➥ CASE SUMMARY OF:
City Engineering (Nigeria) Limited V. Nigerian Airports Authority (SC.36/1993, 25 Jun 1999)
by Branham Chima (LL.B.)
➥ SUBJECT MATTER(S)
Appointment of arbitrator.
➥ CASE FACT/HISTORY
The affidavit evidence showed that the applicant was awarded a contract by the respondent for the construction of the Interim Measures Building and Utility Services andExternal Works at the Kaduna Airport, Kaduna, as per their contract agreement Exhibit “AOS1”, dated 3rd January, 1980. The respondent by its letter, dated 9th June, 1982 (Exhibit A0S3) unilaterally terminated the contract between the parties for alleged poor performance in the execution of the contract. The applicant’s reply was dated 16th June, 1982 (Exhibit A0S4) wherein it was made clear that the termination was a breach of contract and as a result a dispute had arisen between the parties within the meaning of clause or section 19 of the contract agreement or specifically the general conditions of contract (Exh. AOS1 or Exh. AOS2). In short, clause or section 19 provides for a preliminary procedure for the settlement of disputes to precede an eventual submission to arbitration within the meaning of the Arbitration Law of Lagos State.
It was as a result of the failure by the parties to agree on the appointment of an arbitrator that led to the filing of the application before the High Court relying on section 6(1)(a) and section 6(2) of the Arbitration Law of Lagos State. The respondent filed a counter affidavit in opposition to the application, the main thrust of which was that the applicant did not meet the requirement or condition imposed on it by clause or section 19 of the contract agreement, the general conditions of contract by its failure to comply with the preliminary procedure for the settlement of dispute. It was also contended that the applicant had also failed to give the mandatory seven (7) days’ notice to the respondent before filing the application contrary to section 6(2) of the Arbitration Law above. After the learned trial Judge had carefully reviewed the affidavit evidence and submissions of counsel before him, he concluded his ruling thus:- “The total of this application, having regard to the averments in the affidavit and counter-affidavit, with all the annexures exhibited on the affidavit and the counter-affidavit, the arguments advanced by both counsel and my observations, the application fails on the ground of the non-compliance with sub-section 2 of section 6 of the Arbitration Law of Lagos State, the notice to concur was not given before the filing of this action, the application fails and it is hereby dismissed.”
Aggrieved by the ruling of the trial High Court, the applicant appealed to the Court of Appeal, holden at Lagos. One of the main issues contested in that court was whether or not the learned trial Judge was right in holding that the application failed because of non-compliance with section 6(2) of the Arbitration Law of Lagos State. The Court of Appeal in a unanimous judgment delivered on the 22nd day of February, 1989 upheld the ruling of the learned trial Judge and dismissed the appeal with costs in favour of the respondent. Still dissatisfied with the judgment of the Court of Appeal, the applicant has further appealed to this court.
➥ ISSUE(S)
I. Whether the required notice was given by the appellant to the respondent before applying to the court to appoint an arbitrator as required by section 6(1)(a) and (2) of the Arbitration Law of Lagos, 1972?
➥ RESOLUTION(S) OF ISSUES
[APPEAL DISMISSED]
↪️ ISSUE 1: IN RESPONDENT’S FAVOUR.
[THERE WAS NO REQUEST FOR RESPONDENT TO APPOINT AN ARBITRATOR
‘The relevant portion of Exhibit AOS9, dated 26th July, 1982, which the applicant strongly contended constituted a valid and sufficient notice under the above law read thus:- “We cannot see any better example of a dispute as already stated in this matter. In any way the issue as to whether there is a dispute or not is not for your authority to decide, that is the issue that the arbitrator is called upon to decide. In view of the explanation above, it is our clients’ instruction that we should proceed with the setting up of the A necessary machinery for submission to arbitration in this matter and please be informed that the same is in progress.” It is plain to me on the face of the letter above that, there was no request or suggestion that the respondent should appoint or concur in the appointment of an arbitrator. If it gave respondent notice of anything, itmust be a notice that there was a dispute and that the applicant had instructed its solicitors to proceed with the setting up of the machinery for arbitration. What section 6, sub-sections(1)(a) and (2) above requires is a written notice to appoint an arbitrator. Again, it was not disputed that the originating summons in this case was issued on 4th November, 1982, while Exhibit AOS9 definitely cannot amount to a notice under section 6 above, the letter, having not called upon the respondent to appoint an arbitrator.’
