Onward Enterprises Limited V. Mv “matrix” & Ors (2008)
LawGlobal-Hub Lead Judgment Report
ADZIRA GANA MSHELIA, J.C.A.
This is an interlocutory appeal against the ruling of the Federal High Court, Lagos delivered on the 11th day of August, 2004 by Abdullahi Mustapha J. in suit no FHC/L/CS/242/2002.
By contract of Affreightment contained in and/or evidenced by Bills of lading numbered Nos. 148/02B, Nos. 148/02, Nos. 348/02, Nos. 448/02, Nos. 448/02B and Nos. 248/02 dated at Bangkok, Thailand on 25/3/2002, the Plaintiff contracted with the defendants to carry about 280,000 bags of rice from Bangkok, Thailand, to Lagos and Port Harcourt in Nigeria for valuable consideration. In breach of the contract of Affreightment aforesaid, and/or their Duty of Care and/or in breach of their duty as bailee for reward, the defendant damaged and lost some of the plaintiffs cargo. The appellant who was the plaintiff before the lower court took out a writ against the respondents and by his amended statement of claim dated 15/07/2002 appearing at page 66 of the record claimed as follows:-
“WHEREUPON the plaintiff claims as endorsees the sum of US$500, 000 only or its equivalent in Naira with interest at 21% per annum until payment, being damages suffered by the plaintiff by reason of the Defendants’ breach of contract of afffeightment and/or bailment and by reason of the Defendants’ negligence in their care of the plaintiffs cargo of rice, as well as Admiralty costs and legal Expenses.”
The appellant simultaneously, with the issue of the writ of summons aforesaid also filed a motion ex-parte for the arrest and detention of ‘MV Matrix” (1st Respondent herein) which application was granted on 02/07/02 and the Respondents vessel aforesaid was then arrested by the court. The respondents filed two (2) applications simultaneously both dated 12/7/02 and filed 15/07/02. While the first was for the release of the Respondents’ vessel, the second application sought to shift the vessel to anchorage, pending the hearing of the former for release. The appellant consented to the release of the vessel and filed consent to release on 26/07/2002. By order of court granted on 10/06/2002, appellant amended their statement of claim.
On 11/07/2003, the Respondents filed a motion on notice for stay of proceedings pending reference to arbitration in London. The motion was supported by main affidavit containing 10 paragraphs and a further and better affidavit also containing 10 paragraphs. Appellant also filed 16 paragraphs counter-affidavit. The learned trial Judge after considering the submission of counsel, in a considered ruling delivered on 11/08/2004 granted stay of proceedings pending reference of dispute between the parties to arbitration in London.
Dissatisfied with the ruling appellant filed its notice of appeal on 13/08/2004 containing 2 grounds of appeal. In accordance with the practice of this court both parties filed and exchanged briefs of argument. Appellant filed its brief on 9/02/05, while respondents brief was filed on 11/08/05 but same was deemed properly filed on 11/06/07. A reply brief was also filed by the appellant on 15/06/07.
When the appeal came up for hearing appellant’s counsel Mr. Babajide Koku adopted and relied on appellant’s brief of argument. At the same time learned counsel urged the court to allow the appeal. Similarly, respondents’ counsel Mr. Olorunfemi adopted and relied on respondents’ brief of argument and urged us to dismiss the appeal.
From the two grounds of appeal contained in the Notice of Appeal, appellant on one hand distilled one issue for determination in this appeal to wit:-
“Whether the learned trial Judge was right when he ordered a stay of proceedings at the trial court pending reference to Arbitration in London.”
Respondents on the other hand adopted the sole issue formulated by the appellant in the determination of this appeal. The issue is as reproduced supra.
In respondents’ brief of argument he raised a point which I want to resolve before considering the merit of the appeal. Respondents’ counsel contended that the two grounds of appeal do not show any challenge to the lower court’s exercise of its judicial discretion. All of appellant’s arguments on exercise of Judicial discretion must flow from the ground of appeal and argument on the issue must not be off target. See Morakinyo Vs Adesoyero (1995) 7 NWLR (Pt 409) 602 at 614 – 5 H – A.
