Is Nigeria In A CUL-DE-SAC? (Part 3) By Mike Ozekhome, SAN – TheNigerialawyer

INTRODUCTION

Last week, we saw how proponents and supporters of this
government claimed to have discovered a “silver
bullet” to shut down the $9 billion debt legally. How
correct is their assertion? Only time will tell. Today, we shall be
looking at some of their propositions.

LEGAL ISSUES ARISING

DISCOVERY OF “SILVER BULLET” TO SHOOT DOWN $9.6BN
P&ID CLAIM AND PRIVATE INTERNATIONAL LAW
(Continues)

“Taking a close look at the Gas Supply and Processing Agreement
(GSPA), which the two parties to the contract entered into, it will
be deduced that some foreign elements where introduced into the
contract, thereby, bringing in elements of Private International
Law into the contract, aside the fact that parties in the contract
already introduced the foreign element into the contract by their
involvement. Clause 20 of the GSPA provided (a) the
agreement to be construed in accordance with the laws of Nigeria
(b) in the event of a dispute over the interpretation or
performance of the agreement, which cannot be resolved amicably,
either party will serve on the other a notice of arbitration (c)
the Arbitration award shall be final and binding upon the parties
and (d) the venue of the arbitration shall be London, England or
otherwise as agreed by the parties.”

“From the above clause, it is crystal clear that the GSPA only
stated that London, England should serve as the forum convenience
for resolving disputes amicably but never stated that UK laws
should apply in interpreting the agreement; rather it went further
to state that the agreement is to be construed in accordance with
the laws of Nigeria. Consequently, the applicable law in the
circumstances is Nigerian Law, not the UK law.”. This is the
“silver bullet” the protagonists are claiming. But, is that the
law? Let us take a look at certain concepts to arrive at a just
opinion.

NULLUS COMMODUM CAPERE POTEST DE INJURIA SUA
PROPRIA (NO ONE SHOULD BE
PERMITTED TO PROFIT BY HIS OWN WRONG OR DEFAULT)

The above maxim is applicable in this particular case. The
proposition is that a man will not be allowed to take advantage of
his own wrong. This is no doubt a very salutary one and one which
the court would wish to endorse. Most prominent people in
government have argued that the agreement between the two parties
was fraudulent and that the contract did not follow the right
approval channels. Question: can the federal government of Nigeria
be allowed to benefit from its own wrong or default or disobey an
arbitral award on grounds of fraud or illegal approval of contract
when it consented to the jurisdiction of the court and did not
challenge the notice of arbitration, but instead commenced
negotiation on the quantum of damages to be paid?

In F.B.N. Plc v. Songonuga (2007) 3 NWLR (Pt. 1021) 230
at 280 paras. B – D; 266 paras. B – E (CA), the Court of
Appeal, Per. Garba J.C.A., succinctly put the position as
follows:

“…..Be that it may, it would be quite inequitable for
the respondent, a lawyer conscious and fully aware or presumed to
be, of provisions of the Act and its legal implications, willingly
and willfully, eyes wide opened, to be allowed now to claim that
what he did and caused the appellant to rely and act upon, was
void. More inequitable for him is to claim any benefit from his own
failure to discharge an obligation imposed by section 22 (1) of the
Act on him yet to seek and obtain the consent of the Governor in
his relationship with the appellant. The courts have consistently
refused to allow people like the respondent to claim any benefits
from their own deliberate acts of unfairness by trying to exploit
or hide under any absurd technicalities there may be in the law.
The senses and sensibilities of equity, fair play and fairness are
always protected and enforced by the courts in all legal agreements
or relationship freely entered into or created by the parties
themselves. The duty to do so in this appeal could not be more
compulsive.”

