Appeal Against Arbitral Award: Whether Leave of Court is Required

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In the Supreme Court of Nigeria Holden at Abuja On Friday, the 19th day of June, 2020

Before Their Lordships

Olabode Rhodes-Vivour

Mary Ukaego Peter-Odili

Olukayode Ariwoola

John Inyang Okoro

Uwani Musa Abba Aji

Justices, Supreme Court

SC.1276/2018

Between

1. Metroline Nig. Ltd

2. Sheba International Ltd

3. Lawal Aboki

(Carrying on business under the name

& style of Messrs Axis Consulting)

4. Inter-Arc Concept Ltd

5. Metshade Ltd… … … … … … … …Appellants

And

Alhaji Mukhtar Mohammed Dikko… … … …Respondent

(Lead Judgement delivered by Honourable Uwani Musa Abba Aji, JSC)

Facts

The Appellants and the Respondent entered into a Joint Venture Agreement (JVA). Paragraph 8 of the JVA provides that any dispute or question in connection with the JVA, shall be referred to a single arbitrator to be appointed by the Chief Judge of the Federal Capital Territory (FCT), Abuja. Further to a dispute between the parties, the Respondent applied to the Chief Judge of the FCT for appointment of a sole arbitrator, and Mr. M.C. Madumere was appointed by the Chief Judge. Mr. Madumere conducted the arbitration proceedings, and issued an award. Dissatisfied with the award, the Appellants applied to the trial court to set aside the award, while the Respondent applied to the trial court for recognition and enforcement of the award. The trial court refused to set aside the award, and recognised same as judgement of the court. Still dissatisfied, the Appellants unsuccessfully appealed to the Court of Appeal, and this led to a further appeal to the Supreme Court.

The Appellants’ Notice of Appeal, contained two grounds of appeal. The first ground of appeal challenged the court’s finding that the 5th Appellant was not a party to the JVA but was part and parcel of the JVA, while the second ground challenged the holding of the Court of Appeal that the issues submitted to the sole Arbitrator, were arbitrable. The Respondent raised a Preliminary Objection to the Appellants’ appeal in its Respondent’s brief, challenging the jurisdiction of the court to determine the appeal on the basis that the grounds were not grounds of law, and so, leave of court ought to have been sought and obtained.

Issue for Determination

While the Appellants and the Respondent formulated two similar issues from the grounds of appeal, the Supreme Court determined the appeal based on the issue raised in respect of the Preliminary Objection thus:

Whether the Appellants ought to have sought and obtained the leave of court before filing their Notice of Appeal.

Arguments

The Respondent argued in support of the Preliminary Objection, that the two grounds of appeal contained in the Appellants’ Notice of Appeal were grounds of mixed law and facts, which require the leave of court pursuant to Section 233(3) of the Constitution of the Federal Republic of Nigeria, 1999. Counsel relied on the case of OSANYANBI & ANOR v LASISI & 2 ORS (2019) 17 NWLR (Pt. 1701) at 237 D-H. He submitted that since the leave of Court was neither sought nor granted, the appeal was incompetent, and he urged that the appeal be dismissed.

The Appellants refuted the above contention and argued that their complaint was in the Notice of Appeal against the decision of the Court of Appeal, which relates to the privity of the 5th Appellant to the JVA and its operations as a company, and concluded that the two grounds of appeal are pure grounds of law for which leave of court is not required. The Appellants’ counsel cited the case of NWOSU v PDP & ORS (2018) LPELR-443886 (SC) and urged the court to discountenance the Respondent’s Preliminary Objection.

