ISSUE: ARBITRAL AWARD-Mode of bringing application to enforce arbitral award
PRINCIPLE:
"Let me start by saying that the Supreme Court being the Highest Court in Nigeria, we are all bound by its decision.
However I must also point out that the learned trial Judge and the learned counsel of the 1st and 2nd respondents had a misconception for the decision of the Supreme Court in Raz Pal vs. FCDA (supra), which is distinguishable with the instant case. In Raz Pal vs. FCDA (supra), the issues for determination before the Supreme Court was (1) Whether the High Court has jurisdiction to convert an arbitrar award into its own judgment instead of merely recognizing the award as binding on the parties for the purpose of enforcement, (2) whether the High Court has jurisdiction to award interest on the arbitrar award in the exercise of its discretion.
In the instant case, the issues are whether the High Court was right in recognizing and enforcing arbitral award by way of motion ex-parte. Secondly whether there was no denial of fair hearing when the order ex-parte was made in the absence of a party affected by the order. The challenge in the instant case was on the procedure in bringing the application for recognition and enforcement of arbitral award by motion ex-parte which was not the issue decided by the Supreme Court in Raz Pal vs. FCDA (supra) as contemplated by the respondents and relied upon by the trial Court. The facts in Raz Pal vs. FCDA (supra) are not in fours with the facts of the instant case. The Supreme Court in Raz Pal vs. FCDA (supra) did not consider the procedure in the application of Sections 31(1) and 32 of the Arbitration Act. The case was relied upon by the respondents out of context as it is not applicable in circumstances of this case. Section 31(1) of Arbitration and Conciliation Act provides: "An arbitral award shall be recognized as binding and subject to this Section and Section 32 of this Act, shall upon application in writing to the Court, be enforced by the Court."Section 32 of the Act reads: "Any of the parties to an arbitration agreement may request the Court to refuse recognition or enforcement of the award."
While it is correct that Section 31(1) of the Act only provided for the application to be made in writing, but as rightly held by the learned senior counsel for the appellant the Courts have held that such application should be made by a motion on notice and/or originating summons on notice and not by motion ex-parte - Imani vs. Bill Construction Ltd. (supra) and Commerce Assurance Ltd. vs. Alli (supra). Recently in the case of Stabilini Visinoni Ltd. vs. Mallinson & Partners Ltd. (2014) 12 NWLR (Part 1420) 134 at 145 this Court held that an application to enforce an arbitral award under the Arbitration and Conciliation Act is by a motion on notice. See also Triano Ltd. vs. UTB Plc (2009) 12 NWLR (Part 1115) 313 where the Court held: "A careful perusal of Section 31(1) of the Arbitration and Conciliation Act shows that a person seeking to enforce an arbitral award should apply to the Court. The section does not specify what type of application is to be made to the Court. I agree .... that the motion on notice brought by the respondent to enforce the arbitral award was sufficient and accords with the letter and spirit of the Section. Had the Act wanted an application to be made by Originating Summons, it would have stated so."
In Imani & Sons vs. Bill Construction (supra) Aderemi, JCA, (as he then was) stated:
"To have construed Section 31 of the Arbitration and Conciliation Act, Cap 19, Laws of the Federation, 1990 as carrying a legal force which denies a party who would be affected by the eventual order or judgment of a Court hearing before such order or judgment is made is a negation of the fair hearing provisions enshrined in our Constitution."
Although Section 31 of the Arbitration and Conciliation Act did not show thereunder that a respondent to an application shall be put on notice but it accord with reason and common sense, that since the application is one to lead to the granting of an order which may affect another's propriety interest, it must be read into it a provision to the effect that the party against whom the order under Section 31 of the Arbitration and Conciliation Act is sought must be put on notice - Imani & Sons vs. Bill (supra).
On fair hearing, fair hearing is a constitutional right provided by the provisions of Section 36(1) of our Constitution. Section 36(1) of the 1999 Constitution reads:
"In determining of civil rights and obligation, including any question or determination by or against any government or authority, a person shall be entitled to a fair hearing within a reasonable time by a Court or other Tribunal established by law and constituted in such manner as to secure its independence and impartiality."
