Nigerian National Petroleum Corporation v Lutin Investments Ltd and Another (SC 57/2002) [2006] NGSC 9 (12 January 2006)

(2006) 1 All N.L.R. 235

Kalgo, JSC (Delivered the Leading Judgment):- This appeal arose as a result of arbitration proceedings. Briefly, the facts giving rise to this appeal are these. The appellant entered into an Agreement with the first respondent on 23 December 1992, which made provision for reference to arbitration in the event of any dispute arising between the parties thereto, which dispute could not be mutually settled. A dispute actually arose between the parties and reference was then made to an arbitrator appointed by and agreed to by both parties. The second respondent herein was the arbitrator jointly appointed by the parties and all references were submitted and made to him in accordance with Clause 2 of the said Agreement.

In the course of the arbitral proceedings, the learned Counsel for the appellant objected to the continuation of the proceedings on the grounds that:-

(i) the Agreement of 23 December 1992 was entered into between the appellant and Lutin Investment Limited Geneva, Switzerland, but the party that initiated the arbitral proceedings is Lutin Investment of British Virgin Island, a complete stranger to the Agreement? and

(ii) the said Agreement provided for arbitration under the Nigerian law and therefore it was wrong to move the arbitration to London and England, for any reason.

The Learned Arbitrator, the second respondent herein, after hearing the submissions of learned Counsel for the parties to the arbitration, overruled the objections of the learned appellant's Counsel but in respect of objection (i) he ruled that:-

"There is therefore only one company that is the Claimant i.e. Lutin Investment Limited. If in the course of the hearing of witnesses the respondent (now appellant) succeeds in showing that there are two separate companies involved then the normal consequences will follow."

In respect of objection (ii) the learned Arbitrator also ruled that since the parties did not specifically agree on where the arbitration is to be held, in their Agreement, the law gives him full powers to decide the locale of the arbitration.

The appellant was dissatisfied with this ruling and consequently filed a civil summons against the respondents in the Federal High Court, Lagos claiming the following reliefs:-

"1.    A DECLARATION that the learned Arbitrator Honourable Justice Uche Omo mutually appointed by the parties to the arbitration to arbitrate over the disputed claim of GBP24,200 + N61,829,934.94 + $89,260,790.39 by the claimant (the first defendant hereto) is no longer considered reasonable, fair, impartial, suitable and qualified to continue with the arbitration proceedings.

2.      A DECLARATION that the learned Arbitrator, Honourable Justice Uche Omo acted without authority and beyond the scope of the Agreement between the parties and against public policy when he ordered that the Arbitration moves to and sit in London, at the expense of the parties to take evidence from the Claimant's witness.

3.      An ORDER removing the Arbitrator from office to which he had been appointed and in which he had partially served."

The parties filed and exchanged pleadings, called evidence and addressed the Court and the learned trial Chief Judge, Belgore, CJ in his judgment delivered on 20 December 1997 dismissed the whole claims of the appellant. The appellant appealed against his decision to the Court of Appeal which after hearing the appeal also dismissed the appeal as lacking in merit. He then further appealed to this Court on two grounds.

In this Court, the parties filed and exchanged written briefs as required by the rules of court. In the appellant's brief, the following issues for determination were identified:-

"(i) Whether there was sufficient evidence on record that should lead to the conclusion that Lutin of Geneva, Switzerland and Lutin of British Virgin Island are two different and distinct companies, based on the legal principle that words with fixed meaning in a written contract or document need no further proof by oral evidence to mean something different from what they express.

(ii) Whether the Court of Appeal was right in holding that "any place it considers appropriate" under section 16 of Cap. 19 Laws of Nigeria extends to taking evidence in London by the Arbitrator against the wish of one of the parties to the arbitration agreement, the proper, correct and scope of the interpretation of the words:- "any place it considers necessary" in section 16(2) of the Arbitration Act, 1990 of the Laws of Federal Republic of Nigeria.

(iii) Whether it is not against public policy for an arbitrator to travel abroad - London for the benefit of a fugitive offender to take evidence from such offender in arbitral proceedings.

(iv) Whether on the facts and circumstances of this case, the first respondent is entitled in law to take advantage for its own benefit, the evidence of Mr Leno Adesanya who was the sole representative and Agent in Nigeria, of the first respondent in the light of the events leading to the disagreement of the parties and culminating in the arbitration proceedings."

