Taking steps frustrates Arbitration in Nigeria –  kayode Omosehin Esq.

Taking steps frustrates Arbitration in Nigeria – kayode Omosehin Esq.

Preliminary View
Arbitration is an old
dispute resolution mechanism. Some authors have traced its adoption to the
reign of King Solomon in the Bible. It is recorded that the dispute between the
two women over the living son was resolved by Kind Solomon in a manner consistent
with arbitral proceedings. Modern arbitration has proved useful in many
respects in commercial and industrial dispute settlement. Arbitration is partly
regulated by law (in terms of form and procedure), it is however largely based
on agreement by parties.

Arbitration agreement
simply implies that parties shall resolve any dispute arising from their
agreement by an arbitral panel and be bound by the decision from resolution.
When parties freely enter into an arbitration agreement, either of the parties
cannot resolve a dispute by resorting to a regular court. Where a party sues in
court, the other party can object to the suit and pray that the judicial
proceedings be stayed (i.e. put on hold) and urge the court to refer the
dispute to arbitration in accordance with the agreement of both parties.
However, agreement on
arbitration, like other private arrangements, may suffer failure from
unenforceability in some circumstances. Such circumstances are only called into
question when the court has to determine the defendant’s objection to the suit
or application for stay of judicial proceedings in order to enable parties
settle their dispute by arbitration in accordance with their agreement. One of
such circumstances is when the defendant “takes a step” in the judicial
proceedings rather than objecting or before objecting to the suit. In the said
circumstance, the defendant would be deemed to have taken steps and as such has
waived his right to insist on the arbitration agreement. The court would not
recognize the agreement that dispute be resolved by arbitration. What
constitutes these “steps” has however not been a subject of a settled law in
the Nigeria.
It would appear that the
decision of a court on the question of what amounts to taking steps will turn
of the peculiarities of the facts of each case. The determining factor is
whether the step taken is so clear as to amount to a total waiver or
abandonment of the right to insist on arbitration agreement. The foregoing will
ultimately turn on the following:
  • (a) the nature of the process (if any)
    filed by the defendant or any other act or conduct undertaken by the
    defendant before raising the objection on ground of arbitration agreement
    and/or applying for a stay of proceedings; and
  • (b)  the inconsistency of any
    such step taken with the application for stay of proceedings to such
    extent as to make the court to conclude that the right to apply for stay
    of proceedings ought to be deemed to have been waived.
There is an uncertainty in
the state of the law. The misfortune created by uncertainty in the state of the
law appears to have stemmed from the blanket pronouncement of Fatai-Williams
JSC in the case of Obembe v. Wemabod Estates to the effect that “A
party who makes any application whatsoever to the court, even though it be
merely for application for extension of time, takes a step in the proceedings”
A review of the line of
subsequent cases would provide insights into the misunderstanding of the facts
and decision in the Obembe’s case leading to the pronouncement made by
Fatayi-Williams CJN.
The First Step Taken
The checkered history of
the concept of taking steps before making an application for stay of
proceedings in Nigerian courts began with the case of Obi Obembe v. Wemabod
Estates Ltd. (1977) All NLR 130
. If there was any earlier Nigerian case on
the point, it was neither referred to nor considered in the Obembe case. 
In the Obembe case,
the appellant sued the respondent in the High Court of Lagos State for wrongful
termination of appointment as a consulting engineer claiming balance of fees
and reimbursable expenses for engineering work done in respect of a building
project for the respondent. The disagreement arose from their differences in
the quantity of steel recommended by the appellant for the project. The amount
claimed was based partly on the scale of fees laid down in a booklet published
by the Association of Consulting Engineers in London (Exhibit 3).
The respondent defended
the suit and did not file any motion for stay of proceedings even though clause
17 in part 11 of Exhibit 3 contained reference to arbitration in case of
dispute. In the judgment of the High Court, the appellant’s case was dismissed
on the ground that the appellant did not prove his case as he did not lead any
evidence or put in any document to support his case. However, the judge went
further to observe that even if the appellant succeeded in proving the amount
claimed, he (the judge) would have been unable to enter judgment in his favour
in view of clause 17 in part 11 of Exhibit 3.
On appeal to the Supreme
Court, it was held that the lower court was in error to have made the
observation. It is in the judgment of the Supreme Court that Fatayi-Williams
CJN made the general statement that has generated the confusion in the state of
the law regarding what constitutes steps before making application for stay of
proceedings pending arbitration. His lordship said at page 141 that:
“In order to get a stay, a
party to submission must have taken NO step in the proceedings. A party who
makes any application whatsoever to the court, even though it be merely for
application for extension of time, takes a step in the proceedings. Delivery of
a statement of defence is also a step in the proceedings.”

