The Token Vol 1 Issue 8

In a recent decision, the Lagos Division of the Court of

Appeal considered the scope of the powers of an Arbitrator

to legally terminate arbitration proceedings under the

Arbitration and Conciliation Act. This Issue of THE TOKEN

starts off with a look at that decision.

The Nigerian Bar Association held its 55th Annual General

Conference in Abuja in the month of August with much

fanfare. I was a panelist in one of the Breakout Sessions, where I discussed the

Governor’s Consent regime under the Land Use Act as a legal and regulatory obstacle to

doing business in Nigeria and recommended the statutory abolition of the requirement of

Governor's consent for the alienation of land in Nigeria because the regime has long

outlived its initial objectives and is a drawback to doing business in the country. Excerpts

of my presentation are contained in this Issue. I hope you will find the Issue informative.

Tayo Oyetibo, SAN

FROM THE CHIEF COUNSEL...

FROM THE EDITORIAL TEAM...

As contracting parties increasingly utilise the option of arbitration as an Alternative

Dispute Resolution mechanism, Nigeria’s arbitration scene and jurisprudence has

constantly continued to develop. In this Issue, we review the recent decision of the Court

of Appeal (Lagos Division) in TETRAZZINI FOODS LIMITED V. ABBACON

INVESTMENT LIMITED on the termination of arbitral proceedings and misconduct by an

Arbitrator.

THE TOKEN was also at the just concluded 55th Annual General Conference of the

Nigerian Bar Association, and we have brought you some highlights of the week-long

Conference as well as excerpts from a paper delivered by our Tayo Oyetibo, SAN in one

of the Breakout Sessions at the Conference.

We hope you will find the contents of this Issue informative and useful. Questions or

comments are welcome at [email protected].

VOLUME 1 ISSUE 8 AUGUST 2015

THE

TOKEN A Newsletter of Tayo Oyetibo & Co

IN THE NEWS

Federal Government of

Niger ia upgrades

I n la nd C ont a ine r

Nigeria Limited to

Dry-Port of origin and

final destination.

Central Bank of

N i g e r i a r e t a i n s

Monetary Policy Ratio

at 13%.

Ford to begin the

a s s e m b l y o f

best-selling ‘Ranger’ in

Nigeria.

Tayo Oyetibo, SAN

elected as member of

General Council of the

Bar.

IN THIS ISSUE

UNLAWFUL TERMINATION OF

ARBITRAL PROCEEDINGS:

EXPANDING THE FRONTIERS OF

MISCONDUCT

NIGERIAN BAR ASSOCIATION

SUCCESSFULLY HOLDS 55th

ANNUAL GENERAL CONFERENCE

IN ABUJA

EXAMINING THE REQUIREMENT

OF GOVERNOR’S CONSENT

UNDER THE LAND USE ACT

2

3

4

UNLAWFUL TERMINATION OF ARBITRAL PROCEEDINGS: EXPANDING THE FRONTIERS OF MISCONDUCT

It has long been held by the Courts that the

categories of possible misconducts by an

Arbitrator are not closed. In the recent case of

TETRAZZINI FOODS LIMITED V. ABBACON

INVESTMENT LIMITED & ANOR (2015)

LPELR-25007 (CA), the Court of Appeal

decided, among others, that termination of

arbitral proceedings other than in accordance

with the Nigerian Arbitration and Conciliation

Act (ACA) amounts to misconduct. In this

case, TETRAZZINI FOODS LTD (Tetrazzini)

awarded a contract to ABBACON

INVESTMENT LIMITED (Abbacon) for the

construction of the former’s head office in

Lagos. Tetrazzini subsequently became

dissatisfied with Abbacon’s performance of the

contract and therefore terminated it.

This led to a dispute which caused Abbacon to

invoke the arbitration clause in the contract,

pursuant to which an Arbitrator, was appointed

by the High Court of Lagos State. The

Arbitrator convened a preliminary meeting and

parties were ordered to file their pleadings.

Tetrazzini filed its defence and counterclaim

on 7th October 2009 and proceedings

commenced. On 8th October 2009, Tetrazzini

was absent and unrepresented at the

proceedings without prior notification to either

the Arbitrator or Abbacon. The Arbitrator,

nonetheless, continued with the hearing and

declared that the proceedings were terminated

that day. On 13th October 2009, solicitors to

Tetrazzini, unaware that proceedings had

been terminated, wrote to the Arbitrator

requesting for time to present Tetrazzini’s

defence. The Arbitrator did not respond to

Tetrazzini’s solicitors’ letter but noted receipt

of the letter in his Award which he delivered

on 28th October 2009, in favour of Abbacon.

