NORTH POLE NAVIGATION CO. LTD V MILAN NIGERIA LTD

CORAM

PARTIES

NORTH POLE NAVIGATION CO. LTD (Owners of the MV.“Lucky Rose”).   APPELLANTS

MILAN NIGERIA LTD. RESPONDENTS

AREA(S) OF LAW

SUMMARY OF FACTS

The Parties entered into a charter agreement in 2005 which contained an arbitration clause, and in March 2008, the Petitioner/Appellant initiated arbitration proceedings against the Respondent claiming for demurrage and damages for detention of vessel. Both parties appointed an arbitrator each and it was agreed by them not to appoint a third arbitrator as required by the Arbitration clause. The Arbitration Tribunal sat in London and after hearing was concluded, an award was given in favour of the Petitioner/Appellant. The Petitioner/Appellant sought to register and enforce the award at the Federal High Court, Lagos, but the Court declined jurisdiction and struck out the suit on the objection of the Respondent. Aggrieved by the decision of the trial court, the Petitioner/Appellant has appealed to the Court of Appeal.

HELD

Appeal Allowed

ISSUES

Was the lower court right or wrong in holding that the decision of the arbitrators appointed by both parties cannot be binding on them on the ground that the panel of arbitrators must consist of 3 members in order to have jurisdiction over the arbitral proceedings under clause 50 of the relevant charter party.Was it open to the appellant who participated throughout the arbitration proceedings, filed a defence/counterclaim in the arbitration proceedings but failed to object to the composition of the panel to now purport to do so for the first time at the lower courtWhether in the circumstances of the case, the lower court was right to have declined jurisdiction to entertain the matter.

RATIONES DECIDENDI

JURISDICTION IN ARBITRATION PROCEEDINGS – IN ARBITRAL PROCEEDINGS, A PARTY IS NOT ALLOWED TO RAISE THE ISSUE OF JURISDICTION AT ANY TIME AS REQUIRED IN REGULAR COURTS.

“The Supreme Court considered the issue in the case of N.N.P.C. V Klifco (Nig) Ltd (2011) 10 NWLR (Pt 1255) 209 where the apex court in interpreting Section 12 (3) of the Arbitration and Conciliation Act, said the position of the law applicable in the usual way or in regular courts does not apply to arbitral proceedings. It held thus:
“An appeal on the issue of jurisdiction can be entertained by the High Court provided there was no submission to jurisdiction. A party who did not raise the issue of jurisdiction before the arbitral panel is foreclosed from raising it for the first time in the High Court. The reason being that the foundation of jurisdiction in arbitration is submission. In this matter the appellant participated in the arbitral proceedings. At no time did he raise the issue of jurisdiction of the arbitral panel to hear the dispute. The clear interpretation of the appellant’s conduct is that it submitted to jurisdiction it cannot raise the issue of jurisdiction on appeal.”PER Y. B. NIMPAR, J.C.A

JURISDICTION OF AN ARBITRAL TRIBUNAL – THE JURISDICTION OF AN ARBITRAL PANEL IS AFFECTED WHERE THE TRIBUNAL IS NOT PROPERLY CONSTITUTED

“Constitution of an arbitral tribunal has a bearing on jurisdiction, this was settled in the case of Okpanum V S.G.E (Nig) Ltd (1998) 7 NWLR (Pt 559) 537 where the court held as follows:
“It has been decided by this court in Gabriel Madukolu & Ors V Johnson Nkemdilim (1962) 2 SCNLR 341; 1962 ANLR (Pt 4) 587 that a court is competent when:
(1) It is properly constituted with respect to the number and qualification of its members.
(2) The subject matter of the action is within its jurisdiction.
(3) The action is initiated by due process of law.
(4) Any condition precedent to the exercise of its jurisdiction has been fulfilled.”PER Y. B. NIMPAR, J.C.A

JURISDICTION IN ARBITRAL PROCEEDINGS – APPROPRIATE TIME FOR RAISING AN OBJECTION ON JURISDICTION IN ARBITRAL PROCEEDINGS

‘‘Before an objection on jurisdiction can be raised and sustained, a party is expected to do so not later than the time of submission of the points of defence even though the party is not precluded from doing so by reason of the fact that he has participated in the appointment of the arbitrator but must justify the delay in doing so. The situation is so under both the English law and the Nigerian Law.’’ PER Y. B. NIMPAR, J.C.A

ABITRAL AWARD – TIME FRAME FOR CHALLENGING AN ABITRAL AWARD – SECTION 29 OF THE ARBITRATION AND CONCILIATION ACT

“Furthermore, by Section 29 of the Arbitration and Conciliation Act, a party who seeks to challenge an award should do so within 3 months of the award. It provides thus:
“Section 28 (1): A party who is aggrieved by an arbitral award may within three months –
(a) From date of award; or
(b) In a case falling within Section 28 of the Act, from the date the request for additional award is disposed of by the arbitral tribunal, by way of an application for setting aside, the award in accordance with subsection (2) of this section.” PER Y. B. NIMPAR, J.C.A

JURISDICTION IN ARBITRAL PROCEEDINGS – A PARTY WHO FAILS TO OBJECT TO THE JURISDICTION OF AN ARBITRAL PANEL WITHIN THE TIME ALLOWED, WILL BE BARRED FROM RAISING IT LATER.

“Jurisdiction is a threshold issue to any determination of a dispute and it can be raised at any stage of the proceedings and even on appeal for the first time in normal situations but that is not the case under arbitral proceedings and the position has been settled by the Supreme Court in the case of NNPC V Klifco (supra)which held that failure to raise the objection before the Arbitral panel or within the time allowed before a court of competent jurisdiction
bars the party from doing so later.”PER Y. B. NIMPAR, J.C.A

VENUE/APPLICABLE LAW IN ARBITRATION – THE LAW OF THE SEAT OF THE ARBITRATION TRIBUNAL BECOMES APPLICABLE WHERE VENUE AND APPLICABLE LAW ARE NOT STATED IN AN ARBITRATION CLAUSE

‘‘Generally in a situation where venue is not stated in the arbitration clause, and applicable law is also not stated, the practice normally is that the law of the seat of arbitration becomes the applicable law that will guide the arbitration or tribunal.’’PER Y. B. NIMPAR, J.C.A

RECOGNITION OF AWARD – WHEN AN ARBITRAL AWARD SHALL BE RECOGNISED

“The provision of section 31 of the Nigerian Act provides for recognition of awards, it states as follows:
“31 (1) An arbitral award shall not be recognized as binding and subject to this section and section 32 of the Act shall, upon application in writing to the court, be enforced
(2) The party relying on an award or applying for its enforcement shall supply:
(a) duly authenticated original award or a duly certified copy thereof
(b) the original arbitration agreement or a duly certified copy thereof
(3)An award may by leave of the court or a judge be enforced in the same manner as a judgment or order to the same effect”. PER Y. B. NIMPAR, J.C.A

CASES CITED

STATUTES REFERRED TO

Arbitration Act of England, 1996

Arbitration and Conciliation Act,(Cap A18 Laws) of the Federation of Nigeria 2004

Court of Appeal Act

London Maritime Arbitrators Association Terms 2006

Reciprocal Enforcement of Judgments Ordinance, Cap 175, LFN

Reciprocal Enforcement of Judgments Rules

CLICK HERE TO READ FULL JUDGMENT