TRANSOCEAN SHIPPING VENTURES PRIVATELTD v. MT SEA STERLING

CITATION: (2018) LPELR-45108(CA)

In the Court of AppealIn the Lagos Judicial Division

Holden at Lagos

ON THURSDAY, 24TH MAY, 2018Suit No: CA/L/22/2018

Before Their Lordships:

YARGATA BYENCHIT NIMPAR Justice, Court of AppealUGOCHUKWU ANTHONY OGAKWU Justice, Court of AppealABIMBOLA OSARUGUE OBASEKI-ADEJUMO Justice, Court of Appeal

BetweenTRANSOCEAN SHIPPING VENTURES PRIVATE LIMITED - Appellant(s)

AndMT SEA STERLING - Respondent(s)

RATIO DECIDENDI1. APPEAL - RECORD OF APPEAL: Whether parties and the appellate

courts are bound by the record of appeal"It is settled law that both the Court and the parties are bound bythe Records of Appeal and the Court cannot depart therefrom. SeeGARUBA vs. OMOKHODION (2011) 15 NWLR (PT 1269) 145 at 180,ARUM vs. NWOBODO (2013) 10 NWLR (PT 1362) 374 and F. H. A. vs.OLAYEMI (2017) LPELR (43376) 1 at 38-39."Per OGAKWU, J.C.A. (P. 9,Paras. C-E) - read in context

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2. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE:Whether an agreement to submit a dispute to arbitration ousts thejurisdiction of Court"Properly contextualized, the Respondent's contention at the lowerCourt was that because of the arbitration clause in the ShipManagement Agreement, the contract between the parties, theAppellant's action was premature and the Court did not have thejurisdiction to entertain a premature action. The pristine questionhowever is whether an arbitration clause ousts the jurisdiction ofCourt. The law seems to be ensconced that an arbitration clausedoes not oust the jurisdiction of a Court. In OBEMBE vs. WEMABODESTATE (1977) LPELR (2161), the apex Court held that anyagreement to submit a dispute to arbitration does not oust thejurisdiction of the Court. Equally in MESSRS NV SCHEEP vs. MV 'S.ARAZ' (2000) 12 SC (PT 1) 164 at 213, the Supreme Court held thatan arbitration clause does not seek to oust the jurisdiction of a Courtas all it does is to allow the parties the avenue and possibilities ofsettling disputes amicably out of Court. In CELTEL NIGERIA B.V. vs.ECONET WIRELESS LTD (2014) LPELR (22430) 1 at 58 this Court perIkyegh, JCA held as follows: "Arbitration does not remove thejurisdiction of the regular Courts. It is only a stop-gap process tosettle the disputes. See Magbagbeola v. Sanni (2002)4 NWLR (pt.756) 193 at 205 following Confidence Insurance Ltd v. Trustees ofthe Ondo State College of Education (1999)2 NWLR (pt. 591) 373 at386. It follows that a dispute referred to arbitration merely has theeffect of staying proceedings in the regular Court in respect of apending suit over the same subject matter." See also MOBILPRODUCING NIG UNLTD vs. SUFFOLK PETROLEUM SERVICES LTD(2017) LPELR (41734) 1 at 33-35 and EAGLEWOOD INTEGRATEDRESOURCES LTD vs. ORLEANS INVESTMENT HOLDINGS LTD (2017)LPELR (43542) 1 at 19-20. In the light of the legal position that anarbitration clause does not oust the jurisdiction of a Court, theprovisions of Section 20 of the Admiralty Jurisdiction Act whichrenders null and void an agreement that seeks to oust thejurisdiction of the Court does not come into play in this matter."PerOGAKWU, J.C.A. (Pp. 23-25, Paras. D-C) - read in context

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3. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE:Classification of arbitration clauses"Howbeit, the procedure to follow where there is a dispute equallydepends on the nature of the arbitration clause. In OBEMBE vs.WEMABOD (supra) at 16-17, Fatayi- Williams, JSC (as then was laterCJN) stated as follows: "...arbitration clauses, speaking generally, fallinto two classes. One class is where the provision for arbitration is amere matter of procedure for ascertaining the rights of the partieswith nothing in it to exclude a right of action on the contract itself,but leaving it to the party against whom an action may be brought toapply to the discretionary power of the Court to stay proceedings inthe action in order that the parties may resort to that procedure towhich they have agreed. The other class is where arbitrationfollowed by an award is a condition precedent to any otherproceedings being taken, any further proceedings then being, strictlyspeaking, not upon the original contract but upon the award madeunder the arbitration clause. Such provisions in an agreement aresometimes termed "Scott v. Avery" clauses, so named after thedecision in Scott v. Avery (1856) 5 H. L. Cas. 811, the facts of whichare as follows: An insurance company inserted in all its policies acondition that, when a loss occurred, the suffering member shouldgive in his claim and pursue his loss before a committee of membersappointed to settle the amount; that if a difference thereon arosebetween the committee and the suffering member, the mattershould be referred to arbitration, and that no action should bebrought except on the award of the arbitrators. In considering thescope of these provisions, the Court held that this condition was notillegal as ousting the jurisdiction of the Courts." See also CITYENGINEERING (NIG) LTD vs. FHA (1997) LPELR (868) 1 at 23-24(SC)."Per OGAKWU, J.C.A. (Pp. 25-26, Paras. C-F) - read in context(2

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4. ARBITRATION AND CONCILIATION - ARBITRATION CLAUSE:Duty of Court to give effect to arbitration clause in an agreement"...The provision for arbitration is a mere matter of procedure forascertaining the rights of the parties. There is nothing therein thatexcludes a right of action on the contract. But a party against whoman action has been brought may apply to the discretionary power ofthe Court to stay proceedings in the action so that the parties mayresort to the procedure they have agreed upon. See OBEMBE vs.WEMABOD ESTATES LTD (supra) and CITY ENGINEERING (NIG) LTDvs. FHA (supra). In THE OWNERS OF THE MV LUPEX vs. NIGERIAOVERSEAS CHARTERING AND SHIPPING LTD (2003) LPELR (3195) 1at 23-24, Iguh, JSC stated: "The law is also settled that the mere factthat a dispute is of a nature eminently suitable for trial in a Court isnot a sufficient ground for refusing to give effect to what the partieshave, by contract, expressly agreed to. See Re: An Application by thePhoenix Timber Company Ltd. (Appeal of V/O Sovfracht) (1958) 1Lloyd's Rep. 305 at 308. So long as an arbitration clause is retainedin a contract that is valid and the dispute is within the contemplationof the clause, the Court ought to give due regard to the voluntarycontract of the parties by enforcing the arbitration clause as agreedto by them. See Heyman and Another v. Darwins Ltd. (1942) Vol. 72Lloyd's Rep. 65." See also NEURAL PROPRIETARY LTD vs. UNICINSURANCE PLC 2015 LPELR (40998) 1 at 9-10. The rudimentaryprinciple of law in respect of contracts and agreements is expressedin the Latinism pacta conventa qua neque contro leges neque dolomalo inita sunt omni modo observanda sunt, more commonlyexpressed as pacta sunt servanda, meaning that agreements whichare neither contrary to the law nor fraudulently entered into shouldbe adhered to in every manner and in every detail. See SONNAR NIGLTD vs. NORDWIND (1987) LPELR 1 at 44, A-G NASARAWA vs. A-GPLATEAU (2012) LPELR (9730) 1 at 29 and BLUENEST HOTELS LTDvs. AEROBELL NIGERIA LTD (2018) LPELR (43568) 1 at 22. Havingestablished that the arbitration clause does not oust the jurisdictionof a Court and that the Court has a duty to give effect to thearbitration clause in the contract between the parties, not by strikingout the action, but by staying proceedings in the action so thatparties can be held to their bargain of resolving their disputes byarbitration; it becomes translucent that the lower Court erred when itstruck out the Appellant's action for want of jurisdiction."PerOGAKWU, J.C.A. (Pp. 28-31, Paras. F-A) - read in context