KNOWLEDGE OF A DISPUTE CANNOT BE EQUATED WITH NOTICE GIVEN
‘Having come to the conclusion that Exhibit AOS9 did not amount to a notice under the law, I find it difficult to agree with learned counsel for the applicant that it was an irregular notice and that any irregularity arising therein should be regarded as waived or cured by the respondent’s Exhibit AOS10. I repeat again that what was required was a formal notice, a condition precedent, before taking out the originating summons and there was none. The defect was fundamental which could not have been cured or waived by ExhibitAOS10. The notice required cannot also, in my view, be equated with knowledge that the respondent had known that the applicant had instructed its solicitors to proceed with the setting up of machinery for submission to arbitration vide Exhibit AOS9.’
THERE WAS NO CALL FOR THE RESPONDENT TO APPOINT AN ARBITRATOR
‘It is clear to me that what section 6(1)(a) and (2) of the Arbitration Law of Lagos State require is the service by an aggrieved party to the other party of a written notice to appoint an arbitrator where all the parties do not, after a difference has arisen, concur in the appointment of an arbitrator It seems to me that to satisfy the requirement of that section of the Arbitration Law, the written notice must call on the other party to the contract to appoint or concur in the appointment of an arbitrator. In my view, Exhibit AOS9 can by no stretch of the imagination be construed as a call on the respondent to appoint an arbitrator or concur to the appointment of an arbitrator. At best, it is a reply to the respondent’s letter of the 2nd July, 1982, which denied the existence of any dispute between the parties. The appellant, by this reply also asserted its intention to proceed with setting up of the necessary machinery for submission to arbitration.’
‘I think I ought to stress that what section 6(1) of the Arbitration Law of Lagos State does prescribe is a written notice of appointment of an arbitrator and not simply a letter which merely declares the existence of a dispute and an intention to submit to arbitration as Exhibit A0S9 seems to indicate. The written notice prescribed by section 6(1) of the Arbitration Law is a statutory notice which, as a condition precedent to the institution of a valid action for the appointment of an arbitrator, confers the necessary jurisdiction on the court to appoint such an arbitrator who shall have the like powers to act in the reference and make an award as if he had been appointed by the consent of all the parties. It is only after the requirement under section 6(1) is complied with, and the necessary appointment is not made within seven clear days after the service of such notice that the provisions of section 6(2) come into play and an application may then be made to the court under that section of the Law by the party who served the notice for the appointment of an arbitrator or umpire as the case may be.’
‘In the present case, there was non-compliance with statutory provisions of section 6(1) and (2) of the Arbitration Law of Lagos State on the part of the appellant before the institution of the present action. This failure to give the required statutory notice cannot, in my view, be regarded as a mere irregularity as it constitutes a precondition to the institution of the action and thus affected the jurisdiction of the court to entertain the suit. There is no evidence that the respondent which was the party entitled to such notice waived its right to it either expressly or by necessary implication’]
.
.
.
✓ DECISION:
‘The issue is, therefore, resolved against the applicant/appellant. And the appeal fails. It is accordingly dismissed with N10,000,00 costs in favour of the respondent.’
➥ FURTHER DICTA:
⦿ SUBSTANTIAL TECHNICALITY VERSUS UNSUBSTANTIAL TECHNICALITY
A distinction must however be drawn between a mere or unsubstantial technicality in proceedings that are competent and within the jurisdiction of a trial court and a substantial technicality which amounts to a condition precedent to the commencement of an action and which renders a proceeding manifestly incompetent thereby affecting the jurisdiction of the court and renders the same incurably defective. Whereas the former may be waived , the latter as a general rule may not, as acquiescence does not and cannot confer jurisdiction. See: Skenconsult (Nig.) Ltd. and Another v. Godwin Ukey (1981) 1 SC 6 at 26; Management Enterprises Ltd. and Another v. Jonathan Otusanya (1987) 2 NWLR (Pt. 55) 179; Obimonure v. Erinosho and Another (1966) 1 ALL NLR 250; Macfoy v. U.A.C. Ltd. (1961) 3 ALL ER 1169 at 1172 etc. — Iguh JSC.
⦿ RULE OF COURT MAY BE DISPENSED WITH BUT A STATUTORY PROVISION CANNOT BE DISPENSED WITH
Although a rule of court may in appropriate cases and because of the peculiar and exceptional circumstances of the case be dispensed with in the overall interest of justice, and so long as no miscarriage of justice is thereby occasioned, a statutory provision may not be ignored by the court. See: Etim Ekpenyong and others v. Inyang Nyong and others (1975) 2 SC 71. — Iguh JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Kutigi, JSC
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
⦿ FOR THE RESPONDENT(S)
Dr. Onejeme.
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
