The Lagos State High Court presided over by Hon. Justice T.A
Oyekan-Abdullai in suit number LD/1910GCM/ 2017 has set aside
the arbitral award of the Arbitral Tribunal of the International
Chamber of Commerce, for offending the principle of natural
justice.
![image](/2020/10/lawreport.jpg")
The matter was instituted by Global Gas & Refinery Limited
against Shell Petroleum Development Company as Defendant and the
judgement of the court was delivered on Tuesday, 25th
day of February,2020.
![image](/2020/10/NWLRland.jpg")
Prior to the case, the parties both entered into a Gas
Processing Agreement (GPA) dated 15th March, 2002 and
according to the GPA, in the event of a dispute, the matter is to
be settled through arbitration.
However, by an originating motion filed on 4th day of
July 2017, the claimant sought for 4 declarations against the
defendant part of which is urging the court to “set aside the final
award by the majority of the ICC Arbitral tribunal in Case
No:20331/TO, and to refuse any recognition and enforcement of the
final award for being contrary to public policy and manifestly
error-laden having caused substantial injustice and resulting in a
grievous miscarriage as a result of the evident misconduct of the
Majority of the Arbitration Tribunal during the arbitration”.
The Claimant/Applicant argued that, at the time of the
arbitration, the president of the tribunal had a relationship with
the respondent which he failed to disclose both to the parties at
the ICC having given an expert opinion as a barrister in a
litigation matter involving the respondent as a party, and referred
the Court to supporting Exhibits, adding that issue of
non-disclosure is significant that, if not addressed can amount to
misconduct because an arbitrator is expected and enjoined to remain
impartial throughout proceedings and must disclose facts to the
parties if there is any cause for such.
He further argued that the Tribunal’s dismissal of their
application for the dissolution of the tribunal on reasons of lost
confidence at their discovery of the said relationship between the
president, respondent counsel, and a co-arbitrator, raised a
question mark on the supposed impartiality of the tribunal, and
therefore constituted misconduct.
On whether or not there was bias or the likelihood of same on
the part of the president, the Claimant/Applicant furnished that by
virtue of the president being a member of the LACIAC Board of
Governors to which the respondent lead counsel, Mr. Babatunde
Fagbohunlu, SAN is the Chairman and a co-arbitrator nominated
by the Respondent’s counsel, Mrs. Doyin Rhodes-Vivour is the Vice
Chair and that the Board was formed during the pendency of the
arbitration, therefore, , bias was inevitable.
Conversely, the Respondent argued that what the President of the
arbitration did was not in connection with the parties in the suit,
and via a tendered Exhibit, argued that the counter affidavit
bearing the exhibits is false and doctored because the president
neither knew nor had a relationship with the Respondent.
He also submitted that the president’s appointment to the board
of LACIAC ought not to be in question because the Lagos Chamber of
Commerce, International and Arbitration Center is a professional
body just like the Institute of Arbitrators. That the body is not
owned by the Respondent Counsel, and so the respondent counsel
doesn’t take decisions alone on the activities and the affairs of
the LACIAC, and urged the court to discountenance the argument.
THE DECISION OF THE COURT
Having listened to the pith and substance of the case advanced
by the parties, firstly, the court noted that in order to
judiciously answer the question “whether or not the suit is of such
merit that can be set aside on merit” recourse must be had to “what
amount(s) to a misconduct on the part of an arbitrator in arbitral
proceedings that may necessitate the setting aside of a final
award”.
In addressing the above, the court quoting OGUNDARE,
J.S.C (of blessed memory) in A. SAVOIA LTD v SONUBI (2000)
LPELR-7(SC) adumbrated thus:
“what is misconduct is, of course, not
defined in the Law nor in the Act. But this Court has, in Taylor
Woodrow (Nig) Ltd. v. Suddentsche Etna-Werk GMBH (1993) 4 NWLR 127,
spelt out some conduct that would amount to misconduct within the
law. Some of these are: (1) where the arbitrator fails to comply
with the terms, express or implied, of the arbitration agreement;
(2) where, even if the arbitrator complies with the terms of the
arbitration agreement, the arbitration makes an award which on
grounds of policy ought not to be enforced; (3) where the
arbitrator has been bribed or corrupted; (4) technical misconduct,
such as where the arbitratormakes 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; (5) where the arbitrator or umpire fails to
decide all the matters which were referred to home; (6) where the
arbitrator or umpire has breached the rules of natural justice; (7)
if the arbitrator or umpire has failed to act fairly towards both
parties, as for example (a) by hearing one party but refusing to
hear the other; or (b) by deciding the case on a point not
put by the parties”
In addition, the Court stated the supporting effect of
Section 29 (2) and 30 (1) of the Arbitration and
Conciliation Act Cap. A18 Laws of the Federation of Nigeria,
2004 to the above , but emphasized that the attitude of
Nigerian Courts in arbitral award is that of non intervention.