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5. CASE LAW - JUDICIAL PRECEDENT/STARE DECISIS:Circumstances when Court is not bound by the doctrine of staredecisis"By the doctrine of stare decisis, the decision of this Court isgenerally binding on this Court until overruled by the Supreme Court.There are however some exceptions. These are:1) A Court will refuse to follow a decision of its own which althoughnot expressly overruled cannot in its opinion stand with a decision ofthe Supreme Court.2) A Court is not bound to follow a decision of its own if given perincuriam.3) The Court is entitled to decide which of two conflicting decisionsof its own it will follow.See CAMPTEL INT'L SPA vs. DEXSON LTD (1996) 7 NWLR (PT 459)170 at 184 and DISU vs. AJILOWURA (2001) 4 NWLR (PT 702) 76 at90. In the instant case, having regard to the facts and circumstancesof the case, I am inclined to follow the decisions of the apex Court inOBEMBE vs. WEMABOD ESTATES LTD (supra), MESSRS B. V. SCHEEPvs. M. V. 'S ARAZ' and CITY ENGINEERING vs. FHA (supra) because bynecessary implication, the decision of this Court in MV PANORMOSBAY vs. OLAM cannot stand as regards the point that an arbitrationClause ousts the jurisdiction of a Court as agreed by the parties intheir Agreement."Per OGAKWU, J.C.A. (Pp. 36-37, Paras. A-A) - readin context

6. CONSTITUTIONAL LAW - RIGHT TO FAIR HEARING: Nature ofthe right to fair hearing"Fair hearing within the context of Section 36 of the 1999Constitution, has been said to be a trial which ought to be conductedin accordance with all the legal norms designed to ensure thatjustice is done at all cost to all parties. The principle of fair hearing isthat both sides must be given an opportunity to present theirrespective cases. The Courts must observe the fundamentalprinciples of fair hearing as any breach vitiates the entire process,see OVUNWO & ANOR V WOKO & ORS (2011) LPELR - 2841 (SC)."PerNIMPAR, J.C.A. (P. 38, Paras. A-D) - read in context

7. COURT - JURISDICTION: Importance of jurisdiction in the processof adjudication"The importance of jurisdiction in the adjudicatory process cannot beover-emphasised. Jurisdiction is a fundamental pre-requisite in theadjudication of any matter. It is the fons et origo, the threshold ofjudicial power and judicialism. It is the bloodline, lifeline, livewire andindeed spinal cord of a Court of law: A-G OYO STATE vs. NLC (2003)8 NWLR (PT 821) 1 at 26 and ODEDO vs. INEC (2008) 17 NWLR (PT1117) 544."Per OGAKWU, J.C.A. (P. 16, Paras. A-C) - read in context

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8. COURT - JURISDICTION: Importance of jurisdiction; whether theissue of jurisdiction must be resolved as a matter of priority"The next question that will arise is whether both sides were givenan opportunity to present their case which was looked into by theCourt? Definitely. The lower Court heard both the Appellant andRespondent's applications but decided to determine theRespondent's application challenging jurisdiction first consideringthe fact that if it does not have jurisdiction, any other step it takes inthe matter will be an exercise in futility, see NWANKWO V YAR'ADUA(2010) 12 NWLR (PT 1209) 518 SC. In any case, like my learnedbrother, OGAKWU, JCA pointed out, it is trite that a challenge tojurisdiction can be raised at any time and in any manner.Consequently, the lower Court was right in determining theRespondent's application first and having found that it had nojurisdiction, it will be an academic exercise to further determine theAppellant's application. Consequently, the lower Court wasempowered to act in the manner it did and I also find the allegationthat there was a breach of fair hearing not made out."Per NIMPAR,J.C.A. (Pp. 38-39, Paras. D-C) - read in context

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9. PRACTICE AND PROCEDURE - STAY OF PROCEEDINGS: Positionof the law on the grant of stay of proceeding pending an arbitration"The question however is whether the facts and circumstancesbefore the lower Court were such that the lower Court could haveexercised jurisdiction in favour of granting stay of proceedings.Section 5 of the Arbitration and Conciliation Act preserves the powerof the Court to stay proceedings in order for a matter to be referredto arbitration, provided that the party applying has not delivered anypleadings or taken any other steps in the proceedings. The Appellantcontends that the Respondent has taken steps because herapplication by which it sought to enforce the bargain of the partiesfor resolution of their dispute by arbitration included prayers forsecurity for costs and solicitors fees. I am unable to agree. TheRespondent's application in its true purport and essence was toenforce the arbitral clause which the parties had agreed as theavenue for the resolution of any dispute. This remains sonotwithstanding that the Respondent contended that the effect ofthe provisions for arbitration not being followed was divesting theCourt of jurisdiction, which the lower Court erroneously agreed with.In ONWARD ENTERPRISES LTD vs. MV MATRIX (supra) at 21, Mshelia,JCA stated that it is only acts done in furtherance of the prosecutionof the defence that could be said to amount to taking steps in theproceedings. See SINO-AFRIC AGRICULTURE & IND COMPANY LTD vs.MINISTRY OF FINANCE INCORPORATION (supra) at 36 and MOBILPRODUCING (NIG) UNLTD vs. SUFFOLK PETROLEUM SERVICES LTD(supra) at 30. Since the Respondent had not taken any steps in theproceedings, the lower Court ought to have exercised discretion bystaying proceedings in the matter instead of striking out the action.The diacritical circumstances of the matter called for the invocationof the provisions of Section 5 of the Arbitration and Conciliation Actto stay proceedings. See NIGER PROGRESS LTD vs. NORTH EASTLINE CORPORATION (1989) 3 NWLR (PT 107) 68 at 91 and OWNERSOF THE M. V. LUPEX VS. NIGERIAN OVERSEAS CHARTERING ANDSHIPPING LTD (supra) at 21."Per OGAKWU, J.C.A. (Pp. 31-32, Paras.A-E) - read in context

10. PRACTICE AND PROCEDURE - ACADEMIC OR HYPOTHETICALQUESTION(S)/ISSUES/SUIT/EXERCISE: Duty of Court not todecide on or engage in academic/speculative questions or issues"...It is rudimentary law that Courts do not engage in academicissues/exercise but only deal with live issues. See DANIEL vs. INEC(2015) LPELR (24566) 1 at 34, K. R. K. HOLDINGS (NIG) LTD vs. FBN(2016) LPELR (41463) 1 at 26-27 and CPC vs. INEC (2011) LPELR(8257) 1 at 78-79."Per OGAKWU, J.C.A. (Pp. 11-12, Paras. F-A) - readin context