The two issues raised by the first respondent in his brief reads:-

"1.    Whether Arbitration initiated by Lutin Investment Incorporated in British Virgin Island ought to be dismissed in limine because the agreement from which the Arbitration arose was signed by Lutin Investment Limited based in Geneva, Switzerland.

2.      Whether or not the Arbitrator has an unfettered Discretion to take evidence anywhere he considers necessary."

The second respondent adopted into the sole issue formulated by the first respondent.

I have carefully studied the issues for determination set out by the parties to this appeal in their respective briefs as against the grounds of appeal filed by the appellant in this Court, and I am of the view that issues raised by the appellant are apposite, in the circumstances of this case, and I intend to consider them accordingly.

I will take Issue No 1 first. This issue deals with whether there was sufficient evidence that Lutin of Geneva, Switzerland and Lutin of British Virgin Island are two different and distinct companies in the circumstances of this case.

In the arbitration, before the second respondent, the claimant was Lutin Investment Limited, a company registered in the British Virgin Island, described as a "Geneva based" company with a "registered office" in Geneva, Switzerland. Chief Asemota, learned SAN for the appellant submitted before the Arbitrator that the claimant had no locus standi in the matter as, according to him, Lutin Investment of British Virgin Island, was a complete stranger to the Agreement now in dispute and could not therefore take advantage of the arbitration clause in the said Agreement. The Arbitrator heard the arguments of the parties' Counsel on this and ruled that there was insufficient evidence to prove that there are two companies involved and that the claimant had locus standi in the matter at that stage.

The appellant then instituted the present action in the Federal High Court, Lagos claiming several reliefs which were all dismissed at the end of the trial. He then appealed to the Court of Appeal on six grounds and raised six (6) issues for the determination of that Court. The fifth issue in the appellant's brief in that court fully corresponds with the first issue now raised by the appellant in this appeal. The Court of Appeal after considering the issue before it had this to say per Oguntade, JCA (as he then was):-

"The reasoning of both the arbitrator and the court below is simple and straightforward. They both were saying that the evidence available at the time when the preliminary objection was raised was not sufficient to lead to a conclusion that there existed two different companies bearing the name Lutin Investment Limited. The mere fact that a company was described as based and registered in a country could not without more be conclusive proof. The appellant then instituted the present action in the Federal High Court, Lagos claiming several reliefs which were all dismissed at the end of the trial. He then appealed to the Court of Appeal on six grounds and raised six (6) issues for the determination of that Court. The fifth issue in the appellant's brief in that court fully corresponds with the first issue now raised by the appellant in this appeal. The Court of Appeal after considering the issue before it had this to say per Oguntade, JCA (as he then was):-

"The reasoning of both the arbitrator and the court below is simple and straightforward. They both were saying that the evidence available at the time when the preliminary objection was raised was not sufficient to lead f its being incorporated in that country. It has always been recognised under the Nigerian Law that the conclusive way to show the incorporation of a company is the production of the Certificate of Incorporation. The arbitrator had not shut the door against the appellant for he concluded that if it was shown that there were two companies by the name Lutin Investment Ltd, the normal consequences would follow. I affirm the reasoning and conclusion on the point of the court below."

It is common ground that the parties to the Agreement which gave rise to the dispute and permits the parties to submit to arbitration are:-

(i) Nigerian National Petroleum Corporation? and (ii) Lutin Investment Limited.

The head of the agreement provides:-

"THIS AGREEMENT is made on 23 December 1992, BETWEEN NIGERIAN NATIONAL PETROLEUM CORPORATION, a company established under the Laws of Federal Republic of Nigeria (NNPC) of the first part and LUTIN INVESTMENT LIMITED, a Geneva based company having its registered office at 16 Geneva Guisan, 1204, Geneva (For the attention of MR ROD ALEXANDER, SWITZERLAND) with a representative place of business located at 10/12 Calcutta Crescent, Apapa, Lagos (OWNER) of the other part."