Appellant’s counsel on the contrary in his reply brief responded to this argument. Learned counsel contended that the application which gave rise to the ruling appealed against called upon the lower court to exercise judicial discretion as statutorily conferred upon the court by section 5 of the Arbitration and Reconciliation Act (Cap A18 LFN 2004). The lower court in granting respondent’s application, exercised its discretion. Learned counsel submitted that the challenge to the grant of the application cannot therefore raise any other challenge than the exercise by the lower court of its judicial discretion granted by the section 5 Arbitration and Reconciliation Act. The lower court in granting the Respondents’ application, exercised its discretion in favour of the Respondents. It was contended that the cases of Morakinyo Vs Adesoyero supra and Urhobo Vs Oteri (1999)2 NWLR (Pt 589) 147 at 156, A – G, F – G are completely in opposite and inapplicable to this case.
I have carefully examined the two grounds of appeal and the sole issue formulated by the appellant.
It is trite that issues for determination in an appeal must of necessity be limited or circumscribed and falls within the scope of grounds of appeal. Like pleadings to litigation between the parties, the issues for determination are intended to accentuate the real issues for determination before the court. Hence, the issues for determination cannot and should not be at large, but must fall within the preview of the grounds of appeal filed. Issues not formulated from grounds of appeal are liable to be struck out. See Nya Vs Edem (2005) 4 NWLR (Pt 915) 345; Urhobo Vs Oteri supra; Olowosoga V Adebanjo (1988) 4 NWLR (Pt 88) 275 at 283 and Gamstac Eng. Ltd s F.C.D.A. (1988) 4 NWLR (Pt 88) 296. Although appellant’s counsel did not specifically mention the word exercise of discretion, I agree with his submission that the challenge to the grant of the application cannot raise any other challenge than the exercise by the lower court of its judicial discretion granted by section 5 of the Arbitration and Conciliation Act. The issue as couched in my humble view is not from the abstract. I hold that the sole issue as formulated is in order, as such the objection is unfounded and same overruled.
In his submission in respect of the sole issue formulated, learned appellant’s counsel conceded that the lower court has discretion in deciding whether or not to grant a stay of proceedings under section 5 of the Arbitration and Conciliation Act (Cap A18 LFN 2004) but that the discretionary power should be exercised Judicially and Judiciously. Reference was made to cases of: Delfam (Nig) Ltd Vs Okaku International Ltd (2005) 15 NWLR (Pt 735) 203 at 252 para B – C; Eronini & Ors Vs Ihneko (1989) 2 NWLR (Pt 101) 46 at 61. The learned trial Judge improperly exercised his discretion having regard to the peculiar facts of the case. Learned counsel submitted that at the time the claim was filed any claim which may be submitted under the arbitration agreement had become “waived” or “barred”. Clause 40 of the charter party agreement and paragraphs 8, 9, and 10 of the appellant’s counter-affidavit appearing at pages 161 – 162 of the record were referred to. According to learned counsel the depositions were unchallenged and should be taken as established. See A. G. Ondo State Vs A. G. Ekiti State (2001) 7 NWLR (pt 741) 206 at 749 – 750 para G – C. Furthermore, appellant’s counsel contended that appellant’s claims were caught up by the time-bar provision of the Hague/Visby Rules applicable in England. Article 3 rule 6 refers. By granting the stay of proceedings the trial court has permanently deprived the appellant of remedy and has offended the ratio decidendi of the Supreme Court in Sonnar (Nig) Ltd Vs Partenreederi M.S Norwind Vol.3 NSC 175 at t 92. The ratio decidendi is to the effect that a stay of a Nigerian suit would not be granted where the granting of stay would spell injustice to the plaintiff particularly where the action is already time-barred in the foreign forum in favour of which the stay is granted.