(Emphasis mine)
It is consoling, at least
for the purpose of permitting a distinction between the Obembe case and
other cases, that the Supreme Court itself stated the peculiarities of the Obembe’s
to indicate the limited usefulness that the statement of Fatayi-Williams
CJN can serve in determining what constitutes steps in a proceedings when the
court observed at page 141 that:
“No stay was asked for the
defendants/respondents after they were served with the writ of summons. On the
contrary, they accepted service of the statement of claim, filed their own
statement of defence, testified in their defence, and took part in the
Other Steps Taken So Far
It is important to review
few of the cases in which the courts have had opportunity to determine what
constitute steps in a judicial proceedings to defeat the right of a defendant
to insist that the dispute in a judicial proceedings be referred to
K.S.U.D.B. v. Fanz Construction Ltd
(1990) 4 NWLR (Pt. 142) 1.
On the day this case came
up in Court, the defendant’s counsel applied to Court for an order of pleadings
and the Court ordered pleadings to be filed, giving plaintiff twenty-one (21)
days and defendant forty (40) days as requested by counsel. The Plaintiff filed
a statement of claim accordingly. Thereafter the defendant applied for stay of
proceedings. The application was rightly refused.
Fawehinmi Construction Co. Ltd. v. O.
A. U [1998] 6 NWLR (Pt. 553) 171.
In 1998, the Supreme Court
had a golden opportunity to lay down the rule and correct the palpable error
that may arise from the wholesale adoption of the blanket judicial statement of
Fatayi-Williams CJN in the Obembe case. The opportunity arose in Fawehinmi
Construction Co. Ltd. v. O. A. U.
But rather than overruling itself, the
Supreme Court towed the easier path of distinguishing the Obembe case
from the Fawehinmi case and held that the Obembe case has no
application to the case before it, thus, living the state of the law hazy and
susceptible to erratic interpretations of the sweeping statement of
Fatayi-Williams CJN in Obembe case.
In the Fawehinmi
case, the appellant (as plaintiff) took out a writ of summons against the
respondent (as defendant) claiming damages for breach of contract and wrongful detention
of its plants and machinery. On the same day the writ of summons was filed, the
appellant also filed a motion for mandatory injunction compelling the release
of its plants and machinery which motion was fixed for hearing on 3rd June
1987. On 25th May 1987, the respondent filed a motion for stay of proceedings
pending reference to arbitration in accordance with Clause 35 of the contract
between the parties. The motion for stay of proceedings was argued and was
later dismissed. Thereafter, the Court adjourned for hearing of the substantive
The appellant filed a
Statement of Claim and served same on the respondent. The respondent did not
file any Statement of Defence but rather it raised the issue that the suit was
not properly before the Court on ground that Section 46 of the University of
Ife Edict on pre-action notice was not complied with. The High Court overruled
the objection holding that the respondent had waived his right by taking steps
in the proceedings. The respondent’s appeal to the Court of Appeal was upheld
and the appellant’s suit was struck out by the Court of Appeal. The appellant’s
appeal to the Supreme Court was refused. 
It is noteworthy that,
though the defendant in this suit went beyond arbitration agreement by invoking
statutory provision in order to make the suit incompetent, the Supreme Court
nonetheless held that the trial court ought to have upheld the objection to the
suit on ground that the plaintiff did not comply with the arbitration clause in
their contract.
On what amounts to “taking
a step in a proceeding
”, the Supreme Court held at pages 183 – 184 as
“Now by appearing before
the trial in a court to raise preliminary issue of clause on arbitration to be
resorted to first before the trial in a court of law, could the defendant be
said to have waived its right? When parties enter into agreement and there is
an arbitration clause whereby the parties must first go for arbitration before
trial in Court it is natural for the defendant in a case where the other party
has filed a suit to ask for stay of proceedings pending arbitration. That does
not amount to submission to trial. In the case where such application is
refused the next step is to invoke a statutory right where it exists if that
right will make the suit incompetent. In the present case, s. 46(1) of the
Edict, (supra) was invoked by the defendant and the learned trial judge held it
was too late and that the defendant had waived its right. The right under
s.46(1) is very wide. Waiver is not all that simple, appearance by way of
demurrer is not enough to amount to waiver. When party has a right whether by
way of agreement or under statute he can exercise it at the earliest time and
can equally waive it if the statutory right is not absolute and mandatory. The
waiver must be clear and unambiguous like allowing all evidence to be taken or
even decision given before challenging the hearing. It will then be shown that
the party, deliberately refused to take advantage of the right when it availed
him. Such failure to take advantage of a right must be so clear that there will
be no other reasonable presumption than that the right is let go. The
preliminary skirmishes in this case at the trial Court could not by any
imagination be presumed to be a waiver. The defendant had not filed his
statement of defence and service of the statement of claim on it is certainly
not a waiver by it. Had it filed a statement of defence but with indication
that the preliminary objection will be raised that the suit was not properly before
the Court, it would not (sic) have been a waiver. This would have distinguished
the dictum in Kano State Urban Development Board v. Fanz Construction Ltd.
(1990) 4 NWLR (Pt. 142) 1. It is therefore clear, that the defendant had not
taken any step in having the case heard by the trial Court and had not waived
its right under s.46(1) of the Edict. Obembe v. Wemabod Estates Ltd. (1977) 5
SC 115, 131-2 has no application in this case. There is no evidence of waiver
in this case.”
Of particular interest is
the dictum of the Court of Appeal in the above case quoted with approval by
Ogundare JSC (in the concurring judgment) at page 187 of the report. It was
held as follows:
“It is not enough to say
that the appellant entered an unconditional appearance and therefore he has
