J. Export & Chemical Company Limited V. Kaduna Refining & Petro-chemical Company Limited (2002)
LawGlobal-Hub Lead Judgment Report
MAHMUD MOHAMMED, J.C.A. This appeal is against the judgment of the High Court of Justice of Kaduna State delivered by Dogara Mallam J. at Kaduna on 14/5/96. The dispute between the parties arose out of an agreement entered between the parties in this appeal on 11/5/93 by which the appellant hired 4 ISO-Tanks from the respondent for shipment of petroleum products on a rental charge of N10,000.00 for each tank for a period of 8 weeks. The appellant took delivery of the tanks and used the same to ship petroleum products to Europe. At the expiry of the 8 weeks period of lease of the tanks, the appellant failed to return them to the respondent as agreed.
When the respondent requested the appellant to return the tanks, the appellant attributed its failure to return the tanks to the uncertainty in the political situation in Nigeria then brought about by the disputes over the June 12 election. The appellant however promised to deliver the tanks to the respondent on or before 10th August 1993 undertaking to pay any surcharge that may be due. On further demand for the return of the tanks by the respondent, the appellant this time attributed its failure to return the tanks to the alleged industrial action at the Lagos Port. After repeated demands, the appellant finally returned the tanks to the respondent in September 1993 in clean condition along with the payment in the sum of N80,000.00 rental charges for the tanks.
However, nearly 3 months after returning the tanks to the respondent and paying for the lease charges, the appellant raised problems encountered with the tanks in Europe by its agent who claimed the sum of $85,016 from the respondent being alleged expenses incurred by the foreign partner or agent on account of unsuitability of the tanks, lack of fitness certificate for them, rental of alternative tanks in Europe and fines paid for the tanks for breach of relevant regulations. When the appellant’s claim was resisted by the respondent, the appellant then proposed the appointment of an arbitrator to resolved the dispute between the parties and this was accepted by the respondent. When the parties appeared before the arbitrator jointly appointed by them, instead of the earlier sum of $85016.00 claimed by the appellant’s foreign agent, the respondent found a claim of $400,000.00 filed by the appellant awaiting adjudication by the arbitrator jointly appointed by the parties. Thus, the respondent instead of responding to the claim of the appellant before the arbitrator, headed to the Kaduna State High Court of Justice Kaduna and filed an action against the appellant by an originating summons dated 20/12/94 and claimed the following reliefs –
“1. A declaration that the defendant’s claim against the plaintiff upon which reference has been made to Martin M. Olisa (Arbitrator) is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement dated May 11, 1992.
- Leave to revoke the arbitration agreement and the arbitrator’s authority upon the ground set out above.”
Although the appellant by a motion on notice had applied to the trial court for stay of proceedings in this action pending the determination of the arbitration proceedings between the parties, the application was refused by the trial court which proceeded to hear and determine the respondent’s action. In its judgment delivered on 14/5/96, the learned trial Judge granted the reliefs sought by the respondent in its Originating Summons in the following terms:-
“Judgment is hereby entered for the plaintiff as follows: –
The defendant’s claim against the plaintiff upon which reference has been made to Martin O. Olisa (Arbitrator) is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement dated 11th May, 1993. Leave is hereby granted the plaintiff to revoke the arbitration agreement and the arbitrator’s authority.”
Aggrieved by this judgment, the defendant in the trial court which is now the appellant in this Court had appealed against it upon 4 grounds of appeal contained in its Notice and grounds of appeal dated 30/7/96. In the appellant’s brief of argument deemed filed on 12/12/2000 in compliance with the rules of this Court, 2 Issues were formulated from the 4 grounds of appeal for the determination of the appeal. The Issues are:-
“(a) Whether the learned trial Judge was right in entertaining the respondent’s Originating Summons seeking to revoke the authority of the arbitrator on ground of fraud.
(b) If the answer to (sic) (1) is in the affirmative, whether the learned trial Judge was right in revoking the authority of the arbitrator on the ground that the claim of the appellant was prima facie fraudulent.”