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11. PRACTICE AND PROCEDURE - ISSUE OF JURISDICTION: Duty ofCourt when the issue of jurisdiction is raised"It is rudimentary law that the issue of jurisdiction is fundamentaland should be determined at the earliest opportunity. The businessof a Court once its jurisdiction is questioned in a matter is to assumejurisdiction to enquire into and determine whether it has jurisdiction.See ODOM vs. PDP (2015) LPELR (24351) 1 at 52 and BARCLAYSBANK vs. CBN (1976) LPELR (751) 1 at 15. In FBN vs. T. S. A. IND.LTD (2010) LPELR (1283) 1 at 12-13, Adekeye, JSC stated as follows:"Usually where a Court's jurisdiction is challenged by the defence, itis better to settle the issue one way or the other before proceedingto hearing of the case on the merits. Any failure by the Court todetermine any preliminary objection or any form of challenge to itsjurisdiction is a fundamental breach which renders any further steptaken in the proceedings a nullity."Per OGAKWU, J.C.A. (Pp. 15-16,Paras. C-A) - read in context

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12. PRACTICE AND PROCEDURE - ISSUE OF JURISDICTION: Whenan objection to the jurisdiction of Court can be raised"It is trite law that the issue of jurisdiction being threshold in naturecan be raised at any time, even for the first time on appeal at theapex Court. The authorities are legion. I will mention a few. SeeOWIE vs. IGHIWI (2005) LPELR (2846) 1 at 28, ONI vs. CADBURY NIGPLC (2016) LPELR (26061) 1 at 25 and AWUSE vs. ODILI (2003)LPELR (666) 1 at 50. Recently in OLIYIDE & SONS LTD vs. O.A.U ILE-IFE (2018) LPELR (43711) 1 at 9, Ogunbiyi, JSC stated: "An issue ofjurisdiction (like the one at hand) is not a fresh issue and it is settledlaw that such can be raised at anytime by various means even vivavoce for the first time on appeal in this Court." See also ANYANWUvs. OGUNEWE (2014) LPELR (22184) 1 at 31, OBIUWEUBI vs. CBN(2011) 7 NWLR (PT 1247) 465 at 494 and PETROJESSICAENTERPRISES LTD vs. LEVENTIS TECH. CO. LTD (1992) 5 NWLR (PT244) 675. Let me iterate that the Appellant's challenge to thecompetence of the Respondent's Motion is on the basis that theRespondent filed her Memorandum of Appearance out of time andthat the application was not filed in a timely manner. In the light ofthe settled state of the law that an issue of jurisdiction can be raisedat any time, even viva voce, it becomes of no moment whether aMemorandum of Appearance and/or the application was filed in atimely manner. In the circumstances, the consideration andresolution of the Respondent's Motion trumped the considerationand resolution of the Appellant's Motion. The lower Court wastherefore right when it considered and resolved the Respondent'smotion first. This issue number two is therefore resolved against theAppellant."Per OGAKWU, J.C.A. (Pp. 16-17, Paras. D-F) - read incontext

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UGOCHUKWU ANTHONY OGAKWU, J.C.A. (Delivering

the Leading Judgment): The Appellant instituted

proceedings at the Federal High Court, Lagos Division in

respect of outstanding payment due to it for goods and

services it supplied and rendered to the Respondent for her

operation and maintenance. The action was in SUIT NO.

FHC/L/CS/1160/2017: TRANSOCEAN SHIPPING

VENTURES PRIVATE LTD vs. “MT SEA STERLING”. Upon

being served the Court processes, the Respondent filed an

application challenging the jurisdiction of the Court and

urging the Court to strike out the suit. The Appellant filed

processes in opposition to the Respondent’s motion and

further filed an application wherein it urged the Court to

strike out the processes filed by the Respondent for being

incompetent.

The Respondent opposed the Appellant’s application. The

lower Court took argument on both applications together.

It first determined the Respondent’s application which it

granted, holding that it does not have jurisdiction. Based on

the decision that it did not have jurisdiction the lower Court

held that it would be an academic exercise in futility to

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delve into the Appellant’s motion. The Court then

proceeded to strike out the action.

The Appellant was dissatisfied with the decision of the

lower Court and appealed against the same. The extant

Notice of Appeal on which the appeal was argued is the

Amended Notice of Appeal filed on 23rd January 2018, but

deemed as properly filed on 12th February 2018. The

chafed Ruling of the lower Court is at pages 241-251 of the

Records. Upon the compilation and transmission of the

Records of Appeal, the parties filed and exchanged briefs of

argument. The Appellant’s Brief was filed on 23rd January

2018 but deemed as properly filed on 12th February 2018.

The Appellant further filed a Reply Brief on 16th February

2018. The Respondent’s Brief was filed on 12th February

2018. At the hearing of the appeal, the learned counsel for

the parties urged the Court to uphold their respective

submissions in the determination of the appeal.

The Appellant distilled two issues for determination as

follows:

“1. Whether the learned trial judge was right when he

held that the Court lacks jurisdiction to entertain

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the Appellant’s claim and released the Respondent

from arrest as a result of the arbitration clause

contained in the Ship Management Agreement.

2. Whether the learned trial judge’s refusal to

determine the Appellant’s Motion on Notice dated the

8th November, 2017 does not amount to breach of the

Appellant’s right to fair hearing.”

The Respondent equally formulated two issues for

determination, namely:

“i. Whether the lower Court was right when it found

that it lacks jurisdiction to entertain the matter,

hence leading to the striking out of the matter at the

lower Court.

ii. Whether the refusal of the lower Court to

determine the Appellant motion dated 8th November

2017 at the lower Court amounted to lack of fair

hearing.”

The issues nominated for determination by the parties are

the same in every material particular. I will therefore

proceed to resolve this appeal based on the issues as

formulated by the Appellant. I would however reorder the

sequence of the issues by considering issue number two

first and thereafter consider issue number one.

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ISSUES FOR DETERMINATION

ISSUE NUMBER TWO

Whether the learned trial judge’s refusal to

determine the Appellant’s Motion on Notice dated the

8th November, 2017 does not amount to breach of the

Appellant’s right to fair hearing.

SUBMISSIONS OF THE APPELLANT’S COUNSEL

The Appellant submits that its motion challenged the

jurisdiction of the lower Court to take cognizance of the

processes filed by the Respondent and so the Court ought

to have taken its application and determine the same

before proceeding with the Respondent’s application. It

was contended that the failure of the lower Court to

determine its application was a violation of the right to fair

hearing and occasioned a miscarriage of justice since a

Court must hear and determine every application before it.

The cases of DINGYADI vs. INEC (No.1) (2010) 8

NWLR (PT 1224) 1 at 53, MOBIL OIL (NIG) UNLTD

vs. MONOKPO (2003) 18 NWLR (PT 852) 346 at

413-414 and 431 and AMOO vs. ALABI (2003) 15

NSCQR 132 at 144 were referred to.

The Appellant maintained that the jurisdiction of a Court is

dependent on the competence of the Court. That being an

admiralty matter, the Admiralty Jurisdiction Procedure

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Rules, 2011 apply and that the Federal High Court (Civil

Procedure) Rules will only apply subject to the Admiralty

Jurisdiction Procedure Rules. The Appellant contended that

the Respondent having filed her Memorandum of

Appearance out of time without any application to

regularize the same, all subsequent processes filed by the

Respondent were incompetent. It was posited that the

condition precedent to challenge, defend or file any

processes in an action is the filing of a competent

Memorandum of Appearance and that where a condition

precedent has not been compiled with every other action

taken will be null and void. The cases of MADUKOLU vs.

NKEMDILIM (1962) 1 NLR 587 , ORAKUL

RESOURCES LTD vs. NCC (2007) 16 NWLR (PT 1060)

270 at 302, ONYEDEBELU vs. NWANERI (2008)

LPELR – 4793 at 25 among other cases were cited in

support.