Learned SAN for the appellant submitted in his brief and in Court that since the second party to the said agreement was shown to have its registered office in Geneva, Switzerland, the Court must take judicial notice of the fact that Lutin Investment Limited is a Swiss Company and that no further proof is required pursuant to the provisions of section 74(1)(f ) of the Evidence Act. He cited no legal authority in support of this contention. Learned Counsel for the first and second respondents separately in their respective briefs submitted that at the stage of the arbitration proceedings when the appellant raised its objection and on the evidence produced at the trial in the Federal High Court, there was insufficient evidence to establish that there were two different companies bearing the name Lutin Investment Limited. Counsel for the second respondent further submitted that the Nigerian law (section 54 of Companies and Allied Matters Act, Cap. C20 Laws of Federation of Nigeria, 2004) recognises the possibility that a company may be incorporated in another country and yet be based for operational purposes in Nigeria.

It appears to me very clearly that the learned appellant's Counsel is not relying on any evidence produced by him before the arbitrator or the trial court, to prove that the claimant, first respondent, had no locus standi in the arbitration. Rather he was relying on the wording of the head of the Agreement and the provisions of section 74(1) (f ) of the Evidence Act.

I have carefully examined the record of proceedings in this appeal and find nothing in the arbitration proceedings or in the evidence before the trial Federal High Court to establish that there are two companies involved in this case. In fact the second party re-cited in the head of Agreement quoted above, described Lutin Investment Limited as a "Geneva based company having its registered office in Geneva."

According to the Oxford Advanced Learner's Dictionary (5ed) to "base somebody or oneself in or at . . ." means to situate somebody in a place in or from which they operate." This therefore only means that the company was "situated" in Geneva. And "register" by the same Dictionary cited above, means "to record or name an event, a sale etc in a list for official purposes: to make something known officially or publicly especially so that it is recorded." This also indicates that the company was recorded at the address given in Geneva for record purposes only and not incorporated as a company. There was nothing to show or prove that it was "incorporated" in Geneva. The Agreement itself did not say so, as was done in the case of the NNPC of the first part. Also section 74(1)(f ) of the Evidence Act on facts which the court must take judicial notice of provides:-

"(f) The existence, title and national flag of every State or Sovereign recognised by Nigeria."

By this provision, our courts must take judicial notice of the existence, title and national flag of any country recognised by Nigeria. Assuming Nigeria has recognised Switzerland as a Sovereign State, which I do not doubt, then our courts can and must take judicial notice of its existence, title and national flag. This does not cover the capital city or town of the country concerned, in this case Geneva. With respect to the Learned SAN for the appellant, this provision of section 74 of the Evidence Act, has nothing to do with the incorporation of the company concerned even if it is registered in Geneva, Switzerland.

There was also nothing in the pleadings of the respondent either before the arbitrator or the Federal High Court admitting that Lutin Investment Limited of Geneva, Switzerland and Lutin Investment Limited of British Virgin Island are two distinct and different companies with identical names. And on the question of burden of proof, it is in my view, the duty of the appellant who alleges, to prove that there are two companies involved and that the claimant, now first respondent, was a complete stranger to the Agreement giving rise to the arbitration. He had failed to do so according to the record.

I therefore entirely agree with the Court of Appeal that as at this stage, there was insufficient evidence to prove that there were two different companies bearing the name Lutin Investment Limited. The use of the words "based" or "registered" in Geneva, could not without more be conclusive proof of incorporation in Switzerland. I also have no doubt that the best evidence of proof of incorporation of a company is the production of a genuine Certificate of Incorporation from the Company registration authority of any particular country. (See Fawehinmi v N.B.A. (No 2) (1989) NWLR (Part 105) 558 at 632). There was nothing to that effect in this case as at the time of filing the appeal. This issue must fail and I answer it in the negative.

I now move to consider the second issue. This issue is essentially complaining about the interpretation of the provisions of section 16(2) of the Arbitration and Conciliation Act, 1990, Laws of Federal Republic of Nigeria given by the arbitrator and confirmed by the trial Federal High Court and the Court of Appeal. The effect of the interpretation was to extend the proceedings of the arbitrator to London and United Kingdom, where the evidence of witnesses was to be taken.

