What Constitutes Good Grounds For Setting Aside An Arbitral Award?

By Legalpedia

GLOBE MOTORS HOLDING (NIG.) LTD. V. WESTSTAR ASSOCIATES LIMITED

Appel no: CA/L/898/2018

Areas Of Law:

APPEAL, ARBITRATION, COURT, INTERPRETATION OF STATUTE, JURISDICTION, LAW OF EVIDENCE, PRACTICE AND PROCEDURE, WORDS AND PHRASES

Summary Of Facts:

The Appellant, a limited liability company, had direct, dealership relationship with Daimler AG of Germany-the manufacturer of Mercedes Benz vehicles, which made it a major importer and distributor of Mercedes Benz vehicles in Nigeria since 1987.

After the death of its resident sole representative in Nigeria, the Respondent was incorporated sometime in 2007, at the request of the Dailmer AG of Germany, as a Distribution Joint Venture to take charge of Mercedes Benz business in Nigeria.

The Appellant could not make a membership of the Distribution Joint Venture, the Respondent, due to allegation made against it, in a letter of 22nd February, 2007, by one of the members to the Daimler AG of Germany which directed proper investigation of the allegation. In order to provide limited and skeletal services to its clients, the Appellant, on 21st February, 2008, entered into a dealership agreement with the Respondent.

The agreement spelt out the duties, obligations and responsibilities of the parties in the distribution of Mercedes Benz brand of vehicles in Nigeria. Sometime in 2014, the Appellant wrote some complaint letters to the Daimler AG of Germany and the Respondent against MB Automobiles Services Limited, an affiliate of the Respondent, concerning its under declaration of invoice value of imported Mercedes Benz vehicles and defrauding Federal Government of Nigeria by non-payment of appropriate import duties. Sequel to that, the Respondent, vide a letter dated 12th December, 2014, terminated the dealership agreement on the ground that the Appellant breached clause 9.2 (XVIII) of the dealership agreement as it exposed the Mercedes Benz business in Nigeria to disrepute. Consequently, the Respondent, based on clause 46 of the dealership agreement, commenced arbitral proceedings by dint of Notice of Arbitration, dated 17th December, 2014, served on the Appellant.

An Arbitration Tribunal (the tribunal) was constituted; the Appellant counter-claimed against the Respondent.

The tribunal after hearing the case of the parties, granted the Respondent’s claims and dismissed the Appellant’s counter-claim. Dissatisfied with the final award of the tribunal, the Appellant appealed to the Federal High Court, via an originating motion wherein it sought for an Order to set aside the final Award made by the Arbitral Tribunal, amongst others.

The lower Court dismissed the Appellant’s suit, hence this appeal wherein it prayed the court to allow the appeal and make an order setting aside the judgment of the lower court as well as the final award by the Tribunal.

HELD:

Appeal Dismissed

ISSUES FOR DETERMINATION

• Having regard to the totality of the evidence (both affidavit and documentary) placed before the lower Court by both parties to this suit, whether it can be said that the lower Court properly evaluated the evidence of the Appellant with respect to her (Appellant’s) originating motion.
• Whether the lower Court was right in holding that the Arbitral Tribunal has not misconducted itself in the arbitration of the dispute between the parties when the dispute is about complaints of criminal activities being perpetrated by the Respondent’s affiliate, MB. Automobile Services Ltd. which on ground of public policy is not arbitrable
• Whether considering the wordings of clause 9.2 (xviii) of the Dealership Agreement between the parties herein the lower Court was right in holding that the ARBITRAL Tribunal did not commit errors of law when the error is apparent on the face of the award.
• Having regard to the totality of evidence upon which the Arbitral Tribunal predicated its award whether the Tribunal did not act upon inadmissible evidence and excluded relevant evidence to the detriment of the Appellant to justify the holden of the lower Court that the ARBITRAL Award was prima facie good.

RATIONES

ISSUE OF JURISDICTION – RATIONALE FOR THE COURT’S PRIME CONSIDERATION OF THE ISSUE OF JURISDICTION

” The law compels the courts to accord premier attention to issue of jurisdiction, which is numerouno in adjudication, when raised in any proceedings, see Okwu v. Umeh (2016) NWLR (Pt. 1501) 120; Brittania-U (Nig.) Ltd. v. Seplat Pet. Co. Dev. Ltd. (2016) 4 NWLR (Pt.1503) 541; Oni v. Cadbury Nig. Plc. (2016) 9 NWLR (Pt. 1516) 80; Diamond BankLtd. v. Ugochukwu (2016) 9 NWLR (Pt. 1517) 193; PDP v. Umeh (2017) 12 NWLR (Pt. 1579); APC v. Ndual (2018) 2 NWLR (Pt. 1602) 1; Adama v. Maigari (2019) 3 NWLR (Pt. 1658) 26; APC v. Lere (2020) 1 NWLR (Pt. 1705) 254.