SUBMISSIONS OF THE RESPONDENT’S COUNSEL

The Respondent contends that there was no lack of fair

hearing in the refusal of the lower Court to delve into the

Appellant’s Motion. It was stated that the issue of

jurisdiction of a Court is to be determined first and that

once a Court holds that it has no jurisdiction, the want of

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jurisdiction disposes of any other application as any further

step taken will be a nullity. The cases of FBN PLC vs.

ASUBOP & CO (NIG) LTD (2003) 13 NWR Vol. 1 (PT

836) CA 1 at 8 and ADIGUN vs. OSAKA (2003) 5

NWLR (PT 812) 95 were relied upon. It was opined that

the lower Court was right to consider and determine

whether it had jurisdiction first.

It is the further contention of the Respondent that by the

provisions of Order 46 Rule 6 of the Federal High Court

(Civil Procedure) Rules, 2009, time for filing and service of

pleadings and delivery of judgments does not run during

the vacation of the Court. It was stated that the Court

processes were served on the Respondent on 29th July

2017 during the vacation of the Court and that since time

did not run, the Respondent’s application filed on 7th

September 2017 was not filed out of time.

APPELLANT’S REPLY ON LAW

In the Reply Brief the Appellant argues that its application

raised a jurisdictional issue which the lower Court ought to

have resolved first before delving into the Respondent’s

preliminary objection. It was maintained that the provision

of Order 46 Rule 6 of the Federal High Court (Civil

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Procedure) Rules relates only to pleadings, rulings and

judgments and does not apply to the filing of Memorandum

of Appearance and therefore the Respondent’s time started

running from 29th July 2017 when she was served the

originating processes.

It is the further submission of the Appellant that the

Respondent’s application is incompetent for having been

filed outside the period provided under Order 29 of the

Federal High Court (Civil Procedure) Rule, 2009, which

provided that such an application shall be made within

twenty-one days of service of the originating processes. It

was asserted that the Respondent’s application was

incompetent. The cases of NATIONAL INSURANCE

COMMISSION vs. FIDELITY BOND OF NIG LTD

(2016) LPELR – 41427 (CA) and NJC vs. AGUMAGU

(2015) – 24503 (CA) were called in aid.

RESOLUTION OF ISSUE NUMBER TWO

It is imperative to streamline the submissions of learned

counsel relative to the complaint in ground two of the

Amended Notice of Appeal from which the issue has been

distilled. The said Ground Two of the Amended Grounds of

Appeal reads as follows:

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“GROUND TWO

The learned trial judge erred in law and breached the

Appellant’s right to fair hearing when he struck out

the Appellant’s suit without determining the

Appellant’s Motion on Notice dated the 8th

November, 2017 thereby occasioning a miscarriage of

justice

Particulars of error

1. The learned trial failed to determine the

Appellant’s application challenging the competence

of the Memorandum of Appearance and Motion on

Notice filed by the Respondent first.

2. The Appellant’s application challenged the

jurisdiction of the lower Court to take cognizance of

the processes filed by the Respondent before it.

3. The lower Court breached the Appellant’s right to

fairing [sic] by its refusal to determine the

Appellant’s Motion on Notice dated the 8th

November, 2018.”

An integral construction of the ground with its particulars:

OBATOYINBO vs. OSHATOBA (1996) LPELR (2156) 1

at 33 and NWADIKE vs. IBEKWE (1987) 4 NWLR (PT

67) 718; makes it evident that the complaint in the said

ground is that the failure and refusal of the lower Court to

hear and determine the Appellant’s application was a

breach of the

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Appellant’s right to fair hearing which occasioned a

miscarriage of justice. Therefore, properly contextualized

the submissions of learned counsel on whether the

Respondent’s application complained about was filed within

time or not does not arise. Accordingly, in the resolution of

this issue, I will be guided by the complaint in the ground

of appeal.

Innate in the disceptation in this issue are the failure of the

lower Court to hear and determine the Appellant’s

application and the order of hearing applications pending

in Court. It is settled law that both the Court and the

parties are bound by the Records of Appeal and the Court

canno t depar t there f rom. See GARUBA vs .

OMOKHODION (2011) 15 NWLR (PT 1269) 145 at

180, ARUM vs. NWOBODO (2013) 10 NWLR (PT 1362)

374 and F. H. A. vs. OLAYEMI (2017) LPELR (43376)

1 at 38-39.

The Appellant’s Motion which it complains that the lower

Court did not hear and determine is dated 8th November

2017 but filed on 10th November 2017. It is at pages

210-218 of the Records. The Court proceedings of 16th

November 2017 which is at pages 236-238 of the Records,

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shows that the lower Court heard the Appellant’s Motion

dated 8th November 2017. The Appellant having duly

moved the said Motion as borne out by the Records, cannot

be heard to contend on appeal that the lower Court did not

hear the application.

Now, as lucent from the Records, it was after the lower

Court had heard the Appellant’s Motion that it then heard

the Respondent’s application which is dated 7th September

2017. See page 239 of the Records. The lower Court having

heard both pending applications on the said 16th

November 2017 adjourned the matter to 11th December

2017 for Ruling. See page 239 of the Records.

The Ruling of the lower Court is at pages 241-251 of the

Records. The opening sentence of the said Ruling on page

241 reads:

“This Ruling is predicated on both parties Motion on

Notice dated 7th of September 2017 and 8th

November, 2017 respectively.”

From the outset it is clear that the Ruling is in respect of

the Appellants Motion dated 8th November 2017. The

lower Court in clarifying the order of determining the

applications stated thus on the same page 241 of the

Records:

“I will first consider the Motion on Notice dated

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the 7th of September, 2017 as it affects the

jurisdiction of this Court.”

We will still find out in the course of this judgment if the

lower Court was right in the order in which it resolved the

applications subject of the Ruling of 11th December 2017.

The next poser is whether the lower Court reached a

decision on the Appellant’s Motion in the said Ruling which

it had stated was in respect of “both parties Motion on

Notice dated 7th of September 2017 and 8th of November

2017 respectively.” We turn to the Records. At page 251 of

the Records the lower Court held:

“At this point it would be merely an academic

exercise in futility, to delve into the Plaintiff’s Motion

on Notice dated 8th November, 2017 since I have

declined jurisdiction and this Suit had been struck

out.”

So the decision of the lower Court on the Appellant’s

Motion is that the Motion had become academic exercise

since the Court did not have jurisdiction to entertain the

action. It is rudimentary law that Courts do not engage in

academic issues/exercise but only deal with live issues. See

DANIEL vs. INEC (2015) LPELR (24566) 1 at 34,

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K. R. K. HOLDINGS (NIG) LTD vs. FBN (2016) LPELR

(41463) 1 at 26-27 and CPC vs. INEC (2011) LPELR

(8257) 1 at 78-79. So from the Records, the lower Court

determined the Appellant’s Motion and the decision of the

Court is that the Motion was academic since the Court did

not have jurisdiction. Whether it is the correct decision is a

different matter but the lower Court decided the

application. There is therefore no basis for the Appellant’s

contention that the lower Court infringed its right to fair

hearing by failure and refusal to hear and determine its

Motion. As has been demonstrated, the Records of Appeal

bear out that the lower Court heard and determined the

Appellant’s Motion dated 8th November 2017.

The other aspect of this issue is whether the lower Court

should have considered and resolved the Appellant’s

Motion first instead of the Respondent’s Motion. I have

already reproduced page 241 of the Records where the

lower Court stated that it would first consider the

Respondent’s Motion. The relief sought on the Appellant’s

Motion is for:

“An Order of this Honourable Court striking out the

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Memorandum of Appearance and Motion on Notice

dated the 7th day of September filed by the Defendant

in this suit.”