It was further contended that respondents have lost the right to apply for a stay of proceedings under section 5 or the Arbitration and Conciliation Act (Cap A18 LFN 2004) because they had taken steps in the proceedings by filing two motions on notice in the matter before the application for stay. See Niger Progress Ltd Vs Nekon (1989) 3 NWLR (Pt 107) 68 at 91 – 92; H.B & KSUDB Vs Fanz Construction Ltd (1990) 4 NWLR (Pt 142) 1 at 285 and Obenibe Vs Wemabod Estates Ltd 11 NSCC 264 at 272. It was the view of appellant’s counsel that the application to shift the vessel amounts to a step taken in the suit. Learned counsel stressed the need for this court to interfere with the exercise of discretion by the trial court because the order of the lower court was to defeat the rights of the appellant. He urged the court to allow the appeal.
In response, learned counsel for the respondents contended that the question of time bar limitation does not apply to the present proceeding at all or anymore since the appellant commenced the action within time and also obtained security before the lower court. The process of arbitration was already triggered/commenced when respondents appointed their own arbitrator as far back as 22nd July, 2002, 20 days after appellants suit was commenced before the lower court. Learned counsel urged the court to uphold the findings of the trial Judge appearing at pages 220 – 222 of the record. Learned counsel contended that Article 3 rule 6 of the Hague/Visby rules allows room for extension of time for the arbitration. It was also his submission that stay of proceedings is not synonymous with dismissal of action. The action can always be resuscitated in the lower court. Learned counsel referred to the case of Sonnar Ltd Vs Norwind supra and contended that the Supreme Court distinguished foreign jurisdiction clause from a foreign arbitration clause. The decision of this court in MV “Parnomos Bay” Vs Olam Nig Ltd (2004) 5 NWLR (Pt 865)1 at 13 is distinguishable and inapplicable to the present case. Counsel submitted that the Court of Appeal in that case did not have the opportunity of considering section 10 of the Admiralty Jurisdiction Act (1991) and case of MY Lupex Vs N.O.C. & S. Ltd (2003) 15 NWLR (Pt 844) 469 before arriving at that decision. Counsel urged us to follow the decision of this court in Confidence Insurance Ltd VS. Trustees of O.S.CE. (1999) 2 NWLR (Pt 591) 393 and Supreme Court decision in MV Lupex Ys N.O.C & S. Ltd supra. He placed reliance on the cases of Disu V Ajilowura (2001) 4 NWLR (Pt 702) 76 at 91 and Camptel Int. SPA Vs Dexson Ltd (1996) 7 NWLR (Pt 459) 70 at 84. It was his contention that section 10 (1) & (2) of the Admiralty Jurisdiction Act 1991 gives Nigerian court jurisdiction to stay proceedings pending arbitration in London. To further buttress his point he relied on the case of Obembe Vs Wemabod Estates Ltd (1977) NSCC Vol. 11 264 ratio 5 and Halsbury Laws of England (4th Edition) Vol 2 para 555. Referring to the interpretation of the word “May” used in section 5 and ‘shall’ in section 4 of the Arbitration and Conciliation Act; counsel submitted that once the court is satisfied that the requisite conditions are fulfilled by the applicants, it must order a stay of proceedings. Learned counsel contended that respondents are only exercising their right under the contract of affreightment evidenced by the Bills of lading.
Furthermore, respondents’ counsel submitted that an arbitration agreement would be binding on the parties once it is written. It may be included in the parties contract by reference or implication. See Commerce Assurance Ltd Vs Alli (1992) 3 NWLR (Pt 232) 710 at 721-722. Even where the arbitration agreement is ineptly drafted the court cannot disregard it, same remains the contract of the parties and ordinary rules of law relating to contract applies. A case in point is the Supreme Court decision in MISR Nig Ltd Vs Assad (1971) NSCC Vol 186 ratio 2.
On the point that respondents had taken steps in the proceedings counsel contended that respondents did not take steps in the proceedings to compromise their right to stay of proceedings pending arbitration. Learned counsel argued that an application to shift the ship while under arrest or release her from arrest does not amount to taking steps. What the law contemplates is filing of pleadings. See C.O.F. Industries Ltd VS C.S.S.A. marine Ltd & 2 Ors (1990 – 93) vol.1 NSC 98. Learned counsel contended that respondents filed conditional memorandum of appearance and made it clear that they were going to apply for stay of proceedings and refer dispute between the parties to arbitration in London. Reference was made to pages 219 & 220 of the record. Learned counsel, finally urged the court to dismiss the appeal and order appellant to honour its agreement by going to London for arbitration.