The plaintiff now respondent also filed a respondent’s brief of argument within the time extended by this Court on 22/4/2002 also raising 2 Issues from only 3 of the 4 grounds of appeal filed by the appellant as learned senior counsel for the respondent had clearly stated at page 5 of the respondent’s brief that only 3 grounds of appeal were filed by the appellant. However, as far as the appellant’s Notice and Grounds of Appeal dated 30/7/96, contained at pages 75-76 of the record of this appeal is concerned, there are 4 distinct grounds of appeal filed by the appellant. As the issues identified in the respondent’s brief of argument were not related to the grounds of appeal, it is not quite clear which of the grounds of appeal the learned senior counsel to the respondent had decided to ignore in preparing the respondent’s brief of argument which raised the following issues for the determination of the appeal.
“1. Do the courts have the jurisdiction or power under Nigerian Law to intervene where claims before an arbitrator are prima facie fraudulent so that such claims are determined by a court of law?
- If the answer to the above question is positive, was the learned trial Judge right in declaring the present claims prima facie fraudulent and consequently revoking the authority of the arbitrator to determine them?”
Having regard to the 4 grounds of appeal filed by the appellant in this appeal, it is quite clear that the 1st issue framed in the respondent’s brief of argument does not arise from any of the grounds of appeal filed by the appellant.
A brief of argument ought to be confined to matters which properly arise has consistently avoided going into purely academic question.”
Nnamani, JSC (of blessed memory) also underscored the same point in AKEREDOLU V AKINYEMI (1986) 2 NWLR (PT.25) 710 AT -725 where he said:-
“It has long been established that this court will not render an advisory opinion nor will it deal with a matter which is speculative and academic.
The court deals with life issues.”
Thus in the present case where the respondent in its issue NO.1 is asking this Court to determine whether courts in Nigeria have the jurisdiction or power under the law to intervene where claims before an arbitrator are prima facie fraudulent, even though such determination would no doubt be beneficial to the legal profession, to succumb to the demand would definitely lead to rendering an advisory opinion which is not the function of this Court. In the result, Issue NO.1 in the respondent’s brief of argument which does not arise from any of the grounds of appeal filed by the appellant, shall be ignored in the determination of this appeal.
For the foregoing reasons, I shall proceed to determine this appeal on the issues as framed by the appellant in the appellant’s brief of argument.
The first issue for determination therefore is whether the learned trial Judge was right in entertaining the respondent’s Originating Summons seeking to revoke the authority of the arbitrator on the ground of fraud.
In support of this issue, learned counsel to the appellant had argued that by the combined effect of sections 2, 12 and 27 of the Arbitration and Conciliation Act CAP 19 of the Laws of the Federation 1990 and the Arbitration rules made under it, the lower court had no power to intervene in the dispute between the parties after the commencement of the arbitral proceedings. That the Arbitration Act guards the jurisdiction and powers of the arbitrator very jealously and as such notwithstanding section 2 of the Act, a court cannot revoke the arbitral clause after arbitration proceedings have commenced but must direct all parties back to the arbitrator to raise their complaints before him. Learned counsel further argued that the learned trial Judge was in error to have tried an issue of fraud on the originating summons which is only suitable for cases of construction of contracts as specified by Order 37 Rules 1 & 2 of the Kaduna State High Court Civil Procedure Rules. That if the learned trial Judge had taken into consideration of the cases of N.B.N V ALAKIJA (1978) 9-10 SC 59; and DOHERTY V DOHERTY(1967) 1 ALL NLR 245, he ought to have converted the originating summons to pleadings to enable the parties lead evidence viva voce before arriving at a decision. On the reliance by the trial court on Section 24 of the 1950 Arbitration Act of England and the Common Law in arriving at its decision, the appellant’s counsel pointed out that the Arbitration and Conciliation Act of Nigeria having codified matters relating to arbitration in Nigeria, there was no room for falling back on the English Law or Common Law in the absence of similar provision to Section 24 of the 1950 English Arbitration Act in the Nigerian Arbitration Act.