However, the Court said that by virtue of
section 34 of the Act,2004, the Court can grant,
intervene only where so provided in the Act, and noted that
the circumstances have been prescribed in sections 2, 8, 23, 29,
30, 31 and 32 of the Act and SPDC v. CRESTAR . INTEGRATED
NATURAL RESOURCES LTD ()2015 LPELR-40034(CA).
Furthermore, the court stressed that from the arguments
canvassed by the parties, the pith of the suit revolves around the
issue of bias of the Tribunal’s president and stated that in order
to be able to bring clarity to same, the question “whether
there was a showing act of impartiality by the arbitrator” must be
answered.
The Court said “Applicant submission bothers on
non-disclosure of the Tribunal President of his involvement in the
expert opinion as the Head of Chambers in Pump Court Chambers, same
involvement was affirmed in another publication, for the Respondent
in another litigation”, and added that “the President of the said
arbitration continued with its role and gave a decision against the
party who laid compliant of bias”.
Meanwhile , the Court however remarked that :
“What is bias or likelihood of bias is not measured by the
subjective impression of the Applicant herein as the aggrieved
party but from objective standard point of a reasonable
man”.
The Court said it is imperative to examine Section
8(1)(2) & (3) of the Arbitration and Conciliation Act Chapter 18
Laws of the Federation of Nigeria, 2004, that specified
the duty of the Tribunal President to disclose if he has any
connection in the circumstances of the case.
The Court held that:
“The duty to disclose by the arbitrator goes beyond the
rightness or wrongness of their opinion, it is indeed on the
impartiality, bias free proceedings, and it subsists throughtout
the proceedings unless nhe had previously disclosed any such
circumstances which is not the case in the instant suit.”
However, the Court ruled that “the President of the
arbitrator must exercise a duty of care towards all the cases that
are before them. Therefore, it does not lie in the Arbitrators to
raise a defence or put the process in ridicule. What is expected
was to have simply recuse himself, even when the system absolved
him. This is the standard and nothing more is required.”
“To draw a distinction between a parent company and the
subsidiary company is to miss the point in its absolute
terms. As the principle of bias goes beyond the issue of parent and
subsidiary company. It is an attack on the proceeding and the
impartiality of the arbitrators concerned”, the Court
added.
Besides, the Court noted that the Tribunal ought to have
recused itself, as “it beefs me hollow why the learned gentleman ,
even though allowed to proceed to lead the panel, ought to have
graciously throw in the towel”.
Consequently, the Court ruled:
“It is the Court’s view that, the President of the panel did
not comply with expected standard required of an arbitrator to
disclose relationship with any of the parties in this suit, as
a result, it affected all decisions reached in this case by
the and I so hold”.
Also, the Court likened the case to that of the recent
Nigerian case of ATIKU .V. BUHARI (2019) where the
chairman of the Presidential Election Petition Tribunal in
the person of the then Court of Appeal President, Hon.
Justice Zainab Bulkachuwa (retired) had to bow out and allow Hon.
Justice Garba (JCA) as he then was of the Lagos Division to
chair same.
However, the court found itself incapable of determining the
issue raised on minority and majority award, and whether the award
manifests error on the face based on grounds of
jurisdiction.
The Judge said : “ I am of the humble opinion that, this
court lacks jurisdiction to intervene and decide on this issue on
the merit. Since the Supreme Court has said that something cannot
be put on nothing as established in the case of
MADUKOLU & ORS v. NKEMDILIM (1962)
LPELR-24023(SC).”
In the whole, the Court adjudged the Claimant’s suit
to be meritorious and set aside the award adding that “the tribunal
president having not disclosed his relationship with the respondent
as exhibited…..falls short of the standard required and therefore a
solid ground to set aside this award.”
