SCOA NIGERIA PLC V. STERLING BANK PLC

_{Court Of Appeal – Lagos Division}   

_{APPEAL NO: CA/L/170/2013}

_{Areas Of Law
ACTION, APPEAL, ARBITRATION, JURISDICTION, LANDLORD AND TENANT, PRACTICE AND PROCEDURE}

_{Summary Of Facts
The Appellant entered into a lease agreement with the Respondent for a lease of the Appellant’s Property situate at No. 67 Marina, Lagos at a yearly rent of N3, 387, 340 (Three million, Three Hundred and Eighty Seven Thousand, Three Hundred and Forty Naira). It was agreed by parties that the lease was renewable at a rent to be mutually agreed on by the parties and that in the event of failure to reach an agreement; the parties would refer the matter to an arbitrator. Pursuant to that, the Respondent signified an intention to renew the rent agreement vide a letter dated 1-6-2004. The Appellant offered to accept N25 million but the Respondent on its part deposited the sum of N45 Million Naira into the account of the Appellant accompanying same with a letter that the money was for three years’ rent at the rate of N15 million per annum. The Appellant in its reply stated that the rent was N22.5 million per annum and that the N45 million would be regarded as rent for two years which parties disagreed on until the Respondent gave notice and vacated the property while it issued a cheque of N33, 333, 33 per annum, as payment for the period between 1-9-2007 to 31-12-2008.  After series of letters to the  Respondent,  the Appellant instituted an action against the Respondent at the High Court of Lagos State claiming for the sum of N15, 000, 000(Fifteen million Naira), being balance of the rent due from the Respondent, interest of 21% per annum on the sum from 12th June 2009 until judgement and thereafter at the rate of 6% per annum until final liquidation of the judgement debt and the sum of N1,500,000.00 (One Million Five Hundred Thousand Naira) being the cost of action. In reply, the Respondent filed a statement of defence to which the Appellant filed a reply. The court in its judgment dismissed the suit for lack of jurisdiction. Dissatisfied, the Appellant has appealed to this court.}

_{Held
Appeal Allowed}

_{Issues For Determination}

• _{Whether it is proper for the trial court to divest the court of jurisdiction after parties have duly and voluntarily submitted themselves to the jurisdiction of the court, inspite of an arbitration clause contained in the agreement executed by them, and after parties have fully participated in the trial conducted in the matter?}
• _{Whether the court was right in dismissing the Appellant/Claimant’s claims having purported in the matter?}
• _{Whether the failure of the trial court to consider and pronounce on all the issues placed before the court at the trial, before dismissing the Claimant’s claims does not amount to a denial of the Appellant/Claimant’s right to fair hearing.}

_{Rationes
JURISDICTION – IMPORTANCE OF JURISDICTION
“It is now well established that jurisdiction is a threshold issue in adjudication by a court of law. It therefore goes without saying that the determination of a matter by a court will amount to a nullity if done without jurisdiction notwithstanding how right or correct the decision reached might be. It is the basis on which any court or tribunal tries a case because it is the authority it has to decide a matter before it. The importance of jurisdiction to adjudicate on any matter by a court cannot therefore be overemphasised. See Galadima Vs Tambai (2000) 6 SCNJ 190; Yusuf Vs Obasanjo (2004) 5 SCM 193; Ajao Vs Alao (1986) 5 NWLR (Pt 45) 802; Ugba Vs Suswam (NO 2) (2012) 6 SC (Pt 11) 56, A.G Rivers State Vs A.G Akwa-Ibom State (2011) 8 NWLR (Pt 1248) 31.” PER S.C. OSEJI, J.C.A}