(See page 210 of the Records)

The grounds upon which the Appellant brought its

application as set out in the Motion are:

“a. The Memorandum of Appearance filed by the

Defendant is incompetent as same was filed out of the

prescribed period stipulated by the rules of this

Honourable Court.

b. That the Defendant’s application dated the 7th day

of September 2017 is incompetent.

c. The Court has no jurisdiction to entertain

incompetent processes.”

(See page 210 of the Records)

So the premise of the Appellant’s Motion is that the

Respondent’s Motion is incompetent.

The Respondent’s Motion is at pages 141-175 of the

Records. The orders prayed for by the Respondent include,

inter alia:

“1. AN ORDER declaring that this Honourable Court

has no jurisdiction and/or should not exercise any

jurisdiction to entertain the instant suit against the

Defendant.

2. AN ORDER of this Honourable Court striking out

this suit in its entirety against the Defendants

herein." (See page 141 of the Records)

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The grounds upon which the Respondent sought the orders

include:

“i. The Court no [sic] Jurisdiction to entertain the

matter for failure of the Plaintiff to refer the dispute

herein to arbitration in compliance with the

provisions of Clause 21 of SHIPMAN 2009 (Standard

Ship Management Agreement) Part 1 and Clause 23

(BIMCO Dispute Resolution Clause) of SHIPMAN

2009 Part II setting forth the Terms and Conditions

governing the relation between the parties.

ii. Having regard to the true and proper intendment

of Clauses 21 of Shipman Part 1 and 23 of SHIPMAN

Part II governing the relations between the parties,

the Plaintiff has not fulfilled the condition precedent

for the institution of this action.

iii. The Plaintiff/Respondent’s suit is premature and

not maintainable.

iv. The condition precedent for the invocation of the

jurisdiction of the Honourable Court has not been

fulfilled.

v. The Plaintiff/Respondent has no right of action

against Defendant/Applicant.

vi. That in the circumstances, the suit as presently

constituted does not disclose any reasonable cause of

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action against the Defendants. Hence, the Plaintiff

has no locus standi to commence this action.

vii. The Federal High Court of Nigeria has absolutely

no jurisdiction in the present circumstances to

entertain this suit.

viii. The Writ of Summons is otherwise incompetent.”

(See page 142 of the Records)

It is effulgent that the Respondent’s Motion is a challenge

on the jurisdiction of the lower Court to entertain the

action. It is rudimentary law that the issue of jurisdiction is

fundamental and should be determined at the earliest

opportunity. The business of a Court once its jurisdiction is

questioned in a matter is to assume jurisdiction to enquire

into and determine whether it has jurisdiction. See ODOM

vs. PDP (2015) LPELR (24351) 1 at 52 and BARCLAYS

BANK vs. CBN (1976) LPELR (751) 1 at 15. In FBN vs.

T. S. A. IND. LTD (2010) LPELR (1283) 1 at 12-13,

Adekeye, JSC stated as follows:

“Usually where a Court’s jurisdiction is challenged by

the defence, it is better to settle the issue one way or

the other before proceeding to hearing of the case on

the merits. Any failure by the Court to determine any

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preliminary objection or any form of challenge to its

jurisdiction is a fundamental breach which renders

any further step taken in the proceedings a nullity.”

The importance of jurisdiction in the adjudicatory process

cannot be over-emphasised. Jurisdiction is a fundamental

pre-requisite in the adjudication of any matter. It is the fons

et origo, the threshold of judicial power and judicialism. It

is the bloodline, lifeline, livewire and indeed spinal cord of

a Court of law: A-G OYO STATE vs. NLC (2003) 8 NWLR

(PT 821) 1 at 26 and ODEDO vs. INEC (2008) 17

NWLR (PT 1117) 544.

It is trite law that the issue of jurisdiction being threshold

in nature can be raised at any time, even for the first time

on appeal at the apex Court. The authorities are legion. I

will mention a few. See OWIE vs. IGHIWI (2005) LPELR

(2846) 1 at 28, ONI vs. CADBURY NIG PLC (2016)

LPELR (26061) 1 at 25 and AWUSE vs. ODILI (2003)

LPELR (666) 1 at 50. Recently in OLIYIDE & SONS LTD

vs. O.A.U ILE-IFE (2018) LPELR (43711) 1 at 9,

Ogunbiyi, JSC stated:

“An issue of jurisdiction (like the one at hand) is not

a fresh issue and it is settled law that such can be

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raised at anytime by various means even viva voce for

the first time on appeal in this Court.”

See also ANYANWU vs. OGUNEWE (2014) LPELR

(22184) 1 at 31, OBIUWEUBI vs. CBN (2011) 7 NWLR

(PT 1247) 465 at 494 and PETROJESSICA

ENTERPRISES LTD vs. LEVENTIS TECH. CO. LTD

(1992) 5 NWLR (PT 244) 675.

Let me iterate that the Appellant’s challenge to the

competence of the Respondent’s Motion is on the basis that

the Respondent filed her Memorandum of Appearance out

of time and that the application was not filed in a timely

manner. In the light of the settled state of the law that an

issue of jurisdiction can be raised at any time, even viva

voce, it becomes of no moment whether a Memorandum of

Appearance and/or the application was filed in a timely

manner. In the circumstances, the consideration and

resolution of the Respondent’s Motion trumped the

consideration and resolution of the Appellant’s Motion. The

lower Court was therefore right when it considered and

resolved the Respondent’s motion first. This issue number

two is therefore resolved against the Appellant.

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ISSUE NUMBER ONE

Whether the learned trial judge was right when he

held that the Court lacks jurisdiction to entertain the

Appellant’s claim and released the Respondent from

arrest as a result of the arbitration clause contained

in the Ship Management Agreement.

SUBMISSIONS OF THE APPELLANT’S COUNSEL

The quiddity of the Appellant’s submission is that the claim

before the lower Court was an admiralty matter and that

the lower Court has jurisdiction to entertain admiralty

matters. The stipulations of Section 251 (1) (g) of the 1999

Constitution, Section 7 (1) (d) of the Federal High Court

Act, Section 1 (1) (a) of the Admiralty Jurisdiction Act, 1991

and the cases of ALRAINE SHIPPING NIG LTD vs.

ENDURA AUTO CHEMICALS (2001) 12 NWLR (PT

728) 759 and BRAWAL SHIP LTD vs. E. & C. S. (2001)

14 NWLR (PT 732) 172 were referred to.

It was posited that the Respondent’s contention was that

the lower Court lacked jurisdiction because the Ship

Management Agreement between the parties had an

arbitration clause. The Appellant submitted that Section 20

of the Admiralty Jurisdiction Act allows the Appellant to

institute an admiralty claim against the Respondent

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irrespective of the arbitration clause contained in the Ship

Management Agreement. The case of MV PANORMOS

BAY vs. OLAM (2004) 5 NWLR (PT 865) 1 was relied

upon. It was opined that the arbitration clause in the Ship

Management Agreement did not prohibit parties from

commencing legal proceedings until the dispute between

the parties is determined by arbitration. The cases of

KURUBO vs. ZACH MOTISON NIG LTD (1992) 5

NWLR (PT 239) 102, MAGBAGBEOLA vs. SANNI

(2002) 4 NWLR (PT 756) 193, LIGNES ARIENNES

CONGOLAISES vs. AIR ATLANTIC LTD (2006) 2

NWLR (PT 963) 49 and OBEMBE vs. WEMABOD

ESTATES (1977) 5 SC 70 were cited in support.