Dissatisfied with the Award, Tetrazzini applied,

albeit unsuccessfully, to the High Court of

Lagos State for an order setting aside the

Award. Tetrazzini thus appealed to the Court

of Appeal.

In its judgment, the Court of Appeal noted that

the mandate of the Arbitrator ceased upon his

termination of the proceedings and held that

since the Arbitrator, in fact, terminated the

proceedings before the Award was made, he

lacked jurisdiction to proceed to deliver the

Award after the termination. The Court further

held that it is misconduct for an Arbitrator to

terminate proceedings in circumstances

contrary to law, as was done in this case.

The court further held that although Tetrazzini,

being aware of the hearing scheduled for 8th

October and failing to appear, could not be

heard to complain about the proceedings of

that day, the Arbitrator had a duty to inform

Tetrazzini that he would proceed with the

hearing in Tetrazzini’s absence. The failure of

the Arbitrator to give notice of his intention to

proceed ex-parte was therefore held to

amount to another misconduct on his part,

having regard to the fact that Tetrazzini still

had a counterclaim against Abbacon pending

before the Arbitrator. The failure of the

Arbitrator to determine Tetrazzini’s

counterclaim was also found to be another

clear misconduct on his part. In holding that

the Arbitrator failed to give reasons for the

Award, the court held that the Award ought to

contain the evidence led by the parties, the

strengths and weaknesses of each side and

how the Award was arrived at. The Court thus

found misconduct established against the

Arbitrator, set aside the decision of the High

Court refusing Tetrazzini’s Application as well

as the Award itself and ordered the case to be

remitted back to the High Court for the

appointment of another Arbitrator to determine

the dispute between the parties. This decision

highlights the importance of compliance, by

Arbitrators, with the applicable law of the

arbitration in the conduct of arbitration

proceedings. Page 2

THE TOKEN VOLUME 1 ISSUE 8 AUGUST 2015

“...the Arbitrator had

a duty to inform

Tetrazzini that he

would proceed with

the hearing in

Tetrazzini’s absence.”

NIGERIAN BAR ASSOCIATION SUCCESSFULLY HOLDS 55th ANNUAL GENERAL CONFERENCE IN ABUJA

The Nigerian Bar Association (NBA) Annual

General Conference (AGC) is a yearly event

organised by the umbrella body for all legal

practitioners in Nigeria. The AGC is aimed at

continuing professional development and thus

provides an opportunity for lawyers to become

aware of and contribute to the various

developments in legal practice in Nigeria and

also network with colleagues from across the

country.

The theme for this year’s AGC, which held at

the International Conference Centre in Abuja,

was “Lawyers and National Development”.

The conference commenced on Friday 21st

August, 2015 and ended on Friday 28th

August, 2015. The opening ceremony of the

AGC was attended by the President of the

Federal Republic of Nigeria Muhammadu

Buhari, who delivered a speech, in which he

urged lawyers to uphold high ethical standards

and fight corruption with the same zeal used

to champion human rights. Also in attendance

was the Vice President of the country,

Professor Yemi Osinbajo, SAN, who himself

is a legal practitioner. The Keynote speech

titled “Transforming Judiciaries in Africa: the

Kenyan Experience” was delivered by Dr. Willy

Mutunga, the Chief Justice and President of

the Supreme Court of Kenya.

The AGC was attended by over seven

thousand lawyers and was structured into

three Showcase Sessions and 38 Breakout

Sessions. The AGC sessions covered diverse

areas including the Nigerian petroleum

industry and the seemingly unending debate

on the Petroleum Industry Bill (PIB), arbitration

in Nigeria, consumer rights protection, capital

market, cybercrime, legal ethics, insurgency,

entrepreneurship, human capital development,

criminal justice and judicial reforms.

Panellists and Speakers at the Sessions

featured experienced legal practitioners in

different fields of law and stakeholders chosen

from selected fields concerning the topics of

the Sessions. The Panellists and Speakers

offered insight, solutions and

recommendations on areas in which lawyers in

Nigeria can contribute to national

development, with our Tayo Oyetibo, SAN, as

a Panellist, examining the requirement of

Governor’s consent under the Land Use Act

1978 as a legal and regulatory obstacle to

doing business in Nigeria, in one of the

Breakout Sessions.

The Showcase and Breakout Sessions ended

on Wednesday 26th August, 2015 and on

Thursday, the NBA held its Annual General

Meeting (AGM) during which the NBA

Constitution was amended, with a highlight of

the amendments being the introduction of a

system where all members of the Bar are

allowed to vote in NBA elections, as against

the old system where voting in the elections

was restricted to delegates alone. Elections for

members of the General Council of the Bar

were also held, with Mr Tayo Oyetibo, SAN

being elected as a member. In addition,

several Forums and Committees were

inaugurated by the NBA during the AGM, such

as the Prison Lawyers Forum and the

Committee on the Talent-Based Industry,

which is aimed at providing legal support for

the entertainment and sports industries.

