Parties In Arbitration Must Abide By Errors – TheNigerialawyer

The Supreme Court has held that since parties in a contract are
bound by the terms of their contract, they must also be bound by
errors and mistakes they made, condoned and invariably waived.

The apex court made the pronouncement while delivering a
judgement in an appeal emanating from an arbitration dispute
between Dr. Charles Mekwunye and Christian Imoukhuede, wherein the
Court of Appeal had nullified an arbitrary award a tenancy
arbitration agreement between the parties on the basis of an error
in the agreement.

Mekwunye had in 2006 dragged Imoukhuede before an arbitration
panel over a tenancy dispute between them.

After the arbitration panel delivered its judgment in favour of
Mekwunye, Imoukhuede approached the High Court of Lagos to nullify
the arbitrary award which the High Court refused.

He further approached the Court of Appeal seeking to nullify the
decision on several grounds, including that there was an error in
the arbitration agreement.

Imoukhude through his lawyers contended at the lower court, that
while part of the arbitration clause in the tenancy agreement had
stipulated that any dispute between parties must be settled by
Chartered Institute of Arbitrators London, Nigeria branch, there
was no such known body as the only Arbitration body then was
Chartered Institute of Arbitrators, UK, Nigeria branch.

In its decision, the Court of Appeal giving a literally meaning
to the interpretation of the clause, allowed the appeal and
reversed the earlier decision of the arbitration panel affirmed by
the High Court.

But the Supreme Court in a unanimous decision by all five
Justices held that since parties in a contract are bound by the
terms of their contract, they must also be bound by errors and
mistakes they have condoned and waived.

In her concurring judgment, Justice Mary Peter-Odili, said: “The
argument is that the Chartered Institute of Arbitrators, London,
Nigeria Chapter” is non-existent, making the referral to a
non-existent body unenforceable. Indeed, parties are bound by their
contract.

“However, where such terms or expression will not be absurd or
is unambiguous, the intention of the parties is read into the
contract.

“Furthermore, the Respondent was a party to the Tenancy
Agreement and read same before appending his signature or subscribe
to be bound by same. If he knew and believed that Chartered
Institute of Arbitration London, Nigeria Chapter was non-existent,
why did he agree to be bound by same?

“I agree with the interpretation given by the trial court and I
stand by it. Since parties are bound by the terms of their
contracts, they must also be bound by errors and mistakes they have
condoned and waived. The error having been condoned by the
respondent is part and parcel of their contract and shall be
interpreted so by me,” the judge ruled.

On the issue of whether the lower court was right when it held
that two parties to the arbitration agreement must have a say in
the appointment of the arbitration, the apex court held that the
respondent having submitted himself to the arbitration clause,
cannot longer resile out of the decision simply because he is
challenging the appointment of a sole arbitrator which he
subscribed to.

The court held that the respondent conceded to the appointment
of a sole arbitrator by partaking in the arbitration proceeding and
cannot now turn around to challenge the decision of the
arbitrator.

On the issue of whether the lower court has power to set aside
an arbitral award, the apex court held that once all necessary
conditions for the award of cost has been met by the arbitration
panel, no court can nullify such award since parties willingly
submitted themselves for arbitration.

The apex Court then affirmed the arbitrary award compelling
Imoukhuede to pay same to Dr Mekwunye.

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