That relying on the case of N.T.C. V AGUNANE (1995)5 NWLR(PT.397) 541, the lower court was wrong in relying on Section 24 of the 1950 Arbitration Act of England and the Common Law to arrive at its decision.
The argument of the learned senior counsel for the respondent on this issue dwelled mostly in support of his academic issue on the powers of English courts and Nigerian courts in general to intervene and stop arbitral proceedings. The arguments were not related specifically to the present case until at page 15 of the respondent’s brief where learned senior counsel cited Sections 2 and 35 of the Arbitration and Conciliation Act, CAP 19 of the Laws of the Federation 1990 as containing enough provisions empowering the lower court to act as it did even in the absence of similar provisions of section 24(2) of the 1950 Arbitration Act of England in the Nigerian Act. That on the provision of the law, the procedure adopted by the respondent in coming to the lower court was quite in order. That under the law, whenever an issue of fraud arises, even in the con of civil proceedings, the standard is that the allegation must be specifically pleaded and proved beyond reasonable doubt as required by section 138 of the Evidence Act and a long line of cases including UGO V OBIEKWE (1989) 1 NWLR (PT. 99)566 AT 592.
The issue now under consideration is whether the learned trial Judge was right in entertaining the respondent’s originating summons seeking to revoke the authority of the arbitrator on ground of fraud. The first complaint of the appellant in this issue is that by virtue of the provisions of sections 2, 12 and 27 of the Arbitration and Conciliation Act, CAP 19 of the Laws of the Federation 1990 which contain no provision for revocation of arbitration agreement, the learned trial Judge was wrong in entertaining the claims and granting the reliefs sought by the respondent.
Section 2 of the Arbitration and Conciliation Act CAP 19 of the Laws of the Federation 1990 which is relevant in this respect states:-
“2. Unless a contrary intention is expressed therein, an arbitration agreement shall be irrevocable except by agreement of the parties or by leave of the court or judge.”
In order to find out whether a contrary intention had been expressed by the parties in the agreement in relation to its revocation, it is necessary to refer to the agreement in the present case which was executed between the parties on 11/5/93 containing an arbitration clause iii worded as follows:-
“Should any dispute arise in connection with the terms of the contract or the performance thereof, such dispute shall be settled by an arbitrator to be agreed upon by the parties hereto or in default of such agreement by an arbitrator to be appointed in accordance with CAP 13 Laws of the Federation of Nigeria on the application of either party to the High Court of Justice in Nigeria.”
Therefore in the absence of a clear contrary intention of the parties in the above arbitration clause by section 2 of the Arbitration and Conciliation Act, the same can be revoked by the agreement of the parties who brought it into being by their own agreement. It is also clear from the same provision of section 2 of the Act that where the parties failed to agree to revoke the arbitration agreement, any of the parties to the agreement may seek the leave of the court or judge to revoke the agreement.
As to which court or judge the application for leave could be made, the answer is contained in section 57(1) of the Act which defines ‘court’ as the High Court of a State, the High Court of the Federal Capital Territory, Abuja or the Federal High Court. In the same sub-section of the Act, ‘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. Thus, on the proper application of section 2 of the Act as earlier quoted in this judgment, the action filed by the respondent at Kaduna State High Court of Justice before Dogara Mallam J. seeking for a declaration and leave of that court to revoke the arbitration agreement was quite in order.
The appellant had also complained on the propriety of bringing such action by way of originating summons by which such controvertial issue of fraud was determined by the lower court.
As to which types of actions are suitable for being commenced by originating summons, Order 37 Rules 1 and 2 of the Kaduna State High Court Civil Procedure Rules 1987 give some guidance. These rules read as follows: –
“1. Any person claiming to be interested under a deed, Will, or other written instrument may apply by originating summons for the determination of any question of construction arising under the instrument and for a declaration of the rights of the persons interested.
- Any person claiming any legal or equitable right in a case where the determination of the question whether he is entitled to the right depends upon a question of construction of an enactment, may apply by originating summons for the determination of such question of construction, and for a declaration as to the right claimed”.
