Can an arbitral tribunal continue with proceedings in the absence of a party who was notified but failed to appear ?

IKERE EKITI IBUKUN OLUWA TEACHERS COOPERATIVE MULTIPURPOSE SOCIETY LTD v. AJIBUA (2019) LPELR-48493 (CA)

FACTS OF THE CASE
The respondent was a paid secretary of the appellant. The respondent was found to have embezzled the sum of N4, 301,010 and which he admitted to in a statement dated November 7, 2012. The respondent subsequently made a promissory note on December 20, 2012, to pay N1, 000,000 by April/May 2013. Due to the respondent’s failure to honour the Promissory note, the appellant instituted Suit No: HCR/11/2013 against the respondent.

At the end of the trial in the said suit, the trial court dismissed the suit for lack of jurisdiction.

The said decision was not appealed by the appellant, instead, the appellant applied to the Director of Cooperative Services, Ekiti State, to settle the dispute between the appellant and the respondent in accordance with Section 52 of the Cooperative Societies Law of Ekiti State 2012. Based on the appellant’s letter, the Director of Cooperatives sent out Arbitration notice to both parties. While the appellant honoured the Arbitration notice, the respondent neglected the notice and refused to submit himself to the Arbitration Panel. A final notice dated June 25, 2016, was again served on the respondent and yet he refused to appear. At the end of the Arbitration process, an Arbitral Award was made in favour of the appellant.

In accordance with Part VIII Section 52(7) of the Cooperative Societies Law of Ekiti State 2012, the appellant filed the instant suit leading to this appeal amongst others an order of execution of the Arbitration Award against the debtor for the recovery of N4, 634,180. In response, the respondent filed a counter-affidavit. The appellant further filed a further and better affidavit. The High Court of Ekiti State in delivering its ruling dismissed the appellant’s motion on grounds that there is still a subsisting judgment on the subject matter, which struck out an earlier suit of the appellant for want of jurisdiction. Dissatisfied with the decision, the appellant appealed to the Court of Appeal.

ISSUES FOR DETERMINATION
The Appellant formulated the following issues for determination: 1. Whether the lower Court was right by refusing the Application made for the execution of the Arbitral Award basing his decision on the earlier judgment. 2. Whether the lower Court was right by not granting the enforcement of the Arbitral Award because it amounted to sitting on an Appeal over an earlier judgment of the other Court.

The respondent formulated a sole issue for determination viz: In view of the extant and applicable laws, the affidavit evidence and oral submissions on record, can it be rightly said that the trial Court was right by refusing the Appellant’s prayers as contained in motion no: HCR/48M/2017, considering the earlier judgment of the Court of co-ordinate jurisdiction in suit no: HCR/11/2013.

APPELLANT’S COUNSEL SUBMISSION
On issue 1, learned counsel for the appellant submitted that the trial judge was wrong in dismissing the appellant’s motion for enforcement of the Arbitral Award on grounds that it lacked jurisdiction. He submitted that the trial court in holding that decision relied on the judgment in suit No: HCR/11/2013. He submitted that the trial court ought not to have relied on the judgment in Suit No. HCR/11/2013 as the facts/claims in the said suit are different from the instant suit leading to this appeal. Counsel submitted that the instant suit leading to this appeal, which is on the enforcement of an Arbitral Award dated October 25, 2016, is a separate action, which ought to have been considered by the trial court independently on its own merit. He referred to Section 52 (7) of the Cooperative Societies Law of Ekiti State.

On issue 2, learned counsel for the appellant submitted that the trial court was wrong in refusing to grant the appellant’s motion for the enforcement of the Arbitral award on basis of the decision in Suit No: HCR/11/2013. It is the contention of counsel that subject matter in Suit No: HCR/11/2013 wherein the trial court held that the court lacked jurisdiction is different from this instant suit leading to this appeal. Thus, there was no need to vacate the order in suit No: HCR/11/2013 before filing the application to enforce the Arbitral Award.

RESPONDENT’S COUNSEL SUBMISSION
Learned counsel for the respondent submitted that contrary to the contention of counsel for the appellant, the issues and subject matter in Suit No. HCR/11/2013 and the instant suit leading to this appeal (i.e. Suit No: HCR/48M/2017) are the same. He submitted that there is a valid and subsisting judgment in Suit No: HCR/11/2013 (wherein the trial Court declined jurisdiction). He further submitted that the appellant having failed to appeal or comply with the said judgment, the trial Court in Suit No: HCR/48M/2017 was right in refusing the appellant’s application for enforcement. It is the contention of counsel that the appellant having failed to appeal or comply with the judgment in Suit No: HCR/11/2013, the arbitration proceeding and award is illegal.