The Lagos State High Court presided over by Hon. Justice T.A
Oyekan-Abdullai in suit number LD/1910GCM/ 2017 has set aside
the arbitral award of the Arbitral Tribunal of the International
Chamber of Commerce, for offending the principle of natural
justice.
The matter was instituted by Global Gas & Refinery Limited
against Shell Petroleum Development Company as Defendant and the
judgement of the court was delivered on Tuesday, 25th
day of February,2020.
Prior to the case, the parties both entered into a Gas
Processing Agreement (GPA) dated 15th March, 2002 and
according to the GPA, in the event of a dispute, the matter is to
be settled through arbitration.
However, by an originating motion filed on 4th day of
July 2017, the claimant sought for 4 declarations against the
defendant part of which is urging the court to “set aside the final
award by the majority of the ICC Arbitral tribunal in Case
No:20331/TO, and to refuse any recognition and enforcement of the
final award for being contrary to public policy and manifestly
error-laden having caused substantial injustice and resulting in a
grievous miscarriage as a result of the evident misconduct of the
Majority of the Arbitration Tribunal during the arbitration”.
The Claimant/Applicant argued that, at the time of the
arbitration, the president of the tribunal had a relationship with
the respondent which he failed to disclose both to the parties at
the ICC having given an expert opinion as a barrister in a
litigation matter involving the respondent as a party, and referred
the Court to supporting Exhibits, adding that issue of
non-disclosure is significant that, if not addressed can amount to
misconduct because an arbitrator is expected and enjoined to remain
impartial throughout proceedings and must disclose facts to the
parties if there is any cause for such.
He further argued that the Tribunal’s dismissal of their
application for the dissolution of the tribunal on reasons of lost
confidence at their discovery of the said relationship between the
president, respondent counsel, and a co-arbitrator, raised a
question mark on the supposed impartiality of the tribunal, and
therefore constituted misconduct.
On whether or not there was bias or the likelihood of same on
the part of the president, the Claimant/Applicant furnished that by
virtue of the president being a member of the LACIAC Board of
Governors to which the respondent lead counsel, Mr. Babatunde
Fagbohunlu, SAN is the Chairman and a co-arbitrator nominated
by the Respondent’s counsel, Mrs. Doyin Rhodes-Vivour is the Vice
Chair and that the Board was formed during the pendency of the
arbitration, therefore, , bias was inevitable.
Conversely, the Respondent argued that what the President of the
arbitration did was not in connection with the parties in the suit,
and via a tendered Exhibit, argued that the counter affidavit
bearing the exhibits is false and doctored because the president
neither knew nor had a relationship with the Respondent.
He also submitted that the president’s appointment to the board
of LACIAC ought not to be in question because the Lagos Chamber of
Commerce, International and Arbitration Center is a professional
body just like the Institute of Arbitrators. That the body is not
owned by the Respondent Counsel, and so the respondent counsel
doesn’t take decisions alone on the activities and the affairs of
the LACIAC, and urged the court to discountenance the argument.
THE DECISION OF THE COURT
Having listened to the pith and substance of the case advanced
by the parties, firstly, the court noted that in order to
judiciously answer the question “whether or not the suit is of such
merit that can be set aside on merit” recourse must be had to “what
amount(s) to a misconduct on the part of an arbitrator in arbitral
proceedings that may necessitate the setting aside of a final
award”.
In addressing the above, the court quoting OGUNDARE,
J.S.C (of blessed memory) in A. SAVOIA LTD v SONUBI (2000)
LPELR-7(SC) adumbrated thus:
“what is misconduct is, of course, not
defined in the Law nor in the Act. But this Court has, in Taylor
Woodrow (Nig) Ltd. v. Suddentsche Etna-Werk GMBH (1993) 4 NWLR 127,
spelt out some conduct that would amount to misconduct within the
law. Some of these are: (1) where the arbitrator fails to comply
with the terms, express or implied, of the arbitration agreement;
(2) where, even if the arbitrator complies with the terms of the
arbitration agreement, the arbitration makes an award which on
grounds of policy ought not to be enforced; (3) where the
arbitrator has been bribed or corrupted; (4) technical misconduct,
such as where the arbitratormakes 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; (5) where the arbitrator or umpire fails to
decide all the matters which were referred to home; (6) where the
arbitrator or umpire has breached the rules of natural justice; (7)
if the arbitrator or umpire has failed to act fairly towards both
parties, as for example (a) by hearing one party but refusing to
hear the other; or (b) by deciding the case on a point not
put by the parties”
In addition, the Court stated the supporting effect of
Section 29 (2) and 30 (1) of the Arbitration and
Conciliation Act Cap. A18 Laws of the Federation of Nigeria,
2004 to the above , but emphasized that the attitude of
Nigerian Courts in arbitral award is that of non intervention.