ISSUE OF JURISDICTION – DUTY OF COURTS TO AFFORD PARTIES OPPORTUNITY TO ADDRESS IT WHEN THE ISSUE OF JURISDICTION IS RAISED SUO MOTU
_{“In other words the issue of jurisdiction was raised suo motu by the lower court. There is indeed nothing wrong with doing so given the position of the law that the question of jurisdiction being radically fundamental can be raised at any stage of the proceedings. It can be raised at any stage of the case both at the trial and on appeal by any of the parties.
The court can equally raise it suo motu but when it is so raised by the court, the parties must be invited to address the court on it in order to prevent a miscarriage of justice.
See Oloriode Vs Oyebi (1984) 1 SCNLR 390; Odiase Vs Agho (1972) 1 ALL NRL (PT 1) 170, PDP VS Okorocha (2012) 15 NWLR (PT 1323) 205 at 5 NWLR (PT 1292) 181, the Apex Court held at page 206 of the Report that:-
“It is the law that a court should not raise a point suo motu, no matter how clear it may appear to be, and proceed to resolve same without inviting the parties or their counsel to address the court on the point. This is to avoid a breach of parties right to fair hearing.”
See also Katto VS C.B.N (1999) 6 NWLR (PT 607) 390.” PER S.C. OSEJI, J.C.A}

LACK OF JURISDICTION – PROPER ORDER A COURT SHOULD MAKE WHERE IT LACKS JURISDICTION
_{“The law is trite and it has been emphasized again and again that jurisdiction is the very basis on which any court or tribunal can hear a case. It is the life line of all trials in our courts and as such any trial without jurisdiction is a nullity. See PDP Vs Okorocha Supra at page 255.
Where an action before the court is found to be incompetent whether by reason of locus standi or the parties in court are incompetent which has resulted in the lack of the jurisdiction of the court to hear the case, the proper order for the court to make in the circumstance is that of striking out and not dismissal. See Abu Vs Kuyaba (2002) FWLR (PT 99) 1041, Adesokan Vs Adetunji (1994) 6 SCJN 123; Agbenyi Vs Agbo (1994) 7 NWLR (Pt 359) 735, Onumajuru Vs Akanihu (1994) 3 NWLR (Pt 334) 620.
In Ukolo Vs Union Bank of Nigeria Ltd (2004) 2 SCM 187. It was held that the proper order to make where a court has no jurisdiction to entertain an action is that of striking out.
Thus when a court lacks jurisdiction to entertain a suit for any reason, the proper order to make is to strike out the suit and not to dismiss it. See Owners of M.V Arabella Vs Nigerian Agric. Insurance Corporation (2008) 4-5 SC (Pt 11) 189; Ohiaeri Vs Akabeze (1992) 2 SCNJ 76; Uwazurike Vs A.G Federation (2007) 2 SCNJ 369.” PER S. C. OSEJI, J.C.A}

LACK OF JURISDICTION – EFFECT OF LACK OF JURISDICTION
_{“If a court has no jurisdiction to hear and determine a matter, the proceedings remain a nullity ab initio, no matter how well conducted or decided. Given that a defect in competence is not only intrinsic, but extrinsic to the entire process of adjudication.  A court that lacks the vires to entertain a suit cannot exercise judicial powers thereon.  See Egunjobi Vs Federal Republic Of Igeria (2012)12 S.C. (Pt IV) 148; Nigerian National Supply Co. Ltd Vs Establishment Sima Of Vaduz (1990) 11-12 S.C. 209.” PER S.C. OSEJI, J.C.A}

LACK OF JURISDICTION – OPTION AVAILABLE TO A COURT WHERE IT LACKS JURISDICTION
_{“The declaration of lack of jurisdiction in respect of the subject matter of a claim is an admission of legal incompetence or impotence to make any further or binding declaration in the cause before the court.  Hence, the only option available to the court in such a situation is to strike out the suit or subject matter of the claim.  This is so because, where a court does not have jurisdiction over a matter before it and it proceeds to hear and determine the matter, (as in this case) the entire proceedings no matter how well conducted would amount to a nullity.  See Utih Vs Onoyivwe (1991)1 SC (Pt 1) 61 and Gbagbarigha Vs Toruemi (2012)12 SC (Pt V) 54.” PER S. C. OSEJI, J.C.A}

LACK OF JURISDICTION – DUTY OF A COURT WHERE IT DISCOVERS THAT IT LACKS JURISDICTION
_{“Furthermore, having found that it lack jurisdiction to entertain the suit, the only power left for the court to exercise is that of striking out the suit, nothing more nothing less because any further action taken in the proceeding such as in the instant case where the issue of the lease Agreement vis-vis clause 4 was decided upon is null and void ab initio.  See Utih Vs Onoyivwe supra and Lakanmi Vs Adene (2003) 7 SCM 103.” PER S. C. OSEJI, J.C.A}

