(2018) LPELR-45546(CA)lawpavilionpersonal.com/ipad/books/45546.pdf · In the Court of Appeal In the Lagos Judicial Division Holden at Lagos ON FRIDAY, 20TH APRIL, 2018 Suit No: CA/L/1349/2016

MEKWUNYE v. LOTUS CAPITAL LTD & ORS

CITATION: (2018) LPELR-45546(CA)

In the Court of AppealIn the Lagos Judicial Division

Holden at Lagos

ON FRIDAY, 20TH APRIL, 2018Suit No: CA/L/1349/2016

Before Their Lordships:

TIJJANI ABUBAKAR Justice, Court of AppealBIOBELE ABRAHAM GEORGEWILL Justice, Court of AppealJAMILU YAMMAMA TUKUR Justice, Court of Appeal

BetweenDR. CHARLES D. MEKWUNYE - Appellant(s)

And1. LOTUS CAPITAL LIMITED2. STANBIC IBTC ASSET MANAGEMENT LIMITED3. MTN NIGERIA COMMUNICATIONS LIMITED4. HIS HOLDING LIMITED5. INT. TOWERS LIMITED

- Respondent(s)

RATIO DECIDENDI

(201

8) LP

ELR-45

546(

CA)

1. ARBITRATION AND CONCILIATION - ARBITRATION: Whether matters relating to crime or allegation o fraud are arbitrable disputes"It is undisputed that before a matter can be referred to arbitration, same must first be seen to be arbitrable. The dispute must not relate or cover matters which by law, are not permitted to besettled by other dispute resolution mechanisms other than in Court, the Arbitration and Conciliation Act, Cap A18, does not demarcate between disputes that are arbitrable or otherwise, it hashowever been judicially recognized as a matter of public policy that matters relating to crime, matrimonial causes, winding up of a company or bankruptcy are of such nature that cannot besettled by arbitration. See: BCC TROPICAL (NIG.) LTD v. GOVERNMENT OF YOBE STATE OF NIGERIA & ANOR (2011) LPELR-9230 (CA).As the argument of the counsel in this appeal shows, arbitrability of fraud is one of the contentious issues in arbitration, particularly as it involves questions of what type of issue can and cannotbe submitted to arbitration. It has always been the case that where fraud and serious malpractices are alleged in a dispute, same cannot be referred to an arbitrator for resolution. Thejurisdiction of the regular Court on this issue is iron-clad, as fraud, financial malpractice and collusion are allegations with criminal consequences and therefore reserved for the Courts, and anarbitral tribunal, being a creature of contract, is not endowed with general and wide jurisdiction, bestowed upon regular Courts, which are equipped to adjudicate in complex issues and arecompetent to offer wider range of reliefs to the parties in dispute. See: Alipak Banerjee & Vyapak Desai on "Is Fraud Open To Arbitration."In the instant appeal, it is undisputed that the Appellant pleaded fraud with the particulars thereof, particularly at paragraph 45 of the Appellant's Statement of Claim alleging that the 1stRespondent's Telecoms Private Equity Fund Investment Agreement is a Ponzi Scheme and an instrument of fraud, used by the Respondents to defraud unsuspecting Nigerians including theAppellant. It is in this regard that the Appellant sought a declaration that the 1st Respondent's Telecom Private Equity Fund is a Ponzi Scheme used by the 1st Respondent to defraud theAppellant. Appellant holds the view that the issue of fraud alleged in the instant case cannot be resolved by arbitration. The learned Counsel for the 1st Respondent contended otherwise thatthe principal claim of the Appellant is for breach of Agreement and that the use of "fraud" by the Appellant in this case does not refer to any form of criminal offence, but is at best contractualmisrepresentation. I am not aware of any decision of the Superior Courts in this country where the instant issue was considered and pronounced upon. I therefore take solace in decisions inother jurisdictions, which though are of persuasive authority, but are nevertheless applicable to the issues herein. See the decisions in SWISS TIMING LTD v. ORGANISING COMMITTEE, COMMONWEALTH GAMES 2010 (2014) 6 SCC 677; WORLD SPORT GROUP (MAURITIUS) LTD v. MSM SATELLITE (SINGAPORE) PTE LTD in Civil Appeal No. 895 of 2014.In WORLD SPORT GROUP (MAURITIUS) LTD (Supra), the parties entered into a partnership deed on 1st April 1994 for running a hotel. While the Appellant was entrusted with administration, theRespondents alleged that the Appellant had failed to make regular deposits of money into the common operating bank account and had fraudulently siphoned off an amount of INR 10,00,050. Ina separate raid conducted by the Law Enforcement Agents (CBI) on premises of the Appellant's relative, an amount of INR 45,00,000 was seized and alleged to have been given by the Appellantfor business of the hotel. The Respondentsfiled a civil suit seeking right of administration of the hotel. The Appellant sought reference of the dispute to arbitration under Indian Arbitration Act. The High Court rejected the Appellant'sapplication on the ground that the dispute involved allegations of fraud. Aggrieved by the decision, the Appellant preferred an appeal before the Supreme Court. It was the contention of theRespondents in that case, just as the one before this Court that, where allegations of fraud are involved civil Courts are the appropriate forum for adjudication. The Supreme Court of Indiarejected the general notion that elements of criminal wrongdoing detracted from the jurisdiction of arbitral tribunal. Referring to the Indian Arbitration Legislation and the New York Convention,the Court considered that the allegations of fraud did not impact on the validity of the arbitration agreement; the fact that fraud was alleged did not render the agreement inoperative orincapable of being performed.?The foregoing decisions of the Indian Supreme Court are instructive and I must say the reasoning therein is compelling. It is my view, that to accept the Appellant's contention to the effect thatarbitration should be shut out, merely on the basis of allegation of fraud, which has not been subject to proof, would undoubtedly destroy the very purpose for which the parties had agreed bycontract to submit to arbitration. In as much as the allegation of fraud does not relate to the validity of the substantive contract, which is even separable from the Arbitration clause, I am of theopinion that the Court ought to act with caution and circumspection as the allegations of fraud in the circumstances of this case, can be duly considered by an Arbitrator or Arbitral Tribunal. Theallegation of fraud by the Appellant herein is not directed, at the arbitration agreement, thereby impeaching same and the resultant arbitration, nor is it directed at the main contract; I amtherefore unable to accept the submissions of learned Counsel for the Appellant that mere allegation of fraud renders the dispute herein un-arbitrable.I am mindful of the fact that Appellant relied on the decision of this Court in B. J. EXPORT & CHEMICAL COMPANY LTD v. KADUNA REFINING & PETRO-CHEMICAL COMPANY LTD (supra),particularly the dictum of MOHAMMED, JCA at page 36, paras. B-G; thus:"It is trite that the disputes which the subject of an arbitration agreement must be arbitrable. In other words, the agreement must not cover matters which by the law of the State are notallowed to be settled privately or by arbitration usually because this will be contrary to the public policy. Thus, a criminal matter, like the allegation of fraud raised by the respondent in this case,does not admit of settlement by arbitration as was clearly stated by the Supreme Court in KANO STATE URBAN DEVELOPMENT BOARD v. FANZ CONSTRUCTION LTD. (1990) 4 NWLR (Pt. 142) 1 at32-33. This position of the law appears to have been further stated under the Arbitration and Conciliation Act, CAP 19 Laws of Federation...."I must say that decision of this Court in the above case is inapplicable to the instant case. The dispute between the parties in that case arose out of an agreement entered between the partiesby which the Appellant hired four ISO Tanks from the respondent for shipment of petroleum products on a rental charge of N10,000.00 for each tank for a period of 8 weeks. The Appellant tookdelivery of the tanks and used same to ship petroleum products to Europe. At the expiry of the 8 weeks period of lease of the tanks, the Appellant failed to return them to the Respondent asagreed.When the Respondent demanded for the return of the tanks, the Appellants attributed its failure to return same to the uncertainty in the political situation in Nigeria, due to the crisis relating tothe June 12, 1993 election, and subsequently the industrial action at the Lagos Port but finally returned them in September 1993 in clean condition along with the payment of N80,000.00 rentalcharges. However, nearly three months thereafter, the Appellant raised problems encountered with the tanks by its Agent in Europe who claimed the sum of $85,016.00 from the respondentbeing alleged expenses incurred on account of unsuitability of the tanks, etc. When the Appellant's claim was resisted by the Respondent, the Appellant proposed the appointment of anarbitrator to resolve the dispute and this was accepted by the Respondent, whereupon the parties jointly appointed the arbitrator. When the partiesappeared before the arbitrator, instead of the earlier claim of $85,016.00, the Appellant filed a claim of $400,000.00 before the arbitrator. Rather than responding to the Appellant's claim beforethe Arbitrator, the Respondent commenced an action before the Kaduna State High Court vide an Originating Summons seeking (1) A declaration that the Appellant's claim against theRespondent upon which reference was made to the Arbitrator is prima facie fraudulent and therefore not a proper subject of arbitration as contemplated by the parties in their agreement; and(2) Leave to revoke the arbitration agreement and the arbitrator's authority upon the said ground.It is obvious the situation and circumstance of the instant case are not consistent with the one in B. J. EXPORT & CHEMICAL COMPANY LTD where the Respondent's allegation of fraud goes to theroot of the Arbitration Agreement. In the instant case, it does not and I am therefore unable to reach similar conclusion as reached by this Court therein. At any rate, the ratio in that casesupports the position earlier expressed that where the allegation of fraud affects the validity of the substantive contract and/or the Arbitration Agreement, same cannot be determined by anArbitrator; only regular Courts have jurisdiction to consider and pronounce on such issue. In the instant case, the allegation of fraud does not affect or relate to the validity or otherwise of thecontract between the parties or the Arbitration Agreement; therefore the reasoning expressed in decision of this Court in B.J. EXPORT & CHEMICAL COMPANY LTD cannot be adopted here, wherethe allegation of fraud is in relation to the performance of obligations under the contract. In that case, the allegation of fraud affects the contract, or at best, the arbitration agreement and goesto the root of the relationship between the parties. The position of the law stated by this Court in the said case remains potent but qualified to the effect only the Court can adjudicate onallegation of fraud which affects the validity of an arbitration agreement."Per ABUBAKAR, J.C.A. (Pp. 25-34, Paras. E-E) - read in context

2. ARBITRATION AND CONCILIATION - ARBITRATION: Whether there can be more than one party to an arbitration proceeding emanating under one contract where parties submit toarbitration"The other question under this issue relates to the Appellant's contention that since the parties in the instant suit are more than two, the dispute cannot be arbitrable. The Appellant copiouslyreferred to the view expressed by the learned authors, J. O. Orojo and M. A. Ajomo, "Law and Practice of Arbitration and Conciliation in Nigeria", Lagos: 1999, 62 that "as a general rule, there aretwo parties to an arbitration since an arbitration agreement is usually bilateral and so an arbitration proceeding under one contract cannot, without agreement of the parties, be used to resolvedisputes under another contract. Nor can a third party make himself a party to that arbitration."I must say that the Appellant's argument on this ground is misconceived. From the submissions made by the Appellant, it is conceded that there can be more than one party to an arbitrationproceedings emanating under one contract, in so far as the parties involved consent to submit to arbitration. There is nothing on record showing that the parties concerned do (or will) notconsent to arbitration. It is speculative to say the least. I am in agreement with the learned counsel for the 1st Respondent that the pivotal dispute as apparent from the reliefs sought by theAppellant herein, is between the Appellant and the 1st to 3rd Respondents. As a matter of fact, the reliefs sought against the 4th and 5th Respondents, who are not parties to the arbitrationagreement nor agents or privies of the parties thereto, are consequential and ancillary to the principal reliefs sought by the Appellant. As a matter of fact, Reliefs J, Q and U are declaratory andinjunctive reliefs geared towards invalidating the contract purportedly executed by the 1st to 5th Respondents, towards changing the "character and form of the Appellant's investment in theMTN Linked Unit." These reliefs are undoubtedly hinged on the principal claim sought by the Appellant. The only conclusion is that the addition or status of the 4th and 5th Respondent isinsufficient to warrant the conclusion urged on us by the Appellant. Appellant's argument on this issue is therefore misconceived."Per ABUBAKAR, J.C.A. (Pp. 34-36, Paras. F-D) - read in context(2

018)

LPELR

-4554

6(CA)

3. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE: Whether an agreement to submit a dispute to arbitration ousts the jurisdiction of Court"The grievance of the Appellant under this issue is that the learned trial judge refused to follow the decisions in OBEMBE v. WEMABOD ESTATE (supra) and K.S.U.D.B. v. FANZ LTD (supra) and Imust say that the Appellant's complaint is unfounded having had the benefit of studying the decisions referenced. In OBEMBE, the Supreme Court, per FATAYI-WILLIAMS, JSC held as follows:"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 suchan 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. At common law,the Court has no jurisdiction to stay such proceedings. Where, however, there is provision in the agreement, as in Exhibit 3, for submission to arbitration, the Court had jurisdiction to stayproceedings by virtue of its power under Section 5 of the Arbitration Act (Cap 73 of the Laws of the Federation)...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 ownstatement of defence, testified in their defence and took part in the proceedings until judgment was delivered. In order to get a stay, a party to o submission must have taken NO step in theproceedings. 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 statementof defence is also a step in the proceedings... Moreover, if the Court has refused to stay an action, or if the defendant has abstained, as in the case in hand, from asking it to do so, the Court hasseizing of the dispute, and it is by its decision and by its decision alone, that the right of the parties are settled...."In K.S.U.D.B. (supra), the Supreme Court similarly held as follows:"Both the decision in Doleman & Sons v. Ossett Corporation (supra) and that of this Court Obembe v. Wemabod Estates Ltd. (supra) recognize it that the Court alone has not only the jurisdictionbut also the duty to settle the dispute between the parties if called upon to do so. These cases also recognize it that under the relevant section of the arbitration low, upon the application of thedefendant to an action brought in breach of agreement to proceed by arbitration the Court has power to stay the proceedings. In other words, under the provisions of the Arbitration law, theCourt had power to refuse to entertain proceedings brought before it in breach of an agreement to decide the matter by arbitration. However the defendant is not given by the law a carteblanche as to when to apply for the stay of proceedings...."Learned Counsel for the 1st Respondent argued that the decision in the case under reference is not relevant to the facts of the case at hand, and I agree with learned counsel. In the instantcase, the learned trial judge held at pages 474 to 475 of the Records of Appeal as follows and I quote:"I have examined the claim put forward by the Plaintiff which was commenced by Writ of Summons asking the Court to enforce all the Terms set out in the Telecoms Private Equity FundInvestment Agreement dated 21st of August, 2008. Amongst other reliefs sought is for the Court to hold that the 2nd Defendant is a party to the said agreement. Definitely from the reliefssought a dispute has occurred.I found from the claim that the Plaintiff acknowledges the agreement entered into and in particular when he sought that the 2nd Defendant should be declared a party to the agreement. Hebelieves that the 3rd, 4th and 5th Defendants have one thing or the other to do with the transaction which he entered into with the 1st Defendant.An Arbitration clause where embedded in a document voluntarily entered into by parties must of necessity be honored in good faith in the absence of fraud or mistake. The Court must notengage in rewriting agreement for parties...I believe that once an arbitration clause is retained in a contract which is valid and subsisting and the dispute is within the contemplation of the Clause, the Court should give regard to thecontract by enforcing the Arbitration Clause....In the present case if the Plaintiff is not happy with the outcome of the Agreement he ought to have gone to Arbitration and exhaust all the mechanism put in place within the Agreement beforeapproaching...Failure to do so tantamount to not fulfilling the condition precedent to adjudication. As long as this situation exists the Court cannot be said to have the jurisdiction and competence to examinethis matter and all other applications before it..."I am unable to, in the peculiar circumstances of the instant case, hold the view that the learned trial judge failed to follow the decision of the Supreme Court referred to by the Appellant. It isundisputed that contrary to the situation in OBEMBE, the 1st Respondent herein sought for an order for stay of proceedings pending arbitration. From the records before us, it ought not bedisputed that the 1st Respondent had taken no step in the proceedings in the suit at the lower Court. In the Appellant's Reply, it was submitted that the 2nd Respondent filed several processesand joined issues with the Appellant and these steps taken by the 2nd Respondent amount to submitting to the jurisdiction of the lower Court.Granted that it is obvious that the 2nd Respondent had taken steps in the proceedings at the lower Court, and is therefore precluded from enjoying the privilege of being granted an order ofstay pending arbitration, pursuant toSection 5 of the Arbitration and Conciliation Act, I am unable to accept the submissions of the Appellant that the steps taken by the 2nd Respondent amount to submission to the jurisdiction ofthe lower court by the other parties, or the 1st Respondent herein in particular. The decision of the Supreme Court is clear on the position that it is only a party who has taken a step in theproceedings in Court that is estopped from asking the Court for a stay to refer the matter to arbitration in accordance with Section 5(1) of the Arbitration and Conciliation Act. Here, it will beunconscionable and therefore wrong to ascribe the steps taken by the 2nd Respondent with respect to the proceedings as those of the 1st Respondent, as the Appellant has urged. The recordbear witness, the Appellant conceded that the 1st Respondent had taken no step in the proceedings at the lower Court. This is sufficient on this issue as it relates to Section 5(1) of theArbitration and Conciliation Act.?Nevertheless, it is certainly also not the contention of the Appellant that the learned trial judge erred when she held that, considering the circumstances of the instant case, where parties haveby agreement agreed to arbitrate any dispute arising from the contract executed by them, recourse to arbitration is a condition precedent to the exercise of the jurisdiction of the Court.Arbitration clause is not a magic wand used to forestall the exercise of jurisdiction of the Court; rather it is only a mechanism built into a contract to enable the parties, in the event of dispute, tofirst explore the option of settling same out of Court failing which they can proceed to Court. See: MESSRS NV SCHEEP v. MV'S ARAZ (2000) 12 SC (Pt. 10) 154 at 213 where it was held:"In any event, the arbitration clause did not seek to oust the jurisdiction of the Court as all it did was to allow parties the avenue and possibilities of settling disputes amicably out of Court. Theposition of the law is that an arbitration clause in agreement generally does not oust the jurisdiction of the Court or prevent the parties from having recourse to the Court in respect of disputearising therefore. A party to an agreement with an arbitration clause has the option to either submit to arbitration or to have the dispute decided by the Court...."Therefore, the reasoning of the learned trial judge earlier reproduced does not in my view, run contrary to the decision in OBEMBE (supra). Appellant's submission on this issue is thereforemisconceived."Per ABUBAKAR, J.C.A. (Pp. 41-49, Paras. E-A) - read in context

(201

8) LP

ELR-45

546(

CA)

4. ARBITRATION AND CONCILIATION - ARBITRATION: Condition precedent for the exercise of discretion of Court to grant an order staying proceedings pending reference to arbitration"Under this issue Appellant's complain is that the learned trial judge ignored the provisions Section 5(2) of the Arbitration and Conciliation Act as well as the decisions in M.V. PARNOMOS BAY v.OLAM (NIG.) PLC (supra) and UBA v. TRIDENT CONSULTING LIMITED (supra).Section 5 of the Arbitration and Conciliation Act reads as follows:(1) If any party to an arbitration agreement commences any action in any Court with respect to any matter which is the subject of an arbitration agreement, any party to the arbitrationagreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay the proceedings.(2) A Court to which an application is made under Subsection (1) of this section may, if it is satisfied -(a) that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and(b) that the applicant was at the time when the action was commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, make an orderstaying the proceedings."The power donated to the lower Court under the above section is no doubt discretionary and with all the discretionary powers, the appellate Court is always loath to interfere with the way aCourt exercises its discretion unless where the discretion was wrongly exercised; or tainted with some irregularity, or in other instances where the Court sees any reason to interfere with same.See UNILAG v. AIGORO (1985) 1 NWLR (Pt. 1) 143; AJUWA & ANOR v. SPDC NIG. LTD (2011) LPELR-8243 (SC). It must therefore be stated that the competing rights of the parties to justice in thecase must be considered; where such exercise of discretion is motivated by some ulterior considerations in favor of an applicant without adequately taking into account the Respondent's equalright, the discretion will not be said to have been judicially and judiciously exercised. See N.N.P.C. v. FAMFA OIL LTD & ANOR (2009) LPELR-2023 (SC).As I earlier stated, it is the Appellant's complaint that the learned trial judge ignored the provisions of Section 5(2) of the Arbitration and Conciliation Act in reaching the conclusion that the suitbe stayed pending reference to arbitration. Clearly, the purport of Section 5(2) is that a Court may make an order staying proceedings if it is satisfied that there is no sufficient reason(s) why thematter should not be referred to arbitration and that the Applicant was at the time when the action was commenced, willing and ready to do all things necessary for the conduct of thearbitration.Appellant cited the decision in M.V. PANORMOS-BAY v. OLAM (NIG.) PLC (supra) where this Court, per GALADIMA, JCA (as he then was) held that it is the party praying for arbitration as an'applicant' that has the duty to comply with Section 5(2)(b) of the Act by commencing the proceedings. To the contrary, it is the contention of learned Counsel for the 1st Respondent that thedecision in that case was overruled by this Court in ONWARD ENTERPRISES LIMITED v. MV. "MATRIX" & ORS (2008) LPELR-4789 (CA) at Pages 29 to 30, Paras. D to C, where this Court, perMSHELIA, JCA held:"... It is a basic principle of law that where parties to a contract have under the terms thereof agreed to submit to arbitration if there is any dispute arising from the contract between them adefendant who has not taken any steps in the proceedings commenced by the other party, may apply to the Court for stay of proceedings of the action to enable parties to go to arbitration ascontracted.Once an arbitration clause is retained in a contract which is valid and the dispute is within the contemplation of the clause, the Court should give regard to the contract by enforcing thearbitration clause... It is therefore the general policy of the Court to hold parties to the bargain into which they had entered unless there was a strong, compelling and justifiable reason to holdotherwise or interfere. In the instant case, appellant who had the onus to advance compelling reason as to why this Court should interfere with the discretionary power of the trial Judge hadfailed to do so. There is nothing to show that the arbitration agreement was imposed on the appellant. Since both parties voluntarily entered into the agreement same should therefore bebinding on them...."I have had the benefit of reading the decision of the Court in ONWARD ENTERPRISES LIMITED (supra) and I agree with the submissions of learned Counsel for the 1st Respondent that thedecision in M.V. PANORMOS BAY (supra) cannot stand as authority on the issue at hand. This is apparent from the reasoning expressed by my learned brother MSHELIA, JCA at Pages 26 to 28,Paras. F to G, as follows:"I am mindful of the decision of this Court in M.V. Panormos Bay v. Olam (Nig.) Plc supra referred to us by respondent's counsel. In that case this Court declared null and void an arbitrationagreement which states that disputes between parties shall be referred to Arbitration in London on the ground that Section 20 of the Admiralty Jurisdiction Act 1991 is a statutory limitation tothe enforcement of the arbitration agreement in the bills of lading.The reason is that such agreement would deny the Nigerian Courts temporarily of jurisdiction. As rightly observed by respondent's counsel the Court was not called upon to consider theSupreme Court decision in M.V. Lupex v. N.O.C. & S Ltd supra as well as Section 10 of the Admiralty Jurisdiction Act 1991.In M.V. Lupex v. N.O.C. & S Ltd Supra the appellant requested the trial Federal High Court to stay proceedings of the action filed by the respondent in view of the agreement the two partiesentered in clause 7 of the Charter-Party which reads:"7 That parties agreed inter alia on arbitration in London under English Law in the event of dispute,"The Federal High Court refused the stay of proceedings and on appeal this Court affirmed the decision of the trial Court. On further appeal to the Supreme Court, the appeal was allowed andstay of proceedings was ordered. The apex Court held among other things that where parties have agreed to refer their dispute to arbitration in a contract, it behoves the Court to lean towardsordering a stay of proceedings. By this decision it is clear that stay of proceedings, could be granted pending reference to arbitration in a foreign country in deserving cases. I wish to note thatSection 20 of the Admiralty Jurisdiction Act was not discussed in that case...."It is therefore clear that the decision in M.V. PANORMOS BAY (supra) does not reflect the position of the law in this regard and same cannot be relied upon successfully by the Appellant insupport of his contention that no order of stay should be granted by the lower Court pending arbitration. For the avoidance of doubt, the reasoning in that decision does not accord with thedecision of the Supreme Court in M.V. LUPEX, it cannot be relied upon.Appellant's counsel also made reference to UBA v. TRIDENT CONSULTING LIMITED (supra), where the facts show that the Respondent entered into a contract with theAppellant for the implementation of automated Customer Relationship Management (C.R.M.) software for certain aspects of her banking business. There was an arbitration clause in the contractexecuted by the parties. When dispute subsequently arose in respect of some outstanding payments to the credit of the Respondent, the Appellant terminated the contract and the Respondentthen commenced an action at the High Court of Lagos State on sundry reliefs. The Appellant filed an application for stay of proceedings pending arbitration and the application was refused. Onappeal to this Court, it was held that for an application for stay of proceedings pending arbitration to succeed, the Applicant must adduce documentary evidence showing the steps he has takenin respect of the commencement of the arbitration. According to my learned brother IKYEGH, JCA:"Before a stay may be granted pending arbitration, the party applying for a stay must demonstrate unequivocally by documentary and/or other visible means that he is willing to arbitrate. Hedoes it satisfactorily by notifying the other party in writing of his intention of referring the matter to arbitration and by proposing in writing an arbitrator or arbitrators for the arbitration. In theinstant case, the only paragraph of the affidavit evidence of the appellant relevant to the matter deposed in paragraph 8 thereof that:'I was informed by Mr. Ugochukwu Okwesili, a Legal Officer in the applicant Bank in a meeting in our office at 57, Marina, Lagos on the 13th day of May, 2009 at about 2:30pm while reviewingthis matter and I verily believe him that the parties are unable to resolve the matter amicably and that the applicant is ready to do everything necessary to the proper conduct of the Arbitrationin respect of the dispute alleged to have arisen between the parties.'The deposition above is not enough. There must be documentary evidence showing the applicant wrote to the respondent notifying her of the willingness to resort to arbitration over the disputeand also, specifying in the letter or correspondence an arbitrator or arbitrators proposed to be appointed for the arbitration for the ratification or approval of the party."It is settled that the duty of the Court is to give effect to the clear and unambiguous provision of the law and not distort same. See: NIGERCARE DEVELOPMENT COMPANY LTD v. ADAMAWASTATE WATER BOARD & ORS (2008) 9 NWLR (Pt. 1093) 498 SC. In AROMOLARAN v. AGORO (2014) LPELR-24037 (SC), the Apex Court, per GALADIMA, JSC held:"I must say that the duty of the Court is to interpret the words contained in the statute and not to go outside the clear words in searching of an interpretation which is convenient to the Court orto the parties in the process of interpretation. The Court will not embark on a voyage of discovery. Where a statute is clear and unambiguous, as in this case. This Court will follow the literal ruleof interpretation where the provision of the statute is clear and no more."I have earlier made reference to and copiously reproduced Section 5(2) of the Arbitration and Conciliation Act. For emphasis, by that section the lower Court has a discretionary power to grantan order of stay pending arbitration if it is satisfied that there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement and theparty making application for stay is ready and willing to do all things necessary to the proper conduct of the arbitration. The view expressed by this Court in UBA v. TRIDENT CONSULTINGLIMITED (supra) is to the effect that it is not enough for the Applicant to merely depose that he is ready and willing to ensure the proper conduct of the arbitration, he must show same throughdocumentary evidence.It is my view with all due respect that placing the burden of presenting documentary evidence to support an application for stay of proceedings pending arbitration constitutes a departure fromthe plain provisions of Section 5(2) of the Act, particularly in cases where the Applicant has deposed to facts in that regard. Section 5 of the Arbitration and Conciliation Act does not make it acondition precedent before an order of stay pending arbitration can be granted, a Court will be expected to be careful in granting an order staying proceedings pending reference to arbitrationwhere the Applicant has not taken any steps in the proceedings, and the Court is satisfied that there is no sufficient reason that the matter should not be referred to arbitration and where theApplicant has been able to show that he is ready and willing to do all things necessary for the proper conduct of arbitration.It cannot be disputed that the purpose of an Applicant deposing to an affidavit is to provide oral and for documentary evidence to support an application filed in Court. It is used to provideevidence to prove a material point(s) in argument. See: HON. JUSTICE GARBA ABDULLAHI v. THE EXECUTIVE GOVERNOR OF KANO STATE & ORS (2014) LPELR-23079 (CA); AGU & ORS v. IDU(2013) LPELR-19992 (CA). As a matter of fact therefore affidavit constitutes evidence. See: NWOSU v. IMO STATE ENVIRONMENT SANITATION AUTHORITY & ORS (1990) SCNJ 97; ANOKA v. IKPO(2013) LPELR- 20419 (CA). Even though I am mindful that the absence of counter-affidavit or contradictory depositions by a Respondent is not a free pass to judgment in favour of an applicantespecially in cases where the depositions are self-contradictory, it is especially true beyond citing authorities that depositions in affidavit which are not countered or controverted are deemed tohave been admitted. See UGWUANYI v. NICON INSURANCE PLC (2013) LPELR-20092 (SC); AKINSETE v. AKINDUTIRE (1966) LPELR-5416 (SC). Thus in OKOEBOR v. POLICE COUNCIL & ORS (2003)LPELR-2458 (SC) it was held as follows:"The attitude of the Courts to unchallenged evidence is not in doubt and it has been stated and reinstated in a plethora of cases. In Iriri v. Erhurhobara (1991) 2 NWLR (Pt. 173) 252 of 255, itwas held that where the evidence of a witness is not inadmissible in law, uncontradicted and unchallenged, a court of law can act on it and accept it as a true version of the case it seeks tosupport. In the same vein, it was decided that wherever any evidence whether affidavit or oral stands uncontradicted, unless the evidence is patently incredible, the Court ought to regard thematter to proved by that evidence as admitted by the adverse party...."Therefore, unchallenged evidence is deemed to be correct and can be acted upon by the Court. In INEGBEDION v. SELO-OJEMEN & ANOR (2013) LPELR-19769 (SC), the Court held:"It is trite law that any unchallenged and uncontradicted fact in an affidavit remains undisputed and is deemed admitted by the adversary and the Court will so hold. However, it is also the lawthat any such unchallenged and uncontradicted facts which are deemed admitted in the affidavit must be capable of proving and supporting the applicant relying on such facts. In other words, ithas been held that the affidavit evidence must necessarily be cogent and strong enough to sustain the case of the applicant...."In the instant case, just as in UBA v. TRIDENT CONSULTING LIMITED (supra), at page 259 of the record of appeal, the Applicant/1st Respondent herein deposed at paragraph 8 of its applicationfor stay as follows:"The 1st Defendant/Applicant confirms its willingness to participate in arbitration proceedings in respect of any alleged dispute arising out of or pursuant to the Telecoms Private EquityInvestment Agreement."The above deposition was not countered by the Appellant in his Counter Affidavit found at pages 309 to 311 of the record of appeal. By the reasoning expressed in UBA v. TRIDENT CONSULTINGLIMITED (supra), the above deposition is not enough, the 1st Respondent is still required to present documentary evidence in support. Considering the circumstances of the instant case, I amunable to subscribe to the reasoning in the light of the express provisions of Section 5(2) of the Act. Contrariwise, it is my humble view that unless such deposition is controverted by the adverseparty, a Court is at liberty to act upon deposition by an applicant that he is willing and ready to ensure that the arbitration is properly conducted, thereby fulfilling the requirement in Section5(2)(b). I totally agree that the reasoning in UBA v. TRIDENT CONSULTING LIMITED (supra) is only potent and tenable in instances where the Applicant's deposition in the Affidavit in support ofthe Application for stay is challenged and/or contradicted by the Respondent. In such cases, it will be necessary for the Applicant to provide further evidence in support of his deposition in thatregard which is not the case in the instant appeal.?Where, as in the instant case, the Appellant did not challenge the 1st Respondent's deposition that the latter is willing to participate in arbitration proceedings in respect of the dispute arisingfrom the Agreement executedby the parties, and there is no sufficient reason to why the matter should not be referred to arbitration, I am unable to interfere with the exercise of the lower Court's discretion granting an orderstaying proceedings pending reference to arbitration."Per ABUBAKAR, J.C.A. (Pp. 53-68, Paras. C-B) - read in context

