Legalpedia Citation: (2023-05) Legalpedia 70601 (CA)

In the Court of Appeal

KADUNA JUDICIAL DIVISON

Fri May 26, 2023

Suit Number: CA/K/316/19

CORAM

MOHAMMED BABA IDRIS JCA

MUSLIM SULE HASSAN JCA

PARTIES

AYISAGI NIGERIA LTD

APPELLANTS

SUNTORY BEVERAGE AND FOOD NIG

RESPONDENTS

AREA(S) OF LAW

APPEAL, ARBITRATION, CONSTITUTIONAL LAW, CONTRACT, INTERPRETATION LAW, PRACTICE AND PROCEDURE

SUMMARY OF FACTS

The Respondent commenced this suit under the Summary Judgment Procedure for the Court to order the defendant (Appellant) to pay the sums of N37, 000,000.00 (Thirty Seven Million Naira), N10, 224, 626.38 (Ten Million Two Hundred and Twenty Four Thousand Six Hundred and Twenty Six Naira Thirty Eight Kobo), and N5, 000, 000.00 (Five Million Naira) only to him being sums owed him and the cost of prosecuting the matter. Before the Respondent’s application for summary judgment was heard and upon being served the originating processes, the Appellant before putting in his defense and counter claim, filed an application dated 8th May, 2018 praying the court to stay proceedings until the dispute between the parties was first referred to arbitration as contemplated by the distribution agreement executed on 9th December, 2015 by the parties and the application was challenged by the Respondent. The application was heard on the 19th day of July, 2018 by the learned trial judge, Honourable Justice H. A. L. Balogun after which ruling was given in favour of the Respondent on the 13th day of March, 2019. Dissatisfied with the said ruling of the lower court, the Appellant brought his grievance to this Court.

HELD

Appeal dismissed

ISSUES

Ø Whether in view of Exhibit A and E the dispute arising there to confers jurisdiction on the arbitration to be resolved?

Ø Whether the learned trial judge was right to have held that the Appellant did not deny Exhibits 3A and 3B which shows that there is no dispute between them and as such compromised his stand not to go for arbitration?

Ø Whether the learned trial judge was right to have held that the Appellant did not show sufficient readiness and willingness to arbitrate?

RATIONES DECIDENDI

ARBITRATION CLAUSE – THE PRECISE TERMS OF THE ARBITRATION CLAUSE SHOULD BE CONSIDERED

I agree with the argument of the learned counsel for the Appellant that where parties have entered into an agreement and there is an arbitration clause, the court ought to give effect to the express agreement of the parties. I also agree with the Respondent’s Counsel that in considering whether or not a matter may be submitted to arbitration, the precise terms of the language in which the arbitration clause is framed should be considered. I shall now consider the words used by the parties in the agreement and also consider whether the said arbitration clause is a condition precedent to litigation.

One of the cardinal rules of construction of written instruments is that the words of the written instrument must in general be taken in their ordinary sense notwithstanding the fact that any such construction may not appear to carry out the purpose which it might otherwise be intended by the maker or makers of the instrument. The rule is that in construing all written instruments the grammatical and ordinary sense of the words should be adhered to, unless that would lead to some absurdity or some repugnancy or inconsistency with the rest of the instrument, the instrument has to be construed according to its literal import unless again there is something else in the context which shows that such a course would tend to derogate from the exact meaning of the words. See the case of UNILIFE DEVELOPMENT CO. LTD VS. ADESHIGBIN & ORS (2001) LPELR – 3382. – Per M. B. Idris, JCA

CONTRACTS – DUTY OF THE COURTS IN INTERPRETING CONTRACTS

Going further, it is also trite that where there is a contract regulating any arrangement between the parties, the main duty of the court is to interpret the contract to give effect to the wishes of the parties as expressed in the contract. See also the case of ALADE VS. ALIC (NIG) LTD & ANOR (2010) 12 S.C. (PART II) 59 AT 95.  – Per M. B. Idris, JCA

ARBITRATION – MEANING OF ARBITRATION

An arbitration, according to Black’s Law Dictionary 6^th Edition page 105, is a process of dispute resolution in which a neutral party called (arbitrator) renders a decision after hearing at which both parties have an opportunity to be heard.

It is the reference of dispute or difference between not less than two parties for determination, after hearing both sides in a judicial manner, by a person or persons other than a Court of competent jurisdiction. The Arbitrator, who is not an umpire, has the jurisdiction to decide only what has been submitted to him by the parties for determination. If he decides something else, he will be acting outside his authority. Consequently, the whole proceedings will be null and void and of no effect. This will include any award he may subsequently make. See Nigeria National Petroleum Corporation v. Lutin Investment Ltd & Anor (2006) 2 NWLR (pt.965) 506 SC.

The law is that where parties to an agreement make provision for arbitration before an action can be instituted in a court of law, any aggrieved party must first seek the remedy available in the arbitration. If a party goes straight to the Court to file an action without reference to the arbitration clause as contained in the agreement, the Court of law in which the action is filed is bound to decline jurisdiction in the matter. However, before a Court of law can decline jurisdiction on the basis of arbitration clause, the law requires that such clause must be mandatory, precise and unequivocal. See Kurubo v. Zach-Motison (Nig.) Ltd (1992) 5 NWLR (pt. 239) 102 CA.

Where a plaintiff jumps arbitration and commences an action in a Court of law, a defendant shall take steps to stay the proceedings of the Court. The Court would normally stay proceedings if it is satisfied that there is no sufficient reason for the matter not to be referred in accordance with the submission. See M.V. Lupex v. N.O.C.S. Ltd (2003) 15 NWLR (pt.844) 469 SC. – Per M. S. Hassan, JCA

CASES CITED

NIL

STATUTES REFERRED TO

1. Kaduna State High Court Civil Procedure Rules 2007
2. Arbitration and Conciliation Act

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