The imperatives of fair hearing, which have been incorporated into Section 36(1) of the Constitution, are that a body discharging a judicial or quasi - judicial function as the arbitrator, shall give each party before it an opportunity to be heard on any issue so calling for a decision or determination - T.E.S. Inc vs. Cheveron Nig. Ltd. (2017) 11 NWLR (Part 1576) 187 at 194. The principle of fair hearing is a serious fundamental right of natural justice which must be based on rock solid facts before the Court and available to one who has satisfied the conditions of being heard. This is because if that party has not satisfied the conditions required for hearing his case the Court would not be competent to hear him; he would not qualify for the right to be heard - Mgbenwelu vs. Olumba (2017) 5 NWLR (Part 1558) 169 at 177. See also Carew vs. Oguntokun (2011) 5 NWLR (Part 1240) 376; Apatira vs. Lagos Island LGC (2006) 17 NWLR (Part 1007) 46; Jonason vs. Triangbes Ltd. vs. C.M. & P. Ltd. (2002) 15 NWLR (Part 789) 176 and Chime vs. Ude (1996) 7 NWLR (Part 461) 379. In the instant case, the 1st and 2nd respondents did not satisfy the condition for bringing the application for recognition and enforcement of the arbitral award which deprived the Court of jurisdiction to entertain the matter and this Court is also deprived of jurisdiction to entertain the appeal. The 1st and 2nd respondents filed a motion ex-parte for recognition and enforcement of arbitral award. The law is that the respondents should come on notice and the appellant is entitled by Section 36(1) of the 1999 Constitution to a fair hearing in the determination of his rights and obligations. The resultant effect of a breach of the right to fair hearing against the appellant is that the proceedings so conducted are a nullity and of no effect whatsoever. The appellant who is affected by the order ex-parte is entitled to have it set aside. See Adeyemi Bero vs. L.S.D.P.C (2013) 8 NWLR (Part 109) 250; Chitra Knitting & Weaving Manufacturing Co. Ltd. vs. Akingbade (2016) LPELR 40437; Mfa vs. Inongha (2014) 4 NWLR (Part 1397) 343 and Tsokwa Motors (Nig.) Ltd. vs. UBA Plc (2008) 2 NWLR (Part 1071) 347. The motion ex-parte affected the interest of the appellant since his rights and obligations were determined without it having been given a hearing which is a clear violation of the provisions of Section 36(1) of the 1999 Constitution (as amended). Issues one and two are resolved in favour of the appellant." Per HASSAN, JCA.(Pp.15-21,Paras.A-A).
ALLIED ENERGY LTD. & ANOR. vs. NIGERIAN AGIP EXPLORATION LTD.(2018)LPELR-45302(CA)
ISSUE: ENFORCEMENT OF ARBITRAL AWARD-Whether an application for the recognition and enforcement of an arbitral award can be made exparte or on notice
PRINCIPLE:
"The Originating ex parte is the genesis of the journey leading to the controversy in this appeal. Appellants argued that considering the nature of the relief(s) sought by the
Respondent, that is, to enforce the London Arbitral Award against the Appellants, they ought to have been put on notice so as to ensure that the Appellants were given fair
hearing as enshrined in the 1999 Constitution given the magnitude of the Award. On the other hand, the Respondent vehemently contended that Order 52 Rule 16(1) of the
Federal High Court Rules regulates the manner in which an application for the enforcement of an award should be made, and prescribed that it can be made ex parte as
done in the instant case.
Now, Section 31 of the Arbitration and Conciliation Act, provides:
(1) An arbitral award shall be recognized as binding, and subject to this section and Section 32 of this Act, shall, upon application in writing to the Court, be enforced by the
Court.
(2) ...
(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.
Whereas, Order 52 Rule 16 (1) of the Federal High Court Rules, states that:
"An application to enforce an award on an arbitration agreement in the same manner as a judgment or order may be made ex parte, but the Court hearing the application
may order it to be made on notice."
learned Counsel for the respective parties have referred this Court to the decision in IMANI & SONS LTD. Vs. BILL CONSTRUCTION CO. LTD. (Supra) where OGUNTADE, JCA,
(as he then was), while considering the provisions of Section 31 of the Arbitration and Conciliation Act, pronounced as follows:
"The lower Court reasoned that the purpose of an application brought pursuant to Section 37 of the ACA Cap. 19 was merely to inform respondent on the application and
that it was not meant that such respondent should file a counter-affidavit. By that reasoning the lower Court was also saying that a respondent put on notice was not
expected to even address the Court even on point of law. That the lower Court understood Section 31 of ACA Cap. 199 was manifest in what it proceeded to do
immediately it refused adjournment sought. Without asking the appellants' counsel what he intended to do following the refusal by the lower Court of the application for
adjournment, it proceeded to make the order sought on the Originating Summons.