The sole issue for determination in this appeal is whether the learned trial Judge was right when he granted a stay of proceedings pending reference to arbitration in London.
The learned trial Judge exercised his discretion pursuance to section 5 of the Arbitration and Conciliation Act Cap19 Laws of the Federation of Nigeria 1990 and granted the application for stay of proceedings pending reference to arbitration in London. The power is indeed discretionary. It is settled law that an appellate court does not interfere with the discretion of a trial court unless when it is shown that the trial court has acted on some wrong principles of law or misapprehension of facts or that the exercise is patently wrong. See W.A.A.E Co Ltd Vs Akinsete (1999) 13 NWLR (Pt 636) 600.
The appellant who is complaining that the discretion was not exercised judicially and judiciously has the onus to advance strong cause why this court should interfere with the trial court’s exercise of discretionary power.Appellant raised the point that the Respondents had already taken steps as such they are not entitled to stay of proceedings. Section 5(1) of the Arbitration Act makes it clear that the right to evoke the arbitration provision must be asserted before a party takes any other step in the proceedings. For clarity section 5(1) of the Arbitration and Conciliation Act provides:-
“If any party to an arbitration agreement commences any action in any court with respect to any matter which is the subject of an arbitration agreement, May, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings”.
What then constitutes taking “steps in the proceedings”. In Obembe Vs Wemabod Estates Ltd (1977) Vol 11 NSCC 264 the Supreme Court held that:-
“In order to get a stay, a party to a submission must have taken no step in the proceedings. A party who makes any application whatsoever to the court, even though it be merely an application for extension of time, takes a step in the proceedings”. Delivery of a statement of defence is also a step in the proceedings.
In another related case Confidence Insurance Ltd Vs Trustees of O.S.C.E. supra at page 387 Achike JCA (as he then was) had this to say:-
“It is perfectly clear to me that mere entering an appearance by the appellant be it conditional or unconditional appearance, is not controlling nor relevant to the party’s right to rely on the arbitration clause inserted in the parties agreement.
On the contrary, it is in fact what happens after a party has entered an appearance that matters in determining whether or not such a party can still take advantage of the aforesaid arbitration clause”.
See also Halsbury’s Laws of England Volume 2 (1991) 4th Edition paragraph 627. The Learned authors gave examples of what constitutes “steps in the proceedings” as follows:-
“Steps in the proceedings have been held to include: the filing of an affidavit in opposition to summons for summary Judgment, service of a defence, and an application to the court for leave to serve interrogatories, or for a stay pending the giving of security or costs, or for an extension of time for serving a defence or for an order for discovery or for an order for further and better particulars”.
In the instant case, respondents entered conditional appearance and filed two motions on notice before the application for stay. One sought the release of the vessel, while the second sought an order to shift the vessel to anchorage. The application for stay of proceedings was the third application filed by the Respondents. For the appellant, the application to shift the vessel in particular amounts to a step taken in the proceedings. It is evident from the record that respondents did not file any statement of defence nor applied for extension of lime to file any statement of defence. I agree with the submission of respondents’ counsel that neither the application for the release of the vessel nor the application to shift the vessel to anchorage pending the determination of the application to release her from arrest constitute steps taken within the contemplation of section 5(1) of the Arbitration and Conciliation Act. It is only acts done in furtherance of the prosecution of the defence that could be said to amount to steps taken in the proceedings. The learned trial Judge in my humble view rightly concluded on this point at pages 219 and 220 of the record as follows;-
“On the first question, it is in evidence that the Defendants applied to lift the order of arrest of their vehicle M.V. “Matrix”. It is also in evidence that the Defendants applied to shift the vessel to anchorage. These acts to my mind do not come within the necessary intendment of section 5(1) of the Arbitration Act in so far as admiralty matters are concerned. Taking another step must be steps taken by the Defendants towards prosecution of their defence before the court such as filling a Statement of Defence or applying for extension of time within which to file same or application to amend Statement of Defence already filed,”
For the reasons stated, I am of the firm view that the contention of appellant’s counsel that respondents have lost their right to apply for stay of proceedings under section 5 or the Arbitration and Conciliation Act because they have taken steps in the proceedings cannot be sustained.