The reason the law, in its wisdom, insists on prime consideration of jurisdictional issue is obvious. Where a court is drained of the jurisdiction to entertain a matter, the proceeding germinating from it, no matter the quantum of diligence, dexterity, artistry, sophistry, transparency and objectivity injected into it, will be trapped in the intractable web of nullity, see Elugbe v. Omokhafe (2004) 18 NWLR (Pt. 905) 319; Lokpobiri v. Ogola (2016) 3 NWLR (Pt. 1499) 328; Garba v. Mohammed (2016) 16 NWLR (Pt. 1537) 144; Isah v. INEC (2016)18 NWLR (Pt. 1544) 175.” –PER O. F. OGBUINYA, J.C.A

JURISDICTION – MEANING OF JURISDICTION

“Jurisdiction, a mantra in adjudication, connotes the authority/power of a court to determine a dispute submitted to it by contending parties in any proceeding, see Ajamole v. Yaduat (No. 1) (1991) 5 SCNJ 172; Mobil Pro. Co. Untltd. v. LASEPA (2002) 18 NWLR (Pt. 798) 1; Ndaeyo v. Ogunnaya (1977) 1 IM SLR 300; Ebhodagbe v. Okoye (2004) 18 NWLR (Pt. 905) 472; Garba v. Mohammed (2016) 16 NWLR (Pt. 1537) 144; A.-G., Kwara State v. Adeyemo (2017)1 NWLR (Pt. 1546) 210; Isah v. INEC (2016) 18 NWLR (Pt. 1544) 175; Angadi v. PDP (2018) 15 NWLR (Pt. 1641) 1; Nduul v. Wayo (2018) 16 NWLR (Pt. 1646) 548. PER O. F. OGBUINYA, J.C.A

JURISDICTION OF COURT – WHEN IS A COURT VESTED WITH JURISDICTION TO ADJUDICATE ON A MATTER

“A court of law is invested with jurisdiction to hear a matter when: “1. it is properly constituted as regards numbers and qualifications of members of the bench, and no member is disqualified for one reason or another; and 2. the subject matter of the case is within its jurisdiction, and there is no feature in the case which prevents the court from exercising its jurisdiction; and 3. the case comes before the court initiated by due process of law, and upon fulfillment of any condition precedent to the exercise of jurisdiction”, see Modukolu v. Nkemdilim (2006) 2 LC 2081961) NSCC (vol. 2) 374 at 379,per Bairamian F. J., Tukur v. Taraba State (1997) 6 SCNJ 81; Daro v. UBN (2007) 16 NWLR (Pt. 1029) 164; Okereke v. Yar’Adua (2008) 12 NWLR (Pt. 1100); Saraki v. FRN (2016) 3 NWLR (Pt. 1500) 531; Oni v. Cadbury Nig. Plc. (2016) 9 NWLR (Pt. 1516) 80; Diamond Bank Ltd. v. Ugochukwu (2016) 9 NWLR (Pt. 1517) 193; Okpe v. Fan Milk Plc. (2017) 2 NWLR (Pt. 1549) 282; Bello v. Damisa (2017) 2 NWLR (Pt. 1550) 455; Osi v. Accord Party (2017) 3 NWLR (Pt. 1553) 387; Nworka v. Ononeze-Madu (2019) 7 NWLR (Pt. 1672) 422; Adeleke v. Oyetola (2020) 6 NWLR (Pt. 1721) 440.

The three ingredients must co-exist in order to infuse jurisdiction into a court.” –PER O. F. OGBUINYA, J.C.A

SETTING ASIDE OF AN AWARD – CIRCUMSTANCES THAT CONSTITUTES GROUNDS FOR SETTING ASIDE AN AWARD BY AN ARBITRATOR

“Unarguably, where an award contains decision on matters which are beyond the scope of the submission to arbitration or the arbitrator misconducts himself constitutes a good grounds to set it aside, see section 29 (2) and 30 (1) of the Arbitration and Conciliation Act, Cap A 18, Laws of the Federation of Nigeria (LFN), 2004; Taylor Woodrow (Nig.) Ltd. v. Suddentsche Etna-Wriki GMBH (1993) 4 NWLR (Pt. 286)127;  A. Savoia Ltd v. Sonubi (2000) 12 NWLR (Pt. 682) 539; NITEL Ltd. v. Okeke (2017) 9 NWLR (Pt. 1571) 439; T.E.S.T Inc. v. Chevron Nig. Ltd. (2017) 11 NWLR (Pt. 1576) 187; Mekwunye v. Imoukhuede (2019) 13 NWLR (Pt. 1690) 439.