(201

8) LP

ELR-45

546(

CA)

5. CASE LAW - JUDICIAL PRECEDENT/ STARE DECISIS: What the doctrine of stare decisis entails"It is a cardinal principle of law under the doctrine of stare decisis that every inferior Court is bound by the decision of a Superior Court; and it is not the place of an inferior Court to say that thedecision of the Superior Court was wrongly decided. See: N.E.P.A. v. ONAH (1997) LPELR-1959 (SC); PDP v. ORANEZI (2017) LPELR-43471 (SC). It must be said however that, by the doctrine ofstare decisis, inferior Courts are only mandated to follow previous decisions of Superior Courts where the case before them involves similar facts or issues. See: ANEKWE v. STATE (2014)LPELR-22881 (SC). The Supreme Court of Nigeria stated the settled position of the law regarding the meaning and nature of stare decisis in ADETOUN OLADEJI (NIG.) LTD v. NIGERIANBREWERIES PLC (2007) LPELR-150 (SC), where TOBI, JSC (of blessed memory) said:"Factual distinctions or differences in cases only avail a party when they are germane or material to the stare decisis of the case. I say this because stare decisis which means to abide or adhereto decided cases, as policy of Courts to stand by precedent is based on a certain state of facts which are substantially the same and here the word is substantially. This means that the facts thatgive rise to the principle of stare decisis are material facts, devoid of or without the unimportant details. This also means that the facts need not be on all fours in the sense of exactness orexactitude... One major criterion in the determination of the matter is that the facts of the previous case are major, substantial and material to the facts of the current case begging for theapplication of the previous case. Before the application of the previous case, the Judge should ask a question: Could the Court have arrived at the decision but for particular facts or could theCourt have arrived at a different decision in the absence of the particular facts? An unequivocal answer to the above double barrel question will pave the way for the applicability orinapplicability of the doctrine...."Per ABUBAKAR, J.C.A. (Pp. 39-41, Paras. F-D) - read in context

6. COURT - DUTY OF COURT: Duty of Court to consider/pronounce on all issues raised before it and the exception thereof"The law is well settled that every Court must consider and pronounce on all issues joined by the parties before it. See IROLO v. UKA (2002) 14 NWLR (Pt. 786) 195 at 225, paras. D-F, theSupreme Court of Nigeria held that:"It is the duty of a Court, whether of first instance or appellate to consider all the issues that have been joined by parties and raised before it for determination. If the Court failed to do so,without a valid reason, then it has certainly failed in its duty; for in our judicial system, it is a fundamental principle of administration of justice that every Court has a duty to hear, determineand resolve such questions...."In OKONJI & ORS v. NJOKANMA & ORS (1991) LPELR-2476 (SC) the Court held that when a party submits an issue to the Court for determination, the Court must make a pronouncement on thatissue except where the issue is subsumed into another issue. See also BAMGBOYE v. UNILORIN & ANOR (1999) LPELR-737 (SC).It was the contention of learned Counsel for the Appellant that the learned trial judge failed/neglected to pronounce on issues joined by the Appellant and the 2nd to 5th Respondentsrespectively but rather erroneously chose to consider and determine the issues joined between the Appellant and the 1st Respondent. The Appellant who was the Plaintiff filed this suit againstthe 1st-5th Respondents; all the Respondents filed differing objections challenging the competence of the Appellant's suit. In his Ruling on the pending applications and objections, the learnedtrial Judge stated at page 473 that: "The jurisdiction of the Court has been challenged in various forms. When the jurisdiction of a Court is challenged, the Court cannot proceed to make anyorder in this case until it has ruled on the issue of jurisdiction, one way or the other... in the circumstances of the various challenges, the most crucial is whether this matter should be referred toArbitration or attended to by this Court."It is apparent that the learned trial judge adopted the approach of picking out the "most crucial" issue relating to the jurisdiction of the lower Court, which has been raised by the respectiveparties before it. The learned judge merely considered and pronounced upon thesingle issue relating to the question as to whether the matter before him should be referred to Arbitration or not, which is one of the several issues canvassed and argued by the parties beforeit, particularly the Appellant and the 1st Respondent. This approach is seemingly in conflict with the settled position of the law that a Court must consider and pronounce upon every issueproperly placed before it for consideration and determination.I must be quick to add that, the foregoing position permits certain recognized exception which have been accepted as constituting basis for doing away with the settled practice, let me start byinching into the decision in UDO v. EKPO & ANOR (2016) LPELR-41383 (CA), Where this Court held as follows and I quote:"The general rule which is now settled is that a Court be it first or appellate, has a duty to consider all the issues pleaded before it. Howbeit, where it is of the view that a consideration of oneissue is enough to dispose of the matter, the said Court is not under any obligation to consider all the other issues posed by the parties. See 7UP BOTTLING COY LTD v. ABIOLA & SONSBOTTLING CO. LTD. (2001) 13 NWLR (Pt. 730) 469 at 499. Consequently, where a party submits an issue for determination, that Court must make a pronouncement on the issue except wherethe issue is subsumed in another and where that happens, there shall no longer be the necessity of making a separate pronouncement on the issue or issues subsumed...." (Underlining mine)Where a Court determines that a consideration of a single issue can dispose of the matter, the Court is not bound by the general position of the law to consider and pronounce on every issuesubmitted to it by parties on record, the Court is also not bound to consider every issue where the other issues are adequately covered by a consideration of a single issue. See: ADEBAYO v. A-G, OGUN STATE (2008) LPELR-80 (SC) where the Supreme Court held that a Court must make a pronouncement on every issue properly before it "except where the issue is subsumed in anotherissue." Here, while concluding on the sole issue being considered, the learned trial judge held at page 475 of the records of appeal that as long as the condition precedent was not fulfilled, "theCourt cannot be said to have the jurisdiction and competence to examine the Appellant's matter and all other applications before it." I believe the Appellant's counsel knows too well that withoutjurisdiction, the lower Court is stripped of the adjudicatory competence to consider and pronounce on any application. See MADUKOLU v. NKEMDILIM (1962) LPELR-24023 (SC). Even though aCourt is bound to consider all the issues properly before it, the failure to do so is not necessarily fatal to the judgment since the failure to do so had not occasioned a miscarriage of justice. InBAMAIYI v. STATE & ORS (2001) LPELR-731 (SC), the Supreme Court of Nigeria held as follows and I quote:"Failure to consider and pronounce on all issues submitted to a Court or tribunal will not, per se, amount to a denial of a right to fair hearing having regard to the judicial decisions on theprinciple. In some cases, it may occasion failure of justice which amounts to denial of fair hearing and in others as is the case in the present proceedings, it will not...."See: also OKOTIE-EBOH v. MANAGER & ORS (2004) LPELR-2502 (SC). There is nothing on record before us, particularly as it relates to the failure of the lower Court to pronounce on all the issuesjoined by the parties, showing that the failure has occasioned a miscarriage of justice. It is obviously of no relevance, considering the peculiar situation in the instant case, to expect the lowerCourt to pronounce on other issues, when it had already held the view that it does not have any jurisdiction to entertain the matter."Per ABUBAKAR, J.C.A. (Pp. 14-19, Paras. A-C) - read incontext

7. PRACTICE AND PROCEDURE - INTERLOCUTORY APPLICATIONS/MATTERS: Whether Court can pronounce on substantive matters or issues in the course of interlocutory proceedings"The learned trial judge had at pages 474 to 475 of the record of appeal held as follows:"I have no evidence of fraud which at any rate must be established beyond reasonable doubt and there is no evidence of a mistake."It is undisputed that the proceedings at the lower Court leading to the instant appeal were still at the interlocutory stage and the Ruling being appealed against, wherein the above findings wereexpressed by the learned trial judge was interlocutory, at which time no evidence had been called or presented before the Court on the issues at stake in the suit. The law is well settled that aCourt must not comment or make pronouncement on substantive matters in an interlocutory proceeding. In a Ruling on an interlocutory application, the Court must shy away and/or refrain frommaking any observation that might appear to prejudge the main issue in contention by the parties. See: NWANKWO & ORS v. YAR'ADUA & ORS (2010) LPELR-2109 (SC); OKOTIE-EBOH v.MANAGER (2004) LPELR -2502 (SC). The learned trial judge in the instant case made observations and/or findings that there was no evidence of fraud or mistake by the Appellant. Needless tostate that the proof of the allegation of fraud or mistake by the Appellant can only be done during substantive trial and not at the interlocutory stage of the proceedings; I therefore have nohesitation in reaching the conclusion that the learned trial judge with all due respect erred."Per ABUBAKAR, J.C.A. (Pp. 71-72, Paras. B-D) - read in context

(201

8) LP

ELR-45

546(

CA)

TIJJANI ABUBAKAR, J.C.A. (Delivering the Leading

Judgment): This is an appeal against the Ruling of the

Federal High Court, sitting in the Lagos Judicial Division

delivered by C.M.A. Olatoregun J. on the 18th day of

October, 2016 in Suit No: FHC/CS/354/2015 as found at

pages 255-264 of the Records of Appeal. The suit was

commenced at the lower Court by the Appellant against the

Respondents via a Writ of Summons dated the 27th day of

March, 2015 and other accompanying processes found at

pages 1- 249 of the Records of Appeal. In response, the 1st

Respondent filed a Motion on Notice on the 24th April,

2015 found at pages 256-264 of the Records of Appeal

seeking to stay proceedings pending reference to and

determination of the dispute by arbitration as contained in

the agreement binding the parties. The 2nd Respondent

filed a Motion on Notice alongside its Statement of Defense

dated 10th June, 2015 contained at pages 355-376 of the

Records of Appeal seeking an order to strike out the suit for

misjoinder and failure to disclose reasonable cause of

action.

1

(201

8) LP

ELR-45

546(

CA)

The 3rd Respondent filed a Notice of Preliminary Objection

dated 27th April, 2015 contained at pages 265-291 of the

Records of Appeal seeking for an order dismissing and/or

striking out the suit for reasons of incompetence and abuse

of Court process. Also, the 4th and 5th Respondents jointly

filed a Notice of Preliminary objection dated 7th May, 2015

found at pages 338-355 of the Records of Appeal seeking

for an order dismissing and/or striking out the suit for

failure to disclose reasonable cause of action and for want

of jurisdiction.

The Appellant filed Counter-Affidavits against all the

Motions and Preliminary Objections as found at pages

309-320; 414-450; 292-308 and 377-413 of the Records of

Appeal. The 1st Respondent filed a Further-Affidavit on the

8th May, 2015 in support of its Motion as contained at

pages 327-337 of the Records of Appeal; while the 3rd

Respondent filed a Reply on Points of Law on 26th January,

2016 found at pages 463-467 of the Records of Appeal. The

lower Court heard the applications and delivered its Ruling

on the 18th day of October, 2016 contained at pages

468-476 of the Records of Appeal wherein the Court found

in

2

(201

8) LP

ELR-45

546(

CA)

favour of the Respondents to the effect that the Appellant's

suit cannot be heard until reference has been made to

arbitration and exhausted as contained in the agreement

which is a condition precedent to its exercise of

jurisdiction.

Peeved by the decision of the lower Court, the Appellant

filed a Notice of Appeal dated 28th October, 2016, which is

contained at pages 471-485 of the Record of Appeal. The

Appellants' Brief of Argument was settled by the Appellant

in person and was filed on the 28th day of December, 2016

but deemed as properly filed and served on the 24th day of

January, 2018. The 1st Respondent's Brief on the other

hand was filed on the 26th day of July, 2017 through

learned counsel, Chinedum Umeche, Esq.; same was

deemed as properly filed and served on the 24th day of

January, 2018. The Appellant also filed a Reply to the 1st

Respondent Brief on the 22nd day of December, 2017. The

Reply Brief was deemed as properly filed and served on the

24th day of January, 2018. The 2nd-5th Respondents filed

no Brief. Learned counsel for the Appellant formulated six

(6) issues for determination, the issues are reproduced as

follows:

3

(201

8) LP

ELR-45

546(

CA)

1. Whether the trial Court breached the fair hearing

right of the Appellant by its failure and/or refusal to

consider all the issues brought before it for

adjudication as contained in the processes filed by the

Appellant.

2. Whether the trial Court's failure to appreciate that

in the circumstances of this instant case with so

much bearing on the several issues therein that it is

impracticable to resolve these issues by arbitration,

the said issues having not been within the Appellant

and the 1st and 2nd Respondents pursuant to Clause

9.3 of the Telecoms Private Equity Investment

Agreement of May 21, 2008?

