An Agreement To Submit A Dispute To Arbitration Does Not Oust The Jurisdiction Of The Court – Court Rules

Sokoto – The presiding Judge of the National Industrial Court of Nigeria, Sokoto Judicial Division, His Lordship, Hon. Justice K. D. Damulak in a ruling delivered Friday 3rd May 2019 dismissed the preliminary objection brought by Medecins Sans Frontieres (MSF) challenging the court jurisdiction to hear the matter filed by Dr. Anthony Mbagwu for lacking merit.

The court held that an agreement to submit a dispute to arbitration does not oust the jurisdiction of the Court that the right to insist on the arbitration clause is a private right and it can be waived.

In summary, on 5/1/2019 the defendant (Medecins Sans Frontieres) filed a preliminary objection seeking for an order striking out the suit, or, in the alternative, an order staying proceedings and referring this matter for arbitration on the ground that the National Labour Terms & Conditions contain an arbitration clause for resolving any dispute arising from the executed agreement.

The claimant -Dr. Anthony Mbagwu took out a complaint against the defendant on 8/11/2018 seeking that his summary dismissal was unlawful and should be set aside, and be reinstated and paid compensation.

The defendant filed a conditional Memorandum of Appearance and a statement of defence in 2018. The claimant filed his reply to the defence on 13/12/2018.

The applicant deposed that the National Labour Terms and Conditions which the Claimant/Respondent listed in the schedule of Documents to be used at trial provides for arbitration that the claimant did not adduce any reason why the dispute was not taken to arbitration as provided in the agreement that the parties must submit themselves to arbitration before invoking the jurisdiction of the court.

The respondent did not file a counter affidavit. Indeed, the respondent had earlier agreed with the applicant that the matter be referred to arbitration and a stay of proceedings be ordered and had filed written address to that effect.

However, when this motion came up for hearing on 26/2/2019, B.T Aza Esq of counsel to the respondent indicated that he was resiling from the earlier position of the claimant and in view of an authority that had just come to his notice, that he was opposing the application.

In his oral reply on point of law, learned Aza contended that the claimant has taken too many steps in the proceedings by filing a statement of defence contrary to the stipulations of section 5(1)(2) of the Arbitration and Conciliation Act and it is too late in the day for him to ask for a stay of proceedings because of the arbitration clause.

In his oral reply, learned Aigbe Esq for the applicant said the authority cited by the respondent does not relevant to the case as it was determined under the Kwara State High Court Rules that this court has its own Rules and Order 30 Rule 2 (1) (a) of the Rules of this Court allows him to bring this objection at this point.

After careful evaluation of all the processes filed, and the submissions of the learned Counsel from both sides, the Court presided by Hon. Justice K. D. Damulak expressed thus;

“Section 5 of the Arbitration and Conciliation Act did not say that a suit filed without recourse to arbitration where provided for is incompetent but it merely, by the use of the word “may” in section 5(1) gives the defendant an option of insisting on compliance with the arbitration clause.

“It must be stated right away that an agreement to submit a dispute to arbitration does not oust the jurisdiction of the Court. That the right to insist on the arbitration clause is a private right and it can be waived.

“Having said all, I find that the presence of an arbitration clause in the employment agreement did not render the suit filed before this court in violation of the said clause incompetent.

“I find that the right of the defendant to insist on compliance with the arbitration clause was his private or domestic right which could be waived and that the defendant has waived it by filing a statement of defence and he is no longer entitled under section 5 of the Arbitration and Conciliation Act to ask for a stay of proceedings in order to go for arbitration.

“I accordingly find that the suit of the claimant is not incompetent and cannot be struck out.”

The court affirmed jurisdiction and dismissed the preliminary objection for lacking merit, ordered that the substantive suit proceed to hearing.