However, the Court said that by virtue of
section 34 of the Act,2004, the Court can grant,
intervene only where so provided in the Act, and noted that
the circumstances have been prescribed in sections 2, 8, 23, 29,
30, 31 and 32 of the Act and SPDC v. CRESTAR . INTEGRATED
NATURAL RESOURCES LTD ()2015 LPELR-40034(CA).
Furthermore, the court stressed that from the arguments
canvassed by the parties, the pith of the suit revolves around the
issue of bias of the Tribunal’s president and stated that in order
to be able to bring clarity to same, the question “whether
there was a showing act of impartiality by the arbitrator” must be
answered.
The Court said “Applicant submission bothers on
non-disclosure of the Tribunal President of his involvement in the
expert opinion as the Head of Chambers in Pump Court Chambers, same
involvement was affirmed in another publication, for the Respondent
in another litigation”, and added that “the President of the said
arbitration continued with its role and gave a decision against the
party who laid compliant of bias”.
Meanwhile , the Court however remarked that :
“What is bias or likelihood of bias is not measured by the
subjective impression of the Applicant herein as the aggrieved
party but from objective standard point of a reasonable
man”.
The Court said it is imperative to examine Section
8(1)(2) & (3) of the Arbitration and Conciliation Act Chapter 18
Laws of the Federation of Nigeria, 2004, that specified
the duty of the Tribunal President to disclose if he has any
connection in the circumstances of the case.
The Court held that:
“The duty to disclose by the arbitrator goes beyond the
rightness or wrongness of their opinion, it is indeed on the
impartiality, bias free proceedings, and it subsists throughtout
the proceedings unless nhe had previously disclosed any such
circumstances which is not the case in the instant suit.”
However, the Court ruled that “the President of the
arbitrator must exercise a duty of care towards all the cases that
are before them. Therefore, it does not lie in the Arbitrators to
raise a defence or put the process in ridicule. What is expected
was to have simply recuse himself, even when the system absolved
him. This is the standard and nothing more is required.”
“To draw a distinction between a parent company and the
subsidiary company is to miss the point in its absolute
terms. As the principle of bias goes beyond the issue of parent and
subsidiary company. It is an attack on the proceeding and the
impartiality of the arbitrators concerned”, the Court
added.
Besides, the Court noted that the Tribunal ought to have
recused itself, as “it beefs me hollow why the learned gentleman ,
even though allowed to proceed to lead the panel, ought to have
graciously throw in the towel”.
Consequently, the Court ruled:
“It is the Court’s view that, the President of the panel did
not comply with expected standard required of an arbitrator to
disclose relationship with any of the parties in this suit, as
a result, it affected all decisions reached in this case by
the and I so hold”.
Also, the Court likened the case to that of the recent
Nigerian case of ATIKU .V. BUHARI (2019) where the
chairman of the Presidential Election Petition Tribunal in
the person of the then Court of Appeal President, Hon.
Justice Zainab Bulkachuwa (retired) had to bow out and allow Hon.
Justice Garba (JCA) as he then was of the Lagos Division to
chair same.
However, the court found itself incapable of determining the
issue raised on minority and majority award, and whether the award
manifests error on the face based on grounds of
jurisdiction.
The Judge said : “ I am of the humble opinion that, this
court lacks jurisdiction to intervene and decide on this issue on
the merit. Since the Supreme Court has said that something cannot
be put on nothing as established in the case of
MADUKOLU & ORS v. NKEMDILIM (1962)
LPELR-24023(SC).”
In the whole, the Court adjudged the Claimant’s suit
to be meritorious and set aside the award adding that “the tribunal
president having not disclosed his relationship with the respondent
as exhibited…..falls short of the standard required and therefore a
solid ground to set aside this award.”