3. Whether the trial Court was right in refusing to

follow the established principle of law as enunciated

by the Supreme Court in the case of OBEMBE v.

WEMABOD ESTATE (1977) 5 SC 115 at 131 and

K.S.U.D.B v. FANZ LTD (1986) 5 NWLR (Pt. 39) pg.74

at 86 which is in tandem with the instant case and

which is binding on the Court as per the principle of

stare decisis.

4. Whether the trial Court was right to have ignored

the S.5(2)(b) of the Arbitration and Conciliation Act

and the decisions of M. V. PARNOMS v. OLAM (NIG.)

4

(201

8) LP

ELR-45

546(

CA)

PLC [2004] 5 NWLR (Pt. 865) Pg. 1 at 16, Paras. C - D

and UBA v. TRIDENT CONSULTING LIMITED [2013]

4 CLRN 119 which were cited to the Court by the

Appellant.

5. Whether the trial Court was right to have held that

there was no evidence of fraud at the preliminary

stage without averting its mind to the Appellant's

Statement of Claim decision and the case of NIMASA

v. ODEY (2013) LPELR-21402 (CA).

6. Whether the Honorable trial Judge erred in law

when it failed to determine the other issues of

jurisdiction raised by parties in this matter, and

which have a direct bearing as to whether or not the

matter as presently constituted can be referred to

Arbitration or not.

The 1st Respondent equally nominated six (6) issues for

determination also reproduced as follows:

1. Whether the lower Court breached the fair hearing

right of the Appellant in respect of issues raised by

the 2nd-5th Respondents when all parties were

allowed equal opportunities?

2. Whether the lower Court was right when it held

that the case presented by the Applicant was within

the contemplation of the Arbitration Agreement

5

(201

8) LP

ELR-45

546(

CA)

contained in Clause 9.3 of the Telecoms Private

Equity Investment Agreement of May 27, 2008?

3. Whether the lower Court ought to have followed

the decisions in the cases of OBEMBE v. WEMABOD

ESTATE (1977) 5 SC 115 at 131 and K.S.U.D.B v.

FANZ LTD (1986) 5 NWLR (Pt. 39) Pg. 74 at 86 which

are not relevant to the facts and circumstances of this

case.

4. Was the lower Court right to have stayed

proceedings in view of the provisions of Section

5(2)(b) of the Arbitration and Conciliation Act?

5. Whether the decision in the case of NIMASA v.

ODEY (2013) LPELR-21402 (CA) is relevant to the

facts and circumstances of the present case in view of

the Appellant's averments in paragraphs 45 and 46 of

his Statement of Claim filed at the lower Court?

6. Whether the lower Court was right to have decided

the issue of reference to arbitration first, considering

the duty/discretion of the lower Court under Section 5

of the Arbitration Act and Conciliation Act on

reference to Arbitration and Stay of Proceedings

pending Arbitration?

SUBMISSIONS OF COUNSEL

As already stated, the Appellant and the 1st Respondent

6

(201

8) LP

ELR-45

546(

CA)

both crafted six issues each for determination. I have

carefully considered all these issues and I am of the

undoubted view that the 1st Respondent's issues are the

same with the Appellant's issues except for the

terminologies employed to dilute the apparent similarities.

I shall therefore consider the submissions of counsel on the

issues and the reply. I must be quick to state that the

2nd-5th Respondents did not file any process in this appeal.

Before the substantive issues, learned counsel for the 1st

Respondent raised and argued preliminary points

essentially arising from the Appellant's brief, the contention

of the Appellant is that the lower Court failed or refused to

decide some of the issues raised by the 2nd-5th

Respondents and that the said 2nd-5th Respondents did not

challenge the decision of the lower Court. Counsel

submitted that the Appellant cannot complain on behalf of

the 2nd-5th Respondents and therefore, this appeal is

academic and that precious judicial time cannot be

committed to answer academic questions.

Learned counsel further referred to paragraphs 45 and 46

7

(201

8) LP

ELR-45

546(

CA)

of the Statement of Claim at pages 17-18 of the Records of

Appeal to argue that the Appellant's case at the lower

Court was for alleged fraud and misrepresentation but that

the Appellant changed its case to fraud alone in the

Appellant's Brief. Counsel referred to AGBEOTU v.

BRISIBE [2005] 10 NWLR (Pt. 932) Pg. 1 at 19, 36

(CA) to argue that parties are bound by the records of the

Court and that a party cannot change its case on appeal.

Counsel further submitted that arguments contained in a

party's brief, no matter how brilliant, cannot substitute the

Record of Appeal. Learned counsel further referred to a

circular dated 26th May, 2017 and issued by the Chief

Justice of Nigeria to the effect that heads of Courts should

put measures in place to enforce arbitration agreements

contained in commercial contracts.

In response to the foregoing preliminary argument, learned

counsel for the Appellant submitted that the Appellant

joined issues with the 2nd-5th Respondents at the lower

Court. Counsel referred to MARINE MANAGEMENT

ASSOCIATES INC. & ANOR v. NATIONAL MARITIME

AUTHORITY (2012) LPELR-20618 (SC) pg. 27, paras.

D - E and UNILORIN v. AKINOLA (2014)

8

(201

8) LP

ELR-45

546(

CA)

LPELR-23275 (SC) Pg. 36, paras. E-G and submitted

that the 1st Respondent's contention that it is only the

2nd-5th Respondents that can complain of breach of fair

hearing is not the law and therefore not tenable.

I believe the argument canvassed by the learned counsel

for the 1st Respondent here is unsustainable. It is definitely

not disputed that the Appellants joined issues with the 2nd

to 5th Respondents on the issues raised by the latter. As a

result, the Appellant is not precluded from appealing on

such issues or on the failure by the learned trial judge to

consider and/or pronounce on the issues raised by the 2nd

to 5th Respondent. I am in agreement with the Appellant

that the contention of the 1st Respondent here is untenable

and same is hereby discountenanced.

ISSUE ONE

On issue No. 1 which is, "Whether the trial Court breached

the fair hearing right of the Appellant by its failure and/or

refusal to consider all the issues brought before it for

adjudication as contained in the processes filed by the

Appellant", learned counsel for the Appellant referred to

9

(201

8) LP

ELR-45

546(

CA)

X.S. (NIG.) LTD v. TAISEI (2006) 15 NWLR (Pt. 1003)

pg. 558, Paras. C-D and IKECHUKWU v. F.R.N. & ORS

(2015) LPELR-24445 (SC) Pg. 21-22, Paras. G-B to

submit that it is the duty of trial Courts to pronounce on all

issues raised or brought to their notice by the parties and

not to restrict themselves to one or more issues which in

their opinion disposes of the case. Counsel argued that the

parties submitted several issues for determination before

the lower Court but that the lower Court refused and/or

failed and/or neglected to rule on issues joined between the

Appellant and the 2nd, 3rd, 4th & 5th Respondents and

only chose to determine the issues joined between the

Appellant and the 1st Respondent.

Learned counsel argued that the lower Court totally failed

to appreciate that there was no way the issue of stay of

proceedings pending arbitration could have been

determined judicially or judiciously without considering and

determining the issue of joinder of parties, reasonable

cause of action, abuse of Court processes and defective

commencement of action which were all before the lower

Court. Counsel further argued that the lower Court

10

(201

8) LP

ELR-45

546(

CA)

failed to consider the issues raised in the Appellant's

Written Address in response to the 1st Respondent's

Application for stay of proceedings and the facts contained

in the Counter-Affidavits to the 2nd Respondent's Motion

and the 3rd and 4th & 5th Respondents' Notices of

preliminary objection.

Learned counsel cited ODETAYO v. BAMIDELE (2007)

Vol. 35 WRN pg. 1 it 5, Lines 5-10 (sc) and OBIONWU

& ORS v. I.N.E.C. (2013) LPELR-22573 (CA) Pg.

43-44, Paras. D-D to argue that the trial Court should

have considered the live issues before it. Counsel cited

BUREAU OF PUBLIC ENTERPRISE v. REINSURANCE

ACQUISITION GROUP LTD & ORS (2008) LPELR-8560

(CA) to which the lower Court was referred to on the issue

of jurisdiction but ignored. Counsel referred to NYESOM v.

PETERSIDE & ORS (2016) LPELR-40036 (SC); APC &

ORS v. IN RE: CPC & ORS (2014) LPELR-24036 (SC)

Pg. 55-55, Paras. D-E and concluded that the trial Court

breached the Appellant's right to fair hearing by ignoring

and failing to consider and determine all the issues raised

by the Appellant before it thereby occasioned a miscarriage

of justice.

11

(201

8) LP

ELR-45

546(

CA)

On this first issue, learned counsel for the 1st Respondent

referred to S.C.E.N. v. NWOSU [2008] All FWLR (Pt.

413) pg. 1399 at 1421, paras. E-F (CA) to contend that

the lower Court gave equal opportunity to all the parties to

be heard on all the issues raised by all the Respondents and

came to the conclusion at page 475 of the Records of

Appeal that its jurisdiction to proceed with the matter was

yet to be activated because of the failure of the Appellant to

exhaust the dispute resolution mechanism agreed in the

contract prior to the commencement of the suit.

Learned counsel relied on EGHAREVBA v. F.R.N. (2016)

LPELR-40045 (SC); IKECHUKWU v. F.R.N. & ORS

(Supra) to argue that as an exception to the general rule, a

Court needs not pronounce on all issues where the

pronouncement would negate the adjudicatory process,

prejudice the process or pervert the cause of justice of the

matter. Counsel reiterated that the trial Court did not deny

the Appellant any fair hearing and that the lower Court

having resolved that its jurisdiction was yet to be activated

12

(201

8) LP

ELR-45

546(

CA)

was not bound by the genera l ru le o f making

pronouncement on all issues before it. Counsel urged this

Court to resolve this issue in favor of the 1st Respondent

against the Appellant.

Learned counsel for the Appellant in the Reply Brief

reiterated his submissions under issue No. 1 in the

Appellant's Brief and further referred to NEWSWATCH

COMMUNICATIONS LTD v. ATTA [2006] 4 SCNJ (Pt.

1003] Pg. 282 at 299-300 to argue that the trial Court

breached the Appellant's right to fair hearing by choosing

to determine only the issues joined by the Appellant and 1st

Respondent and neglecting the issues raised and joined by

the Appellant and the other Respondents thereby visiting

miscarriage of justice on the Appellant. Counsel referred to

AKYEN & ANOR v . MU'AZU & ORS (2009)

LPELR-3697 (CA) Pg. 49, Paras. B-F to submit that 1st

Respondent in contending that the case of IKECHUKWU

v. F.R.N. & ORS (Supra) is inapplicable, the 1st

Respondent has not denied the principle that a Court must

pronounce on all issues raised by the parties before it

which was the decision in IKECHUKWU v. F.R.N. & ORS.

13

(201

8) LP

ELR-45

546(

CA)

RESOLUTION

The law is well settled that every Court must consider and

pronounce on all issues joined by the parties before it. See

IROLO v. UKA (2002) 14 NWLR (Pt. 786) 195 at 225,

paras. D-F, the Supreme Court of Nigeria held that:

"It is the duty of a Court, whether of first instance or

appellate to consider all the issues that have been

joined by part ies and raised before i t for

determination. If the Court failed to do so, without a

valid reason, then it has certainly failed in its duty;

for in our judicial system, it is a fundamental

principle of administration of justice that every Court

has a duty to hear, determine and resolve such

questions...."

In OKONJI & ORS v. NJOKANMA & ORS (1991)

LPELR-2476 (SC) the Court held that when a party

submits an issue to the Court for determination, the Court

must make a pronouncement on that issue except where

the issue is subsumed into another issue. See also

BAMGBOYE v. UNILORIN & ANOR (1999) LPELR-737

(SC).

It was the contention of learned Counsel for the Appellant

that the learned trial judge failed/neglected to pronounce

14

(201

8) LP

ELR-45

546(

CA)

on issues joined by the Appellant and the 2nd to 5th

Respondents respectively but rather erroneously chose to

consider and determine the issues joined between the

Appellant and the 1st Respondent. The Appellant who was

the Plaintiff filed this suit against the 1st-5th Respondents;

all the Respondents filed differing objections challenging

the competence of the Appellant's suit. In his Ruling on the

pending applications and objections, the learned trial Judge

stated at page 473 that: "The jurisdiction of the Court has

been challenged in various forms. When the jurisdiction of

a Court is challenged, the Court cannot proceed to make

any order in this case until it has ruled on the issue of

jurisdiction, one way or the other... in the circumstances of

the various challenges, the most crucial is whether this

matter should be referred to Arbitration or attended to by

this Court."

It is apparent that the learned trial judge adopted the

approach of picking out the "most crucial" issue relating to

the jurisdiction of the lower Court, which has been raised

by the respective parties before it. The learned judge

merely considered and pronounced upon the

15

(201

8) LP

ELR-45

546(

CA)

single issue relating to the question as to whether the

matter before him should be referred to Arbitration or not,

which is one of the several issues canvassed and argued by

the parties before it, particularly the Appellant and the 1st

Respondent. This approach is seemingly in conflict with the

settled position of the law that a Court must consider and

pronounce upon every issue properly placed before it for

consideration and determination.

I must be quick to add that, the foregoing position permits

certain recognized exception which have been accepted as

constituting basis for doing away with the settled practice,

let me start by inching into the decision in UDO v. EKPO

& ANOR (2016) LPELR-41383 (CA), Where this Court

held as follows and I quote:

"The general rule which is now settled is that a Court

be it first or appellate, has a duty to consider all the

issues pleaded before it. Howbeit, where it is of the

view that a consideration of one issue is enough to

dispose of the matter, the said Court is not under any

obligation to consider all the other issues posed by

the parties. See 7UP BOTTLING COY LTD v. ABIOLA

16

(201

8) LP

ELR-45

546(

CA)

& SONS BOTTLING CO. LTD. (2001) 13 NWLR (Pt.

730) 469 at 499. Consequently, where a party submits

an issue for determination, that Court must make a

pronouncement on the issue except where the issue is

subsumed in another and where that happens, there

shall no longer be the necessity of making a separate

pronouncement on the issue or issues subsumed...."

(Underlining mine)

Where a Court determines that a consideration of a single

issue can dispose of the matter, the Court is not bound by

the general position of the law to consider and pronounce

on every issue submitted to it by parties on record, the

Court is also not bound to consider every issue where the

other issues are adequately covered by a consideration of a

single issue. See: ADEBAYO v. A-G, OGUN STATE

(2008) LPELR-80 (SC) where the Supreme Court held

that a Court must make a pronouncement on every issue

properly before it "except where the issue is subsumed in

another issue." Here, while concluding on the sole issue

being considered, the learned trial judge held at page 475

of the records of appeal that as long as the condition

precedent

17

(201

8) LP

ELR-45

546(

CA)

was not fulfilled, "the Court cannot be said to have the

jurisdiction and competence to examine the Appellant's

matter and all other applications before it." I believe the

Appellant's counsel knows too well that without

jurisdiction, the lower Court is stripped of the adjudicatory

competence to consider and pronounce on any application.