The AGC ended with a press conference and

communiqué issued by the President of the

NBA, Mr Augustine Alegeh, SAN.

Page 3

THE TOKEN VOLUME 1 ISSUE 8 AUGUST 2015

“The AGC was

attended by over seven

thousand lawyers and

was structured into

three Showcase

Sessions and 38

Breakout Sessions.”

EXAMINING THE REQUIREMENT OF GOVERNOR’S CONSENT UNDER THE LAND USE ACT

At the recently concluded 55th Annual General Conference of the Nigerian Bar Association held in Abuja, the Firm’s Chief Counsel- Tayo Oyetibo, SAN, was a panelist in one of the breakout sessions, which was themed: ‘Removing Legal and Regulatory Obstacles to Doing Business in Nigeria’. In his presentation, he examined the requirement of Governor’s consent under the Land Use Act 1978, he highlighted a number of pitfalls of the requirement and the ways in which it constitutes a legal and regulatory obstacle to doing business in Nigeria. He concluded by calling for the abolition of the Governor’s consent requirement for the alienation of land in Nigeria.

The Governor’s consent regime is one of the rigid controls affecting the alienation of land and securitization of debts in Nigeria. The Land Use Act (the Act) does not prescribe a particular procedure for obtaining Governor’s consent as the Act empowers State Governors to make Regulations for obtaining consent in their States. As a result, all the States of the Federation have each established some particular procedures for obtaining Governor’s consent for the alienation of land in their States.

Historically, the Governor’s consent requirement was introduced by the Act to give Governors administrative control and oversight over land within their States. However, in many States across the country, Governors have delegated the duty of signing off on consent documents to another member of government and almost in all the Sates, the procedure for the grant of consent has become, more or less, a clerical process

and an income generating measure. As a result, the foundational reason for the introduction of the Governor’s consent has been defeated, as most Governors are more interested in the income generated from consent fees than any oversight function.

It is to be noted that under the provisions of the Act, an Applicant for Governor's consent is not required to fulfil any particular condition before consent can be granted. Most of the States only require payment of prescribed fees for the grant of the consent, whilst some require, in addition, evidence of payment of tax for three years, development levy and in some cases, tenement rate or Land Use Charge for the land concerned. So, essentially, apart from the monetary requirements, the process of obtaining Governor’s consent and the grant of the consent itself is no more than a supposedly glorified administrative Exercise. Yet, in many States, the Governor’s consent application process and indeed the grant of the consent itself takes several months and in extreme cases, years, to conclude.

This outdated concept of Governor’s consent and the bureaucratic delays inherent in the process presents a major obstacle to doing business in Nigeria from a land acquisition and disposal perspective. It has been noted repeatedly that the obstacles encountered in the process of obtaining Governor’s consent have contributed to the loss of significant inflow of direct foreign investments into the Nigerian economy as investors are forced to acquire land in neighbouring countries with less strenuous and more straightforward land alienation systems.

In his concluding remarks, a key recommendation put forward by Mr Oyetibo, SAN was the abrogation of the Governor’s consent as a legal requirement for the alienation of land in Nigeria on the basis that in the present day, it serves no useful purpose legally or economically. He further recommended that in order not to deprive States of the internally generated revenue accruable from the current Governor’s consent regime, the fees being paid for Governor's consent should be added to land registration fees.

Page 4

THE TOKEN VOLUME 1 ISSUE 8 AUGUST 2015

“The Governor’s

consent regime is one

of the rigid controls

affecting the alienation

of land and

securitization of debts

in Nigeria”

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THE TOKEN VOLUME 1 ISSUE 8 AUGUST 2015

THE TOKEN is designed to provide information of a general nature and is not intended as a substitute for professional or le-gal consultation or advice in a particular matter. The opinions and interpretations expressed within are those of the author only and may not reflect those of other identified parties. In no event will Tayo Oyetibo & Co be liable for any damages whatsoever arising out of the use of or reliance on the contents of this Newsletter. The Newsletter is for private circulation to the addressees only and not for re-circulation. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of this Newsletter is strictly prohibited. This Newsletter is not intended to be an advertisement or solicitation.

Editor: Mobisola Akerele, Deputy Editor: Mofesomo Tayo-Oyetibo Copyright © Tayo Oyetibo & Co. All rights reserved. Replication or redistribution of content, including by caching, framing or similar means, without the prior written consent of Tayo Oyetibo & Co, is expressly prohibited . Any questions on this Newsletter may be addressed to: [email protected]