Co. as Secretary, a resident partner of Uche Chigbo along with Mr. Uche Chigbo in the arbitration vitiate the proceedings in law?

2. Is there any permissive or mandatory provision in the arbitration and Conciliation Decree No. 11 of 1988, directing Arbitrator after giving his award to report the result to the High Court?.
3. Whether the Judge in the court below adopted the correct approach when the respondent failed to file counter-affidavit to the claimant motion for leave to enforce the award; when the respondent did not also adduce argument in challenge to application for leave to enforce the award, when the only alternative left for the learned Judge was to grant to the claimant an order for leave to enforce the award?.
4. Whether the court below was right when the Judge held that it was the duty of the arbitrator to provide the court with copy of the proceedings in the court below instead of the Respondent/Applicant?.
5. Was the court below right when it refused to grant leave to enforce the award?
6. Did the Judge below evaluate the evidence putting the case of the parties on the imaginary scale on the principle of Mogaji v. Odofin?”.

The Respondent in its brief formulated the following issues for determination:

“1. Was the Arbitration Panel properly constituted when Messrs. Uche and Reginal I. Ochiogu sat in arbitration in which the Arbitral Agreement provided for a single arbitrator in the event of disagreement?.

2. Whether a party that applies to the Court for leave to enforce an award which is being contested, opposed or disputed should provide the court with authenticated documents relevant to the application to enable the court to act in accordance with the law?.
3. Whether a party who applied to the court for an award to be set aside and addressed the court on the impropriety of enforcing the award can be said not to have challenged the award?.
4. Whether there were sufficient evidence before the learned trial Judge to enable him apply the principle in Mogaji v. Odofin (1978) 4 SC 91?”.

I shall in this judgment be guided by the issues formulated by the appellant as all the issues raised by the respondent fall within the purview of the issue formulated by the appellant.

The issues raised by the appellant dovetail into each other. I shall therefore take the issues together. It is important that I preface a consideration of issues by stating that I am not in this appeal concerned with whether or not the application which the respondent brought before the lower Court for the award of the arbitrators to beset aside was correctly struck out by the trial Judge. It is sufficient to recognise that the application was struck out and that the respondent has not appealed against the order striking out its application. See Ejowhomu v. Edok-Eter Ltd. (1986) 5 NWLR (pt.39) 1.

In considering the applications brought by each of the parties before him, the trial Judge had not treated each application separately. He generally identified certain matters in the proceedings before the arbitrators and then concluded that these constituted irregularities which did not enable him to consider the applications on their merit. He then struck out the two applications. What I propose to do therefore is to consider the matters identified by the lower Court as constituting irregularities and determine whether or not these constituted reasons enough to refuse the application by the appellant which sought to enforce the award. I should of course, link such matters with the issues for determination.

In an application filed on 2/5/89, the present appellant (as applicant) prayed for an order “to enforce the award in these proceedings made on the 24th day of November,1988, by the respondent”.

In the affidavit in support of the application, the appellant deposed thus:

“I, Clement Chibueze Ebokam, Nigerian, Christian, now resident at Nani Town in Anambra State of Nigeria, do hereby make oath and as follows:-

1. That I am the plaintiff/applicant on record.
2. That upon an originating summons brought by me in this honourable Court for appointment of an arbitrator, the parties having been unable to appoint one on their own, the 2nd respondent herein was appointed sole arbitrator to arbitrate in the dispute between me and the 1st respondent on the 23rd day of March, 1987.
3. That the said arbitration proceedings arose pursuant to an arbitration agreement between the 1st respondent company and myself dated 6th of December, 1976.
4. That the 2nd respondent duly conducted the arbitration proceedings pursuant to the said appointment and based on pleadings as filed by both parties and on the evidence led on both sides.
5. That by an order of this honourable Court made pursuant to an application for enlargement of time within which to deliver to the award brought by the 2nd respondent, on the 4th day of November, 1988, the 2nd respondent was allowed till the 28th day of November, 1988, to deliver the award.
6. That on the 24th day of November, 1988, the 2nd respondent in the presence of the parties and their counsel delivered the said award.
7. That after delivery of the said award, the 2nd respondent did not give me nor my solicitors a copy of the award and as it was adjudged that the 1st respondent shall bear the costs of the arbitration, the 1st respondent not having paid the said costs of arbitration which includes the arbitrators fees and out of pocket expenses, the 2nd respondent exercising a right of lien over the said award refused to give same to either party until the said costs was paid.
8. That the said award has now been released by the 2nd respondent and same is already before the Court and annexed to the “Further and better affidavit for and on behalf of Uche Chigbo & Co. (sole Arbitrator) sworn to by one Donatus Aduba, a Legal Executive in the law firm of Messrs. A. C. Afubera & Co., the 2nd respondent’s Solicitors, herein on 3/4/89, in the proceedings relating to the application brought by the 1st Respondent to set aside the award afore-said”.
9. That the said award annexed to the affidavit aforesaid as Exhibit ‘A’ shall be relied upon at the hearing of this application.
10. That the said award sets out in detail, the pleadings of the parties before the arbitral tribunal (i.e. points of claim; defence to counter-claim), to show the issues joined by the parties to the submission.
11. That also set out in the award in the partnership agreement between the parties dated 6th of December, 1976, the basis of the association between the 1st respondent and I, the interpretation of which gave rise to the arbitral proceedings and arbitration award in the said Exhibit ‘A’ above referred, That I make the contents of this affidavit bonafide and in support of my application”.