Court’s Judgement and Rationale

In determining the issue, the Apex Court reiterated the laid down principles for identifying whether grounds of appeal are grounds of law, mixed law and fact, or strictly based on fact, thus: (i) a ground of appeal which challenges the findings of fact made by the trial court or involves issues of law and fact, is a ground of mixed law and facts; (ii) where the evaluation of facts established by the trial court before the law in respect thereof is applied, is under attack or question, the ground of appeal is one of mixed law and fact; (iii) where evaluation of evidence tendered at the trial is exclusively questioned, it is a ground of fact; (iv) where it is alleged that the trial court or an appellate court misunderstood the law or misapplied the law to the admitted or proved facts, such a ground of appeal is one of law; (v) it is a ground of law if the adjudicating tribunal or court took into account some wrong criteria in reaching its conclusion or applied some wrong standard of proof or, if although in applying the correct criteria, it gave wrong weight to one or more of the relevant factors; (vi) several issues that can be raised on legal interpretation of deeds, documents, terms, words or phrases, and inference drawn therefrom are grounds of law; (vii) it is a ground of law where the ground deals merely with a matter of inference even if it is limited to admitted or proved and accepted facts; (viii) where it is alleged that there was no evidence or no admissible evidence upon which a finding or decision was based, this is regarded as a ground of law. The court referred to the decision in GLOBAL WEST VESSEL SPECIALIST (NIG.) LTD v NIGERIA LNG LTD. & ANOR. (2017) LPELR-41987 (SC). Further, the court held that, once a court of law exercises a discretionary power in the interpretation process, the position in most cases is no longer that of law alone, but becomes one of mixed law and fact.

In addition, the Supreme Court opined that once parties have consented to arbitration, they have also consented to accept the final award by the Arbitrator. The Apex Court held that since arbitral awards have some touch of finality where especially the parties voluntarily went into it, appeals therefrom, save as provided in Sections 29 and 30 of the Arbitration and Conciliation Act, should be by the leave of court, since, of course, it does not fall within the purview of Section 233(1)(2) of the 1999 Constitution (as amended). Now, Section 233(1) of the 1999 Constitution confers jurisdiction on the Supreme Court, to the exclusion of any other court of law in Nigeria, to hear and determine appeals from the Court of Appeal. In Section 233(2)(a)-(f), the various circumstances in which appeals shall lie as of right from the Court of Appeal to the Supreme Court, are clearly provided thereunder. Thus, appeals on facts or mixed law and facts require the leave of court, for the, to be competent – OBAYUWANA & ORS. v ADUN (2020) LPELR-49377(SC).

The Supreme Court found that the Appellants’ two grounds and particulars, could not be divorced from the arbitration and the appeal therefrom. The Appellants’ first ground, questioned the decision of the Court of Appeal on the status of the 5th Appellant that he was not privy to the JVA; this is in the realm of mixed law and fact. Similarly, the basis of the second ground of appeal was on the dispute of the parties that arose from clause 8 of the JVA, which provides that the dispute be arbitrated by a single Arbitrator who has arbitrated on the facts and evidence presented by the parties, and given a final award. The second ground questioned the evaluation of facts before the application of the law, and this makes it a ground of mixed law and fact.

Given the above, their Lordships concluded that the grounds of appeal upon which the Appellants’ appeal is founded were of mixed law and fact, in respect of which leave to appeal ought to have been sought and obtained for the appeal to be competent. Since the condition precedent was absent, it follows that the Supreme Court lacked the jurisdiction to look into the questions raised, thereby rendering the appeal incompetent.

Preliminary Objection Sustained; Appeal Struck Out.

Representation

Mohammed Ndayako Esq. for the Appellants.

Dr. Olumide Ayeni for the Respondent.

Reported by Optimum Publishers Limited , Publishers of Nigerian Monthly Law Reports (NMLR)(An Affiliate of Babalakin & Co.)

Quote

“Since arbitral awards have some touch of finality, where especially the parties voluntarily went into it, appeals therefrom, save as provided in Sections 29 and 30 of the Arbitration and Conciliation Act, should be by the leave of court, since, of course, it does not fall within the purview of Section 233(1)(2) of the 1999 Constitution (as amended)”