The Appellant further contended that the Respondent had

taken steps in the matter by the prayers in her Motion

dated 7th September 2017 and had waived her right to

insist on arbitration. The cases of KAYODE vs. ROYAL

EXCHANGE ASSURANCE (1953) WRNLR 154 at 158,

HARRIS vs. REYNOLDS (1845) 7 QB 71, ONWARD

ENTERPRISES LTD vs. MV “MATRIX” (2008) LPELR –

4789 (CA) and KANO STATE URBAN DEVELOPMENT

BOARD vs. FANZ CONSTRUCTION CO. LTD (1990) 6

SCNJ 77 at 92 and 115 were called in aid. The Appellant

conclusively submitted that if the lower Court was swayed

by the

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arbitral clause contained in the Ship Management

Agreement; rather than strike out the suit, it could have

stayed proceedings to abide arbitration in order to preserve

the security for the purpose of enforcement of an award.

Section 10 of the Admiralty Jurisdiction Act was referred to.

SUBMISSIONS OF THE RESPONDENT’S COUNSEL

The Respondent contends that a condition precedent to

instituting an action must be met before an action is

commenced since the condition precedent is a yardstick to

measure whether the Court has jurisdiction. The cases of

MADUKOLU vs. NKEMDILIM (1962) 2 SCNLR 341

and UGWUANYI vs. NICON INSURANCE PLC (2004)

15 NWLR (PT 897) 612 at 634 were relied upon. It was

submitted that commencing the action without referring

the same to arbitration robbed the lower Court of

jurisdiction. Clauses 21 and 23 of the Ship Management

Agreement were referred to and it was maintained that

failure to submit to arbitration first before going to Court

robbed the lower Court of jurisdiction. The failure to

comply with the condition precedent it was stated went to

the root of the matter and robbed the Court of jurisdiction.

The cases

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of MOHAMMED vs. OLAWUNMI (1990) 2 NWLR (PT

133) 458 at 475 and ZAKARI vs. NIGERIA ARMY

(2015) 5-6 SC 41 at 44 were cited in support.

The Respondent asserted that the arbitration clause

provided for arbitration in London and that based on the

doctrine of pacta sunt servanda, the agreement between

the parties is to be respected and effected, even if the

dispute is eminently suitable for trial in a Court. The cases

of AGBAREH vs. MIMRA (2008) 2 NWLR (PT 1071)

387 at 412-413, OWNERS OF THE M. V. LUPEX vs. N.

O. C. S. LTD (2003) 6 SC (PT II) 62 and SINO

AGRICULTURE & IND. CO. LTD vs. MINISTRY OF

FINANCE INCORPORATION (2013) LPELR 22370 CA

were called in aid.

The Respondent maintained that it had not waived her right

to arbitration as she had not taken any steps in the

proceedings as she had done nothing towards prosecution

of her defence. The cases of SINO AGRICULTURE & IND.

CO.LTD vs. MINISTRY OF FINANCE INCORPORATION

(supra) and ONWARD ENTERPRISE LTD vs. MV

‘MATRIX’ (2008) LPELR-4789 were referred to. The

Respondent conclusively submitted that any suit instituted

in contravention of the precondition provision is

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incompetent and a Court lacks jurisdiction to entertain the

same. The case of DINGYADI vs. INEC (2011) 4 SC (PT

II) 1 at 9 was relied upon.

APPELLANT’S REPLY ON LAW

In the Reply Brief the Appellant submits that the cases of

OWNERS OF THE MV LUPEX vs. N. O. C. S. LTD

(supra) and SINO AGRICULTURE & IND. LTD vs.

MINISTRY OF FINANCE INCORPORTATION (supra)

relied on by the Respondent do not support the

Respondent’s case as the said cases decided that an

arbitration clause does not oust the jurisdiction of the

Court to entertain a matter but that a defendant who has

not taken any steps in the proceedings may apply for stay

of proceedings.

The Appellant referred to Section 10 of the Admiralty

Jurisdiction Act as recognizing that the lower Court had the

jurisdiction to entertain the Appellant’s claim and that the

lower Court could have exercised its disciplinary powers

based on an appropriate application to stay further

proceedings in the matter. The lower Court it was posited

was wrong to have declined jurisdiction because of the

arbitration clause since the commencement of arbitration

was not a condition precedent to the institution of the

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Appellant’s claim. Section 20 of the Admiralty Jurisdiction

Act and the cases of MV PANORMOS BAY vs. OLAM

(supra) and LIGNES ARIENNES CONGOLAISES vs.

AIR ATLANTIC LTD (supra) were referred to. The

Appellant maintained that the Respondent had taken steps

in the proceedings to the extent that the reliefs sought on

her application included security for costs, solicitors fees

etc., thereby taking steps and waiving her right to

arbitration.

RESOLUTION

It is pertinent to state that there can be no confutation that

the Federal High Court has jurisdiction to entertain

admiralty matters. It equally cannot be confuted that the

Appellant’s claim before the lower Court was an admiralty

matter. Properly contextualized, the Respondent’s

contention at the lower Court was that because of the

arbitration clause in the Ship Management Agreement, the

contract between the parties, the Appellant’s action was

premature and the Court did not have the jurisdiction to

entertain a premature action. The pristine question

however is whether an arbitration clause ousts the

jurisdiction of Court.

The law seems to be ensconced that an arbitration

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clause does not oust the jurisdiction of a Court. In

OBEMBE vs. WEMABOD ESTATE (1977) LPELR

(2161), the apex Court held that any agreement to submit

a dispute to arbitration does not oust the jurisdiction of the

Court. Equally in MESSRS NV SCHEEP vs. MV ‘S.

ARAZ’ (2000) 12 SC (PT 1) 164 at 213, the Supreme

Court held that an arbitration clause does not seek to oust

the jurisdiction of a Court as all it does is to allow the

parties the avenue and possibilities of settling disputes

amicably out of Court. In CELTEL NIGERIA B.V. vs.

ECONET WIRELESS LTD (2014) LPELR (22430) 1 at

58 this Court per Ikyegh, JCA held as follows:

“Arbitration does not remove the jurisdiction of the

regular Courts. It is only a stop-gap process to settle

the disputes. See Magbagbeola v. Sanni (2002)4

NWLR (pt. 756) 193 at 205 following Confidence

Insurance Ltd v. Trustees of the Ondo State College of

Education (1999)2 NWLR (pt. 591) 373 at 386. It

follows that a dispute referred to arbitration merely

has the effect of staying proceedings in the regular

Court in respect of a pending suit over the same

subject matter.”

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See also MOBIL PRODUCING NIG UNLTD vs.

SUFFOLK PETROLEUM SERVICES LTD (2017) LPELR

(41734) 1 at 33-35 and EAGLEWOOD INTEGRATED

RESOURCES LTD vs. ORLEANS INVESTMENT

HOLDINGS LTD (2017) LPELR (43542) 1 at 19-20.

In the light of the legal position that an arbitration clause

does not oust the jurisdiction of a Court, the provisions of

Section 20 of the Admiralty Jurisdiction Act which renders

null and void an agreement that seeks to oust the

jurisdiction of the Court does not come into play in this

matter.