See MADUKOLU v. NKEMDILIM (1962) LPELR-24023

(SC). Even though a Court is bound to consider all the

issues properly before it, the failure to do so is not

necessarily fatal to the judgment since the failure to do so

had not occasioned a miscarriage of justice. In BAMAIYI v.

STATE & ORS (2001) LPELR-731 (SC), the Supreme

Court of Nigeria held as follows and I quote:

"Failure to consider and pronounce on all issues

submitted to a Court or tribunal will not, per se,

amount to a denial of a right to fair hearing having

regard to the judicial decisions on the principle. In

some cases, it may occasion failure of justice which

amounts to denial of fair hearing and in others as is

the case in the present proceedings, it will not…."

See: also OKOTIE-EBOH v. MANAGER & ORS (2004)

LPELR-2502 (SC).

18

(201

8) LP

ELR-45

546(

CA)

There is nothing on record before us, particularly as it

relates to the failure of the lower Court to pronounce on all

the issues joined by the parties, showing that the failure

has occasioned a miscarriage of justice. It is obviously of no

relevance, considering the peculiar situation in the instant

case, to expect the lower Court to pronounce on other

issues, when it had already held the view that it does not

have any jurisdiction to entertain the matter. To this extent

therefore, this issue is resolved in favor of the 1st

Respondent.

ISSUE TWO

On the second issue, which is, "Whether the trial Court's

failure to appreciate that in the circumstances of this

instant case with so much bearing on the several issues

therein that it is impracticable to resolve these issues by

arbitration, the said issues having not been within the

Appellant and the 1st and 2nd Respondents pursuant to

Clause 9.3 of the Telecoms Private Equity Investment

Agreement of May 21, 2008?" Learned counsel placed

reliance on NIKA FISHING CO. LTD v. LAVINA

CORPORATION [2008] 16 NWLR (Pt.

19

(201

8) LP

ELR-45

546(

CA)

114) 509 and HALILU AKILU v. CHIEF GANI

FAWEHINMI (No. 2) [1989] NWLR (Pt. 102) 122 to

submit that an application for stay of proceedings is not

granted as a matter of course; but that the applicant must

place before the Court sufficient grounds that will sway the

exercise of the Court's discretion in its direction. Counsel

argued that arbitration agreement is usually bilateral and

therefore, arbitration proceedings under one contract

cannot, without agreement of the parties, be used to

resolve disputes under another contract nor can a third

party make himself a party to an arbitration.

Learned counsel referred to LIGNES AERIENNES

CONGOLAISES v. AIR ATLANTIC NIGERIA LIMITED

[2006] 2 NWLR (Pt. 903) pg. 49; N.V. SCHEEP v. MV'S

ARAZ [2000] 15 (Pt. 691) Pg, 22; OBEMBE v.

WEMABOD ESTATE [1977] 5 SC 15 at 131 and

K.S.U.D.B. v. FANZ LTD (1986) 5 NWLR (Pt. 39) Pg.74

at 86-87, Paras. C-D to submit that an arbitration clause

does not oust the jurisdiction of the Court or prevent

parties from having recourse to the Court. Counsel relied

on OGUNWALE v. SYRIAN ARAB REPUBLIC [2002] 9

NWLR (Pt. 771) Pg. 127 to submit that

20

(201

8) LP

ELR-45

546(

CA)

not all the issues between the parties herein can be

determined by arbitration because most of the reliefs being

sought by the Appellant in this matter are equitable reliefs

which only the trial Court can hear and determine.

Learned counsel for the Appellant also referred to Section

5(2)(b) of the Arbitration Act; M.V. PARNOMS BY v.

OLAM (NIG.) PLC [2004] 5 NWLR (Pt. 865) Pg. 1 at

16, Paras. C-D to submit that parties seeking Stay of

proceedings pending arbitration are enjoined to commence

or initiate the arbitral process before making the

application for Stay to the Court and that the 1st

Respondent in the instant case had opportunity to initiate

the arbitration proceedings but failed to do so. Counsel

further referred to MOUKTAR MOHAMMED & USMAN

DANTATA JNR. (2012) 11 NWLR (Pt. 1310) Pg. 47-48,

Paras. H-A to contend and urge this Court to hold that the

3rd, 4th & 5th Respondents, not being parties thereto, are

not privy to the Agreement dated 21st May, 2008 between

the 1st Respondent; 2nd Respondent and the Appellant.

Learned counsel further submitted that fraud was pleaded

21

(201

8) LP

ELR-45

546(

CA)

with particulars in the instant case and therefore, it cannot

be within the contemplation of the Arbitration agreement.

Counsel cited J. EXPORT & CHEMICAL COMPANY LTD

v. KADUNA REFINING & PETRO-CHEMICAL

COMPANY LTD (2002) LPELR-12175 (CA) and urged

this Court to resolve this issue in favor of the Appellant.

On this second issue, learned counsel for the 1st

Respondent submitted that the Appellant did not deny the

Agreement and the fact that parties agreed to be bound by

arbitration. Counsel submitted that the Appellant and the

1st-3rd Respondents are bound by the arbitration clause in

the agreement dated 21st May, 2008 and that there is no

mutually exclusive claim against the 4th & 5th

Respondents. Learned counsel submitted that the use of

the word fraud in the context of this case does not refer to

any criminal offence and that a civil claim does not

automatically transform into criminal proceedings

incapable of being resolved by arbitration merely because a

party made an allegation of fraud, whether rightly or

wrongly.

Learned counsel submitted that the case of

22

(201

8) LP

ELR-45

546(

CA)

OKOLI v. MORECAB FINANCE (NIG.) LTD (Supra)

does not support the Appellant, the present suit which is

not a criminal case and that the allegation of fraud made by

the Appellant at the lower Court is that of contractual or

civil impropriety which is capable of being resolved in line

with the agreement of the parties. Counsel placed reliance

on the case of A AYYASAMY v. A PARAMASIVAM & ORS

(CA Nos. 8245-8245 OF 2016) decided by the Supreme

Court of India where it was held that allegations of fraud

are no impediments for arbitration proceedings unless the

allegation is very serious in nature or in relation to the

arbitration agreement itself. Learned counsel submitted

that OGUNWALE v. SYRIAN ARAB REPUBLIC (supra)

and J. EXPORT & CHEMICAL COMPANY LTD v.

KADUNA REFINING & PETRO-CHEMICAL COMPANY

LTD (Supra) do not support the case of the Appellant and

that the lower Court was right to have held that the case

presented by the Appellant was within the contemplation of

the arbitration agreement. Counsel urged this Court to

resolve this issue in favor of the 1st Respondent against the

Appellant.

23

(201

8) LP

ELR-45

546(

CA)

The response of learned counsel to the Appellant on the

second issue is that contrary to the Respondent's

contention, the Appellant had specific claims against the

4th & 5th Respondents as contained at paragraphs J, U and

V at pages 3-4 of the Records of Appeal. Learned counsel

further referred to UMANAH v. ATTAH [2006] 17 NWLR

(Pt. 1009) Pg. 503 to submit that the 1st Respondent did

not deny the issue of fraud and/or fraudulent

misrepresentation raised by the Appellant and that fraud is

fraud whether in civil or criminal proceeding as long as it is

pleaded and particulars of the said fraud are furnished as

done in the instant case at pages 310-311 of the Records of

Appeal.

Learned counsel for the Appellant further submitted that

the instant case is not to be determined by arbitration and

that the lower Court has a duty to determine the allegation

of crime. Counsel argued and referred to A AYYASAMY v.

A PARAMASIVAM & ORS (Supra) to contend that the

Appellant can bring action not only against parties to the

Agreement dated 21st May, 2008 but also against all

persons in the world. Learned counsel referred to pages 7-

24

(201

8) LP

ELR-45

546(

CA)

24 of the Records of Appeal to submit that the allegation of

crime against the 1st Respondent goes to the root of the

Agreement dated 21st May, 2008 and involves several

thousands of dollars and voluminous evidence and

therefore essential for a Court to determine the said issue.

Counsel again referred to OGUNWALE v. SYRIAN ARAB

REPUBLIC (Supra) and J. EXPORT & CHEMICAL

COMPANY LTD v. KADUNA REFINING & PETRO-

CHEMICAL COMPANY LTD (Supra).

RESOLUTION

The plank of the Appellant's submission under this issue is

that the subject matter giving rise to the present appeal

does not fall within matters that should be subject to

arbitration, on the ground that issues before the Court

involve more than one party and that fraud is alleged by the

Appellant in his statement of claim.

It is undisputed that before a matter can be referred to

arbitration, same must first be seen to be arbitrable. The

dispute must not relate or cover matters which by law, are

not permitted to be settled by other dispute resolution

mechanisms other than in Court, the Arbitration and

Conciliation Act, Cap A18, does not demarcate between

25

(201

8) LP

ELR-45

546(

CA)

disputes that are arbitrable or otherwise, it has however

been judicially recognized as a matter of public policy that

matters relating to crime, matrimonial causes, winding up

of a company or bankruptcy are of such nature that cannot

be settled by arbitration. See: BCC TROPICAL (NIG.)

LTD v. GOVERNMENT OF YOBE STATE OF NIGERIA

& ANOR (2011) LPELR-9230 (CA).

As the argument of the counsel in this appeal shows,

arbitrability of fraud is one of the contentious issues in

arbitration, particularly as it involves questions of what

type of issue can and cannot be submitted to arbitration. It

has always been the case that where fraud and serious

malpractices are alleged in a dispute, same cannot be

referred to an arbitrator for resolution. The jurisdiction of

the regular Court on this issue is iron-clad, as fraud,

financial malpractice and collusion are allegations with

criminal consequences and therefore reserved for the

Courts, and an arbitral tribunal, being a creature of

contract, is not endowed with general and wide

jurisdiction, bestowed upon regular Courts, which are

equipped to adjudicate in complex issues and are

26

(201

8) LP

ELR-45

546(

CA)

competent to offer wider range of reliefs to the parties in

dispute. See: Alipak Banerjee & Vyapak Desai on "Is Fraud

Open To Arbitration."

In the instant appeal, it is undisputed that the Appellant

pleaded fraud with the particulars thereof, particularly at

paragraph 45 of the Appellant's Statement of Claim

alleging that the 1st Respondent's Telecoms Private Equity

Fund Investment Agreement is a Ponzi Scheme and an

instrument of fraud, used by the Respondents to defraud

unsuspecting Nigerians including the Appellant. It is in this

regard that the Appellant sought a declaration that the 1st

Respondent's Telecom Private Equity Fund is a Ponzi

Scheme used by the 1st Respondent to defraud the

Appellant. Appellant holds the view that the issue of fraud

alleged in the instant case cannot be resolved by

arbitration. The learned Counsel for the 1st Respondent

contended otherwise that the principal claim of the

Appellant is for breach of Agreement and that the use of

"fraud" by the Appellant in this case does not refer to any

form of criminal offence, but is at best contractual

misrepresentation.

27

(201

8) LP

ELR-45

546(

CA)

I am not aware of any decision of the Superior Courts in

this country where the instant issue was considered and

pronounced upon. I therefore take solace in decisions in

other jurisdictions, which though are of persuasive

authority, but are nevertheless applicable to the issues

herein. See the decisions in SWISS TIMING LTD v.

ORGANISING COMMITTEE, COMMON WEALTH

GAMES 2010 (2014) 6 SCC 677; WORLD SPORT

GROUP (MAURITIUS) LTD v. MSM SATELLITE

(SINGAPORE) PTE LTD in Civil Appeal No. 895 of

2014.

In WORLD SPORT GROUP (MAURITIUS) LTD (Supra),

the parties entered into a partnership deed on 1st April

1994 for running a hotel. While the Appellant was

entrusted with administration, the Respondents alleged

that the Appellant had failed to make regular deposits of

money into the common operating bank account and had

fraudulently siphoned off an amount of INR 10,00,050. In a

separate raid conducted by the Law Enforcement Agents

(CBI) on premises of the Appellant's relative, an amount of

INR 45,00,000 was seized and alleged to have been given

by the Appellant for business of the hotel . The

Respondents

28

(201

8) LP

ELR-45

546(

CA)

filed a civil suit seeking right of administration of the hotel.

The Appellant sought reference of the dispute to arbitration

under Indian Arbitration Act. The High Court rejected the

Appellant's application on the ground that the dispute

involved allegations of fraud. Aggrieved by the decision, the

Appellant preferred an appeal before the Supreme Court. It

was the contention of the Respondents in that case, just as

the one before this Court that, where allegations of fraud

are involved civil Courts are the appropriate forum for

adjudication. The Supreme Court of India rejected the

general notion that elements of criminal wrongdoing

detracted from the jurisdiction of arbitral tribunal.

Referring to the Indian Arbitration Legislation and the New

York Convention, the Court considered that the allegations

of fraud did not impact on the validity of the arbitration

agreement; the fact that fraud was alleged did not render

the agreement inoperative or incapable of being performed.

The foregoing decisions of the Indian Supreme Court are

instructive and I must say the reasoning therein is

compelling. It is my view, that to accept the Appellant's

29

(201

8) LP

ELR-45

546(

CA)

contention to the effect that arbitration should be shut out,

merely on the basis of allegation of fraud, which has not

been subject to proof, would undoubtedly destroy the very

purpose for which the parties had agreed by contract to

submit to arbitration. In as much as the allegation of fraud

does not relate to the validity of the substantive contract,

which is even separable from the Arbitration clause, I am of

the opinion that the Court ought to act with caution and

circumspection as the allegations of fraud in the

circumstances of this case, can be duly considered by an

Arbitrator or Arbitral Tribunal. The allegation of fraud by

the Appellant herein is not directed, at the arbitration

agreement, thereby impeaching same and the resultant

arbitration, nor is it directed at the main contract; I am

therefore unable to accept the submissions of learned

Counsel for the Appellant that mere allegation of fraud

renders the dispute herein un-arbitrable.

I am mindful of the fact that Appellant relied on the

decision of this Court in B. J. EXPORT & CHEMICAL

COMPANY LTD v. KADUNA REFINING & PETRO-

CHEMICAL COMPANY LTD (supra), particularly the

30

(201

8) LP

ELR-45

546(

CA)

dictum of MOHAMMED, JCA at page 36, paras. B-G; thus:

"It is trite that the disputes which the subject of an

arbitration agreement must be arbitrable. In other

words, the agreement must not cover matters which

by the law of the State are not allowed to be settled

privately or by arbitration usually because this will be

contrary to the public policy. Thus, a criminal matter,

like the allegation of fraud raised by the respondent

in this case, does not admit of settlement by

arbitration as was clearly stated by the Supreme

Court in KANO STATE URBAN DEVELOPMENT

BOARD v. FANZ CONSTRUCTION LTD. (1990) 4

NWLR (Pt. 142) 1 at 32-33. This position of the law

appears to have been further stated under the

Arbitration and Conciliation Act, CAP 19 Laws of

Federation...."