A perusal of Section 37 of the ACA shows that it is not prescribed thereunder that a respondent to an application shall be put on notice but it seems to me that since the
procedure is one leading to the granting of an order which may affect another's proprietary interest, I must read into it a provision to the effect that a party against whom
an order under Section 37 ACA is sought must be put on notice...."
Expressing similar opinions, ADEREMI, JCA, (later JSC) (of blessed memory) observed as follows:
"... To have construed Section 37 of the Arbitration and Conciliation Act Cap. 19 Laws of the Federation 1990 as carrying a legal force which denies a party who would be
affected by the eventual order or judgment of a Court hearing before such order is made is a negation of fair hearing enshrined in our Constitution. And such law must not
be accorded any application for it defeats the course of justice and erodes into the confidence which all law abiding citizens must have in the administration of justice - an
essential to social order and security..."
The above decision proceeded on appeal to the Supreme Court in BILL CONSTRUCTION CO. LTD. Vs. IMANI & SONS LTD. (2006) 19 NWLR (Pt.1031) 1, and while the Supreme
Court found and held that the Court of Appeal was in error in its decision that the Respondent therein was not granted fair hearing, there was no pronouncement by the
Supreme Court relating to the position of the law stated by this Court that a person to be affected by an application brought pursuant Section 31 of the ACA must be put on
notice. In the words of TABAI, JSC, at page 17 of the law report;
"The learned trial Judge, rightly in my view, refused that request for an adjournment in that such a counter-affidavit could not be taken as an application to set aside the
arbitral award as provided for in Section 29(1)(a) of the Arbitration and Conciliation Act which has to be made within three months of the delivery of the award. The lower
Court, however allowed the appeal and set aside the order made by the trial High Court.
I believe that the lower Court was in error in its decision in the matter because the counter-affidavit sought to be filed by the respondent could not serve any useful
purpose. This is because, any request made in such application to set aside the arbitral award could not be entertained by the Court as it would not have been made within
the three months stipulated by law for making such application..." Contrary to the erroneous contention of the learned Counsel for the Respondent, the decision of the
Supreme Court setting aside that of this Court was hinged on the fact that the Counter-Affidavit sought to be filed by the Respondent therein will serve no useful purpose as
the time prescribed for the setting aside of the arbitral award had elapsed. It is also striking that in that case the Respondent therein was indeed put on notice of the
motion seeking leave to enforce the Arbitral; but rather than file a counter affidavit, it filed a preliminary objection (filed after three months of the delivery of the award)
which was subsequently over-ruled by the trial Court; whereupon the Respondent sought an adjournment to file a counter-affidavit in respect of the motion to enforce. This
was not granted by the trial Judge for the obvious reason enumerated by the Supreme Court. Therefore, I am unable to accept the Respondent's contention that the
pronouncement of this Court in IMANI & SONS LTD. Vs. BILL CONSTRUCTION (Supra) with respect to the construction of Section 31 of the ACA was overruled by the Supreme
Court on appeal. As I indicated above, there is nothing to that effect; as a matter of fact, I adopt the reasoning that it must be read into the provision of Section 31 of the
ACA that any application for the recognition and enforcement of Arbitral award, which touches on the proprietary or pecuniary interest of another, must be served on that
person.
For the avoidance of doubt, the reasoning of this Court in the above case remains much more potent where, as in the instant case, the Respondent seeks leave to enforce
an arbitral award within three months of the delivery of the said award. Looking at the decision of the Supreme Court in BILL CONSTRUCTION (Supra), it is obvious that the
Court was persuaded to reach its conclusion primarily on the ground that the three months prescribed for the filing of application to set aside an arbitral award under Section 29 of the ACA had elapsed. That is not the situation in this case. Order 52 Rule 1-6 (1) of the Rules of the lower Court may have given the learned trial Judge the discretion to direct that application filed ex parte for the recognition and enforcement of an arbitral award, be made on notice, I believe the discretion will be shown to have been exercised judicially and judiciously, not warranting interference by this Court, the learned trial Judge should have exercised restraint and ordered that the Appellants be put on notice before any order is made against them, considering the peculiar circumstances of this case, and in particular Section 29 of the ACA which reads:
"(1) A party who is aggrieved by an arbitral award may within three months -
(q) from the date of the award; or
(b) in a case falling within Section 28 of this Act, from the date the request for additional award is disposed of by the arbitral tribunal, by way of application for setting aside, request the Court to set aside the award in accordance with Subsection (2) of this section."Sections 29(1) and 31(1) of the ACA as well as Order 52 Rule 16 (1) of the Federal High Court Rules, seem to me, plain to the effect that, an application for the recognition and enforcement of arbitral award may be made either ex parte or on notice; where it is made ex parte, the Court may direct as it deems fit that the other party be put on notice. It is my view, that where the Application is made within the three months the Award is made, the debtor is permitted to apply to set aside the award, such application must be made on notice or the Court should direct that the other party should be put on notice. On the contrary, where the three months prescribed had elapsed, it implies that the Award debtor does not intend to exercise his right under Section 29 of the Act; and the shoreline is then clear for the Applicant to make his application ex parte without the fear that the statutory right of the Award debtor is being supplanted.