The next point to resolve is whether the action is time-barred. Appellant contended that it was no longer possible to submit a valid claim under the arbitration agreement at the time the application for stay of proceedings was filed because a period of one year had elapsed since the cause of action arose and the claim would have been submitted outside the agreement. Also at the time the application was filed by the Respondents, the Appellant’s claims were caught up by the time-bar provision of the Hague/Visby Rules applicable in England. I think it is necessary from the onset to note the nature of the arbitration agreement and the relevant Hague/Visby Rules referred to by the appellant’s counsel. Clause 40 of the charter – party dated 7th March, 2002 read as follows:-
“The charter-party is governed by English Law and any dispute arising out of this charter unless the parties agree on a single arbitrator, shall be referred to the final arbitrament of the two arbitrators in London. One to be appointed by each of the parties with power to such arbitrators to appoint an umpire. The arbitrators including the umpire so appointed shall be members of the L.M.A.A. and whose rule shall apply. Any claim must be made in writing and claimant’s arbitrator appointed within 6 months of redelivery and where this provision is not complied with, the claim shall be deemed waived and barred —–,”
Article 3 Rule 6 of the Hague/Visby Rules also provides:-
“Subject to paragraph 6 his the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods; unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.”
It appears parties did not dispute the fact that the cause of action occurred in June, 2002 when the appellant’s goods were delivered in Nigeria. After discharge of the goods the next line of action concerned the redelivery of the ship to the owner. Appellant in the instant case commenced the suit before Federal High Court Lagos on 2/07/02 within time. It is note worthy that when the respondents brought the application for stay of proceedings on 11/07/03 some documents were attached to the further and better affidavit filed on 10/9/03 as Exhibits FA2, FA3, FA4, FA5, FA6, FA7, FA8, FA9 and FA10 respectively. The said exhibits were reflected in paragraphs 3, 4, 5, and 6 of the further and better affidavit. See pages 145 and 146 of the record. It is evident from the various exhibits referred to supra that respondents had since 22/07/02 appointed their own arbitrator and the said information was communicated to the appellant. The respondents timely set in motion arbitration proceedings by appointing their arbitrator in compliance with clause 40 of the charter-party agreement endorsed by both parties. It seems to me respondents fulfilled their own obligation. See Tradex Export Vs Volkswagenwerk A.G. (1970) 1 QB 537. Section 5(1) of the Arbitration and Conciliation Act clearly shows that the party praying for arbitration as an applicant has the duty to comply with section 5(2) (b) of the said Act by commencing the arbitration proceedings. Section 5(2) (b) of the Arbitration and Conciliation Act provides:-
“(2) A court to which an application is made under subsection (1) of this section may, if it is satisfied
(a) That there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and
(b) That the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration.
The approach of the respondents clearly indicates that they are ready and willing to do all things necessary to the proper conduct of the arbitration. I have carefully examined the averments deposed to in the counter-affidavit filed by the appellant in opposition to the motion filed for Stay of proceedings with particular reference to paragraphs 7, 8 and 9 relied upon by appellant’s counsel. (Pages 161 and 162 of the record refer). I agree with the observation of the learned trial Judge that the reasons are not substantial enough to prevent the grant of stay of proceedings.