I must say that decision of this Court in the above case is

inapplicable to the instant case. The dispute between the

parties in that case arose out of an agreement entered

between the parties by which the Appellant hired four ISO

Tanks from the respondent for shipment of petroleum

products on a rental charge of N10,000.00 for each tank

for

31

(201

8) LP

ELR-45

546(

CA)

a period of 8 weeks. The Appellant took delivery of the

tanks and used same to ship petroleum products to Europe.

At the expiry of the 8 weeks period of lease of the tanks,

the Appellant failed to return them to the Respondent as

agreed.

When the Respondent demanded for the return of the

tanks, the Appellants attributed its failure to return same to

the uncertainty in the political situation in Nigeria, due to

the crisis relating to the June 12, 1993 election, and

subsequently the industrial action at the Lagos Port but

finally returned them in September 1993 in clean condition

along with the payment of N80,000.00 rental charges.

However, nearly three months thereafter, the Appellant

raised problems encountered with the tanks by its Agent in

Europe who claimed the sum of $85,016.00 from the

respondent being alleged expenses incurred on account of

unsuitability of the tanks, etc. When the Appellant's claim

was resisted by the Respondent, the Appellant proposed

the appointment of an arbitrator to resolve the dispute and

this was accepted by the Respondent, whereupon the

parties jointly appointed the arbitrator. When the parties

32

(201

8) LP

ELR-45

546(

CA)

appeared before the arbitrator, instead of the earlier claim

of $85,016.00, the Appellant filed a claim of $400,000.00

before the arbitrator. Rather than responding to the

Appellant's claim before the Arbitrator, the Respondent

commenced an action before the Kaduna State High Court

vide an Originating Summons seeking (1) A declaration that

the Appellant's claim against the Respondent upon which

reference was made to the Arbitrator is prima facie

fraudulent and therefore not a proper subject of arbitration

as contemplated by the parties in their agreement; and (2)

Leave to revoke the arbitration agreement and the

arbitrator's authority upon the said ground.

It is obvious the situation and circumstance of the instant

case are not consistent with the one in B. J. EXPORT &

CHEMICAL COMPANY LTD where the Respondent's

allegation of fraud goes to the root of the Arbitration

Agreement. In the instant case, it does not and I am

therefore unable to reach similar conclusion as reached by

this Court therein. At any rate, the ratio in that case

supports the position earlier expressed that where the

allegation of fraud affects the validity of the

33

(201

8) LP

ELR-45

546(

CA)

substantive contract and/or the Arbitration Agreement,

same cannot be determined by an Arbitrator; only regular

Courts have jurisdiction to consider and pronounce on such

issue. In the instant case, the allegation of fraud does not

affect or relate to the validity or otherwise of the contract

between the parties or the Arbitration Agreement;

therefore the reasoning expressed in decision of this Court

in B.J. EXPORT & CHEMICAL COMPANY LTD cannot be

adopted here, where the allegation of fraud is in relation to

the performance of obligations under the contract. In that

case, the allegation of fraud affects the contract, or at best,

the arbitration agreement and goes to the root of the

relationship between the parties. The position of the law

stated by this Court in the said case remains potent but

qualified to the effect only the Court can adjudicate on

allegation of fraud which affects the validity of an

arbitration agreement.

The other question under this issue relates to the

Appellant's contention that since the parties in the instant

suit are more than two, the dispute cannot be arbitrable.

34

(201

8) LP

ELR-45

546(

CA)

The Appellant copiously referred to the view expressed by

the learned authors, J. O. Orojo and M. A. Ajomo, "Law and

Practice of Arbitration and Conciliation in Nigeria", Lagos:

1999, 62 that "as a general rule, there are two parties to an

arbitration since an arbitration agreement is usually

bilateral and so an arbitration proceeding under one

contract cannot, without agreement of the parties, be used

to resolve disputes under another contract. Nor can a third

party make himself a party to that arbitration."

I must say that the Appellant's argument on this ground is

misconceived. From the submissions made by the

Appellant, it is conceded that there can be more than one

party to an arbitration proceedings emanating under one

contract, in so far as the parties involved consent to submit

to arbitration. There is nothing on record showing that the

parties concerned do (or will) not consent to arbitration. It

is speculative to say the least.

I am in agreement with the learned counsel for the 1st

Respondent that the pivotal dispute as apparent from the

reliefs sought by the Appellant herein, is between the

35

(201

8) LP

ELR-45

546(

CA)

Appellant and the 1st to 3rd Respondents. As a matter of

fact, the reliefs sought against the 4th and 5th

Respondents, who are not parties to the arbitration

agreement nor agents or privies of the parties thereto, are

consequential and ancillary to the principal reliefs sought

by the Appellant. As a matter of fact, Reliefs J, Q and U are

declaratory and injunctive reliefs geared towards

invalidating the contract purportedly executed by the 1st to

5th Respondents, towards changing the "character and

form of the Appellant's investment in the MTN Linked

Unit." These reliefs are undoubtedly hinged on the

principal claim sought by the Appellant. The only

conclusion is that the addition or status of the 4th and 5th

Respondent is insufficient to warrant the conclusion urged

on us by the Appellant. Appellant's argument on this issue

is therefore misconceived. This issue is resolved in favor of

the 1st Respondent.

ISSUE THREE

The third issue is "Whether the trial Court was right in

refusing to follow the established principle of law as

enunciated by the Supreme Court in the case of OBEMBE

v. WEMABOD ESTATE (1977) 5 SC 115 at 137 and

36

(201

8) LP

ELR-45

546(

CA)

K.S.U.D.B. v. FANZ LTD (1986) 5 NWLR (Pt. 39) Pg.

74 at 86 which is in tandem with the instant case and

which is binding on the Court as per the principle of stare

decisis"; On this issue, learned counsel referred to

CHUKWUMA OGWE & ANOR v. I.G. OF POLICE &

ORS (2015) LPELR-24322 (SC) Pg. 17-18, Paras. C-A

and Pg. 24-25, Paras. F-C; L.A.C. v. A.A.N. LTD [2006]

2 NWLR (Pt. 963) Pg. 49 where the cases of N.V.

SCHEEP v. MV'S ARAZ (Supra); OBEMBE v.

WEMABOD ESTATE (Supra) and K.S.U.D.B v. FANZ

LTD (Supra) were relied upon. Counsel argued that

contrary to the principle of stare decisis, the trial Court

refused to be bound by these authorities which were

brought before it without any reason for its departure from

the established principle of law as stated in the referred

authorities.

Learned counsel submitted that the lower Court failed to

appreciate that the reliefs sought by the Appellant include

declarative equitable reliefs which an arbitrator cannot

grant. Counsel urged this Court to resolve this issue in

favor of the Appellant.

On issue No. 3 learned counsel for the 1st Respondent

37

(201

8) LP

ELR-45

546(

CA)

relied on YAMPA & ORS v. BABAREKE & ANOR (2015)

LPELR-41212 (CA) to argue that the principle of stare

decisis does not imply that a Court must apply the decision

of the higher Court in the previous case to the case before

it where the two cases do not have common underlying

attributes and factual basis. Counsel argued that the cases

of OBEMBE v. WEMABOD ESTATE (1977) 5 SC 15 at

131 and K.S.U.D.B. v. FANZ LTD [1986] 5 NWLR (Pt.

39) Pg. 74 at 86-87, Paras. C-D relied on by the

Appellants were cited out of context and in a manner that is

completely irrelevant to the facts and circumstances of the

present case.

Counsel argued further that unlike the facts in OBEMBE v.

WEMABOD ESTATE (Supra) and K.S.U.D.B. v. FANZ

LTD (Supra), the 1st Respondent in the instant case had

not taken any step in the proceedings at the lower Court

before filing its application for stay of proceedings. It was

further argued by learned counsel for the 1st Respondent

that the lower Court did not make any decision that its

jurisdiction was ousted by the arbitration agreement.

Counsel urged this Court to resolve this issue in favor of

38

(201

8) LP

ELR-45

546(

CA)

the 1st Respondent against the Appellant.

The learned counsel for the Appellant in the Reply Brief

referred to AKYEN & ANOR v. MU'AZU & ORS. (2009)

(Supra) to submit that the facts in a case relied upon need

not be the same where there exists a situation where the

principle in the former case can be applied in the latter.

Counsel argued that the principles of law in OBEMBE v.

WEMABOD ESTATE (Supra) and K.S.U.D.B v. FANZ

LTD (Supra) are relevant to and apply to the instant case.

Learned counsel referred to pages 1-199 of the Additional

Records of Appeal to submit that contrary to the 1st

Respondent's submission, the 2nd Respondent filed

processes and joined issues with the Appellant at the lower

Court thereby severing the arbitration agreement by

submitting to the jurisdiction of the lower Court. Counsel

cited GAMJI FERTILIZER COMPANY LTD & ANOR v.

FRANCE APPRO (2016) LPELR-41245 (CA) Pg.25-17,

Paras. F-F and submitted that arbitration is not suitable

for a multi-party proceedings as this.

RESOLUTION

It is a cardinal principle of law under the doctrine of stare

39

(201

8) LP

ELR-45

546(

CA)

decisis that every inferior Court is bound by the decision of

a Superior Court; and it is not the place of an inferior Court

to say that the decision of the Superior Court was wrongly

decided. See: N.E.P.A. v. ONAH (1997) LPELR-1959

(SC); PDP v. ORANEZI (2017) LPELR-43471 (SC). It

must be said however that, by the doctrine of stare decisis,

inferior Courts are only mandated to follow previous

decisions of Superior Courts where the case before them

involves similar facts or issues. See: ANEKWE v. STATE

(2014) LPELR-22881 (SC). The Supreme Court of

Nigeria stated the settled position of the law regarding the

meaning and nature of stare decisis in ADETOUN

OLADEJI (NIG.) LTD v. NIGERIAN BREWERIES PLC

(2007) LPELR-150 (SC), where TOBI, JSC (of blessed

memory) said:

"Factual distinctions or differences in cases only avail

a party when they are germane or material to the

stare decisis of the case. I say this because stare

decisis which means to abide or adhere to decided

cases, as policy of Courts to stand by precedent is

based on a certain state of facts which are

substantially the same and here the word is

substantially. This means that the facts

40

(201

8) LP

ELR-45

546(

CA)

that give rise to the principle of stare decisis are

material facts, devoid of or without the unimportant

details. This also means that the facts need not be on

all fours in the sense of exactness or exactitude... One

major criterion in the determination of the matter is

that the facts of the previous case are major,

substantial and material to the facts of the current

case begging for the application of the previous case.

Before the application of the previous case, the Judge

should ask a question: Could the Court have arrived

at the decision but for particular facts or could the

Court have arrived at a different decision in the

absence of the particular facts? An unequivocal

answer to the above double barrel question will pave

the way for the applicability or inapplicability of the

doctrine...."

The grievance of the Appellant under this issue is that the

learned trial judge refused to follow the decisions in

OBEMBE v. WEMABOD ESTATE (supra) and

K.S.U.D.B. v. FANZ LTD (supra) and I must say that the

Appellant's complaint is unfounded having had the benefit

of studying the decisions referenced. In OBEMBE, the

Supreme Court,

41

(201

8) LP

ELR-45

546(

CA)

per FATAYI-WILLIAMS, JSC held as follows:

"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.

At common law, the Court has no jurisdiction to stay

such proceedings. Where, however, there is provision

in the agreement, as in Exhibit 3, for submission to

arbitration, the Court had jurisdiction to stay

proceedings by virtue of its power under Section 5 of

the Arbitration Act (Cap 73 of the Laws of the

Federation)...

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 judgment was delivered. In order to

get a stay, a party to o submission must have taken

NO step in the proceedings. A party who makes

42

(201

8) LP

ELR-45

546(

CA)

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... Moreover,

if the Court has refused to stay an action, or if the

defendant has abstained, as in the case in hand, from

asking it to do so, the Court has seizing of the

dispute, and it is by its decision and by its decision

alone, that the right of the parties are settled...."

In K.S.U.D.B. (supra), the Supreme Court similarly held

as follows:

"Both the decision in Doleman & Sons v. Ossett

Corporation (supra) and that of this Court Obembe v.

Wemabod Estates Ltd. (supra) recognize it that the

Court alone has not only the jurisdiction but also the

duty to settle the dispute between the parties if called

upon to do so. These cases also recognize it that

under the relevant section of the arbitration law,

upon the application of the defendant to an action

brought in breach of agreement to proceed by

arbitration the Court has power to stay the

proceedings. In other words, under the provisions of

43

(201

8) LP

ELR-45

546(

CA)

the Arbitration law, the Court had power to refuse to

entertain proceedings brought before it in breach of

an agreement to decide the matter by arbitration.

However the defendant is not given by the law a carte

blanche as to when to apply for the stay of

proceedings... ."

Learned Counsel for the 1st Respondent argued that the

decision in the case under reference is not relevant to the

facts of the case at hand, and I agree with learned counsel.

In the instant case, the learned trial judge held at pages

474 to 475 of the Records of Appeal as follows and I quote:

"I have examined the claim put forward by the

Plaintiff which was commenced by Writ of Summons

asking the Court to enforce all the Terms set out in

the Telecoms Private Equity Fund Investment

Agreement dated 21st of August, 2008. Amongst

other reliefs sought is for the Court to hold that the

2nd Defendant is a party to the said agreement.

Definitely from the reliefs sought a dispute has

occurred.

I found from the c la im that the Pla int i f f

acknowledges the agreement entered into and in

particular when he sought that the 2nd Defendant

44

(201

8) LP

ELR-45

546(

CA)

should be declared a party to the agreement. He

believes that the 3rd, 4th and 5th Defendants have

one thing or the other to do with the transaction

which he entered into with the 1st Defendant.

An Arbitration clause where embedded in a document

voluntarily entered into by parties must of necessity

be honored in good faith in the absence of fraud or

mistake. The Court must not engage in rewriting

agreement for parties...

I believe that once an arbitration clause is retained in

a contract which is valid and subsisting and the

dispute is within the contemplation of the Clause, the

Court should give regard to the contract by enforcing

the Arbitration Clause....

In the present case if the Plaintiff is not happy with

the outcome of the Agreement he ought to have gone

to Arbitration and exhaust all the mechanism put in

place within the Agreement before approaching...

Failure to do so tantamount to not fulfilling the

condition precedent to adjudication.

45

(201

8) LP

ELR-45

546(

CA)

As long as this situation exists the Court cannot be

said to have the jurisdiction and competence to

examine this matter and all other applications before

it…"

I am unable to, in the peculiar circumstances of the instant

case, hold the view that the learned trial judge failed to

follow the decision of the Supreme Court referred to by the

Appellant. It is undisputed that contrary to the situation in

OBEMBE, the 1st Respondent herein sought for an order

for stay of proceedings pending arbitration. From the

records before us, it ought not be disputed that the 1st

Respondent had taken no step in the proceedings in the

suit at the lower Court. In the Appellant's Reply, it was

submitted that the 2nd Respondent filed several processes

and joined issues with the Appellant and these steps taken

by the 2nd Respondent amount to submitting to the

jurisdiction of the lower Court.