There is no doubt that the whole essence of the Kaduna State High Court (Civil Procedure) Rules in general is to provide for the determination of Civil Proceedings when the issues are clear on the pleadings and the parties are clearly seised of the issues in controversy between them. However, it is quite clear from rules 1 and 2 of Order 37 of the Kaduna State High Court Rules 1987 quoted above and the leading Supreme Court decision on the appropriateness or otherwise of using originating summons to commence an action in the case of NATIONAL BANK OF NIGERIA LTD V. LADY AYODELE ALKIJA & ANOR. (1978) 9 & 10 SC 59, that application by originating summons should never be a substitute for initiating contentious issues of fact. Kayode Eso JSC (as he then was) had this to say at page 71 of the report on the question as follows:-
“In other words it is our considered view that originating summons should only be applicable in such circumstances as where there is no dispute on questions of fact or the likelihood of such dispute. Where for instance, the issue is to determine short questions of construction, and not matters of such controversy that the justice of the case would demand the settling of pleadings, originating summons could be applicable.”
Even under the United Kingdom Rules where there is option to proceed either by writ or originating summons, and where the courts in England have developed a modern trend of extending the use of the procedure by originating summons to declaratory actions, the courts still take good care not to substitute the use of that procedure for contentious actions of disputed facts. Lord Denning, M.R. (as he then was) in PUTTON V MINISTRY OF PENSIONS 1963 1 ALL E. R 275 seemed to have had this in mind when he said at page 278 of the report as follows:-
“Before us, counsel on behalf of the plaintiffs did not rely on the affidavits which they had filed on the facts. Counsel did not even read them. He made it quite clear that he was no longer challenging the findings of fact by the Commissioner.
All counsel desired, he said was a determination of the point of law: what was the proper interpretation of the words in the statute ‘directly interested?
Were the plaintiffs on the facts found by the Commissioner ‘directly interested’ or not in the trade dispute which caused the stoppage of work? When the case is put that way, it seems to me to be a very proper matter for determination for originating summons for a declaration. Indeed it is a sensible and modern way of approach.”
In the present case, quite contrary to the contention of the appellant, the trial court did not try the contentious issue of fraud which requires proof beyond reasonable doubt on an originating summons. What the lower court simply determined on the facts which were not in dispute between the parties was that the claim of the appellant submitted for arbitration between the parties was prima facie fraudulent and therefore not a proper subject of arbitration which therefore required revocation under the law.
The facts which were not in dispute between the parties arose from an ISO tanks lease agreement for 8 weeks duration which was completed with the return of the tanks used by the appellant to their owners the respondent which was duly paid N80,000.00 for the hire. On the request of the appellant the respondent also waived the sum of N60, 000.00 paid by the appellant as surcharge for the late return of the tanks. However after the return of the tanks, paying for their hire or lease and enjoying the waiver of the surcharge for the late return of the tanks in clean conditional in accordance with the lease agreement containing an arbitration clause, the appellant’s foreign agent then submitted a claim of US$85016.00 for expenses incurred on the hiring of the tanks which were not in good condition. The parties then agreed to go to arbitration. When this claim rose to the tune of US$250,000.00and then to the tune of US$400,000.00 at the time the parties finally appeared before the arbitrator appointed by them, the respondent decided to abandon the arbitration proceedings and headed for the lower court for the reliefs contained in its originating summons.
Having regard to these facts which were not in dispute between the parties and the provision of section 2 of the Arbitration and Conciliation Act, CAP 19 of the Laws of the Federation 1990 under which the action was filed, I am of the view that the respondent’s claim for the declaratory reliefs were properly heard by the originating summons procedure. To this extent the learned trial Judge was right in entertaining the respondent’s case because the facts leading to the filing of the action which were based on documents exchanged between the parties were not in dispute or even likely to be in dispute.