waived his (sic) right to complain about jurisdiction. The decision in Muni v.
Worsfold (supra) which was followed in the case of U.B.A. Trustees Ltd. v.
Nigergrob Ceramic Ltd. (sura) has determined that entering an appearance, even
unconditional, does not constitute a waiver of the right to object. It is
therefore not enough to say that the appellant having entered unconditional
appearance cannot raise the objection on the decision of the court. For it is
clear from the record that as soon as the appellant entered appearance, the
first step taken by its counsel was to protest against the jurisdiction of the
court by seeking a stay of its proceedings with a view to referring the case to
arbitration as set out in the agreement between the parties. The only step
taken after appearance therefore by the appellant was to protest against the
court hearing the case. If any step could be said to have been taken. (sic) it
is only in protestation.”
3. Confidence Insurance
Ltd. v. Trustees of O.S.C.E. (1999) 2 NWLR (Pt. 591) 373 
In this case, upon the
commencement of the suit and service of the originating process, parties
exchanged pleadings. In its statement of defence, the appellant averred that
the respondent’s action was premature as the respondents did not exhaust
arbitration as agreed in the trust deed before resorting to litigation.
Judgment was entered against the appellant and he appealed against the refusal
to stay proceedings. The appeal was dismissed with the following dictum at page
388 paragraphs A-D as follows:
“While certain acts done
by a party may or may not constitute steps in the proceedings,
nevertheless some acts will surely be construed to mean “taking steps in the
proceedings.” For example, exchange of correspondence between parties or their
counsel after entering appearance or efforts made out of court to settle the
matter in controversy between the parties or moving the court to seek a
party’s desire that the matter be placed before arbitration panel cannot
ordinarily amount to taking other steps in this proceedings as to defeat a
party’s right to rely on the arbitration provision.”
4. M. V. Lupex v. N. O.
C. (2003) 15 NWLR (Pt. 844) 469
The next case to be
considered is the case of M. V. Lupex v. N. O. C. The dispute in this
case arose between the parties in respect of a charter-party agreement which
contained a clause that disputes should be resolved by arbitration. The
Respondent sued the Appellant at the Federal High Court claiming damages for
breach of the charter-party and thereafter obtained an order ex parte
for the arrest of the chartered vessel (M.V. LUPEX) which at the time had
berthed at the port of Warri. On becoming aware of the ex parte order,
the Appellant filed a motion on notice for the following orders:
An order setting aside the order for the
arrest of the vessel, alternatively;
An order for the release of the arrested
vessel unconditionally or upon such terms as the Court may direct;
An order for stay of proceedings in the
suit sine die.
The Federal High Court
held that it had jurisdiction and refused the Appellant’s prayer to stay
proceedings. Also, the Court released the vessel on monetary condition. The
Appellant appealed to the Court of Appeal. The Court of Appeal dismissed the
appeal. The Appellant further appealed to the Supreme Court. The Supreme Court
allowed the appeal and granted stay of proceedings sine die to enable
parties resort to arbitration.
Mohammed JSC held at pages
“Taking into consideration
all what I have considered above in this judgment, it is crystal clear that the
trial High Court could only have acted judicially and judiciously if it
exercised its discretion by ordering a stay of proceedings in the case at hand.
It is abundantly clear that the trial court had acted on wrong principles of
law and that it misapprehended the facts of this case when it refused to grant
the appellant’s application for stay of proceedings of the action filed before
it by the respondent. The court below is therefore in error to affirm the
decision of the trial Federal High Court in refusing to grant a stay of
5. Enyelike v. Ogoloma
(2008) 14 NWLR (Pt. 1107) 247
In Enyelike v. Ogoloma,
the dispute arose between the parties from a lease agreement which contained an
arbitration clause. The Respondent sued the Appellant on 14th March 2000 before
the High Court of Rivers State contrary to the arbitration agreement. On 22nd
February 2000, the Appellant filed a Notice of preliminary objection seeking to
dismiss the suit. Thereafter the Appellant filed a conditional appearance out
of time and a motion for extension of time to file and serve his statement of
defence and counterclaim dated 12th February 2001. The Appellant pleaded the
arbitration agreement in his statement of defence and counterclaim.
The High Court of Rivers
State held (quoted at page 254 of the report) as follows:
“As can be seen in all the
authorities to above, there is something that a party to an arbitration cannot
do……he must not have taken any tangible step in the proceedings or as section 5
of the Arbitration Law, cap 10 put it, “taking any other steps”. In this
instant matter, the defendant/applicant not only entered a conditional
appearance out of time, after filing a motion for to enter appearance out of
time, but filed a motion on notice for an extension of time within which he can
file and serve his statement of defence and counterclaim dated 12/2/2001, and
this motion dismissing (sic) the suit for lack of jurisdiction. All these constitute
an act of “taking any other steps”
committed by the defendant/applicant and
having done so, he cannot be heard to raise the issue of non-compliance with
the arbitration clause.”
(Emphasis mine)
The Court of Appeal, Port
Harcourt agreed and held at pages 257-258 as follows:
“By virtue of the
provisions of subsection (1) of section 5 of the Arbitration and Conciliation
Act (supra), either the appellant or the respondents have the right to, at any
time after entering an appearance but before filing any pleadings (including
statement of defence) or taking any other steps (e.g. filing of motions etc),
apply to the court to stay proceedings. In the instant case, it’s rather
obvious that the appellant having already deemed it fit or expedient to file
(i) a statement of defence (ii) a counter claim to the respondents’ suit, it
was rather most inappropriate, to say the least for him to file the notice of
preliminary objection in question seeking that the suit be dismissed

