CASE SUMMARY OF:
Obi Obembe v. Wemabode Estates Ltd (1977) - SC
Wemabode Estates Ltd
(1977) 5 S.C. 70;
(1977) All N.L.R 130;
LEAD JUDGEMENT DELIVERED BY:
A. Fatayi-Williams, C.J.N;
LAWYERS WHO ADVOCATED
* FOR THE APPELLANT
* FOR THE RESPONDENT
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Bank: Zenith Bank.
Name: Branham Paul Chima.
Account No.: 2178756839.
FACT (as relating to the issues)
HOLDING & RATIO DECIDENDI
1. In the case in hand, clause 17 of the "Model Form of Agreement B" at page 37 of the Booklet (Ex.3), which on the evidence, both oral and documentary, adduced by both parties, has been incorporated by reference into the agreement between the parties, reads: "Any dispute or difference arising out of this Agreement shall be referred to the arbitration of a person to be mutually agreed upon or, failing agreement, of some person appointed by the President for the time being of the Institution of Consulting Engineers."
This clause is clearly different from the "Scott v. Avery" clause. As a matter of fact, it belongs to the first class of arbitration clauses. We pause here for a moment to point out that when the dispute between the parties arose, the plaintiff, through his solicitors (the letter dated 9th January, 1971Exhibit 24 refers) asked that the dispute should be referred to arbitration. The defendants, through their own solicitors, replied that a submission of the dispute to arbitration would serve no useful purpose. (See letter dated 19th January, 1971-Exhibit23). As we have pointed out earlier, any agreement to submit a dispute to arbitration, such as the one referred to above, does not oust the jurisdiction of the court. Therefore, either party to such an agreement may, before a submission to arbitration or an award is made, commence legal proceedings in respect of any claim or cause of action included in the submission.
2. In view of the non production of the working drawings, and the extracts from the letters referred to above, we do not see how any court would have given him a kobo in respect of the fees claimed by him for structural and civil engineering services. The learned trial judge was therefore justified in dismissing the plaintiff/appellant's claim for 44,662pounds although we think his reasons for doing so are erroneous. The appeal against this decision therefore fails.
Such provisions in an agreement are sometimes termed "Scott v. Avery" clauses, so named after the decision in Scott v. Avery (1856) 5 H.L.Cas. 811, the facts of which are as follows. An insurance company inserted in all its policies a condition that, when a loss occurred, the suffering member should give in his claim and pursue his loss before a committee of members appointed to settle the amount; that if a difference thereon arose between the committee and the suffering member, the matter should be referred to arbitration, and that no action should be brought except on the award of the arbitrators. In considering the scope of these provisions, the court held that this condition was not illegal as ousting the jurisdiction of the courts.
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One class is where the provision for arbitration is a mere matter of procedure for ascertaining the rights of the parties with nothing in it to exclude a right of action on the contract itself, but leaving it to the party against whom an action may be brought to apply to the discretionary power of the court to stay proceedings in the action in order that the parties may resort to that procedure to which they have agreed. - Fatayi-Williams, C.J.N. Obembe v. Wemabode (1977)
No stay was asked for by the defendants/respondents after they were served with the writ of summons. On the contrary, they accepted service of the statement of claim, filed their own statement of defence, testified in their defence, and took part in the proceedings until judgement was delivered. In order to get a stay, a party to a submission must have taken NO step in the proceedings. A party who makes any application whatsoever to the court, even though it be merely an application for extension of time, takes a step in the proceedings. Delivery of a statement of defence is also a step in the proceedings. - Fatayi-Williams, C.J.N. Obembe v. Wemabode (1977)
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