The second issue for determination is whether the learned trial Judge was right in revoking the authority of the arbitrator on the ground that the claim of the appellant was prima facie fraudulent. Learned counsel to the appellant had argued that the lower court was in error when it relied on section 24 of the 1950 Arbitration Act of England in arriving at its decision when no similar provisions are contained in the Nigerian Arbitration Act CAP 19 of the Laws of the Federation 1990. Relying on the cases of CUNNINGHAM-REID V. BUCHANAN-JARDINE (1988) 2 ALL E. R. 438; and CAUNILLA COTTON OIL CO. V. GRANDEX SA (1976) 2 LLOYDS REP.10, learned counsel to the appellant observed that although the party alleging fraud actually commenced an action alleging fraud and claimed account and damages in the first case) while allegation of fraud was not made until at the Court of Appeal stage in the second case, there was no authority for permitting prima facie fraud to be first established by originating summons before an issue of fraud could be raised in a separate action. That the mere fact that the appellant claimed a sum higher than previously claimed does not make such action fraudulent as silence per se cannot amount to fraud taking into consideration the case of OLUFUNMISHE V. FALANA (1990)3 NWLR (PT.136) 1. Learned counsel to the appellant therefore concluded that fraud cannot be traced at all from the facts of this case and as such there was no basis for revoking the authority of the arbitrator.
In the respondent’s brief however, the learned senior counsel pointed out that the trial Judge was not invited to decide the issue of fraud and in fact he did not decide the issue of fraud. That what the Judge was invited to decide was merely the best forum to adjudicate on the appellant’s claims against the respondent and that was what the learned trial Judge did basing his findings on the affidavit evidence placed before him by the parties. Having found that the charge of fraud was not baseless, the learned trial Judge was right in granting the respondent’s reliefs in exercise of his discretion. That since there was no complaint by the appellant that the discretion was not properly exercised, the declaration that the appellant’s claims were prima facie fraudulent was quite in order, concluded the learned senior counsel.
The question of whether or not the lower court was right in revoking the authority of the arbitrator on the ground that the claim of the appellant was prima facie fraudulent can be easily determined from the judgment of the lower court itself and the applicable law on the subject of the revocation being attacked in this issue. The relevant part of the judgment of the lower court from which this issue arose is at page 74 of the record and it reads:-
“Judgment is hereby entered for the plaintiff as follows:-
The defendant’s claim against the plaintiff upon which reference has been made to Martin O. Olisa (Arbitrator) is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement dated 11th May. 1993. Leave is hereby granted the plaintiff to revoke the arbitration agreement and the arbitrator’s authority.”
It is significant to note that as far as the present issue is concerned, there is no complaint against the declaratory relief granted to the respondent by the lower court that the defendant now appellant’s claim upon which reference had been made to the arbitrator was prima facie fraudulent and therefore not a proper subject of arbitration. In other words the real complaint in the issue is the alleged revocation of the authority of the arbitrator by the lower court. The question however is did the lower court in fact revoke the authority of the arbitrator in its judgment as alleged in this issue as framed by the appellant? The answer is of course in the negative having regard to the plain relief sought by the respondent in its originating summons and the actual relief granted by the lower court. In this respect, the relief sought by the respondent reads:-
“Leave to revoke the arbitration agreement and the arbitrator’s authority upon grounds set up above.”
This was the relief that was granted by the learned trial Judge who granted leave to the respondent which was the plaintiff to go ahead and revoke the arbitration agreement and the arbitrator’s authority as sought in the reliefs contained in the originating summons. Therefore since the lower court did not itself revoke the authority of the arbitrator in its judgment, the question of whether that court was right in revoking the arbitrator’s authority on any grounds can not even arise from the judgment of the trial court.
It is important to emphasise that the formulation of the issues for determination should be based on the grounds of appeal filed and must also be related to the judgment being challenged in the appeal. See OKONKWO V OKOLO (1988) 2 NWLR (PT. 79) 632 at 649.
This issue therefore should have been properly framed by asking the correct question of whether the lower court was right in granting the respondent leave to revoke the arbitration agreement and the arbitrator’s authority.