A misconduct denotes mishandling of the arbitration as is likely to amount to some substantial miscarriage of justice, see Araka v. Ejeagwu (2000) 15 NWLR (Pt. 692) 684.”- PER O. F. OGBUINYA, J.C.A

JURISDICTION OF COURT – YARDSTICK FOR DETERMINATION OF WHETHER OR NOT A COURT HAS JURISDICTION

“Nota bene, the case-law has endorsed in toto a statement of claim as the major yardstick to be used by the court to measure the presence or absence of its jurisdiction, see Akine v. Edjerode (2001) 18 NWLR (Pt. 745) 446; A.D.H. Ltd. v. A.T. Ltd. (2006) NWLR (Pt. 989) 635; Oni v. Cadbury (2016) 9 NWLR (Pt. 1516) 80; Ladoja v. Ajimobi (2016) 10 NWLR (Pt. 1519) 87; B.B. Apugo & Sons Ltd. v. O.H.M.B. (2016) 13 NWLR (Pt. 1529) 206;Yar’adua v. Yandoma (2015) 4 NWLR (Pt. 1466) 213; Akpamgbo-Okadigbo v. Chidi (No. 2) (2015) 10 NWLR (Pt. 1466) 124; Isah v. INEC (supra); Lau v. PDP (supra); Azubuogu v. Oranezi (supra); Agi v. PDP (2017) 17 NWLR (Pt. 1595) 386; A.-G, Fed. v. A.-G., Anambra State (2018) 6 NWLR (Pt. 1615) 314; Roe Ltd. v. UNN (2018) 6 NWLR (Pt. 1616) 420; F.U.T., Minna v. Olutayo (2018) 7 NWLR (Pt. 1617) 176; A.-G., Lagos State v. Eko Hotels (2018) 7 NWLR (Pt. 1619) 518.

In an action commenced by dint of originating summons/motion, the affidavit in support serves as the statement of claim, see Uwazuruonye v. Gov., Imo State (2013) 8 NWLR (Pt. 1355) 28; PDP v. Ezeonwuka (2018) 3 NWLR (Pt. 1606) 187; Lau v. PDP (2018) 4 NWLR (Pt. 1608) 60; Owuru v. Adigwu (2018) 1 NWLR (Pt. 1599) 1; CBN v. Aribo (2018) 4 NWLR (Pt. 1608) 130.” – PER O. F. OGBUINYA, J.C.A

COURT – DUTY OF THE COURT TO READ THE PLEADINGS OF PARTIES HOLISTICALLY

“The law commands the court to read pleading holistically in order to garner a flowing story of it, see Okochi v. Animkwoi (2003) 18 NWLR (Pt. 851) 1; Agi v. PDP (2017) 17 NWLR (Pt. 1595)366; NNPC v. Roven Shipping Ltd. (2019) 9 NWLR (Pt. 1676) 67.” – PER O. F. OGBUINYA, J.C.A

JURISDICTION OF COURT – DETERMINANT OF A COURT’S JURISDICTION

“That is not all.  In the eyes of the law, relief, too, is one of the determinants of jurisdiction of court, see Onwudiwe v. FRN (2006) 10 NWLR (Pt. 988) 382; Garba v. Mohammed (2016) 16 NWLR (Pt. 1537) 114;PDP v. Oranezi (2018) 7 NWLR (Pt. 1618) 245; Gbileve v. Addingi (2014) 16 NWLR (Pt. 1433) 394; Wambai v. Donatus (2014) 14 NWLR (Pt. 1427) 223; Emeka v. Chuba-Ikpeazu (2017) 15 NWLR (Pt. 1589) 345; Cocacola (Nig.) Ltd. v. Akinsanya (2017) 17 NWLR (Pt. 1593) 74; Dec Oil & Gas Ltd. v. Shell (Nig.) Gas Ltd. (2019) 14 NWLR (Pt. 1692) 273. – PER O. F. OGBUINYA, J.C.A

EVALUATION OF EVIDENCE – WHAT DOES EVALUATION OF EVIDENCE CONNOTE?

“To begin with, evaluation of evidence connotes the appraisal/assessment of evidence, both viva voce and documentary before a court, and ascription of probative value to them which results in finding of fact. This primary evidentiary duty falls, squarely, within the exclusive preserve of a trial court. It enjoys this prerogative in that it has the singular advantage, which cannot be recaptured by an appellate court, to watch the witnesses, form impression on their demeanour and assess the credibility or otherwise of their evidence, see Okpa v. State (2017) 15 NWLR (Pt. 1587) 1; Kekong v. State (2017) 18 NWLR (Pt. 1596) 108; Ezeani v. FRN (2019) 12 NWLR (Pt. 1686) 221. PER O. F. OGBUINYA, J.C.A

EVALUATION OF EVIDENCE –MODE OF DISCHARGING THE DUTY ON A TRIAL COURT IN EVALUATION OF EVIDENCE

“To discharge that bounden duty, a trial court must show how and why it arrived at its finding of fact and final determination of the issues before it. It has to be cautious and understand the distinction between summary or restatement of evidence and evaluation of evidence which means assessment of evidence and giving them probative value. It appraises evidence by constructing an imaginary scale of justice and putting the evidence of the parties on the two different pans of the scale.