The learned Counsel for the appellant submitted in his brief that the arbitrator has wrongly and unreasonably extended the application of the provisions of section 16(2) aforesaid and it was also wrong for the lower courts to confirm this. Learned Counsel contended that the Agreement entered into by the parties provided that it shall be governed by the Nigerian law and by Article 16 of the Agreement, the place agreed by the parties is Nigeria and the arbitrator cannot locate any place outside Nigeria in pursuance of the Agreement. Counsel pointed out that the purpose of limiting the application of the Agreement to Nigeria was to allow the High Court in Nigeria to intervene whenever appropriate and generally to protect the arbitrator and the conduct of the arbitration. He further submitted that in law, the words, "any place it considers appropriate" in section 16(2) of the Arbitration Act, Cap. 19 of the Laws of the Federation, 1990, is to be restricted in its interpretation to mean "any where in/or within Nigeria" and not anywhere in the world. Learned Counsel therefore submitted that the decision to extend the meaning of the provisions of section 16(2) of the said Act to overseas countries, has breached the substantive law of Nigeria and was contrary to the intendment of the said Act and the Agreement entered into by the parties more especially as one of the parties is opposed to it.

For the first respondent, it was submitted in the brief that the second respondent, the arbitrator has the powers under section 16(1) and (2) of the said Act to determine and locate the place where the arbitration proceedings can take place in order to be fair and just to both parties. For this reason, learned Counsel submits that the reasoning and findings of the Court of Appeal in this matter cannot therefore be faulted. In his oral argument in Court, learned counsel referred to the preamble and section 56(2) of the said Act and submitted that the lower courts have taken cognisance of the importance of international arbitration which involved a foreign company as in this case, and this entitled the arbitrator to take proceedings outside Nigeria in fairness to the parties.

The learned Counsel for the second respondent relied on his brief and also fully adopted the submissions of the first respondent's Counsel. He pointed out that there were concurrent findings in this appeal which should not be disturbed. He urged the Court to dismiss the appeal.

It is now well settled that the cardinal principle of the interpretation of statutes is that where the words used by the Legislature in a statute are clear and unambiguous in their ordinary meaning, effect should be given to them without resort to any external aid. The duty of the court therefore is to interpret the words as used in the statute. (See Attorney-General Bendel State v Attorney-General Federation (1983) 1 SCNLR 293? Odua Investment Co Ltd v Talabi (1997) 10 NWLR (Part 523) 1 at page 59? City Engineering (Nigeria) Ltd v Nigeria Airports Authority (1999) 11 NWLR (Part 625) 76 at 86).

I will now consider the provisions of section 16(2) of the Arbitration and Conciliation Act, 1990 mentioned earlier in this judgment. Section 16(1) and (2) provide:-

(1)    "Unless otherwise agreed by the parties, the place of the arbitral proceedings shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(2)    Notwithstanding the provisions of subsection (1) of this section and unless otherwise agreed by the parties the arbitral tribunal may meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts, or the parties or for the inspection of documents, goods or other property." (Underlining mine.)

According to subsection (1) of section 16 above, the arbitral tribunal has the full powers to determine or decide the place where the arbitration proceedings shall take place unless the parties have themselves earlier agreed on where the proceedings shall take place. Subsection (2) of section 16, opened with the words "Notwithstanding the provisions of subsection (1)". The word or expression "Notwithstanding" is a term of exclusion in legal drafting? it simply means "in spite of or irrespective of or disregarding". Therefore, it means that in spite of the provisions of subsection (1) of section 16, and unless the parties have agreed upon, the rest of the provisions of subsection (2) shall apply. (See for example Olatubosun v NISER Council (1988) 3 NWLR (Part 80) 25? Kotoye v Saraki (1994) 7 NWLR (Part 357) 414). And the rest of the subsection gives the arbitral tribunal the power to meet "at any place it considers appropriate" for any of the purposes set out therein, and "any place" is not restricted to Nigeria only. It appears clearly to me that the most important factor in determining the place of arbitral proceedings according to section 16(1) and (2) above, is the agreement of the parties before coming to arbitration. This must be contained, in the Agreement entered into between the parties giving rise to the arbitration. By Clause 12 of the Agreement dated 23 December 1992, the parties agreed that:-

"(a)   Any dispute arising out of this Agreement which cannot be settled by mutual agreement shall be referred to an arbitrator to be agreed between the parties or failing such agreement, to an arbitrator appointed by the Chief Justice of the Federal Republic of Nigeria, on application of either party to him?