Howbeit, the procedure to follow where there is a dispute

equally depends on the nature of the arbitration clause. In

OBEMBE vs. WEMABOD (supra) at 16-17, Fatayi-

Williams, JSC (as then was later CJN) stated as follows:

"...arbitration clauses, speaking generally, fall into

two classes. One class is where the provision for

arbitration is a mere matter of procedure for

ascertaining the rights of the parties with nothing in

it to exclude a right of action on the contract itself,

but leaving it to the party against whom an action

may be brought to apply to the discretionary power of

the Court to stay proceedings in the action in order

that the parties may resort to that procedure to

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which they have agreed. The other class is where

arbitration followed by an award is a condition

precedent to any other proceedings being taken, any

further proceedings then being, strictly speaking, not

upon the original contract but upon the award made

under the arbitration clause. Such provisions in an

agreement are sometimes termed "Scott v. Avery"

clauses, so named after the decision in Scott v. Avery

(1856) 5 H. L. Cas. 811, the facts of which are as

follows: An insurance company inserted in all its

policies a condition that, when a loss occurred, the

suffering member should give in his claim and pursue

his loss before a committee of members appointed to

settle the amount; that if a difference thereon arose

between the committee and the suffering member,

the matter should be referred to arbitration, and that

no action should be brought except on the award of

the arbitrators. In considering the scope of these

provisions, the Court held that this condition was not

illegal as ousting the jurisdiction of the Courts."

See also CITY ENGINEERING (NIG) LTD vs. FHA

(1997) LPELR (868) 1 at 23-24 (SC).

What is the class of arbitration clause in this matter? The

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parties are agreed that the applicable arbitration clause

guiding them is Clause 23 (a) of the Standard Ship

Management Agreement. The said Agreement is

reproduced at pages 10-28 of the Records. The said Clause

23 (a) provides thus:

“23. BIMCO Dispute Resolution Clause

(a) This Agreement shall be governed by and

construed in accordance with English law and any

dispute arising out of or in connection with this

Agreement shall be referred to arbitration in London

in accordance with the Arbitration Act 1996 or any

statutory modification or re-enactment thereof save

to the extent necessary to give effect to the provisions

of this Clause.

The arbitration shall be conducted in accordance with

the London Maritime Arbitrators Association (LMAA)

Terms current at the time when the arbitration

proceedings are commenced.

The reference shall be to three arbitrators. A party

wishing to refer a dispute to arbitration shall appoint

its arbitrator and send notice of such appointment in

writing to the other party requiring the other party to

appoint its own arbitrator within 14 calendar days of

that notice and stating that it will appoint its

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arbitrators as sole arbitrator unless the other party

appoints its own arbitrator and give notice that it has

done so within the 14 days specified. If the other

party does not appoint its own arbitrator and give

notice that it has done so within the 14 days

specified, the party referring a dispute to arbitration

may, without the requirement of any further prior

notice to the other party, appoint its arbitrator as sole

arbitrator and shall advise the other party

accordingly. The award of a sole arbitrator shall be

binding on both parties as if he had been appointed

by agreement.

Nothing herein shall prevent agreeing in writing to

vary these provisions to provide for the appointment

of a sole arbitrator.

In cases where neither the c la im nor any

counterclaim exceeds the sum of USD50,000 (or such

other sum as the parties may agree) the arbitration

shall be conducted in accordance with the LMAA

Small Claims Procedure current at the time when the

arbitration proceedings are commenced.”

The above Clause is not the ‘Scott vs. Avery Clause.’ The

provision for arbitration is a mere matter of procedure for

ascertaining the rights of

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the parties. There is nothing therein that excludes a right of

action on the contract. But a party against whom an action

has been brought may apply to the discretionary power of

the Court to stay proceedings in the action so that the

parties may resort to the procedure they have agreed upon.

See OBEMBE vs. WEMABOD ESTATES LTD (supra)

and CITY ENGINEERING (NIG) LTD vs. FHA (supra).

In THE OWNERS OF THE MV LUPEX vs. NIGERIA

OVERSEAS CHARTERING AND SHIPPING LTD (2003)

LPELR (3195) 1 at 23-24, Iguh, JSC stated:

"The law is also settled that the mere fact that a

dispute is of a nature eminently suitable for trial in a

Court is not a sufficient ground for refusing to give

effect to what the parties have, by contract, expressly

agreed to. See Re: An Application by the Phoenix

Timber Company Ltd. (Appeal of V/O Sovfracht)

(1958) 1 Lloyd's Rep. 305 at 308. So long as an

arbitration clause is retained in a contract that is

valid and the dispute is within the contemplation of

the clause, the Court ought to give due regard to the

voluntary contract of the parties by enforcing the

arbitration clause as agreed to by them. See

Heyman and Another v. Darwins Ltd. (1942) Vol. 72

Lloyd's Rep. 65."

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See also NEURAL PROPRIETARY LTD vs. UNIC

INSURANCE PLC 2015 LPELR (40998) 1 at 9-10.

The rudimentary principle of law in respect of contracts

and agreements is expressed in the Latinism pacta

conventa qua neque contro leges neque dolo malo inita

sunt omni modo observanda sunt, more commonly

expressed as pacta sunt servanda, meaning that

agreements which are neither contrary to the law nor

fraudulently entered into should be adhered to in every

manner and in every detail. See SONNAR NIG LTD vs.

NORDWIND (1987) LPELR 1 at 44, A-G NASARAWA

vs. A-G PLATEAU (2012) LPELR (9730) 1 at 29 and

BLUENEST HOTELS LTD vs. AEROBELL NIGERIA

LTD (2018) LPELR (43568) 1 at 22.

Having established that the arbitration clause does not oust

the jurisdiction of a Court and that the Court has a duty to

give effect to the arbitration clause in the contract between

the parties, not by striking out the action, but by staying

proceedings in the action so that parties can be held to

their bargain of resolving their disputes by arbitration; it

becomes translucent that the lower Court erred when it

struck out the Appellant’s action for want of

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jurisdiction.

The question however is whether the facts and

circumstances before the lower Court were such that the

lower Court could have exercised jurisdiction in favour of

granting stay of proceedings. Section 5 of the Arbitration

and Conciliation Act preserves the power of the Court to

stay proceedings in order for a matter to be referred to

arbitration, provided that the party applying has not

delivered any pleadings or taken any other steps in the

proceedings. The Appellant contends that the Respondent

has taken steps because her application by which it sought

to enforce the bargain of the parties for resolution of their

dispute by arbitration included prayers for security for

costs and solicitors fees. I am unable to agree. The

Respondent’s application in its true purport and essence

was to enforce the arbitral clause which the parties had

agreed as the avenue for the resolution of any dispute. This

remains so notwithstanding that the Respondent contended

that the effect of the provisions for arbitration not being

followed was divesting the Court of jurisdiction, which the

lower Court erroneously agreed with.

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In ONWARD ENTERPRISES LTD vs. MV MATRIX

(supra) at 21, Mshelia, JCA stated that it is only acts done

in furtherance of the prosecution of the defence that could

be said to amount to taking steps in the proceedings. See

SINO–AFRIC AGRICULTURE & IND COMPANY LTD vs.

MINISTRY OF FINANCE INCORPORATION (supra) at

36 and MOBIL PRODUCING (NIG) UNLTD vs.

SUFFOLK PETROLEUM SERVICES LTD (supra) at 30.

Since the Respondent had not taken any steps in the

proceedings, the lower Court ought to have exercised

discretion by staying proceedings in the matter instead of

striking out the action. The diacritical circumstances of the

matter called for the invocation of the provisions of Section

5 of the Arbitration and Conciliation Act to stay

proceedings. See NIGER PROGRESS LTD vs. NORTH

EAST LINE CORPORATION (1989) 3 NWLR (PT 107)

68 at 91 and OWNERS OF THE M. V. LUPEX VS.

NIGERIAN OVERSEAS CHARTERING AND SHIPPING

LTD (supra) at 21.