The respondent did not file a counter-affidavit to the affidavit in support of the application, That being the position, the facts deposed to in the affidavit in support of the application were to be accepted as unchallenged evidence, Now the lower Court in its ruling at pages 261 – 262 of the record of proceedings observed:

“From the foregoing reasoning, the materiality of the records of proceedings with the exhibits is vital to the hearing of the 2 consolidated applications.

Equally, it is impossible to deliberate on the application to enforce the award when the records of the proceedings is (sic) not sent to this Court, thus this Court is not put in a position to get at the reasoning how the award has (sic) arrived at. In the face of this glaring irregularity which goes to the root of the applications set aside the award and to enforce the award, the basis is non -existed (sic) to consider the marathon submissions of both counsel in the applications, I am in no doubt in my mind that the whole exercise in the arbitration from the beginning to the end is a waste of precious time and money. Equally, the whole exercise in the matter is an exercise in futility”.

From the above, it would appear that the reason why the trial Judge did not consider the application to enforce the award was because the record of proceedings before the arbitrator was not before him, Section 31 of the Arbitration and Conciliation Act, Cap 19 Laws of the Federation 1990 provides:

“31(1) An Arbitral award shall be recognised as binding and subject to this section 32 of this Act, shall upon application in writing to the Court, be enforced by the Court,

The party relying on an award, or applying for its enforcement shall supply-

(a) the duly authenticated original award or a duly certified copy thereof;

(b) the original arbitration agreement or a duly certified copy thereof,

(3) An award may, by leave of the Court or a Judge be enforced in the same manner as a judgment or order to the same effect”.

It is manifest that the appellant only needed to bring before the lower court the original award or a certified copy thereof and the original arbitration agreement or a duly certified copy thereof. In the course of the proceedings before the lower court, the appointed arbitrator, Mr. Uche Chigbo filed the award and also the arbitration agreement. There was therefore no doubt that the necessary documents as prescribed under section 31 of Cap 19 Laws of Nigeria, 1990, were before the lower Court.

It could therefore be no valid excuse to the lower Court that the relevant proceedings were not before it. Certainly, the only materials which the Law considers relevant for the enforcement of an award were before the lower Court.

In an application to enforce an award, the plaintiff must prove:

1. The making of the contract which contains the submission.
2. That the dispute arose within the terms of the submission.
3. That Arbitrators were appointed in accordance with the clause which contains the submissions;
4. The making of the award; and
5. That the amount awarded has not been paid: See Christopher Brown Ltd. v. Genossenschaft etc. (1953) 2 All ER 1039 at 1040.

I had made the point that, the respondent did not challenge the facts deposed to in the affidavit in support of the motion. From the undisputed facts before the lower Court, it was established that- (a) The parties had an agreement between them referring the dispute between them to a Sole Arbitrator (b) That the Arbitrator made the award. (c) That the amount awarded has not been paid. (d) The nature of the dispute also fell within the terms of the award.

The only aspect upon which the lower Court would appear to have expressed a reservation as to the matters that the appellant needed to establish was in connection with the number of Arbitrators who sat on the case. Clause 17 of the agreement of parties provided:

“17. Any dispute or question in connection with the partnership of this agreement shall be referred to a single arbitrator under the provision of the Arbitration Act or any statutory modification or re-enactment thereof for the time being in force”.