Section 2 of the Arbitration and Conciliation Act, CAP 19 of the Laws of the Federation 1990 earlier quoted in this judgment provides that unless a contrary intent is expressed therein, an arbitration agreement shall be irrevocable except by agreement of the parties or by leave of court or of a Judge. By this provision on the surface, once parties enter into a valid arbitration agreement, as the parties did in the present case, one of them cannot unilaterally revoke that agreement. However, where a party has a good cause to want to revoke the agreement, that party must apply to the court or judge to be granted leave to do so as was correctly done by the respondent in this case. While it is true that the court has no power under the law to revoke such arbitration agreement between the parties who brought it into being, the court has the power to grant leave to any of the parties to such agreement to go ahead to revoke the same on satisfying the court of good reasons for the need to do so. This is because to my mind, an arbitration agreement like any other contract properly entered into between parties can also be lawfully repudiated before performance.
It is trite that the disputes which are the subject of an arbitration agreement must be arbitrable. In other words the agreement must not cover matters which by the law of the State are not allowed to be settled privately or by arbitration usually because this will be contrary to the public policy. Thus, a criminal matter, like the allegation of fraud raised by the respondent in this case, does not admit of settlement by arbitration as was clearly stated by the Supreme Court in the case of KANO STATE URBAN DEVELOPMENT BOARD V. FANZ CONSTRUCTION LTD. (1990) 4 NWLR (PT.142)1 at 32-33. This position of the law appears to have been further stated under the Arbitration and Conciliation Act, CAP 19 Laws of Federation. Our legal system draws much of its strength from being part of a Common Law system having its roots in the past while remaining organic. Our efforts should be directed to how best to build on the legacy of that great system of laws rather than to a denigration of the past we have built on and are building on.”
Therefore having regard to the history of this great nation Nigeria and its legal system, the Common Law principles of law are not only still applicable in the development and continued development of our legal system but will also continue to be so applicable.
It is perhaps necessary to point out at this stage that the learned trial Judge in the present case did not determine the issue of fraud which by law is required to be specifically pleaded and proved beyond reasonable doubt by credible evidence in line with section 138 of the Evidence Act – CAP 112 of the Laws of the Federation 1990, and the case of UGO V OBIEKWE (1989) 1 NWLR (PT.99)566 AT 592 on originating summons as alleged by the appellant in its argument. The decision of the trial court had merely declared that the claim of the appellant before the arbitrator appointed by the parties was prima facie-fraudulent and therefore not suitable or proper subject of arbitration as contemplated by the parties in their agreement executed on 11th May, 1993 and accordingly granted the respondent leave to revoke the same. This of course leaves the appellant with the option of filing the same claim before a court of law of competent jurisdiction where the claim for the damages incurred by the appellant’s agent abroad and the question of fraud raised by the respondent on the claim could be properly determined on pleadings.
However, on the undisputed facts of this case where a contract for the hire of 180 tanks for the rental charges in the sum of N80,000.00 which accrued to the respondent in the transaction gave rise to a claim of U8$400,000.00 damages to the appellant, I am of the firm view that I have no reason whatsoever to disagree with the learned trial Judge that the appellant’s claim is prima facie fraudulent and therefore not suitable for arbitration. It is for these reasons that I have decided that this appeal must fail. Accordingly, the appeal is hereby dismissed with N5, 000.00 costs to the respondent.
ISA AYO SALAMI, J.C.A.: I have read before now the judgment of my learned brother, Mahmud Mohammed, JCA, just delivered and I am in complete agreement with the reasoning contained therein and the conclusion arrived thereat. I propose to add one or two words of mine purely as a matter of emphasis.
The learned counsel for appellant, in the appellant’s brief, framed or identified the following two issues as calling for determination:-
“(a) Whether the learned trial judge was right in entertaining the Respondent’s originating summons seeking to revoke the authority of the arbitrator on ground of fraud.
(b) If the answer to (a) is on the affirmative, whether the learned trial judge was right in revoking the authority of the arbitrator on the ground that the claim of the Appellant was prima facie fraudulent.”
In canvassing issue (4) learned counsel sub-divided his arguments into the following categories:-
3.1 Propriety of claim;
3.2 Propriety of procedure; and
3.3 Nature of and interpretation of Cap.19.
Learned counsel for respondent did not complain either in the respondent’s brief or orally against the line of argument adopted by the learned counsel for the appellant. Although learned counsel for appellant failed to disclose from which of his four grounds of appeal issue (a) was framed, it is nevertheless clear that it is the rule of practice and procedure not to canvass or advance argument in respect of more than one issue which may embrace one or more grounds at a time. The question of procedure and claim are clearly incongruous and could not arise from the same ground of appeal. I do not propose to proceed further in my observation since parties failed to join issue thereon.