ARBITRATION CLAUSE– MEANING OF AN ARBITRATION CLAUSE
_{“An arbitration clause is a written consensus reached by the parties to a contract and as applicable to other written agreements it must be construed according to the language used by the parties therein without external imputation.  An arbitration clause embodies the agreement of the parties that if any dispute should arise with regard to the obligations which both parties have undertaken to observe, such dispute  should be settled by a third party or tribunal of their own choice and constitution.  See L.S.W.C. VS Sakamori Construction (Nig) Ltd (2011)12 NWLR (Pt 1262) 569 and Royal Exchange Assurance Vs Bentworth Finance (Nig) Ltd (1976)11 SC 107.” PER S. C. OSEJI, J.C.A}

ARBITRATION CLAUSE – DUTY OF THE PARTIES TO HONOUR CLAUSES IN AN AGREEMENT
_{“It is trite that where a clause in an agreement provides that any difference or dispute arising out of the agreement shall be referred to an arbitrator, both parties ought to honour and comply with provisions of the clause.” PER S. C. OSEJI, J.C.A}

ARBITRATION – WHETHER A MERE AGREEMENT TO SUBMIT A DISPUTE TO ARBITRATION OUST THE JURISDICTION OF A COURT
_{“It is also trite law that any agreement to submit a dispute to arbitration does not oust the jurisdiction of the court.  See Obembe Vs Wemabod Estates Ltd. (1977) 5 SC 70. The jurisdiction of the court can only be ousted based on certain qualifications as provided in the Arbitration and Conciliation Act.” PER S. C. OSEJI, J.C.A}

JURISDICTION OF A COURT– CATEGORIES OF MATTERS AFFECTING THE JURISDICTION OF A COURT
_{“Furthermore in the case of Feed and Food Farms (Nig) Ltd VS NNPC (2009) 6-7 S C 1 the Apex court also held that matters affecting the jurisdiction of the court should be categorized into two areas or compartments.  These are matters affecting the public in the litigation process and those affecting the personal private or domestic rights of the party.  While the former cannot in law be waived, the later can be waived in law.” PER S. C. OSEJI, J.C.A}

ARBITRATION – WHETHER A RIGHT OF ACTION SHALL ACCRUE WHERE PARTIES TO A CONTRACT AGREE TO ARBITRATION WITH RESPECT TO ANY DISPUTE THAT MAY ARISE THEREFROM
_{“The law is well settled that parties cannot by contract oust the jurisdiction of the court; but any person may covenants that no right shall accrue till a third person has decided on any difference that may arise between himself and the other party to the covenant. Where it is expressly, directly and unequivocally agreed upon between the parties that there shall be no right of action whatever till the arbitrators have decided, it is bar to the action that there had been no such arbitration. See A.I.D.C v. Nigeria L. N.G Ltd (2000) 4 NWLR (pt 653) 494 SC; City Engineering Nigeria Ltd V. Federal Housing Authority (1997) 9 NWLR (Pt 520) 22A SC”.
Therefore, while parties cannot by contract oust the jurisdiction of the courts, they can agree that no right of action shall accrue in respect of any differences which may arise between them until such differences have been adjudicated upon by an arbitrator. Such a provision is popularly known in law as the Scott v. Avery Clause in Scott V. Avery (1856) 10 ER 1121.” PER A.O.OBASEKI-ADEJUMO, J.C.A}

ARBITRATION- PURPOSE OF ARBITRATION
_{“I must say that Arbitration merely seeks to complement the court process. Arbitration is not a condition precedent to litigation in the absence of express or implied terms making arbitration a condition precedent. Therefore, as it relates to the instant case, where parties had by an agreement stated that dispute between them be settled by arbitration without expressing that same will be made a condition precedent to exercising their right to access the court, and subsequently, albeit, impliedly agree to submit the matter to court without first resorting to court, it is incumbent on the court without first resorting to court, it is incumbent on the court to whom the matter was submitted to adjudicate on the dispute that was competently brought before it.” PER A.O.OBASEKI-ADEJUMO, J.C.A}

Statutes Referred To
_{Arbitration and Conciliation Act, 2004
Constitution of the Federal Republic of Nigeria 1999 (As Amended)}