(Emphasis mine)
6. Onward Enterprises
Ltd. v. MV Matrix & Ors (2010) 2 NWLR (Pt. 1179) 530
This is another case in
which the Court of Appeal did not follow the hardship in Obembe case
though distinguished the earlier case from the present one. The appellant (as
plaintiff) sued the respondent claiming damages for breach of contract of
affreightment and obtained an ex parte order on 2nd July 2002 for the
arrest and detention of the respondent’s vessel (M.V. Matrix). On 15th July
2002, the respondent filed two applications. While the first application was
for release of the vessel, the second application sought to shift the vessel to
anchorage pending the hearing of the application for release. The appellant
consented to the release of the vessel on 26th July 2002. On 11th July 2003,
the respondent filed a motion for stay of proceedings pending reference to
arbitration in London. The Court granted the motion for stay of proceedings.
The Court of Appeal at
page 551 took a step to state certain steps which can be regarded as waiver of
the right to insist on arbitration agreement wherein Mshelia JCA held as
“In the instant case,
respondents entered conditional appearance and filed two motions on notice
before the application for stay. One sought the release of the vessel, while
the second sought an order to shift the vessel to anchorage. The application
for stay of proceedings was the third application filed by the respondents. For
the appellant, the application to shift the vessel in particular amounts to a
step taken in the proceedings. It is evident from the record that the
respondents did not file any statement of defence nor applied for extension of
time to file any statement of defence. I agree with the submission of
respondents’ counsel that neither the application for the release of the vessel
nor the application to shift the vessel to anchorage pending the determination
of the application to release her from arrest constitute steps taken within the
contemplation of section 5 (1) of the Arbitration and Conciliation Act. It is
only acts done in furtherance of the prosecution of the defence that could be
said to amount to steps taken in the proceedings.”
7. Nissan (Nig.) Ltd. v.
Yaganathan & Anor (2010) 4 NWLR (Pt. 1183) 135. 
The dispute in this case
arose from a contract in restraint of trade between the 1st Respondent and the
Appellant (his former employer). The contract contained arbitration clause. The
Appellant sued the 1st Respondent at the High Court of Lagos State for taking
up a new employment with the 2nd Respondent. On being served with the writ of
summons and other court process, the Respondents filed a notice of preliminary
objection seeking orders:
To strike out the suit against the 2nd
Respondent for non-disclosure of a reasonable cause of action and for being
improperly joined in the suit;
To strike out the suit for being
incompetent and non-compliant with the arbitration agreement; and
For such further orders as the Court may
make in the circumstances.
The High Court granted
prayers (i) and (ii). Also, the Court stayed further proceedings in the suit
which was not one of the prayers in the notice of preliminary objection. At the
Court of Appeal, Lagos, one of the issues was whether the High Court was right
to grant a relief not claimed. The Court of Appeal allowed the appeal in part,
holding at pages 156-157 as follows:
“From decided authorities,
it is clear that the application to refer the matter to arbitration would
succeed if the application is made at any time after the applicant enters
appearance but before filing pleadings or taking any other steps in the
proceedings. In this case, the respondents entered conditional appearance on
15th January 2007 and the next day, 16th January 2007 filed a preliminary
objection seeking order of the court striking out the suit for non-compliance
with the arbitration clause. It ought to have been not for striking out the
suit, but for stay of proceedings to enable the parties go to arbitration. …………
The order granting a stay of proceedings pending resolution of their disputes
by arbitration as agreed between the parties is correct notwithstanding that
the respondents asked that the suit be struck ou
8. Williams vs Williams
& 3 Ors. (2013) 3 CLRN 114
The Appellant petitioned
for the winding up of the 4th Respondent on the grounds of alleged commission
of sundry illegalities by the 1st and 2nd Respondents, the alter ego of the 4th
Respondent; and the oppressive and discriminatory conduct of members of the 4th
Respondent in relation to the running of the affairs of the 4th Respondent.
Pursuant to section 5 of
the ACA, the 1st and 2nd Respondents filed a motion for stay of proceedings
pending arbitration as agreed by parties. Before the motion was heard, counsel
to the 1st and 2nd Respondents did the following:
(a) orally applied to the
court for an adjournment;
(b) gave an undertaking in
respect of a pending motion on notice in the substantive suit; and
(c) prayed the trial court
not to grant the prayers of interim injunction in the terms sought by the
The Appellant contended
that the 1st and 2nd respondents took steps in the substantive suit in view of
the above. The foregoing contention notwithstanding, the court upheld the 1st
and 2nd Respondents’ motion and stayed its proceedings in the matter pending
arbitration. The court further directed the Appellant to commence arbitral
proceedings pursuant to the parties’ written agreement. Dissatisfied with the
ruling of the trial court, the Appellant appealed to the Court of Appeal where
the Appellant, relying on the Obembe’s case, forcefully contended that the 1st
and 2nd Respondents had taken a step in the proceedings. Accordingly, the
Appellant submitted that the 1st and 2nd Respondents had lost their right to
ask for a stay of proceedings pending arbitration. The Appeal was refused.
9. S. A. & Ind. Co.
Ltd. v. Ministry of Finance Incorp (2014) 10 NWLR (Pt.1416) 515.
The dispute in this case
arose from a contract for supply of fertilizer between the 1st Appellant and
Kano Government (represented by the 2nd Respondent). The contract contained
arbitration clause. The Respondents sued the Appellants at the High Court of
Kano State for balance due under the agreement and for damages. Upon being
served with the originating process, the appellants filed their respective memorandum
of conditional appearance under protest. Thereafter, without delivering
pleadings, the appellants filed a motion for stay of proceedings pending
arbitration (though the third appellant filed a motion to strike out the
The High Court refused the
application for stay of proceedings. The Court of Appeal overruled the lower
court and granted stay of the proceedings. Nothing is said about taking step as
it was not in issue. However, the Court adopted the views expressed in Confidence