Similarly, in STANBIC IBTC BANK v. LONGTERM GLOBAL
CAPITAL LTD & ORS (2018) LPELR-44053(CA), the
intermediate court further held that:

“…..The Appellants cannot in good conscience, equity and
even in law be allowed to take advantage of their own wrong. I
deprecate it as morally despicable. They cannot approbate and
reprobate at the same time. See Sosan v. H.F.P. Eng. (Nig.) (2003)
LPELR-7232 (CA). See also Kentus Chemical and Allied Products Ltd
v. UBA Plc (2012) LPELR-9836 (CA); Buswell v. Goodwin (1971) 1 All
ER 418.” Per GEORGEWILL, J.C.A. (Pp. 35-36, Paras.
E-E)”.

Question: can the Nigerian government take advantage of its
wrong to repudiate a contract in which an arbitral award has been
made, with the government already negotiating the quantum of
damages? I think not.

SETTING ASIDE AN ARBITRAL AWARD 

Authorities no doubt abound in which Nigerian courts have
pronounced that acts of misconduct could lead to the setting aside
of an arbitral award. In the case of TRIANA LIMITED v.
UNIVERSAL TRUST BANK PLC (2009) LPELR-8922(CA), the
intermediate court imprimatured as follows:

“The word “misconduct” has not been defined in the Act or what
would amount to misconduct on the part of an arbitrator to
necessitate the setting aside of his award. But the Court is not
without guidance. The apex court in Taylor Woodrow Nigeria Limited
v. S.E.G.M.B.H. (Supra) having had recourse to the common law has
determined what constitutes misconduct. Several instances have been
listed though it cannot be said to be exhaustive. I think each case
should be treated based on its peculiar facts to determine whether
or not an arbitrator has misconducted himself. Where an Arbitrator
had done anything either expressly or impliedly for which a
reasonable by-stander would conclude that he was not fair to both
parties, I think such act of the Arbitrator would qualify as a
misconduct. For the avoidance of doubt, the following instances
enunciated in the above case will certainly constitute acts of
misconduct, that is to say:- (i) where the arbitrator fails to
comply with the terms, express or implied, of the arbitration
agreement; (ii) where, even if the arbitrator complies with the
terms of the arbitration agreement, the arbitrator makes an award
which on grounds of public policy ought not to be enforced; (iii)
where the arbitrator has been bribed or corrupted; (iv) technical
misconduct, such as where the arbitrator makes a mistake as to the
scope of the authority conferred by the agreement of reference.
This however does not mean that every irregularity of procedure
amounts to misconduct; (v) where the Arbitrator or umpire fails to
decide all the matters which were referred to him; (vi) where, by
his award, the Arbitrator or umpire purports to decide matters
which have not in fact been included in the agreement or reference,
for example:- (a) where the award contains unauthorized directions
to the parties; or (b) where the arbitrator has power to direct
what shall be done but his directions affect the interests of 3rd
parties; or (c) where the Arbitrator decided as to the parties’
rights, not under the contract upon which the arbitration had
proceeded, but under another contract. (vii) if the award is
inconsistent, or is ambiguous or there is some mistake of fact
which mistake must be either admitted or at least clear beyond any
reasonable doubt; (viii) where the umpire or Arbitrator refuses to
state a special case for himself or allow an opportunity of
applying to the court for an order directing the statement of a
special case; (ix) where the Arbitrator or umpire delegates any
part of his authority, whether to a stranger or to one of the
parties, or even to a co-arbitrator; (x) where the Arbitrator or
umpire accepts the hospitality offered with the intention of
influencing his decision; (xi) where the Arbitrator or umpire
acquires an interest in the subject – matter of the reference, or
is otherwise an interested party; (xii) where the Arbitrator or
umpire takes a bribe from either party. (xiii) where the Arbitrator
or umpire has breached the rules of natural justice…” (To be
continued).

THOUGHT FOR THE WEEK

“Experience hath shewn, that even under the best forms of
government those entrusted with power have, in time, and by slow
operations, perverted it into tyranny.” (Thomas
Jefferson).

LAST LINE

I thank Nigerians for always keeping faith with the Sunday
Sermon on the Mount of the Nigerian Project, by Chief Mike
Ozekhome, SAN, OFR, FCIArb., Ph.D, LL.D. I enjoin you to look
forward to next week’s treatise.