Then, it weighs them to determine which is heavier, not in terms of quantity, but quality of the testimonies, see Mogaji v. Odofin (1978) 3 SC 91; Olagunju v. Adesoye (2009) 9 NWLR (Pt. 1146) 225; Oyewole v. Akande (2009) 5 NWLR (Pt. 1163) 11; Ayuya v. Yonrin (2011) 10 NWLR (Pt. 1254) 135; Adusei v. Adebayo (2012) 3 NWLR (Pt. 1288) 534; Odutola v. Mabogunje (2013) 7 NWLR (P1355) 522; Ndulue v. Ojiakor (2013) 8 NWLR (Pt. 1356) 311; Okoro v. Okoro (2018) 16 NWLR (Pt. 1646) 506; D.M.V (Nig.) Ltd. v. NPA (2019) 1 NWLR (Pt.1652) 1635; Oguntade v. Oyelakin (2020) 6 NWLR (Pt. 1719) 41.- PER O. F. OGBUINYA, J.C.A

RULE OF INTERPRETATION – THE LITERAL RULE OF INTERPRETATION

“To this end, the court is enjoined by law to apply the literal rule as a cannon of interpretation, id est, to accord the words employed therein their ordinary grammatical meaning without any embellishments, see UBN v. Ozigi (1994) 3 NWLR (Pt. 333) 385, UBN Ltd. v. Sax (Nig.) Ltd. (1994) 8 NWLR (Pt. 361) 150; Enilolobo v. N.P.D.C. Ltd. (2019) 18 NWLR (Pt. 1703) 168.” – PER O. F. OGBUINYA, J.C.A

“CONDITION PRECEDENT”– MEANING OF THE TERM “CONDITION PRECEDENT”

In the eyes of the law, a condition precedent is: “the one that delays the vesting of a right until the happening of an event”, see Atalegbe v. Awuni (1997) 9 NWLR (Pt. 525) 537 at 562, per Uwais, CJN; Niger Care Dev. Co. Ltd. v. ASWB (2008) 9 NWLR (Pt. 1093) 493; A. –G., Kwara State v. Adeyemo (2017) 1 NWLR (Pt. 1546) 210; Jumbo United Co. Ltd. v. Leadway Ass. Co. Ltd. (2016) 15 NWLR (Pt. 1536) 439.” – PER O. F. OGBUINYA, J.C.A

COURT- DUTY OF COURTS IN CONSTURING A DOCUMENT

“Indisputably, the law grants to the courts the unbridled licence to read a document holistically so as to reach and garner harmonious results of its content, see Ojokolobo v. Aremu (1987) 3 NWLR (Pt. 61) 377/(1987) SCNJ 98; Unilife Dev. Co. Ltd. v. Adeshigbin (2001) 4 NWLR (Pt. 707) 482; ACB v. Apubo (2001) 5 NWLR (Pt. 707) 482; Mbani v. Bosi (2006) 11 NWLR (Pt. 991) 400; Bunge v. Gov. Rivers State (2006) 12 NWLR (Pt. 995) 573; Agbareh v. Minra (2008)2 NWLR (Pt. 1071) 378; Nigerian Army v. Aminu-Kano (2010) 5 NWLR (Pt.1188) 429; BFI Group v. BPE (2012) 18 NWLR (Pt. 1332) 209; Julius Berger Nig. PLC. v. T.R.C.B. Ltd. (2019) 5 NWLR (Pt. 1665) 219.

It flows that the law, in order to meet the ends of justice in a matter, commands the court to read mutually-related provisions/clauses in a document together. That is to say, clauses/provisions that share common mission, to realise the intention of the parties, should be construed conjunctively, not independent of the other. – PER O. F. OGBUINYA, J.C.A

EVIDENCE ACT – WHETHER THE PROVISIONS OF THE EVIDENCE ACT IS APPLICABLE TO ARBITRATION PROCEEDINGS

“It is apropos to place on record, perforce, that by virtue of the provision of section 256 (1) of the Evidence Act, 2011, the provisions of the Act shall not apply to any proceedings before an arbitrator. Undeniably, the arbitral proceeding before the tribunal was before an arbitrator. To this end, the provisions of the Act would not be applicable to the arbitral proceeding which parented the action in this appeal”. PER O. F. OGBUINYA, J.C.A

Statutes Referred To:

Arbitration and Conciliation Act, Cap A 18, Laws of the Federation of Nigeria (LFN), 2004
Evidence Act, 2011