Insurance Ltd. v. The Trustees of Ondo State College of Education Staff Pension
(1999) 2 NWLR (Pt. 591) 373 at 386-387 paragraphs C-G
where Achike, JCA as
“It is perfectly clear to
me that mere entering an appearance by the appellant, be it conditional or
unconditional appearance, is not controlling nor relevant to the party’s right
to rely on the arbitration clause inserted in the parties’ agreement. On the
contrary, it is in fact what happens after a party has entered an appearance
that matters in determining whether or not such a party can still take
advantage of the aforesaid arbitration clause.”
Making a Case against Obembe
v. Wemabod
In the determination of
the application to stay judicial proceedings in order that parties may go to
arbitration, the relevant question the court should consider is whether the
party applying for stay is “guilty” of doing something in the judicial
proceedings which negates his application for stay of judicial proceedings so
as to constitute waiver of his right to insist on arbitration. If the question
is answered in the affirmative, the application for stay of judicial
proceedings should be refused. Otherwise, stay should be granted. 
However, the determination
of whether the particular step taken qualifies for waiver is not a simple
straight-forward task particularly in the face of Obembe case. Although,
as already indicated in the list of cases considered above, the courts have
done well in some cases by distinguishing the peculiarities in the Obembe case
from the one being decided to avoid the application of the sweeping statement
of Fatayi-Williams CJN that “A party who makes any application whatsoever to
the court, even though it be merely for application for extension of time,
takes a step in the proceedings”
. The Obembe case still appears to
be a law to which a lazy recourse can be easily had where there is no judicial
willingness to distinguish the facts of the case being decided from those in Obembe
case to avoid the application of the far-reaching statement of
Fatayi-Williams CJN.
With due respect, the Obembe
case is not a useful authority for any issue bordering on whether a party
has taken steps that constitutes waiver. Also, the popular statement of
Fatayi-Williams CJN is not a statement of the law, rather it is a statement
made in error as it arose from the Supreme Court’s determination of a ground of
appeal complaining against an observation made in passing by the trial
judge. The trial judge observed that “Had I been in a position on the facts
to find any of the plaintiff’s claims proved I would have been unable to enter
judgment in his favour in view of the Arbitration Clauses 17 of Exh. 3 at page
37 which parties had agreed would govern their contract.”
The foregoing
observation of the trial judge, in my respectful view, is an obiter dictum
as it did not form the basis of his dismissal of the plaintiff/appellant’s
The law is trite that it
is only against the ratio decidendi in a judgment and not an obiter
that an appeal (if any) can be lodged. The Supreme Court in A.I.C.
LTD V. NNPC (2005) 22 NSCQLR 903, at 925 (2005) 5 SC (PT. 11) 60
defined ratio
and obiter dicta as follows: “The ratio decidendi
of a case represents the reasoning or principle or ground upon which a case is
decided. Obiter simply means in passing, incidental, cursory. Obiter dicta
reflects, inter alia, the opinions of the Judge, which do not embody the
resolution of the Court.”
The ground and issue
formulated by the appellant in the Obembe case in respect of the
observation made by the trial judge ought to have been struck out by the
Supreme Court for being incompetent. Failure to strike out the ground and the
issue led to the popular statement by Fatayi-Williams CJN that “A party who
makes any application whatsoever to the court, even though it be merely for
application for extension of time, takes a step in the proceedings”
V. UBA PLC. (2010) 6 NWLR (PT. 1191) 474 at 493 PARAGRAPHS E- F
, the
Supreme Court made the point so clear that grounds of appeal must attack the ratio,
when it held thus: “It is settled law that issues for determination
must be distilled from Grounds of Appeal which Ground(s) must attack the ratio
decidendi of the judgment not anything said by the way, or obiter dicta or be
formulated in vacuo, as issue 5 in the instant case.”
It is therefore my
humble view that the statement of Fatayi-Williams CJN was made per incuriam
which ought to be overruled or jettisoned by subsequent courts. It must be
noted however that even though the Supreme Court can depart from or overrule
the Obembe case, the Court of Appeal and all other inferior courts are
bound by it.
Generally speaking the
Supreme Court may depart from or overrule its previous decision under certain
circumstances and in accordance with laid down principles of law, such as where
it is shown or demonstrated that the earlier decision is either erroneous in
law, or given per incuriam or that it has become an instrument of
injustice etc, see Veepes Industries Ltd vs Cocoa Industries Ltd (2008) ALL
FWLR (Pt.425) 1667 at 1687; Bakare v. NRC (2007) ALL FWLR (Pt.391) 1663.
addition to the above, where the decision complained of hinders the proper
development of the law (e.g. the law of arbitration) in which a broad issue of
public policy was involved, the Supreme Court may depart from such a decision.
It is therefore my humble submission that the decision in Obembe case
should be overruled by another panel of the Supreme Court for being a major
impediment to the development of arbitration law in Nigeria.
The Way the Law should Go
It is clear from the
totality of cases considered that if the arbitration law must develop and be
seen to be developing in Nigeria, the court should be more inclined to granting
stay of arbitration than refusing it. The steps that a defendant is alleged to
have taken in a judicial proceeding to defeat his right to arbitration must be
so clear and positive as to constitute a waiver of his right to insist on the
resolution of the dispute by arbitration. The following steps have been
highlighted, though not exhaustive, on what a defendant can do to frustrate his
right to go to arbitration, namely:
filing an affidavit in opposition to
summons or motion for summary judgment, or
filing and/or service of a statement
defence, or
filing an interpleader summons, or
filing of a counterclaim, or
filing an application for leave to serve
interrogatories, or
filing an application for stay of
proceedings pending the giving of security or costs
filing an application for extension of time
to file and/or serve a statement of defence
filing an application for an order for
filing an application for an order for
further and better particulars,
filing a motion to commence a third party
Tanimola Anjorin –  An exposè on the Arbitration procedural stages