(b)    any reference shall be deemed to be a submission to Arbitration within the Arbitration Act, Cap. 19 of Laws of Nigeria 1990 or any subsequent revisions thereto?

(c)    the findings of the arbitrator shall be binding on the parties hereto."

It is abundantly clear that the parties have agreed to be bound by the provisions of the Arbitration Act, 1990 of the Federal Republic of Nigeria and any revision thereto, and so section 16(1) and (2) above applied to the arbitration proceedings in this case.

By subsection (1) of section 16 of the said Act, the arbitral tribunal has the power to determine the place of the arbitral proceedings except where the parties agreed on a place. And subsection (2) of section 16 of the same Act says that excluding or in spite or irrespective of the provisions of subsection (1), the arbitral tribunal may still meet at a place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for the inspection of documents, goods or other property. It appears to me that section 16 of the Act deals with two types of situations in the arbitral proceedings. Subsection (1) deals with determining or deciding the place where the arbitration shall take place and subsection (2) deals with the place where the arbitral tribunal may meet for the purposes set out in that subsection such as hearing evidence of the parties, their witnesses or the inspection of goods or documents relevant to the arbitration.

I have carefully examined the Agreement entered into by the parties on pages 272-278 of the Record, and I am satisfied that nowhere in any clause of the Agreement did the parties agree on the place of the arbitral proceedings or where the tribunal shall meet. They however agreed to be bound by the laws in force in Nigeria to govern their relationships. Clause 11 of the Agreement provides:-

"LAW OF THE AGREEMENT

This agreement shall be deemed to be a Nigerian Agreement and shall be governed and construed in accordance with the Laws in force in the Federal Republic of Nigeria. Parties to the Agreement shall comply with these laws."

Therefore since the said Act governs the Agreement between the parties and nowhere in it did the parties agree on the place to conduct arbitral proceedings, the arbitrator ("second respondent") has full and unfettered powers to determine or decide where the proceedings shall take place or continue pursuant to the provisions of section 16 of the said Act.

The Court of Appeal, after setting out the provisions of section 16 in its judgment, Per Oguntade, JCA (as he then was) said:-

"Under the above provisions, unless both parties agreed to the contrary, an arbitral panel can on its own decide the place of the arbitral proceedings and may meet at any place it considers appropriate. In the instant case, the arbitral panel agreed to sit in London for the purpose of taking the evidence of Mr Leno Adesanya and one or two other witnesses. Even if it was thought by the appellant that the decision to go to London to take the evidence of some witnesses to be called by the first respondent was inconvenient or needlessly expensive, the decision still remained one arrived at in absolute compliance with S.16 of Cap. 19 above."

I entirely agree with this finding. I do not therefore agree with the learned Counsel for the appellant that the lower courts have wrongly extended the interpretation of section 16 of the said Act or that the phrase "any place it considers appropriate" did not empower the arbitrator to conduct proceedings anywhere outside Nigeria. Nowhere in the said Act or the Agreement between the parties, was there any provision or clause respectively indicating that all proceedings in the arbitration must be restricted or limited to within Nigeria only. In the circumstances, I answer Issue No 2 in the affirmative.

I have examined issues (iii) and (iv) in the appellant's brief and found them to be merely ancillary to issues (i) and (ii) considered above. The resolution of both or either of them, even if in favour of the appellant, cannot affect the findings in issues (i) and (ii) and would not assist the appellant in any way in this case. I do not therefore, in the circumstances, intend to consider issues (iii) and (iv) of the appellant in the determination of this appeal.

I have earlier determined issues (i) and (ii) against the appellant. The trial Federal High Court and the Court of Appeal have also done the same. There is therefore concurrent findings of the two lower courts on this. This Court does not entertain the habit of interfering with the concurrent findings of the lower courts unless special reasons or circumstances are shown. There are no such circumstances shown here at all.

Therefore from all what I have said above, I find no merit in this appeal. I accordingly dismiss it with N10,000 costs in favour of the respondents.

Kutigi, JSC:- I have had the privilege of reading in advance the judgment just rendered by my learned brother, Kalgo, JSC. I agree with his reasoning and conclusions. The appeal is clearly without merit and it is hereby dismissed with N10,000 costs against the appellant.

