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ARBITRATION CLAUSE IS A WRITTEN SUBMISSION AGREED TO BY PARTIES.

An arbitration clasue is a written submission agreed to by the parties to the contract and like other written submissions it must be construed according to its language and in the light of the circumstances in which it is made. So held the Superme Court of Nigeria, holden at Abuja in a lead judgment delivered by His Lordship, U. Mohammed, JSC, his learned brothers, M. L. Uwais, CJN, M.E. Ogundare, A.I. Iguh, and D. Musdapher, JJSC, concurring while allowing the Appellant's appeal. The parties were represented by Babajide Koku Esq., for the Appellant, Rober Clarke Esq. With him. Y. Paiko for the Respondent. The facts are as contained in the body of the judgment. This is an appeal from the decision of the Court of Appeal, Lagos Division. The Plaintiff, who is Respondent in this appeal, claims damages for the loss it suffered as charter of the Defendant's ship "LUPEX" under a charter party agreement dated, April 11, 1991. The loss was in consequence of the Defendants breaches of the said charter party. The defendant is the Appellant in this appeal.

After filing the suit, the respondent applied through a motion. At that time, the ship had berthed at the Port of Warri. The trial High Court granted the order as prayed. On being aware of the order given by the Court directing the arrest of the ship the Apellant went to court and filed a motion on notice and applied for the following orders.

1. Setting aside the order of this Honourable Court dated October 13 1992 for the arrest of the vessel M. V. LUPEX alternatively,
2. For the release of the vessel M. V. LUPEX from the arrest of this Honourable Court unconditionally or upon such terms as this Honourable Court may direct,
3. Stay of the proceedings in this suit sine die."

The learned trial Judge, in his ruling, considered the submission of learned counsel for theAppellant, Mr. Candide-Johnson that the Court should have declined jurisdiction in view of the provisions of the Arbitration and Conciliation Act Cap. 19, Laws of the Federation of Nigeria 1990. The learned Judge was also referred to the Charter Party Agreement and the cases of K.S.U.D.B. V Franz Construction Limited (1990) 4 NWLR (Pt. 142) pg. 1 at 33 and Sonnar Nigeria Ltd V Partemreederi M.S. Nord-wind (Owners of the ship M. V. Nordwind) and Another (1987) 3 NWLR (Pt. 66) 520. Referring to his application for setting aside the order of arrest of the vessel M. V. LUPEX, the learned counsel for the Appellant submitted that when the oreder was given through an Ex Parte application not all the relevant submitted facts were known to the Court. The Court was not aware of the existence of arbitral in London. Learned counsel then urged the trial Court to set aside the order of arrest of the ship. The motion was opposed strongly by learned conusel for the Respondent, Mr. Mbanefo, SAN.

The learned trial judge considered all the submissions made before him and held that he had jurisdiction to entertain the action filed by the Respondent and declined to stay proceedings. On the order of arrest of the ship, the court gave a condition that the appellant should supply a Bank Guarrantee to the tune of $735,000.00 US dollars or its equivalent in Naira before the ship could be released.

Dissatisfied with this ruling the Appellant appealed to the Court of Appeal. The Court of Appeal considered all the issues canvassed before it and dismissed the appeal. The appellant now come before this Court, armed with three grounds of appeal, challenging decision of the Court below.

The real issue in dispute between the parties which concerns this appeal is the application filed by the Appellant, requesting the trial High Court to stay proceedings of the action filed by the Respondent in view of the Agreement the two parties entered in clause 7 of the Charter Party, which reads:

7. That the parties agreed inter alia on arbitration in London under English Law in the event of "any dispute".

Learned counsel for the Appellant, Babajide Koku, referred to a number of authorities, both Nigerian and foreign, to buttress his argument that once an arbitration clause is retained in a contract, which is valid and the dispute is within the contemplation of the clause, the Court should give regard to the contract by enforcing the arbitration clause.

Learned counsel for the Respondent argued that the trial High Court exercised its discretion in refusing to say proceedings and it is trite that an Appellant Court may interfere with such a decision only when it is shown that the trial Court had acted on some wrong principles of law or a misapprehension of the facts that the exercise is patently wrong. He referred to Sonnar (Nig) Ltd V Nordwind (1987) 4 NWLR (Pt. 56) 520. Eso JSC (as he then was) wrote the lead judgment in Sonnar's case.

It could be seen, in that case, that Eso JSC concluded that where the granting of a stay would spell injustice to the Plaintiff, as where the action was already time barred in the foreign Court and the grant of a stay would amount to permanently denying the Plaintiffs any redress, justice is better served by refusing a stay than by granting one.

An arbitration clause is written submission agreed by the parties to the contract and like other written submissions it must be construed according to its language and in the light of the circumstances in, which it is made. The parties in this case agreed to refer their disputes to arbitration in London under the English Law. Unlike in Sonnar's case where, on the grounds of balance of convenience, the proceedings in Germany were time barred, in this case, the tribunal in English had started hearing the dispute and parties have begun to present their respective cases before it.

Coming back home, I think the comments made by Ephraim Akpata JSC in the book The Nigerian Arbitration Law is apt on the issue of staying proceedings where parties have agreed to refer their dispute to arbitration ina contract. He expressed his opinion in the following exposition.

"That the power to order a stay is discretionary is not in doubt. It is a power conferred by statute. It however behoves the court to lean towards ordering a stay for two reasons; namely;

1. The provision of section 4 (2) may make the Court's refusal to order a stay ineffective as the arbitral proceedings "may nevertheless be commenced or continued" and an award made by the arbitral tribunal may be binding on the party that has commenced an action in court.
2. The court should not be seen to encourage the breach of a valid arbitration agreement particularly if it has international flavour. Arbitration, which is a means by, which contract disputes are settled by a private procedure agreed by the parties has become a prime method of setting internationl commercial disputes. A party generally cannot both approbale and reprobate and contract. A party to an arbitration agreement will in a sense be reprobating the agreement if he commences proceedings in court in respect of any dispute within the purview of the agreement to submit to arbitration".

Judges and courts exercise their discretion in accordance with rules of law and justices and not according to private opinion. An exercise of discretion is a liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar circumstances of the particular case, guided by the spirit and principles of Law. Where parties have chosen to determine for themselves that they would refer any of their dispute to arbitration instead of resorting to regular Courts a prima facie duty is case upon the Courts to act upon their agreement. See Willesford V Watson (1873) 8 Ch. App 473.

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 proceedings. This is a clear case, which deserves the interference with trial court's discretion by the Court of Appeal.

In the event, this appeal succeeds and it is allowed. The judgment of the Court of Appeal in which it affirmed the ruling of the Federal High Court, Lagos refusing to stay proceedings in this case is hereby set aside. The proceedings before the trial Federal High Court are hereby stayed sine die. The appellants are entitled to the costs of this APPEAL WHICH I ASSESS AT N10,000.00 and the costs of the appeal at the Court of Appeal at N1,500.00