It is at this point where it has been ascertained that the

lower Court was wrong to have struck out the action and

that the proper order to have made was to stay proceedings

that the provisions of Section 10 of the Admiralty

Jurisdiction Act become relevant.

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From the Records, prior to the Ruling of the lower Court

subject of this appeal, the lower Court had made an order

for the arrest of the Respondent Vessel. (See pages

129-130 0f the Records). Upon making the order striking

out the action for want of jurisdiction, the lower Court

ordered for the release of the Respondent Vessel from

arrest. The concomitance of the holding the lower Court

was wrong in striking out the action for want of jurisdiction

is a restoration of the order of arrest of the Respondent

Vessel made by the lower Court on 27th July 2017. The said

Section 10 of the Admiralty Jurisdiction Act provides as

follows:

“10 (1) Without prejudice to any other power of the

Court –

(a) where it appears to the Court in which a

proceeding commenced under this Act is pending that

the proceeding should be stayed or dismissed on the

ground that the claim concerned should be

determined by arbitration (whether in Nigeria or

elsewhere) or by a Court of a foreign country; and

(b) where a ship or other property is under arrest in

the proceeding, the Court may, order that the

proceeding be stayed on condition that the arrest

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and detention of the ship or property shall stay or

satisfactory security for their release be given as

security for the satisfaction of any award or judgment

that may be made in the arbitration or in a

proceeding in the Court of the foreign country.

(2) The power of the Court to stay or dismiss a

proceeding commenced under this Act includes power

to impose any condition as is just and reasonable in

the circumstances, including a condition –

(a) with respect to the institution or prosecution of

the arbitration or proceeding in the Court of a foreign

country; and

(b) that equivalent security be provided for the

satisfaction of any award or judgment that may be

made in the arbitration or in the proceeding in the

Court of a foreign country.

(3) Where the Court has made an order under

Subsection (1) or (2) of this Section, the Court may

make such interim or supplementary orders as are

appropriate in relation to the ship or other property

for the purpose of preserving –

(a) the ship or other property; or

(b) the rights of a party or of a person interested in

the ship or other property.

(4) Where –

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(a) a ship or other property is under arrest in a

proceeding;

(b) an award or judgment as mentioned in Subsection

(1) of this section has been made in favour of a party;

and

(c) apart from this section, the award or judgment is

enforceable in Nigeria, then in addition to any other

proceeding that may be taken by the party to enforce

the award or judgment, the party may apply to the

Court in the stayed proceeding for an appropriate

order in relation to the ship or property to give effect

to the award or judgment.”

The conflating of all I have said thus far is that there is

merit in this appeal signified by the success of issue

number one which must be resolved in favour of the

Appellant. The lower Court was not right when it held that

it lacked jurisdiction to entertain the Appellant’s claim on

account of the arbitration clause contained in the Ship

Management Agreement, the contract between the parties.

The said order of the lower Court is hereby set aside and

the act ion f i led by the Appel lant in SUIT NO.

FHC/L/CS/1160/2017 is to be restored to the Cause List of

the lower Court.

Let me at this stage state that I considered the decision of

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this Court in MV PANORMOS BAY vs. OLAM (supra)

relied on by the Appellant. By the doctrine of stare decisis,

the decision of this Court is generally binding on this Court

until overruled by the Supreme Court. There are however

some exceptions. These are:

1) A Court will refuse to follow a decision of its own

which although not expressly overruled cannot in its

opinion stand with a decision of the Supreme Court.

2) A Court is not bound to follow a decision of its own

if given per incuriam.

3) The Court is entitled to decide which of two

conflicting decisions of its own it will follow.

See CAMPTEL INT’L SPA vs. DEXSON LTD (1996) 7

NWLR (PT 459) 170 at 184 and DISU vs. AJILOWURA

(2001) 4 NWLR (PT 702) 76 at 90. In the instant case,

having regard to the facts and circumstances of the case, I

am inclined to follow the decisions of the apex Court in

OBEMBE vs. WEMABOD ESTATES LTD (supra),

MESSRS B. V. SCHEEP vs. M. V. ‘S ARAZ’ and CITY

ENGINEERING vs. FHA (supra) because by necessary

implication, the decision of this Court in MV PANORMOS

BAY vs. OLAM cannot stand as regards the point that an

arbitration Clause ousts the

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jurisdiction of a Court as agreed by the parties in their

Agreement.

In exercise of the general powers of this Court under

Section 15 of the Court of Appeal Act and pursuant to the

provisions of Section 10 of the Admiralty Jurisdiction Act, a

s t a y o f p r o c e e d i n g s o f t h e s a i d S U I T N O .

FHC/L/CS/1160/2017 is hereby ordered pending arbitration

as agreed by the parties in their Agreement. The parties

are to take steps forthwith to commence the arbitration

proceedings in terms of Clause 23 (a) of their Agreement,

the Standard Ship Management Agreement. The

Respondent shall provide adequate security for the

satisfaction of any award that may be made in the

arbitration within thirty (30) days from even date, failing

which the Admiralty Marshall shall effect the restored

order of the lower Court for the arrest of the Respondent

Vessel. The parties are to bear their respective costs of this

appeal.

YARGATA BYENCHIT NIMPAR, J.C.A.: I had the

privilege of reading in advance the judgment just delivered

by UGOCHUKWU ANTHONY OGAKWU, JCA and I am in

complete agreement with the reasoning and conclusion

arrived therein.

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One of the main complaints of the Appellants border on the

fact that by failing to determine its application to strike out

the Respondent’s motion challenging jurisdiction, the lower

Court had breached its fundamental right to fair hearing.

Fair hearing within the context of Section 36 of the 1999

Constitution, has been said to be a trial which ought to be

conducted in accordance with all the legal norms designed

to ensure that justice is done at all cost to all parties. The

principle of fair hearing is that both sides must be given an

opportunity to present their respective cases. The Courts

must observe the fundamental principles of fair hearing as

any breach vitiates the entire process, see OVUNWO &

ANOR V WOKO & ORS (2011) LPELR — 2841 (SC).

The next question that will arise is whether both sides were

given an opportunity to present their case which was

looked into by the Court? Definitely. The lower Court heard

both the Appellant and Respondent’s applications but

decided to determine the Respondent’s application

challenging jurisdiction first considering the fact that if it

does not have jurisdiction, any other step it takes in the

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matter will be an exercise in futility, see NWANKWO V

YAR’ADUA (2010) 12 NWLR (PT 1209) 518 SC. In any

case, like my learned brother, OGAKWU, JCA pointed out, it

is trite that a challenge to jurisdiction can be raised at any

time and in any manner. Consequently, the lower Court was

right in determining the Respondent’s application first and

having found that it had no jurisdiction, it will be an

academic exercise to further determine the Appellant’s

application. Consequently, the lower Court was empowered

to act in the manner it did and I also find the allegation that

there was a breach of fair hearing not made out.

In all, I too see merit in the appeal for reasons of the fuller

consideration made in the lead judgment and also allow it. I

abide by the consequential orders made therein.

ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: I

have had the privilege of reading in draft, the leading

judgment just delivered by my learned brother,

UGOCHUKWU ANTHONY OGAKWU, JCA. I completely

agree with and endorse the reasons and conclusion reached

in the judgment which I hereby adopt as mine.

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Appearances:

Oluwafemi Adenitire, Esq. For Appellant(s)

A. O. Agbola, Esq. (with Ms. N. V. Chinwuba, S. T.Agbaje, Esq., Obiora Okechi, Esq. & Ms. DeborahOke) For Respondent(s)

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