Granted that it is obvious that the 2nd Respondent had

taken steps in the proceedings at the lower Court, and is

therefore precluded from enjoying the privilege of being

granted an order of stay pending arbitration, pursuant to

46

(201

8) LP

ELR-45

546(

CA)

Section 5 of the Arbitration and Conciliation Act, I am

unable to accept the submissions of the Appellant that the

steps taken by the 2nd Respondent amount to submission

to the jurisdiction of the lower court by the other parties, or

the 1st Respondent herein in particular. The decision of the

Supreme Court is clear on the position that it is only a

party who has taken a step in the proceedings in Court that

is estopped from asking the Court for a stay to refer the

matter to arbitration in accordance with Section 5(1) of the

Arbitration and Conciliation Act. Here, it will be

unconscionable and therefore wrong to ascribe the steps

taken by the 2nd Respondent with respect to the

proceedings as those of the 1st Respondent, as the

Appellant has urged. The record bear witness, the

Appellant conceded that the 1st Respondent had taken no

step in the proceedings at the lower Court. This is sufficient

on this issue as it relates to Section 5(1) of the Arbitration

and Conciliation Act.

Nevertheless, it is certainly also not the contention of the

Appellant that the learned trial judge erred when she held

that, considering the circumstances of the instant case,

47

(201

8) LP

ELR-45

546(

CA)

where parties have by agreement agreed to arbitrate any

dispute arising from the contract executed by them,

recourse to arbitration is a condition precedent to the

exercise of the jurisdiction of the Court. Arbitration clause

is not a magic wand used to forestall the exercise of

jurisdiction of the Court; rather it is only a mechanism built

into a contract to enable the parties, in the event of

dispute, to first explore the option of settling same out of

Court failing which they can proceed to Court. See:

MESSRS NV SCHEEP v. MV'S ARAZ (2000) 12 SC (Pt.

10) 154 at 213 where it was held:

"In any event, the arbitration clause did not seek to

oust the jurisdiction of the Court as all it did was to

allow parties the avenue and possibilities of settling

disputes amicably out of Court. The position of the

law is that an arbitration clause in agreement

generally does not oust the jurisdiction of the Court

or prevent the parties from having recourse to the

Court in respect of dispute arising therefore. A party

to an agreement with an arbitration clause has the

option to either submit to arbitration or to have the

dispute decided by the Court...."

48

(201

8) LP

ELR-45

546(

CA)

Therefore, the reasoning of the learned trial judge earlier

reproduced does not in my view, run contrary to the

decision in OBEMBE (supra). Appellant's submission on

this issue is therefore misconceived. This issue is therefore

resolved in favor of the Respondent.

ISSUE FOUR

Issues No. 4 is "Whether the trial Court was right to have

ignored the S.5 (2) (b) of the Arbitration and Conciliation

Act and the decisions of M.V. PARNOMS BAY v. OLAM

(NIG.) PLC (2004) 5 NWLR (Pt. 865) Pg. 1 at 16,

Paras. C-D and UBA v. TRIDENT CONSULTING

LIMITED [2013] 4 CLRN 119 which were cited to the

Court by the Appellant"; Under this issue, counsel for the

Appellant argued that the lower Court refused to be bound

by the decision in the case of UBA v. TRIDENT

CONSULTING LIMITED (2013) 4 CLRN 119 which was

also brought before it without any reason for its refusal to

be bound by the authority. Counsel again referred to

Section 5(2)(b) of the Arbitration Act; M.V. PARNOMS

BAY v. OLAM (NIG.) PLC (Supra) to submit that parties

seeking Stay of proceedings pending arbitration are

enjoined to commence or initiate the arbitral

49

(201

8) LP

ELR-45

546(

CA)

process before making the application for Stay to the Court

and that the lower Court ought not to have granted the 1st

Respondent's Application for stay of proceedings pending

arbitration because the 1st Respondent failed to show by its

affidavit evidence that it had commenced the arbitral

process in compliance with Section 5(2)(b) of the

Arbitration Act. Learned counsel referred to DR.

ERASTUS AKINGBOLA v. F.R.N. & ANOR (2014)

LPELR-24258 (CA) Pg. 43-44, Paras. D-D to submit that

the lower Court against the principle of stare decisis,

refused without any reason to be bound by the decisions of

this Court and the Apex Court cited before it in the instant

case.

On issue No. 4, learned counsel for the 1st Respondent

referred to Section 5(2)(b) of the Arbitration and

Conciliation Act; paragraph 8 of the Affidavit in support of

the 1st Respondent's Application for Stay of proceedings at

page 259 of the Records and the Appellant's Counter-

Affidavit filed at page 309-311 of the Records of Appeal.

Counsel then relied on ALHAJI MUJAHID DOKUBO-

ASARI v. F.R.N. (2007) LPELR-958 (SC); ADESINA v.

OSOGBO

50

(201

8) LP

ELR-45

546(

CA)

(1996) 4 SCNJ 111; A.G. ANAMBRA STATE v. OKEKE

[2002] 5 SC (Pt. II) Pg.58 and STEPHEN LAWSON-

JACK v. THE SHELL PETROLEUM DEVELOPMENT

COMPANY OF NIGERIA LTD. (2002) 7 SC (Pt. II) Pg.

112 to submit that facts not controverted are deemed

admitted and that the Appellant did not controvert the 1st

Respondent's willingness to participate in the arbitration

proceeding.

Learned counsel submitted that the Appellant cannot be

heard to argue on appeal that the 1st Respondent did not

fulfill the condition under Section 5(2)(b) of the Arbitration

and Conciliation Act. Counsel argued that the cases of M.V.

PARNOMOS BAY v. OLAM (NIG.) PLC (Supra) and

UBA v. TRIDENT CONSULTING LIMITED (Supra) are

different from the present case wherein the willingness of

the 1st Respondent is not in issue. Counsel further

submitted that this Court overruled the decision in M.V.

PARNOMOS BAY v. OLAM (NIG.) PLC (Supra) in the

latter decision inONWARD ENTERPRISES LIMITED v.

MV "MATRIX" & ORS (2008) LPELR-4789 (CA) Pg.

29-30, Paras. D-C. Learned counsel urged this Court to

hold that the Appellant's argument that the 1st Respondent

failed to comply

51

(201

8) LP

ELR-45

546(

CA)

Section 5(2)(b) of the Arbitration and Conciliation Act or

should have initiated the arbitration process is an

afterthought. Counsel further urged this Court to resolve

this issue in favor of the 1st Respondent favour and against

the Appellant.

On issue No. 4, learned counsel for the Appellant in the

Reply Brief submitted that the provisions of Section 5(2)(b)

of the Arbitration Act was affirmed in the cases of M.V.

PARNOMOS BAY v. OLAM (NIG.) PLC (Supra) and

UBA v. TRIDENT CONSULTING LIMITED (Supra) and

therefore binding on the parties and the Court. Counsel

argued that he 1st Respondent failed to fulfill the condition

precedent to an order for Stay of proceedings pending

arbitration. Learned counsel argued that there is no

conflict between the decisions in M.V. PARNOMOS BAY

v. OLAM (NIG.) PLC (Supra) and ONWARD

ENTERPRISES LIMITED v. MV "MATRIX" & ORS

(Supra).

Learned counsel for the Appellant further submitted that

the Appellant argued in the Written Address in opposition

to the Application for Stay before the trial Court at page

316 of the Records of Appeal that the 1st Respondent

52

(201

8) LP

ELR-45

546(

CA)

failed to comply with the provisions of Section 5(2)(b) of the

Arbitration and Conciliation Act and therefore similar

submission in the Appellant's Brief is not an after thought

as argued by the 1st Respondent. Counsel cited SIFAX

NIGERIA LTD & ORS v. MIGFO NIGERIA LTD & ANOR

(2015) LPELR-24655 (CA) to submit that the trial Court

should have considered all the issues placed before it.

Learned counsel urged this Court to discountenance the

submissions of the 1st Respondent on this issue.

RESOLUTION

Under this issue Appellant's complain is that the learned

trial judge ignored the provisions Section 5(2) of the

Arbitration and Conciliation Act as well as the decisions in

M.V. PARNOMOS BAY v. OLAM (NIG.) PLC (supra)

and UBA v. TRIDENT CONSULTING LIMITED (supra).

Section 5 of the Arbitration and Conciliation Act

reads as follows:

(1) If any party to an arbitration agreement

commences any action in any Court with respect to

any matter which is the subject of an arbitration

agreement, any party to the arbitration agreement

may, at any time after appearance and before

53

(201

8) LP

ELR-45

546(

CA)

delivering any pleadings or taking any other steps in

the proceedings, apply to the Court to stay the

proceedings.

(2) A Court to which an application is made under

Subsection (1) of this section may, if it is satisfied -

(a) that there is no sufficient reason why the matter

should not be referred to arbitration in accordance

with the arbitration agreement; and

(b) that the applicant was at the time when the action

was commenced and still remains ready and willing to

do all things necessary to the proper conduct of the

arbitration, make an order staying the proceedings."

The power donated to the lower Court under the above

section is no doubt discretionary and with all the

discretionary powers, the appellate Court is always loath to

interfere with the way a Court exercises its discretion

unless where the discretion was wrongly exercised; or

tainted with some irregularity, or in other instances where

the Court sees any reason to interfere with same. See

UNILAG v. AIGORO (1985) 1 NWLR (Pt. 1) 143;

AJUWA & ANOR v . SPDC NIG. LTD (2011)

LPELR-8243 (SC). It must therefore be stated that the

competing rights of the

54

(201

8) LP

ELR-45

546(

CA)

parties to justice in the case must be considered; where

such exercise of discretion is motivated by some ulterior

considerations in favor of an applicant without adequately

taking into account the Respondent's equal right, the

discretion will not be said to have been judicially and

judiciously exercised. See N.N.P.C. v. FAMFA OIL LTD &

ANOR (2009) LPELR-2023 (SC).

As I earlier stated, it is the Appellant's complaint that the

learned trial judge ignored the provisions of Section 5(2) of

the Arbitration and Conciliation Act in reaching the

conclusion that the suit be stayed pending reference to

arbitration. Clearly, the purport of Section 5(2) is that a

Court may make an order staying proceedings if it is

satisfied that there is no sufficient reason(s) why the matter

should not be referred to arbitration and that the Applicant

was at the time when the action was commenced, willing

and ready to do all things necessary for the conduct of the

arbitration.

Appellant cited the decision in M.V. PANORMOS-BAY v.

OLAM (NIG.) PLC (supra) where this Court, per

GALADIMA, JCA (as he then was) held that it is the party

55

(201

8) LP

ELR-45

546(

CA)

praying for arbitration as an 'applicant' that has the duty to

comply with Section 5(2)(b) of the Act by commencing the

proceedings. To the contrary, it is the contention of learned

Counsel for the 1st Respondent that the decision in that

case was overruled by this Court in ONWARD

ENTERPRISES LIMITED v. MV. "MATRIX" & ORS

(2008) LPELR-4789 (CA) at Pages 29 to 30, Paras. D

to C, where this Court, per MSHELIA, JCA held:

"... It is a basic principle of law that where parties to a

contract have under the terms thereof agreed to

submit to arbitration if there is any dispute arising

from the contract between them a defendant who has

not taken any steps in the proceedings commenced by

the other party, may apply to the Court for stay of

proceedings of the action to enable parties to go to

arbitration as contracted.

Once an arbitration clause is retained in a contract

which is valid and the dispute is within the

contemplation of the clause, the Court should give

regard to the contract by enforcing the arbitration

clause... It is therefore the general policy of the Court

to hold parties to the bargain into which they had

56

(201

8) LP

ELR-45

546(

CA)

entered unless there was a strong, compelling and

justifiable reason to hold otherwise or interfere. In

the instant case, appellant who had the onus to

advance compelling reason as to why this Court

should interfere with the discretionary power of the

trial Judge had failed to do so. There is nothing to

show that the arbitration agreement was imposed on

the appellant. Since both parties voluntarily entered

into the agreement same should therefore be binding

on them...."

I have had the benefit of reading the decision of the Court

in ONWARD ENTERPRISES LIMITED (supra) and I

agree with the submissions of learned Counsel for the 1st

Respondent that the decision in M.V. PANORMOS BAY

(supra) cannot stand as authority on the issue at hand. This

is apparent from the reasoning expressed by my learned

brother MSHELIA, JCA at Pages 26 to 28, Paras. F to G, as

follows:

"I am mindful of the decision of this Court in M.V.

Panormos Bay v. Olam (Nig.) Plc supra referred to us

by respondent's counsel. In that case this Court

declared null and void an arbitration agreement

which states that disputes between parties shall be

57

(201

8) LP

ELR-45

546(

CA)

referred to Arbitration in London on the ground that

Section 20 of the Admiralty Jurisdiction Act 1991 is a

statutory limitation to the enforcement of the

arbitration agreement in the bills of lading.

The reason is that such agreement would deny the

Nigerian Courts temporarily of jurisdiction. As rightly

observed by respondent's counsel the Court was not

called upon to consider the Supreme Court decision

in M.V. Lupex v. N.O.C. & S Ltd supra as well as

Section 10 of the Admiralty Jurisdiction Act 1991.

In M.V. Lupex v. N.O.C. & S Ltd Supra the appellant

requested the trial Federal High Court to stay

proceedings of the action filed by the respondent in

view of the agreement the two parties entered in

clause 7 of the Charter-Party which reads:

"7 That parties agreed inter alia on arbitration in

London under English Law in the event of dispute,"

The Federal High Court refused the stay of

proceedings and on appeal this Court affirmed the

decision of the trial Court. On further appeal to the

Supreme Court, the appeal was allowed and stay of

58

(201

8) LP

ELR-45

546(

CA)

proceedings was ordered. The apex Court held among

other things that where parties have agreed to refer

their dispute to arbitration in a contract, it behoves

the Court to lean towards ordering a stay of

proceedings. By this decision it is clear that stay of

proceedings, could be granted pending reference to

arbitration in a foreign country in deserving cases. I

wish to note that Section 20 of the Admiralty

Jurisdiction Act was not discussed in that case...."

It is therefore clear that the decision in M.V. PANORMOS

BAY (supra) does not reflect the position of the law in this

regard and same cannot be relied upon successfully by the

Appellant in support of his contention that no order of stay

should be granted by the lower Court pending arbitration.

For the avoidance of doubt, the reasoning in that decision

does not accord with the decision of the Supreme Court in

M.V. LUPEX, it cannot be relied upon.

Appellant's counsel also made reference to UBA v.