Musdapher, JSC:- I have read before now, the judgment of my Lord Kalgo, JSC just delivered, with which I am in agreement. For the same reasons so clearly and comprehensively stated, I too find no merit in this appeal. I accordingly dismiss it. I abide by the Order for costs contained in the aforesaid judgment.

Onnoghen, JSC:- I have had the benefit of reading in draft, the lead judgment of my learned brother, Kalgo, JSC just delivered. I agree with his reasoning and conclusion that the appeal is without merit and should be dismissed.

In resolving the issue as to whether there are two different companies with separate legal personality named Lutin Investment Ltd, it is very instructive to note that the appellant in instituting the action at the trial court specifically sued Lutin Investment Ltd which is the company that entered into the contractual agreement with the appellant resulting in the arbitration. Both the trial and lower courts held that the fact that the company was described as "based and registered in Geneva" does not make it a different company from one that is incorporated in the British Virgin Island? that a company may be incorporated in one country but be based and registered in another country for the purposes of carrying on its business and that if in the course of the proceedings and as a result of further evidence adduced by the witnesses, it becomes established that the claimant and the party that entered into the agreement with the appellant are two different and separate companies, then the normal consequence will follow. These are concurrent findings by the trial and lower courts and the appellant has not satisfied this Court why the said findings should be disturbed. I hold the view that the Court of Appeal is right in confirming the decision of the trial court on the matter particularly as the appellant has not been shut out completely on the issue since if in the process of continuing with the proceedings evidence is produced to confirm the allegation of the appellant that two separate companies are involved in the matter, the proper order would be made by the tribunal. In short the decision is in effect that the objection is premature particularly as there is no evidence or sufficient evidence to support the contention of the appellant that two separate companies are involved in the proceeding.

That apart, it is trite law that the only way incorporation of a company can be established in any proceeding is by tendering the certificate of its incorporation.

This has not been done in this case and by the decision of the two courts, that, if in the course of further proceedings evidence of that nature is produced, the law will take its course, it is clear that the appellant still has an opportunity to tender the certificates of incorporation in proof of its allegation. This Court has the jurisdiction to interfere or disturb the evaluation of evidence and/or concurrent findings of fact by the Court of Appeal and the trial court but would only exercise that jurisdiction if the findings of fact in question are not reasonably justified by the evidence available and the appellant seeking such a disturbance of the findings of fact demonstrates that the said findings are perverse, or are wrong conclusions from accepted credible evidence and that these resulted in a miscarriage of justice - (see Owoyemi v Adekoya (2003) 18 NWLR (Part 852) 307 at 335). As stated earlier in this judgment, the appellant has failed to satisfy this Court of the existence of any of the conditions needed for the court to exercise its jurisdiction to set aside or interfere with or disturb the, concurrent findings of fact in this matter.

On the issue as to whether or not the Arbitrator has an unfettered discretion to take evidence anywhere he considers necessary, it is necessary to look at the terms of the arbitration agreement between the parties and the provisions of section 16 of the Arbitration and Conciliation Act.

The agreement between the parties is dated 23 December 1992 and Clause 12 of it is very relevant? it provides, in effect, as follows:-

(a)    that any dispute between the parties that cannot be resolved by mutual agreement shall be referred to an arbitrator?

(b)    that the arbitrator shall be appointed upon agreement by the parties?

(c)    that where the parties cannot agree on the appointment of an arbitrator, the arbitrator shall be appointed by the Chief Justice of the Federal Republic of Nigeria, upon an application by either party?

(d)    that the arbitration proceedings shall be governed by the provisions of the Arbitration and Conciliation Act? and

(e)    that the arbitrator's findings shall be binding on the parties to the agreement.

These provisions in the agreement clearly show that the parties did not reach an agreement as to the place of arbitration or the rules for the conduct of the arbitration? neither did they restrict the powers of the arbitrator. It is therefore my view that in order to resolve the issue in the absence of any express terms in the agreement, recourse has to be made to the provisions of the Arbitration and Conciliation Act which automatically regulates issues of place of arbitration, power of the arbitrator, etc. The relevant provision is section 16 of the Act, sub-section (1) which provides that unless the parties have agreed, the arbitral tribunal or a