Contrary to the submission of appellant’s counsel the granting of stay of proceedings in my humble view did not offend the ratio decidendi of the Supreme Court in Sunnar Nig Ltd Vs Partenreederi M.S Nordwind supra because appellant would not be permanently deprived of remedy. Sunnar Vs Nordwind supra is distinguishable from the case in hand. In Sunnar Vs Nordwind the Supreme Court agreed to reverse the decision of both the High Court and Court of Appeal because it was established during the hearing of the appeal that if parties were sent to Germany which was the country adopted by the parties in the Bill of Lading as the place of litigation in regard to any dispute arising between them the action would be time-barred under the German law. In the instant case, as earlier stated appellant instituted the action before the Federal High Court i.e. trial court within time. As rightly submitted by respondents’ counsel even if the claim to be submitted before the arbitrator in London is time-barred the same provision i.e. Article 3 rule 6 of the Hague/visby Rules reproduced supra relied upon by the appellant allows for extension of time. Appellant is entitled to explore that opportunity. It is my humble view that respondents need not seek leave before raising this point because it is the same provision relied upon by the appellant’s counsel to buttress the point that the claim is time-barred. If the Arbitrator hold that the dispute before it is time barred, the appellant’s action before the trial court is not time barred and so appellant can fall on it. See section 4(2) of the Arbitration and Conciliation Act. The respondents have conceded to the jurisdiction of the trial court and are not trying to oust it. The granting of the stay only temporarily ousted the jurisdiction of the trial court pending the completion of arbitral proceedings in London. In Confidence Assurance Vs Trustees, Ondo College of Education supra at page 386 Achike JCA (as he then was) had this to say:-
“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 arbitaration does not generate the heat of ouster of jurisdiction of the court. It merely postpones the right of either of the contracting parties to resort to litigation in court whenever the other contracting party elects to submit the dispute under their contract to arbitration. Second where such reference to arbitration under the arbitration clause is properly raised the trial seized of the action cannot overlook a party’s right to submit to the arbitration, which clearly is a condition precedent to the exercise of its discretion”.
The question of denying the appellant permanently of remedy does not arise in the instant case. The stay was granted on the condition that the security posted by the respondents be retained to abide any order that the arbitrator may make.
I am mindful of the decision of this court in M.V. Panormos Bay vs. Olam (Nig) Plc supra referred to us by respondent’s counsel. In that case this court declared null and void an arbitration agreemnet which states that
disputes between parties shall be referred to Arbitration in London on the ground that section 20 of the Admiralty jurisdiction Act 1991 is a statutory limitation to the enforcement of the arbitration agreemnt in the bills of lading.
The reason is that such agreement would deny the Nigerial courts temporarily of jurisdiction. As rightly observed by respondent’s counsel the court was not called upon to consider the Supreme Court decision in M.V. Lupex vs. N.O.C. & S Ltd supra as well as section 10 of the Admiralty Jurisdiction Act 1991.
In M.V. Lupex Vs N.O.C. & S Ltd supra the appellant requested the trial Federal High Court to stay proceedings of the action filed by the respondent in view of the agreement the two parties entered in clause 7 of the Charter-Party which reads:
“7 That parties agreed inter alia on arbitration in London under English Law in the event of any dispute,”
The Federal High Court refused the stay of proceedings and on appeal this court affirmed the decision of the trial court. On further appeal to the Supreme Court, the appeal was allowed and stay of proceedings was ordered. The apex court held among other things that where parties have agreed to refer their dispute to arbitration in a contract, it behoves the court to lean towards ordering a stay of proceedings. By this decision it is clear that stay of proceedings could be granted pending reference to arbitration in a foreign country in deserving cases. I wish to note that section 20 of the Admiralty jurisdiction Act was not discussed in that case.
Let me acknowledge that decision of this court is generally binding on this court until overruled by the Supreme Court. However, there are exceptions to this doctrine of stare decisis these are:-
(a) The court will refuse to follow a decision of its own which although not expressly overruled cannot in its opinion stand with a decision of the Supreme Court.
(b) Is not bound to follow a decision of its own if given per incuriam.