Tanimola Anjorin – An exposè on the Arbitration procedural stages

Arbitration as a better alternative to litigation: An
exposè on the procedural stages[1]
Alternative Dispute Resolution (“ADR”) simply refers to any means of
dispute resolution excluding litigation in a courtroom.  It is a form of
facilitated settlement, which is confidential and without prejudice. 
Consequently, the details of the process are not usually disclosed to the
public except where it snowballs into a court action.

The laws governing arbitration in
Nigeria include the Arbitration and Conciliation Act (“the Act”)[2],
which is a federal law, Lagos State Arbitration Law 2009 (“the Lagos Law”) and
some other states’ arbitration laws.
This paper seeks to examinethe procedural stages in arbitration,one of
the most common ADR mechanisms,
and the reasons which
make arbitration a better alternative to litigation. 
provides a forum for participants to present arguments and evidence in support
of their case, to a third party neutral who makes a binding decision called an
award. It is a process controlled by a single arbitrator or a panel of
arbitrators appointed by the parties.
of the parties to a contract may adopt arbitration where an arbitration clause
is contained in the agreement, and a dispute arises in relation to it.Where
there is noarbitration clause and the parties desire is to proceed to
arbitration, a consent to arbitration via submission agreement may be entered
by the parties.
expeditious disposal of cases in arbitration stems from the less formal
procedure adopted in arbitral proceedings.The procedure for initiating and
conducting arbitration are spelt out in the arbitration rules to be found in
the First Schedule to the Act. 
of the advantages of arbitration is that the disputants have consensually
chosen their own private “judge” called the arbitrator(s)[3].
The arbitral tribunal determines the venue of the hearings after due
consultation with the parties. Where there are three or more arbitrators,
decision is by majority. Therefore, an odd number of arbitrators is advised. 
commences with a notice to commence arbitration being sent by an aggrieved
party to the other party.In the course of arbitration proceedings, request for
more information, discovery of documents and visits to relevant location may be
done. However, to ensure expeditious disposal of the matter, all of these
issues would most likely be narrowed down during pre-hearing review. 
tribunal listens to the oral statements and questioning of the witnesses of
both parties(cross examination)as examination-in-chief may be in form of
witness statements on oath. Also, expert witnesses may be called by the parties
to render their opinions on issues in dispute.This may be pruned down during
pre-hearing review as the parties are likely to distill witness of facts and
expert witnesses.
proceedings are not however regulated by formal rules of evidence as stipulated
in the Evidence Act thereby resulting in less formal and flexible proceedings.
ensuring an expeditious process in arbitration, some basic procedures are adopted
which endears the business world to arbitration instead of litigation:
first step in any arbitral proceedings is to constitute the arbitral panel.This
can either be provided in the arbitration agreement or conducted in accordance
with the Act[4]. In any
case, there can be no arbitration without an arbitrator and an arbitrator must
be appointed to conduct the reference. Once the arbitrator is appointed he must
be clothed with jurisdiction.
Jurisdiction is the authority to arbitrate
upon the dispute between the parties.
The arbitrator is only authorised to
exercise the jurisdiction and powers conferred on him by the parties.
jurisdiction is derived from the agreement of the parties i.e. the issues
submitted to him for determination or from Statute. The arbitral tribunal is
competent to rule on its jurisdiction[5].
mainpurpose of a preliminary meeting is to plan the expeditious and efficient
conduct of the arbitration. Arbitration is a broad spectrum where innovations
and variety are not only encouraged but lauded:
arbitral tribunal may, subject to this Act, conduct the arbitral proceeding in
such a manner as it considers appropriate so as to ensure a fair hearing”[6].
overriding procedural obligations of an arbitration tribunal in conducting a
reference include:
(i)    complying with the express mandate, if any,
laid down by the parties;
(ii)   conducting the process fairly and even-handedly;
(iii)  using all reasonable dispatch in entering on, proceeding
with the reference and making an award.
meeting therefore cannot be held until:
(i)    The tribunal has been appointed;
(ii)   The tribunal has been provided with the
information as to the principal issues between the parties although this can
sometimes be dealt with at the preliminary meeting;
(iii)  Administrative fees, where applicable, have
been paid; and
(iv)  The impartiality of the arbitrators have been
checked, where necessary, and the result made available to all.
is imperative that adequate preparations be made well ahead by the arbitrators,
the parties and their advisers before the preliminary meeting. Issues like the (i)
(ii) time[8],
(iii) transportation arrangements for the arbitrators and other sundry issues must
be addressed in order to have a successful meeting and most importantly, a well-drawn
up agenda.
advance of the preliminary meeting, the parties should also try to identify the
matters to be dealt with and, if possible, agree on the procedure and any
directions to be sought from the tribunal. If agreement is reached, this will
save time and costs at the preliminary meeting itself and may even render such
meeting unnecessary.
is preferable except in very simple cases to hold a pre-hearing review before
the hearing and after all the preliminary meetings. This helps to save time and
costs at the hearing because the pre-hearing review helps the arbitrator and
the parties clarify all outstanding issues so that by the time they go into the
hearing they can go through them on a day-to-day basis and finish in a short time.
The matters to be discussed at the pre-hearing review will vary depending on
what has transpired at the preliminary meetings (if any).
The choice of proceedings to be adopted depends on
the facts of each case[9].
Where parties do not
choose or agree on any type of hearing, the tribunal chooses the type of
It is better for the parties to agree