TRIDENT CONSULTING LIMITED (supra), where the

facts show that the Respondent entered into a contract

with the

59

(201

8) LP

ELR-45

546(

CA)

Appellant for the implementation of automated Customer

Relationship Management (C.R.M.) software for certain

aspects of her banking business. There was an arbitration

clause in the contract executed by the parties. When

dispute subsequently arose in respect of some outstanding

payments to the credit of the Respondent, the Appellant

terminated the contract and the Respondent then

commenced an action at the High Court of Lagos State on

sundry reliefs. The Appellant filed an application for stay of

proceedings pending arbitration and the application was

refused. On appeal to this Court, it was held that for an

application for stay of proceedings pending arbitration to

succeed, the Applicant must adduce documentary evidence

showing the steps he has taken in respect of the

commencement of the arbitration. According to my learned

brother IKYEGH, JCA:

"Before a stay may be granted pending arbitration,

the party applying for a stay must demonstrate

unequivocally by documentary and/or other visible

means that he is willing to arbitrate. He does it

satisfactorily by notifying the other party in writing of

his intention of referring the matter to arbitration

and by proposing in writing an arbitrator

60

(201

8) LP

ELR-45

546(

CA)

or arbitrators for the arbitration. In the instant case,

the only paragraph of the affidavit evidence of the

appellant relevant to the matter deposed in

paragraph 8 thereof that:

'I was informed by Mr. Ugochukwu Okwesili, a Legal

Officer in the applicant Bank in a meeting in our

office at 57, Marina, Lagos on the 13th day of May,

2009 at about 2:30pm while reviewing this matter and

I verily believe him that the parties are unable to

resolve the matter amicably and that the applicant is

ready to do everything necessary to the proper

conduct of the Arbitration in respect of the dispute

alleged to have arisen between the parties.'

The deposition above is not enough. There must be

documentary evidence showing the applicant wrote to

the respondent notifying her of the willingness to

resort to arbitration over the dispute and also,

specifying in the letter or correspondence an

arbitrator or arbitrators proposed to be appointed for

the arbitration for the ratification or approval of the

party."

It is settled that the duty of the Court is to give effect to

61

(201

8) LP

ELR-45

546(

CA)

the clear and unambiguous provision of the law and not

distort same. See: NIGERCARE DEVELOPMENT

COMPANY LTD v. ADAMAWA STATE WATER BOARD

& ORS (2008) 9 NWLR (Pt. 1093) 498 SC . In

AROMOLARAN v. AGORO (2014) LPELR-24037 (SC),

the Apex Court, per GALADIMA, JSC held:

"I must say that the duty of the Court is to interpret

the words contained in the statute and not to go

outside the clear words in searching of an

interpretation which is convenient to the Court or to

the parties in the process of interpretation. The Court

will not embark on a voyage of discovery. Where a

statute is clear and unambiguous, as in this case. This

Court will follow the literal rule of interpretation

where the provision of the statute is clear and no

more."

I have earlier made reference to and copiously reproduced

Section 5(2) of the Arbitration and Conciliation Act. For

emphasis, by that section the lower Court has a

discretionary power to grant an order of stay pending

arbitration if it is satisfied that there is no sufficient reason

why the matter should not be referred to arbitration in

accordance with the arbitration agreement and the party

62

(201

8) LP

ELR-45

546(

CA)

making application for stay is ready and willing to do all

things necessary to the proper conduct of the arbitration.

The view expressed by this Court in UBA v. TRIDENT

CONSULTING LIMITED (supra) is to the effect that it is

not enough for the Applicant to merely depose that he is

ready and willing to ensure the proper conduct of the

arbitration, he must show same through documentary

evidence.

It is my view with all due respect that placing the burden of

presenting documentary evidence to support an application

for stay of proceedings pending arbitration constitutes a

departure from the plain provisions of Section 5(2) of the

Act, particularly in cases where the Applicant has deposed

to facts in that regard. Section 5 of the Arbitration and

Conciliation Act does not make it a condition precedent

before an order of stay pending arbitration can be granted,

a Court will be expected to be careful in granting an order

staying proceedings pending reference to arbitration where

the Applicant has not taken any steps in the proceedings,

and the Court is satisfied that there is no sufficient reason

that the matter should

63

(201

8) LP

ELR-45

546(

CA)

not be referred to arbitration and where the Applicant has

been able to show that he is ready and willing to do all

things necessary for the proper conduct of arbitration.

It cannot be disputed that the purpose of an Applicant

deposing to an affidavit is to provide oral and for

documentary evidence to support an application filed in

Court. It is used to provide evidence to prove a material

point(s) in argument. See: HON. JUSTICE GARBA

ABDULLAHI v. THE EXECUTIVE GOVERNOR OF

KANO STATE & ORS (2014) LPELR-23079 (CA); AGU

& ORS v. IDU (2013) LPELR-19992 (CA). As a matter of

fact therefore affidavit constitutes evidence. See: NWOSU

v. IMO STATE ENVIRONMENT SANITATION

AUTHORITY & ORS (1990) SCNJ 97; ANOKA v. IKPO

(2013) LPELR- 20419 (CA). Even though I am mindful

that the absence of counter-affidavit or contradictory

depositions by a Respondent is not a free pass to judgment

in favour of an applicant especially in cases where the

depositions are self-contradictory, it is especially true

beyond citing authorities that depositions in affidavit which

are not countered or controverted are deemed to have been

admitted. See

64

(201

8) LP

ELR-45

546(

CA)

UGWUANYI v. NICON INSURANCE PLC (2013)

LPELR-20092 (SC); AKINSETE v. AKINDUTIRE (1966)

LPELR-25416 (SC). Thus in OKOEBOR v. POLICE

COUNCIL & ORS (2003) LPELR-2458 (SC) it was held

as follows:

"The attitude of the Courts to unchallenged evidence

is not in doubt and it has been stated and reinstated

in a plethora of cases. In Iriri v. Erhurhobara (1991) 2

NWLR (Pt. 173) 252 of 255, it was held that where the

evidence of a witness is not inadmissible in law,

uncontradicted and unchallenged, a court of law can

act on it and accept it as a true version of the case it

seeks to support. In the same vein, it was decided that

wherever any evidence whether affidavit or oral

stands uncontradicted, unless the evidence is patently

incredible, the Court ought to regard the matter to

proved by that evidence as admitted by the adverse

party...."

Therefore, unchallenged evidence is deemed to be correct

and can be acted upon by the Court. In INEGBEDION v.

SELO-OJEMEN & ANOR (2013) LPELR-19769 (SC), the

Court held:

"It is tr ite law that any unchallenged and

uncontradicted fact in an affidavit remains

undisputed and is deemed admitted by the adversary

65

(201

8) LP

ELR-45

546(

CA)

and the Court will so hold. However, it is also the law

that any such unchallenged and uncontradicted facts

which are deemed admitted in the affidavit must be

capable of proving and supporting the applicant

relying on such facts. In other words, it has been held

that the affidavit evidence must necessarily be cogent

and strong enough to sustain the case of the

applicant...."

In the instant case, just as in UBA v. TRIDENT

CONSULTING LIMITED (supra), at page 259 of the

record of appeal, the Applicant/1st Respondent herein

deposed at paragraph 8 of its application for stay as

follows:

"The 1st Defendant/Applicant confirms its willingness

to participate in arbitration proceedings in respect of

any alleged dispute arising out of or pursuant to the

Telecoms Private Equity Investment Agreement."

The above deposition was not countered by the Appellant in

his Counter Affidavit found at pages 309 to 311 of the

record of appeal. By the reasoning expressed in UBA v.

TRIDENT CONSULTING LIMITED (supra), the above

deposition is not enough, the 1st Respondent is still

66

(201

8) LP

ELR-45

546(

CA)

required to present documentary evidence in support.

Considering the circumstances of the instant case, I am

unable to subscribe to the reasoning in the light of the

express provisions of Section 5(2) of the Act. Contrariwise,

it is my humble view that unless such deposition is

controverted by the adverse party, a Court is at liberty to

act upon deposition by an applicant that he is willing and

ready to ensure that the arbitration is properly conducted,

thereby fulfilling the requirement in Section 5(2)(b). I

totally agree that the reasoning in UBA v. TRIDENT

CONSULTING LIMITED (supra) is only potent and

tenable in instances where the Applicant's deposition in the

Affidavit in support of the Application for stay is challenged

and/or contradicted by the Respondent. In such cases, it

will be necessary for the Applicant to provide further

evidence in support of his deposition in that regard which is

not the case in the instant appeal.

Where, as in the instant case, the Appellant did not

challenge the 1st Respondent's deposition that the latter is

willing to participate in arbitration proceedings in respect

of the dispute arising from the Agreement executed

67

(201

8) LP

ELR-45

546(

CA)

by the parties, and there is no sufficient reason to why the

matter should not be referred to arbitration, I am unable to

interfere with the exercise of the lower Court's discretion

granting an order staying proceedings pending reference to

arbitration. This issue is resolved in favor of the 1st

Respondent.

ISSUE FIVE

Learned counsel for the Appellant in his argument on issue

No. 5 which is "Whether the trial Court was right to have

held that there was no evidence of fraud at the preliminary

stage without averting its mind to the Appellant's

Statement of Claim decision and the case of NIMASA v.

ODEY (2013) LPELR-21402 (CA) made reference to the

decision of this Court in NIMASA v. ODEY (2013)

LPELR-21402 (CA) Pg. 49-50, Paras. A-G as to what

constitutes fraud and fraudulent act. Counsel referred to

pages 17-18 of the Records of Appeal to argue that fraud

was pleaded with particulars in the pleadings. Counsel also

referred to the Counter-affidavit at pages 310-311 of the

Records of Appeal to submit that some of the issues

between the parties cannot be decided on arbitration

because they contain allegations of fraud.

68

(201

8) LP

ELR-45

546(

CA)

Learned counsel submitted that the lower Court erred in

holding that the Appellant did not prove the allegation of

fraud in its pleadings at the preliminary stage and that

what is required of the Appellant was to plead fraud and

give particulars.

Learned counsel referred to OKOLI v. MORECAB

FINANCE (NIG.) LTD (2007) 14 NWLR (Pt. 1053)

Pg. 37 to submit that the lower Court had no jurisdiction to

make any findings relating to fraud or other substantive

matters raised in the pleadings at the preliminary stage

when it has not taken any evidence. Counsel further relied

on OTUKPO & v. JOHN & ANOR (2012) LPELR-20619

(SC) to submit that from the facts and pleadings of the

instant case, fraud can be deduced and that therefore it will

require a Court of competent jurisdiction to adjudicate on

the issues between the parties.

On the fifth issue learned counsel for the 1st Respondent

referred to paragraphs 45 and 46 of the Statement of Claim

at pages 17-18 of the Records of Appeal and the

submissions under issue No. 2 of the Respondent's Brief to

submit that the allegation of fraud raised by

69

(201

8) LP

ELR-45

546(

CA)

the Appellant goes to no issue because the said allegation

was made in the alternative with allegation of contractual

misrepresentation. Counsel argued that a determination of

the Appellant's allegation of contractual misrepresentation

by the Arbitrator(s) will completely resolve the dispute

without delving into the issue of fraud. Learned counsel

submitted that the case of NIMASA v. ODEY (Supra)

relied upon by the Appellant is not relevant to the facts and

circumstances of the present case in view of the Appellant's

averments at paragraphs 45 and 46 of the Statement of

Claim at pages 17-18. Counsel urged this Court to resolve

this issue in the 1st Respondent's favour and against the

Appellant.

Responding to the 1st Respondent's submission on the fifth

issue, learned counsel to the Appellant in the Reply Brief

referred to HOLBORN NIGERIA LTD v. O. C. CHRIS

ENTERPRISES LTD (2014) LPELR-23972 (CA) Pg.

36-37, Paras. A-C to submit that the trial Court ought to

consider the main claims before any attempt to delve into

the alternative claim and that alternative claims cannot

render the main claim impotent. Counsel submitted that

70

(201

8) LP

ELR-45

546(

CA)

the principle enunciated in NIMASA v. ODEY (Supra)

and OKOLI v. MORECAB FINANCE (NIG.) LTD

(Supra) applies to the instant case and that the allegation

of fraud in this case which was supported with the

particulars of fraud cannot be resolved by arbitration.

RESOLUTION

The learned trial judge had at pages 474 to 475 of the

record of appeal held as follows:

"I have no evidence of fraud which at any rate must

be established beyond reasonable doubt and there is

no evidence of a mistake."

It is undisputed that the proceedings at the lower Court

leading to the instant appeal were still at the interlocutory

stage and the Ruling being appealed against, wherein the

above findings were expressed by the learned trial judge

was interlocutory, at which time no evidence had been

called or presented before the Court on the issues at stake

in the suit. The law is well settled that a Court must not

comment or make pronouncement on substantive matters

in an interlocutory proceeding. In a Ruling on an

interlocutory application, the Court must shy away and/or

refrain from making any observation

71

(201

8) LP

ELR-45

546(

CA)

that might appear to prejudge the main issue in contention

by the parties. See: NWANKWO & ORS v. YAR'ADUA &

ORS (2010) LPELR-2109 (SC); OKOTIE-EBOH v.

MANAGER (2004) LPELR -2502 (SC).

The learned trial judge in the instant case made

observations and/or findings that there was no evidence of

fraud or mistake by the Appellant. Needless to state that

the proof of the allegation of fraud or mistake by the

Appellant can only be done during substantive trial and not

at the interlocutory stage of the proceedings; I therefore

have no hesitation in reaching the conclusion that the

learned trial judge with all due respect erred. I agree with

the Appellant on this point and I resolve the instant issue in

favor of the Appellant.

ISSUE SIX

I believe the sixth and last issue regarding the question as

to "Whether the Honorable Trial Judge erred in law when it

failed to determine the other issues of jurisdiction raised by

parties in this matter, and which have a direct bearing as to

whether or not the matter as presently constituted can be

referred to Arbitration or not"; has been

72

(201

8) LP

ELR-45

546(

CA)

adequately considered and dealt with under the first issue.

It has become academic and spent. I shall therefore refrain

from delving into it.

In the end therefore, having resolved the first to fourth

issues in favor of the 1st Respondent, the conclusion to be

reached is that the Appellant's appeal is not meritorious

and therefore deserves to be and is hereby dismissed. The

Ruling of C.M.A. OLATOREGUN, J., of the Federal High

Court delivered on the 18th day of October, 2016 is

affirmed.

Cost of N200,000.00 is awarded against the Appellant to

the 1st Respondent.

BIOBELE ABRAHAM GEORGEWILL, J.C.A.: I had the

privilege of a preview of the comprehensive lead judgment

just delivered by my learned brother Tijjani Abubakar, JCA.

I am in complete agreement with the lucid reasoning, the

profound statements of law and the impeccable conclusions

reached therein which I hereby adopt as mine. I have

nothing more useful to add.

JAMILU YAMMAMA TUKUR, J.C.A.: I read before today

73

(201

8) LP

ELR-45

546(

CA)

the lead judgment just delivered by my learned brother

TIJJANI ABUBAKAR, JCA.

I adopt the judgment as mine with nothing useful to add.

74

(201

8) LP

ELR-45

546(

CA)

Appearances:

Cyril Onyezazir with Abayomi Asorobi ForAppellant(s)

G. Ojodile Okafor with Abiiba Michael ForRespondent(s)

(201

8) LP

ELR-45

546(

CA)