In AYOADE Vs. SPRING BANK PLC. (2014) 4 NWLR (Pt.1396) 93, the Court held that:
"One of the cardinal requirement of law, to imbue a Court with jurisdiction to hear a case, is that, the person to be affected by its decision must be duly summoned or
served with processes of Court and given opportunities to be heard or defend themselves. That is an inalienable constitutional right of every person. A Court has no
jurisdiction to make orders to bind a party that was not given opportunity to be heard by the Court before issuing the order, except such persons are agents, servants, or
privies of the parties to the case, in which case they are contemplated..." Therefore, having contemplated making the Appellants at the receiving end of the Originating
Application filed by the Respondent to enforce the Arbitral Award within three months of its delivery, and as it is aimed at affecting them, the Court ought to have directed
that the Appellants be put on notice, to give them opportunity to be heard before visiting on them the calamity of abrogating their statutory right under Section 29 of the
ACA, to have the award set aside within three months of delivery.
The learned trial Judge adopted the decision of this Court relied upon by the Respondent in UMAR Vs. ONWUDINE (Supra); but as will be seen, both the Respondent and the
lower Court misconceived the reasoning of the Court in that case. If the learned trial Judge had carefully studied the decision of this Court in that case, it would have
reached a different conclusion. At page 149 to 152 of the Report, this Court, per UMOREN, JCA, while considering the question I earlier raised, as to whether an application
should be heard and granted ex parte, held as follows:
"...I have examined the nature of the orders made by the learned trial Judge. I am of the view that it entails deliberation on a number of well-settled issues upon which the
right of the applicant to the grant of it depends...
Clearly, whenever the need arises for the determination of the civil rights and obligation of every Nigerian, this provision (Section 33 of the 1979 Constitution, now Section
36 of the 1999 Constitution) guarantees to such a person a fair hearing within a reasonable time. Fair hearing has been interpreted by the Courts to be synonymous with fair trial and as implying that
every reasonable and fair minded observer who watched the proceedings should be able to come to the conclusion that the Court or other tribunal has been fair to all the parties concerned... As this is so, an order which ex-facie, as in this appeal, looks final, lacks at least one of the attributes of fair hearing or as for example, equality of opportunity to both sides to the contest...Once a party or an appellant as in this case shows that there is an infringement on the principle of natural justice against him, it is my view that he need to show nothing more. The finding that there is an infringement of the principle is sufficient to grant him a remedy...." Without any particle of doubt, there is nothing in the entire decision of this Court in UMAR Vs. ONWUDINE (Supra) supporting the conclusion reached by the lower Court and the stance taken by the Respondent. To the contrary, this Court clearly held that any provision of rules of Court or Act which states that an Appellant cannot appeal against an ex parte order which is ex facie a final order or decision is inconsistent, null and void with the Constitution. Also, according to OMAGE, JCA, at page 156 of the Report, a party against whom an ex parte order is made has the option of approaching the Court to have same vacated or elect to appeal, as done in that case. To sum it up therefore, the conclusion reached by the learned trial Judge runs contrary to the decision it relied upon; it cannot be allowed to stand.
As earlier noted expressly in this judgment, in so far as the application for leave to enforce the Arbitral Award was not served on the Appellants before same was heard and
determined, the Appellants' right to fair hearing would be taken as having been breached, thereby rendering the entire proceedings including the order made by the lower Court, a complete nullity, and therefore liable to be set aside. See EKE Vs. OGBONDA (Supra); PURIFICATION TECHNIQUES (NIG.) LTD. Vs. AG, LAGOS STATE (2004) 9 NWLR (Pt. 879) 665." Per ABUBAKAR, JCA.(Pp.46-59,Paras.E-B)
: ISSUE - Arbitral Award-Mode of Bringing Application to Enforce Arbitral Award.- By Adedotun Habeeb Adetunji, LL.M (M.IoD), FCAI'){kind=link}
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