Learned counsel for appellant contended that learned trial judge relied on the provisions of Section 24 of the Arbitration Act, 1950 of England in arriving at his decision. I have scanned the judgment of the learned trial judge and cannot find a single reference to S. 24 of the English enactment. The learned trial judge, after ably reviewing the facts leading the respondent to suspect fraud, held as follows:-
“It is reasonable to my mind for the plaintiff to suspect foul play or fraud on the part of the defendant. Sir Michael J. Mustil and Stewart C.
Boyd the learned authors of Commercial Arbitration (Second Edition) on P.116 said as follows:-
“An issue of fraud is capable in principle of falling within the scope of an agreement to arbitrate whether or not it does so depends on the wording of the agreement. The court has however a jurisdiction to order that the arbitration agreement shall cease to have effect and may also give leave to revoke authority of the arbitrator, so far as may be necessary to enable an issue of fraud to be determined in the High Court.”
Learned trial judge further read from pages 282 – 283 of the Halbury’s Laws of England, Fourth Edition to buttress his point of view that where an agreement between parties provides that disputes which may arise in the future between the parties shall be referred to arbitration and the dispute which arises involves issue of fraud the high court has power to enable it determine the question if any of the parties is guilty of fraud. Learned trial judge therefore relied on the common law of England and not a statute of England. Section 28 of the Kaduna State High Court Law, Cap.67 of the Laws of Kaduna State of Nigeria, 1991 allows the trial court to do what it did. Section 28 of Cap.67 reads as follows:-
“28. Subject to the provisions of any written law and in particular of this section and of sections 26, 33 and 35 of this Law:-
(a) the common law
(b) the doctrines of equity shall, in so far as they relate to any matter in respect of which the state is for the time being competent to make laws, be in force within the jurisdiction of the court.”
(underlining mine)
See NTC v. Aguname (1995) 5 NWLR (Pt.397) 541 and Caribbean Trading and Fidelity Corporation v. Nigerian National Petroleum Corporation etc (2002) 14 NWLR (Pt.786) 133.
Section 2 of Arbitration and Conciliation Act Cap.19 of the Laws of the Federation of Nigeria, 1990 seem to vest power similar to those contained in S.24(2) of the Arbitration Act 1950 of England but for its economy of words. Section 24(2) of the English Act reads as follows:-
“(2) Where an agreement between any parties provides that disputes which may arise in the future between them shall be referred to arbitration, and a dispute which so arises involves the question whether any such party has been guilty of fraud, the High Court shall, so far as may be necessary to enable that question to be determined by the High Court, have power to order that the agreement shall cease to have effect and power to give leave to revoke the authority of any arbitrator or umpire appointed by or by virtue of the agreement.”
(underlining mine)
Section 2 of Arbitration Conciliation Act Cap.19 reads as follows:-
“2. Unless a contrary intention is expressed therein, an arbitration agreement shall be irrevocable except by agreement or by leave of the court of judge.”
These provisions clearly recognize that arbitration agreement at any stage may be revoked with leave of court. It is settled principle of interpretation of statute that where the words of a legislation is clear it should be given its clear, natural and grammatical meanings. Nablan v. ablan (1967) 1 All NLR 47 and Mobil Oil (Nigeria) Ltd v. Federal Board of Inland Revenue (1977) 3 SC 53. There is nothing in the statute impeding the power of the court under this section to grant leave or restricting the exercise of the powers to certain stages of arbitral proceeding or stipulating grounds upon which leave may be granted to revoke arbitration agreement. I agree with the learned counsel for respondent’s submission that the ground upon which leave might be considered and granted would be in accordance with the established principles of common law such as fraud or public policy.