The lower court in its ruling at page 258 expressed a displeasure that more than one person sat on the arbitration panel. The Court said:

By the Order of this court dated 23rd March, 1987, Messrs. Uche Chigbo and Company of No. 4 Hospital Road, Onitsha was appointed the Sole Arbitrator between the parties in this action. The point is uncontestable and beyond controversy that the said Arbitrator alone was appointed by the court. However, it is curious in the case to find from the pieces of record I found in the Judge’s file that it appeared that it is not Mr. Uche Chigbo alone who presided over this Arbitration, but one Mr. Reginald I. Ochiogu, A.C.A., a resident partner of Messrs. Uche Chigbo and Company also took his seat along with the Sole Arbitrator. Throughout the proceedings in the Arbitration, his name occurred in the pieces of proceedings I found in the court’s file. Moreover, this gentleman also signed the award finally as a witness. I think that there is a general misconception on the part of the parties and their Counsel, not even the learned Arbitrator who is an accountant that the order appointing Mr. Uche Chigbo as the Sole Arbitrator spread over to other partners in the firm. This is clearly a serious error as it appeared that a stranger took part in the Arbitration. My own understanding of the order of this Court is appointment of Mr. Uche Chigbo as the Sole Arbitrator in the Arbitration. This is one of the unsatisfactory features of this Arbitration”. (Italics Mine)

I think the lower court was wrong in its conclusion that more than one person sat over the dispute between the parties as Arbitrators. The lower court itself had appointed an unincorporated body “Messrs. Uche Chigbo and Company of No. 4 Old Hospital Road, Onitsha”, as sole administrator. Being an unincorporated body, the firm of Uche Chigbo & Co. must consist of employees and partners other than the principal partner, Mr. Uche Chigbo. It seems to me that the law must regard Uche Chigbo & Co. as one firm or one body even if it consists really of other employees and partner. It would be wrong for Uche Chigbo & Co. to bring in persons other than their employees and partners to sit over the Arbitration. But it is my view that, for as long as no outsiders were brought in, it would be untenable to argue that other partners within Uche Chigbo & Co. could not assist the principal partner within the same firm in an assignment belonging to the firm. In any case, it is apparent from the award that Mr. Reginald I. Ochiogu, was only used as secretary of the Arbitration. I am therefore satisfied that only one person sat over the Arbitration in accordance with paragraph 17 of the Parties Agreement and the order made by the Court.

The other criticisms of the award by the lower court included these: (1) That the Arbitrator did not file the proceedings of the Arbitration panel with the lower court. (2) That the exhibits used by the Arbitration Panel were not transmitted to the lower court. It seems to me that all these criticisms ought only to have been directed against the Respondent in this appeal who had brought an application that the award be set aside and therefore bore the burden of proving its case including the provision of the documents needed for such proof. As I observed earlier, since the Respondent whose application was struck out by the lower court has not appealed, I am not placed to decide whether or not the lower court was correct in striking out the application by the respondent on the grounds stated.

Had I been satisfied that the Arbitrators appointed by the lower court did not act alone, I would have agreed with the views expressed by the lower court. The law is that Arbitrators cannot refer their arbitrements to others or umpire; if the submission be not so; neither can they make their arbitrement in the name of themselves and of a third person to whom no submission was made, not later after it is once made. See Neale v. Richardson (1938) 1 All ER 753.

But an Arbitrator may delegate to another the performance of acts of a Ministerial character. Such acts include in my humble view the duties of recording evidence as secretary which Mr. R. Ochiogu performed in this case. Now in this case, the respondent had brought an application that the award be set aside. He had inter alia alleged some acts of misconduct against the Arbitrator. The application to set aside the award was struck out. The respondent did not appeal against the order striking its application out. The facts in support of the application to enforce were not challenged as there was no counter-affidavit filed by the respondent. In the circumstances, I think that leave ought to be granted to the appellant to enforce the award in his favour. In deciding to grant leave to enforce the award, I bear in mind the views expressed by the Court in Re Hopper (1867) L.R. 2 Q.B. 367 by Cockburn C.J. that-

“I would observe that we must not be over-ready to set aside awards where parties have agreed to abide by the decision of a tribunal of their own selection, unless we see that there has been something radically wrong and vicious in the proceedings”.

I can see nothing vicious or wrong in the proceedings before the Arbitrator in this case. Parties who make a submission to an Arbitrator often do so in order to adopt a quick, simple, inexpensive and technicality – free procedure to resolve their dispute. A court should not therefore upset the expectation of the parties except for the clearest evidence of wrong doing or manifest illegality on the part of the Arbitrator.

In the final conclusion, this appeal is allowed. The order of the lower court striking out the application to enforce the award is set aside. In its place, I make an order granting leave to the appellant to enforce the award made on 24/11/1988, by Uche Chigbo & Company of No. 4 Old Hospital Road, Onitsha in favour of the appellant. I award in favour of the appellant against the 1st respondent costs assessed and fixed at N5,000.00k

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Other Citations: (2000)LCN/0754(CA)