on the type of hearing to be adopted where there is a serious dispute over
relevant facts. The proceedingat trial may take the form of:documents only where there are no oral testimonies to support
the claim;documents only with brief oral final submissions; or documents only
with only experts in attendance to give oral testimony before the arbitrators
“Documents Only” method is
agreed, then the “issues” need
to be framed with more precision than when any other form of proceedings is
Procedure Hearing:
is only suitable for “quality”
dispute requiring some summary decision,i.e,“look
and sniff”
cases.  Each party usually
bears his own costs.
Procedure with Hearing:
is for disputes that require examination
or cross-examination of witnesses of fact.
  This evidence is usually partly oral and partly documentary.
The tribunal must consider whether a Scott Schedule[11]
is desirable.
It must
be noted that the procedure adopted determines the length of the hearing.
procedure adopted must not contravene the provisions of the applicable law and
procedural rules:
“…the Claimant to state the fact
supporting his Points of Claim, the points at issue and the relief or remedy
sought by him whilst the respondent is to state his Points of Defence in
respect of the particulars unless the parties have otherwise agreed on the
“required elements of the Points of Claim and Defence.[12]
tribunal and parties must consider such factors as the complexity of the matter
and the nature of the dispute in ensuring that they adopt the most suitable
procedure. Disputes with little factual details may be best suited to the
Statement of Case procedure by mere exchange of correspondence; e.g. quality
disputes which are tobe determined on expert evidence only while pleadings may
be best suited to cases involving complex issues of law.
tribunal is to determine the time for exchange of written statements. In any
case, the law provides that the time must not exceed 45days except if
arbitration proceedings the parties agree on an “Agreed Bundle” of documents,
which constitutes the documents to be referred to during the hearing. The arbitrator
will direct the parties to meet and agree on the bundle within a specified
time. This also helps to fast track proceedings.
The Evidence Act excludes
arbitration from its application[14].
This is not to say however that rules of evidence do not apply to arbitration.
In fact, the rules of evidence are wider than what the Evidence Act provides
and they apply to arbitration to enable the arbitrator come to a reasonable
decision on the evidence before him. It should be noted that Section 15 (3) of
the Actconfers powers on the arbitral tribunal to determine the admissibility,
relevance, materiality and weight of evidence placed before it[15].
The reason for this provision is to play down as much as possible the recurrent
technicalities that surround the rule of relevancy and admissibility under the
Evidence Act.
numerous advantages of arbitration over litigation include a faster and cheaper
means of dispute resolution, utmost privacy of the issues between the parties[16]amongst
others. While litigation has been shown to give room for frivolous techniques, arbitral
proceedings have been sped up byadmitting written statements in place of
opening and closing speeches
, admitting depositions made by
witnesses of fact and inviting such witnesses only for cross-examination. In
addition,admitting reports prepared by experts while they appear only for
cross-examination,using a Scotts Schedule.
Other ways to save time at the
hearing are:
Defining the Issues
arbitrator should direct, at the outset, that a list of issues be agreed and
delivered to the arbitrator a reasonable time before the hearing, and that
failing such agreement each side delivers a list of what it considers to be the
issues. The procedure for defining the issues vary according to the nature and
complexity of the dispute.
Proofs in advance
arbitrator may require that proofs of all witnesses be exchanged, and copies
delivered to the arbitrator, before the hearing.
Selected before Hearing
The arbitrator
may require that the documents to be referred to at the hearing be selectedbefore
the hearing, and this should be the responsibility of the advocate who is to
conduct the case.  The arbitrator should also
direct that:
(i)      The consolidated bundle(s)
of the documents selected should be delivered to the arbitrator by a specified
date before the hearing;
(ii)      At the hearing all the
documents so submitted shall be taken as read (because he will in fact have
read them); and
(iii)      At an appropriate stage
the arbitrator will specifically consider the question whether a substantial
number of irrelevant documents has been selected, and if so whether a special
order should be made in respect of the additional costs thereby occasioned.
frontloading system and the case management conference in the rules of court[17]
can be likened to the preliminary meetings, pre-hearing sessions, defining
issues and exchanging proofs and written statements obtainable in arbitration
proceedings. The introduction of these similar concepts in the rules of court
and a fast track division is to ensure efficient and speedy dispensation of
justice but the bureaucracy in the system has prevented the system from making
any remarkable achievements. Even the motion for summary judgment in the rules
which shouldn’t take more than 2weeks to hear and determine usually suffers the
same fate as the cases on the general cause list.
is the duty of the arbitral tribunal to adopt
procedures suitable to the circumstances and to avoid unnecessary delay and
The parties must also cooperate by doing all things necessary
for the proper and expeditious conduct of the proceedings as cost may be
awarded against any party that foists any sort of delay tactics in the course
of the proceedings.
proceduresin arbitration sessions examined above have proved effective and
efficient in the expeditious disposal of arbitral cases, thereby endearing the business
community and the public in general to the choice of arbitration over
litigation. The adoption of arbitration either by an arbitration clause or
submission agreement has become more popular as people are coming to terms with
the fact that arbitration constitutes a better alternative. It is also an
amicable method of dispute resolution enabling the parties to maintain their
business relationships.

