FACTS
General Electric International Operations Nigeria Limited (the Appellant) and Q Oil and Gas Services Limited (the Respondent) entered into a master services agreement and other related contractual documents under which the Respondent claimed to have provided expatriate manpower, consultancy, and technical support services to the Appellant in the execution of certain oil and gas projects within Nigeria. According to the Respondent, these services were duly rendered in strict compliance with the terms and specifications contained in the master services agreement, but the Appellant failed, neglected, and refused to make full payment for them despite several reminders and repeated demands. The Respondent therefore brought an action at the High Court of Rivers State, Port Harcourt Judicial Division, under the undefended list procedure, claiming the sum of US$459,123.27 as the outstanding contractual payment, together with interest at the rate of 10% per annum after judgment until the final liquidation of the debt. The claim was supported by invoices, correspondence, and other documentary evidence showing the extent of the services rendered.
The Appellant, upon being served with the originating processes, contested the action by filing a notice of intention to defend, along with a formal application seeking a stay of proceedings pending reference of the dispute to arbitration in line with the arbitration clause expressly contained in the master services agreement between the parties. In its considered ruling, the trial court upheld the Appellant’s application, granted the order for stay of proceedings, and adjourned the matter sine die pending the outcome of the arbitral proceedings, holding that the parties were bound by their contractual obligation to submit disputes to arbitration.
Dissatisfied with that decision, the Respondent appealed to the Court of Appeal. In response, the Appellant raised a preliminary objection, contending that the trial court’s ruling was interlocutory in nature and that, by law, an interlocutory appeal must be filed within fourteen (14) days, and not within two years as done by the Respondent. The Court of Appeal, however, dismissed the objection, holding that the ruling of the trial court was a final decision on the issue of jurisdiction. It thereafter proceeded to hear the substantive appeal, allowed it, set aside the ruling of the trial court, and ordered that the case be remitted to the Chief Judge of Rivers State for reassignment to another judge for hearing and determination on the merits.
Aggrieved by the decision of the Court of Appeal, the Appellant appealed to the Supreme Court. One of the issues for determination was: Whether the lower court was right when it held that the order of the trial staying further proceedings in the suit and referring the parties to mediation or arbitration was a final order appealable as of right.
ARGUMENTS
The Learned Silk for the Appellant contended that the court below erred when it held that the decision of the trial court, which stayed proceedings and referred the parties to mediation or arbitration, amounted to a final decision appealable as of right under the Constitution. He maintained that the order did not in any way dispose of the substantive rights of the parties but merely gave effect to their contractual agreement to explore arbitration or mediation pending litigation. Learned Silk further argued that it is well settled that an order which merely determines a procedural issue, such as referring a dispute to arbitration, is interlocutory in nature and does not dispose of the interests of the contending parties. He emphasised that the reference to arbitration was a procedural step in accordance with the contract freely entered into by both parties, and that it neither extinguished nor adjudicated upon any of their respective claims or defences. He also stressed that an adjournment sine die, by its very nature, does not terminate proceedings but only suspends them indefinitely pending the occurrence of a future event, such as the conclusion of the arbitration process or any other agreed mechanism of settlement. Learned senior counsel reiterated that the ruling of the trial court neither resolved the substantive claim nor determined liability, and therefore could not properly be classified as a final decision within the meaning of the law. In his view, the trial court merely paused to allow the parties to pursue an alternative method of dispute resolution as they had voluntarily agreed, after which the matter could, if necessary, be revived and determined on its merits. He concluded that, being interlocutory in character, the order required the Respondent to first obtain leave of court before filing an appeal, and that the lower court therefore fell into grave error when it assumed that the reference to arbitration meant there was nothing left for the trial court or any other court of co-ordinate jurisdiction to determine.
In response, the Learned Silk for the Respondent argued that although the decision of the trial court emanated from an interlocutory application, it was in substance a final decision for the purposes of appeal. He relied on the definition of ‘judgment’ in the Court of Appeal Act, which includes any decision or order of a court, as well as the relevant provisions of the Constitution, which define a ‘decision’ to include a judgment, decree, order, conviction, sentence, or recommendation. Learned Silk submitted that the ruling in question conclusively determined the rights of the parties in relation to the issue of jurisdiction and left nothing more for the trial court to adjudicate upon. He maintained that once the trial court stayed proceedings and referred the parties to arbitration, it had effectively declined jurisdiction over the matter and could not thereafter take any further steps in the case.
He argued that the trial court thereby became functus officio on that point, having finally pronounced upon its competence to hear the case. The learned Silk contended that a proper reading of the relevant judicial authorities shows that where a ruling conclusively determines a court’s jurisdiction, such a ruling is final in nature, notwithstanding that it arises in interlocutory proceedings. He further added that by declining jurisdiction and adjourning the matter sine die, the trial court effectively shut its doors to the Respondent and curtailed its right to pursue its claim before a court of law. Accordingly, in the view of learned counsel, the trial court had exhausted its authority on the issue and the ruling satisfied the hallmark of a final decision, as there was nothing further left for the trial court to entertain in relation to the substantive claim or any ancillary question that might arise from the contractual dispute.
DECISION OF THE COURT
In resolving this issue, the Supreme Court held that:
A court which stays proceedings and refers a matter to arbitration does not thereby exhaust its judicial authority or render itself functus officio. Rather, the court continues to play a supervisory and facilitating role over the arbitral process. To treat such a referral as final, the Court reasoned, would amount to elevating a procedural step into a substantive determination an approach wholly inconsistent with the law.
The Court further clarified that an order staying proceedings and directing the parties to arbitration is purely interlocutory in nature and does not amount to a final determination of the rights of the parties. Such an order merely suspends the proceedings before the trial court to allow the agreed arbitral process to take its course. Consequently, any appeal arising from such an order can only be validly brought with the prior leave of court, as required by law for interlocutory decisions. In the present case, the trial court’s referral of the matter to arbitration neither disposed of the substantive claims before it nor extinguished its jurisdiction to entertain the matter upon the conclusion of arbitration. The proceedings were only held in abeyance pending the outcome of the arbitral reference. Accordingly, the Supreme Court held that the Court of Appeal erred in treating the ruling as final.
Issue resolved in favour of the Appellant.
Adedapo Tunde-Oluwu, SAN, Rebecca Ebokpo,Esq. and Michael Aigbe, Esq. for the Appellant.
Prof. Mike A. Ozekhome, SAN, Collins N.Obulor, Esq.; Osilama Mike Ozekhome, Esq.; Oshoma Mike Ozekhome, Esq.; Jemilat Kassim Ali [Miss]; Yusuf Amoda-Kannike, Esq.; Osikhuemhe Mike Ozekhome, Esq.) for the Respondent.