NICON INSURANCE LIMITED .v. BRIGHTHOUSE ESTATE LIMITED (2025) 8 NWLR (Pt. 1993) 469
ON RATIONALE FOR REFERRING DISPUTES TO ARBITRATION
Parties, as in this case, who refer any disputes arising from their legal relationship to arbitration clearly intend to avoid other usual or ordinary ways or methods of settling disputes, such as litigation in ordinary courts which involves cumbersome procedures, unimaginable delays, expenses and general inconvenience. [Nitel Ltd. v. Okeke (2017) 9NWLR (Pt. 1571) 439; Mainstreet Bank Capital Ltd.v. Nig. RE (2018) 14 NWLR (Pt. 1640) 423; Statoil Nig. Ltd. v. NNPC (2013) 14 NWLR (Pt. 1373) 1;BSG Energy Holdings Ltd. (2013) ALL FWLR (Pt.694) 105 referred to.](P. 492, paras. E-F)
NICON INSURANCE LIMITED .v. BRIGHTHOUSE ESTATE LIMITED (2025) 8 NWLR (Pt. 1993) 469
ON NATURE OF ARBITRAL AWARDS
Arbitral awards are not the usual or ordinary decisions/judgments delivered by the ordinary or normal courts established by Law, but outcomes of proceedings and decisions by people or institutions freely and voluntarily chosen specifically by the parties in the course of their agreements/contracts that are fiduciary in nature, to, in the event of any dispute arising from such relationship in which, very often, time is of essence, expeditiously and with relative ease, settle it conclusively to bind them. [R. M. A. F & C. v. U.E. S. Ltd. (2011) 9 NWLR (Pt. 1252) 379; Ras Pal Gazi Const. Co. Ltd. v. F.C.D.A. (2001) 10 NWLR (Pt. 722)559 referred to.] (P. 492, paras. B-D)
NICON INSURANCE LIMITED .v. BRIGHTHOUSE ESTATE LIMITED (2025) 8 NWLR (Pt. 1993) 469
ON CONSENSUAL NATURE OF ARBITRAL PROCEEDINGS AND NEED FOR PARTIES TO ABIDE BY ARBITRAL AWARDS
Since an arbitral award arises from a determination of dispute(s) by an arbitrator freely and mutually chosen and appointed to determine the same by the parties to the dispute, the parties who fully participated in the proceedings without objection should accept and abide by such an award even if they do not like it because it did not go in their favour. They should be frank and sincere in their attitude towards such awards and should be discouraged from turning arbitral proceedings into a pre-litigation or an elongated litigation procedure for the sole purpose of frustrating and eventually defeating the primary purpose of such proceedings freely chosen by them. It defeats the purpose of an agreement to refer a dispute to arbitration if after fully participating therein, a party is allowed to raise technical objections to defeat the award. Put differently, where parties to a dispute have voluntarily submitted themselves to an arbitrator on the complaint raised, it would be unjust for one party to challenge it on its face. [Mekwunye v. Imoukhuede (2019) 13 NWLR (Pt. 1690) 439; Commerce Assurance Ltd. v. AlIi (1992) 3 NWLR (Pt. 232) 710;Taylor Woodrow Nig. Ltd. v. S. E. GMBH (1993) 4 NWLR(Pt. 286) 127; Ras Pal Gazi Const. Co. Ltd. v. F.C.D.A.(2001) 10 NWLR (Pt. 722) 559; A.-G., River State v. A.-G.,Akwa Ibom State (2011) 8 NWLR (Pt. 1248) 31 referred to.] (Pp. 492-493, paras. F-C; paras. F-G)
SEMBCORP ENG. PTE LTD. V. IPCO (WA) HOLDINGS LTD. (2024) 17 NWLR (PT. 1968) 531
ON ESSENCE AND ADVANTAGES OF ARBITRATION CLAUSE IN A CONTRACT
The essence of an arbitration clause in an agreement is that the parties agree that in the event of a dispute arising between them as regards any aspect of their contract, the dispute shall be settled by a tribunal of their choice. The advantages of this course of action are numerous. It saves costs in the long run. The parties are at liberty to choose their arbitrator. They are more likely to accept the outcome of the process. The procedure adopted in arbitration proceedings is less formal than the regular courts and the usual delays experienced through litigation in court are reduced to the barest minimum. [Kwara State Government v. Guthrie (2022) 13 NWLR (Pt. 1846) 189; K.S.U.D.B. v. Fanz Const. Co. Ltd. (1990) 4 NWLR (Pt. 142) 1; Mainstreet Bank Capital Ltd. v. Nigeria Reinsurance Corporation Plc. (2018) 14 NWLR (Pt. 1640) 423referred to.] (P. 569, paras. B-E).
SEMBCORP ENG. PTE LTD. V. IPCO (WA) HOLDINGS LTD. (2024) 17 NWLR (PT. 1968) 531
ON IMPLICATION OF ARBITRATION CLAUSE IN A CONTRACT
The purport of a contract containing an arbitration clause, such as the one executed by the appellant and the respondents, is that the contract requires the parties to resolve their disputes through an arbitration process. The attitude of Nigerian courts towards arbitration and arbitration clauses is to enforce same and hold the parties bound to an agreement voluntarily entered into by them. It is due to the respect by courts for arbitration agreements that an arbitration clause in an agreement is treated as separate from and independent of the agreement itself, such that where the agreement which contains an arbitration clause fails or is found to be null and void or is modified, the arbitration clause survives and can be enforced. This is stated in section 12(2) of the Arbitration and Conciliation Act, 1988, which is in pari materia with section 14(2) of the Arbitration and Mediation Act, 2023. Hence, where an arbitration clause is contained in a contract, atrial court ought to give regard to the voluntary contract of the parties by enforcing the arbitration clause as agreed by them. [U.B.A. Plc v. Triedent Consulting (2023) 14 NWLR (Pt. 1903) 95; OptimumC. & P. Dev. Ltd. v. Ake (2021) 18 NWLR (Pt. 1807)148; N.N.P.C. v. Klifco (Nig.) Ltd. (2011) 10 NWLR (Pt. 1255) 209 referred to.] (P. 560, paras. C-F).
SEMBCORP ENG. PTE LTD. V. IPCO (WA) HOLDINGS LTD. (2024) 17 NWLR (PT. 1968) 531
ON PROPER STEP FOR DISPUTING PARTIES TO AN ARBITRATION AGREEMENT
Where parties voluntarily execute a contract, which includes an arbitration clause, the honourable thing to do is to go through with the terms of their contract by proceeding to arbitration in the event of a dispute. Hence, when a court refers such parties to arbitration, it accords with the principle that a court ought not to make or prepare a contract for the parties different from the one executed by them, but a court should rather enforce the terms of contract entered into by the parties. (P. 568, paras. E-F).