Counsel further submitted that assuming the arbitration proceeding was properly conducted, the appellant’s motion for enforcement was incompetent as it did not comply with the provisions of Order 39 Rule 3 (1 & 2) of the High Court of Ekiti State Civil Procedure Rules, 2011 and Section 31 (1 & 2) and 51 (1 & 2) of the Arbitration and Conciliation Act, Cap. A18, LFN 2004. It is the contention of counsel that by the said provisions the appellant ought to have attached in its application for enforcement of arbitral award the original arbitration agreement signed by the parties in writing or a duly certified copy thereof and the duly authenticated original award or a duly certified copy thereof which they failed to do. He submitted that the appellant only attached a photocopy and not a certified copy of the Arbitral Award, hence their application in Suit No: HCR/48M/2017 was incompetent. He cited the case of EBOKAN V EKWENIBE & SONS TRADING CO (2001) 2 NWLR (Pt 696) 31.
RESOLUTION OF ISSUES

Determining the appeal, the court held as follows:
“When a court lacks jurisdiction as the lower court held, there is nothing remaining for the court to do other than to strike out the suit. Once a court lacks jurisdiction, a party cannot use any statutory provision or Common Law principle to impose jurisdiction because the absence of jurisdiction is irreparable in law. The matter ends there and the only procedural duty of the court is to strike it out. Thus, the fact that a judgment is obtained by or tainted with fraud cannot be used as the basis for conferring jurisdiction to entertain a matter, no amount of successful case made out of fraud can resuscitate or rescue jurisdiction. The only valid way is to file the action in a court of competent jurisdiction. See UMANAH VS ATTAH (2006) 17 NWLR PT. 1009 PG. 503 INYANG VS ETUK (2012) LPELR 8483, ODOFIN VS AGU (1992) LPELR 2225 LAKANMI VS ADENE (2003) LPELR 1750, A.G. LAGOS STATE VS AGF (2014) LPELR 22701.

The lower court rightly struck out the suit since it held it had no jurisdiction. Where the court holds that it has no jurisdiction to try the suit before it, what options are left for the litigant, where a suit is merely struck out by a court without determining it on the merit? The plaintiff still reserves the option of either appealing against the said judgment/ruling or instituting a fresh suit. TSEMWAN VS GOV. OF PLATEAU STATE (2012) LPELR 7922, PANALPINA WORLD TRANSPORT (NIG) LTD VS. S. B. OLANDEEN INTERNATIONAL (2010) LPELR 2902. PDP VS. ASADU (2016) LPELR 41007.

The appellant in this case as stated above had the option to appeal or to institute a fresh suit in a court of competent jurisdiction as advised by the learned trial Judge in the court below.
Therefore, the appellant, in this case, had an option to either appeal against the judgment of the court that lacked jurisdiction or to institute a fresh action in the appropriate court. The appellant thereafter approached the director of Co-operative, Ekiti State for settlement of the dispute between the parties.”

As regards the proceedings of the Arbitral Tribunal, the Court held as follows: “An Arbitral Tribunal must give each party an equal opportunity to present its case and reply to the opponent’s case. The respondent, in this case, failed to appear before the Arbitral Tribunal. However, the law empowers the Arbitral Tribunal to continue with the arbitral proceedings in the absence of a party in two circumstances. Where a party fails to attend or be represented at a hearing and where a party fails to submit any written submissions in documents. In order to give the absent or non-participating parties a reasonable opportunity, the Arbitral Tribunal should ensure that it has given that party sufficient notice that it intends to proceed with the arbitration despite that party’s absence or non-participation.

The respondent had not complained about the Arbitral Tribunal or the mode at which it conducted its affairs concerning this dispute. The Arbitral Tribunal had done what it is expected of it. That is inviting the respondent twice. The panel only owes the parties a duty to invite them. It cannot force the parties to attend the tribunal sittings. See ZUOKEMEFA VS OBIPAN CO LTD (2010) LPELR 5105, where Eko JCA (as he then was) held; “The essence of hearing notice is for the party or parties to be aware of the date their matter was adjourned to by the Court and for them to arrange to be present, if they want, at the adjourned date. A party represented by counsel is deemed to be aware of the adjourned date if the counsel representing him is aware of the adjourned date. NIGERIA NAVY VS. IRONBAR (2017) LPELR 43528 N.U.T. TARABA VS. REV. SARDUANA HABU (2018) LPELR 44057.”

The court noted that contrary to the respondent(s) submission, this appeal is not an extension of the suit in the lower Court HCR/11/2013, that the appellant had taken the option of instituting a fresh suit with the Arbitral Tribunal subject to the Co-operative Societies Law of Ekiti State 2012 and the appellant after the Tribunal had made its award, the appellant approached the High Court for its enforcement. The court held that the High Court of Ekiti State has jurisdiction in civil suits and therefore had jurisdiction to give orders for the enforcement of the Arbitral Award. The court held further that the judgment in HCR/11/2013 cannot affect the enforcement of this Arbitral Award. Both cases are different in terms of subject matters. In HCR/11/2013 the subject matter as the court held can only be heard in the National Industrial Court (NIC). However, the enforcement of Arbitral Award is a different issue altogether.

HELD
In a unanimous decision, the appeal was found meritorious and was thus allowed. The ruling of the trial court was set aside.

Appearances:
A. O. Okeya, Esq., Dr. A. A. Ojo, Esq.,
B. I. Ogunsemi, Esq. and S.C. Odofin
-For Appellant(s)

Ebenezer Gbenga Alabadan, Esq. with him,
Adefisayo Oyedeji, Esq. and Taiwo Olatunji, Esq.
-For Respondent(s)
Compiled by LawPavilion