The position of the law is that the principles of common law and equity are part of the Nigerian arbitration law so far as the principles are nowhere abolished by the Arbitration and Conciliation Act, Cap.19. I am encouraged in this proposition by the book of Olakunle Orojo and Ayodele Ajomo Law and Practice of Arbitration and Conciliation in Nigeria cited in the respondent’s brief. At page 12 thereof, learned authors states as follows:-
“There are two main sources of Nigerian Arbitration Law. The first is the common law and the doctrines of equity and the second is the statute. There has never been an Arbitration code in Nigeria. Rather, the statutes only deal with certain major issues, leaving all the lacunae and crivices to be filled by the common law and the doctrine of equity supplemented by trade usages and indeed, the agreement of the parties.”
(underlining mine)
See also section 22(4) and 47(4) of Cap.19 which equally provide for application of these bodies of law.
In the circumstance, I disagree with the proposition of law contained in the appellant’s brief to the effect that the Nigerian Arbitration and Conciliation Act (a) is a codifying statute and is exhaustive on the whole law of arbitration including statute as well as common law and (b) the omission of a section similar to the provision of section 24(2) of the English Arbitration Act 1950 was a deliberate and significant intention by the legislature to make all question upon arbitration agreement determinable only by the arbitrator. I do not think that this is a question of being influenced by a provision of the English Arbitration Act, 1950.
Section 24(2) thereof is a common law principle that has been enacted.
If we tear ourselves from the statute, can we easily divorce ourselves from the principles of common law to which we have been married by virtue of our colonial heritage and the legal system that has thereby evolved? Certainly not. I refused to be intimidated by the case Nigeria Tobacco Co. Ltd. v. Aguname (1995) 5 NWLR (pt.397) 541 cited in the appellant’s brief. I am rather fortified, in my view, that common law is enforceable or is applicable in Kaduna State of Nigeria by dint of section 28 of the Kaduna State High Court Law Cap. 67. See also Carribbean Trading Fidelity case (supra) and Aguname’s case (supra). Nowhere did Aguname case decide that common law is not applicable in Nigeria.
Finally, the issue of propriety of commencing the action by originating summons is respectfully premature or academic at this stage.
What the court was called upon was to adjudicate the appropriate forum to contest appellant’s claim arbitration or High Court. The nature of suit would only be relevant, after the High Court had ordered that the agreement shall cease to have effect, leave given to revoke the authority of the arbitrator or umpire and the appellant decides to approach the High Court for its remedy. In that circumstance, the appellant as the plaintiff would have to commence the action by taking out a writ of summons which will invariably necessitate ordering or filing of pleadings.
The reason for trying the issue on the pleadings is that originating summons cannot be used to initiate a claim based on allegations of fraud. Originating summons is only suitable for cases of construction of statute or contract or where the facts are not in dispute as in the suit culminating into this appeal. See Order 37 rules 1 and 2 of the Kaduna State High Court (Civil Procedure) Rules Cap. 68 of the Laws of the Kaduna State of Nigeria, 1991, N.B.N. V B. Alakija (1978) 9-10 SC.59 and Doherty v. Doherty (1976) 1 All NLR 245 cited in the appellant’s brief. All that was required was for the trial judge to examine the material placed before him by the affidavit evidence of both parties and ascertain whether the charge of fraud was substantial. And clearly there is no dispute amongst the parties on the facts accepted by the learned trial judge in these proceedings. It is when the forum for the trial of the appellant’s claim against the respondent shifts from the arbitration to the High Court and issue or issues are joined on fraud that the charge of fraud must be pleaded with utmost particularity as has been aptly pointed out by Thesiger L.J. in Davy Bros v. Garret (1878) 7 Ch D 489 and United Africa Co. Ltd. V B. Taylor (1936) 2 WACA7. At that stage, the considerations would be different as that action and not the instant one will be tried on pleadings.
For this and the fuller reason contained in the lead judgment of my learned brother Mahmud Mohammed, JCA, 1 also dismiss the appeal. I abide by all the consequential order including the order as to costs contained in the lead judgment of my learned brother, Mahmud Mohammed.
Other Citations: (2002)LCN/1289(CA)
