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.”