(c) The court is entitled to decide which of two conflicting decisions of its own it will follow,
See Camptel Intl SPA Vs Dexson Ltd (1996) 7 NWLR (Pt 459) 179 at 184 and Disu Vs Ajilowura (2001) 4 NWLR (Pt 702) 76 at 90. In the instant case, having regard to the facts and circumstances of the case, I am inclined to follow the decision of the Supreme Court in M.V. Lupex Vs N.O.C & S Ltd supra because by implication the decision of this court in Olam’s case cannot stand as regards the point stated that section 20 of the Admiralty Jurisdiction Act limited enforceable agreements to those having Nigeria as its forum. The provision of section 10 of the Admiralty Jurisdiction Act 1991 referred to by respondents’ counsel is also relevant. The provision clearly shows that it is within the discretionary power of court to stay proceedings pending reference to arbitration in foreign country. For clarity section 10 reads:-
“(1) without prejudice to any other power of the court-
(a) where it appears to the court in which a proceeding commenced under this Decree is pending that the proceedings should be stayed or dismissed on the ground that the claim concerned should be determined by arbitration (whether in Nigeria or else where) or by a court of a foreign country; and
(b) where a ship or other property is under arrest in the proceedings, the court may order that the proceeding be stayed on condition that the arrest and detention of the ship or property shall stay or satisfactory security for the satisfaction of any award or judgment that may be made in the arbitration or in a proceeding in the court of the foreign country.”
The parties in this dispute by clause 40 of the charter-party agreed to refer their disputes to Arbitration in London under the English law. It is a basic principle of law that where parties to a contract have under the terms thereof agreed to submit to arbitration if there is any dispute arising from the contract between them a defendant who has not taken any steps in the proceedings commenced by the other party, may apply to the court for stay of proceedings of the action to enable parties go to arbitration as contracted.
Once an arbitration clause is retained in a contract which is valid and the dispute is within the contemplation of the clause, the court should give regard to the contract by enforcing the arbitration clause. See Heyman and Anor Vs Darwins Limited (1942) A.C. 356. It is therefore the general policy of the court to hold parties to the bargain into which they had entered unless there was a strong, compelling and justifiable reason to hold otherwise or interfere. In the instant case appellant who had the onus to advance compelling reason as to why this court should interfere with the discretionary power of the trial Judge had failed to do so. There is nothing to show that the arbitration agreement was imposed on the appellant. Since both parties voluntarily entered into the agreement same should therefore be binding on them. See Jadesimi Vs Egbe & Ors (2003) 10 NWLR (Pt 827) 30 at 31.
As earlier stated the timely commencement of arbitration proceedings was frustrated by the conduct of the appellant as such it should not be allowed to take advantage of the situation. Appellant must honour the agreement. I entirely agree with the observation of the learned trial Judge at page 222 of the record when he said:-
“If as claimed by the Plaintiff, time has now run out, it was by their own inaction. It would therefore be despicable for them to now turn round and say any claim made by them before the Arbitrator in London is caught by the Time Bar Provision.”
The granting of stay of proceedings is discretionary and the court has power under section 5 of the Arbitration and Conciliation Act to grant same. From the facts and circumstances of this case I am of the firm view that the learned trial Judge exercised his discretion judicially and judiciously by granting the stay of proceedings. It is apt to note the observation of the apex court in M. V. Lupex Vs N.D.C. & S. Ltd supra on exercise of discretionary power. His Lordship Mohammed JSC at page 488 had this to say:-
“Judges and courts exercise their discretion in accordance with rules of law and justice and not according to private opinion. An exercise of discretion is a liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar circumstances of the particular case, guided by the spirit and principles of law. Where parties have chosen to determine for themselves that they would refer any of their dispute to arbitration instead of resorting to regular courts a prima facie duty is cast upon the courts to act upon their agreement. See Willesford Vs Watson (1873) 8 Ch App 473.”
From all that I have said above in this judgment, there is no cause for this court to interfere with the trial court’s exercise of discretionary power, under section 5 of the Arbitration and Conciliation Act. Consequently, for the reasons stated I will resolve the sole issue in favour of the respondents.
On the whole, I hold the view that this appeal lacks merit. It is hereby dismissed. I affirm the decision of the Lower Court. I shall award N30, 000 costs in favour of the respondents.
Other Citations: (2008)LCN/2838(CA)