[1]Tanimola Anjorin
holds a bachelor’s degree in History and International Studies from Lagos State
University. He thereafter obtained a Bachelor of Laws degree from Lagos State
University and was called to the Nigerian Bar. He is also an Associate of the
Chartered Institute of Arbitrators (UK) Nigeria Branch.
[2]1988 Cap. A18 LFN 2004.
[3]Where the parties to an arbitration
agreement do not provide for the number of arbitrators to be appointed, section
7 of the Act provides that the number of arbitrators shall be deemed to be
[4]Section 6 of the Act provides for
the number of arbitrators to be appointed in the event that the arbitration
agreement is silent on this issue while Article 6 – 8 of the Arbitration Rules
in the First Schedule gives a detailed procedure to be adopted in the
appointment process.

[5]This is laid down in the popular case ofCOMPETENZ v COMPETENZ. See also section
12 of theAct and Article 21 of the Arbitration Rules in the First Schedule to
the Act.

[6]Section 15(2)of the Act.
[7]Section 16 of the Act.
Section 17
of the Act.
[9]  Section 20(1) of the Act
[10]See Article 15 of the Arbitration
Rules in the First Schedule to the Act.
[11]In arbitration sessions, parties
bring numerous claims and issues which make the arbitral proceedings appear
like litigation. In order to avoid this, the tribunal may resort to the use of
the Scott schedule. The Scott schedule is essentially a table with inputs from
both the claimant and respondent. The claimant sets out hisargument first, and
then the schedule is passed to the respondent to set out his responses. The
main objective of the Scott schedule is for the issues in disputes to be
presented as clearly as possible, thus saving time, reducing cost and
conserving efforts.
[12]  Section19 the Act.
[13]See Article 23 of the Arbitration
rules in the First schedule of the Act.
[14]  Section 256(1)(a) of the Evidence Act 2011.
[15]See also Article 25(6) of the
Arbitration Rules in the First Schedule of the Act.
[16]Article 25 (4) of the Arbitration
rules provides: “Hearing shall be held in
camera unless the parties agree otherwise
[17]Order 3, 5 and 25 of the High Court
of Lagos State (Civil Procedure) Rules 2012.

Photo Credit – www.newtonarbitration.com



Esq. Seminars on the 28th – 30th of
October, 2014 hosted the Esq. Arbitration School 2014 at the Civic Centre in
Victoria Island, Lagos which was supported by the prestigious law firm of Aluko & Oyebode. It was a great
time for the delegates and the resounding success for the organisers. The panel
of facilitators was very impressive as it attracted some of the best
arbitration practitioners from Nigeria and also from London.

Facilitators included:-

  • Gbenga Oyebode MFR, Chairman, Management Board, Aluko &

  • Lere Fashola, CEO, Legal Blitz Limited;

  • Jerome Finnis, Of Counsel, International Arbitration Group,
    Hogan Lovells LLP;

  • Babatunde Fagbohunlu SAN, Partner, Head of Litigation &
    Arbitration, Aluko
    & Oyebode;

  • Patrick Ikwueto, SAN, FCI.Arb, Managing Partner, Patrick
    Ikwueto & Co,

  • Chief Bayo Ojo SAN, FCIArb, Chartered Arbitrator, Senior
    Partner, Bayo Ojo
    & Co, Abuja. Director, International Centre for Arbitration and Mediation Abuja (ICAMA);

  • Abdul Jinadu Esq, Barrister, Keating Chambers, 15 Essex
    Street, London;

  • Jobalo Oshikanlu, Legal Director, ARM-Harith Infrastructure

  • Wale Akoni SAN, Head of Chambers, Babalakin & Co.;

  • Olatunde Busari, SAN, FCI.Arb, Chartered Arbitrator, Partner,
    Akinwunmi &
    Busari, Lagos;

  • Ned Mojuetan;
  • Mark Molyneux, Partner,Addleshaw Goddard LLP;
  • Seyilayo Ojo FCI.Arb, Managing Counsel, Seyilayo Ojo &Co.;
  • Nkiru Balonwu, CEO, Spinlet Nigeria;
  • Wale Goodluck, General Manager, Commercial Legal, MTN.
  • Yemi Akinsanya, Principal, Adeyemi-Akinsanya Associates;
  • Oludare Senbore, Partner, Aluko & Oyebode, Nigeria,
    former Head of Legal,
    Infrastructure and Project Finance, StanbicIBTC;
  • Seye Kosoko, Head of Legal and Company Secretary, Standard
    Chartered Bank
    of Nigeria;
  • Irene Robinson-Ayanwale, Head, Legal Department and Council
    The Nigerian Stock Exchange; and
  • Ace Ankomah, Head of Litigation and Arbitration,
    Bentsi-Enchill, Accra, Ghana.

Cross section of facilitators

Cross section of facilitators

Cross section of Delegates

Lunch time

Jerome and Kate

Adedunmade, Jerome & Kate

Cross section of facilitators

Cross section of facilitators

Esq. Seminars hold regular trainings on various areas of law
and it will do legal practitioners and in-house counsel out there a great deal
of good to keep an eye out for their seminars/trainings and participate in
them. We shall also do well to inform you of upcoming Esq. Seminars.