TAYLOR WOODROW OF NIGERIA LIMITED v. SUDDEUTSCHE ETNA-WERK GMBH
CITATION: (1993) LPELR-SC.43/1991
   
new OTHER CITATIONS:
1 Taylor Woodrow (Nig.) Ltd. v. S.F. GMBH (1993) 4 NWLR (Pt.286)127
2 (1993) 4 SCNJ 32
3 (1993) 24 N.S.C.C (Pt I) 415
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Nigerian Coat of Arms
In The Supreme Court of Nigeria
On Friday, the 23rd day of April, 1993
Suit No: SC.43/1991
 
 Between
TAYLOR WOODROW OF NIGERIA LIMITED Appelants
 
 And
SUDDEUTSCHE ETNA-WERK GMBH Respondents
 
SUMMARY OF JUDGMENT 

This appeal raises the question when and in what circumstances, a court will disturb the award made by an arbitrator to whom the parties to a contract have voluntarily submitted a dispute arising between them for adjudication.

Taylor Woodrow of Nigeria Limited by a contract dated 23rd May, 1981 entered into by it and the Niger State Government, agreed to build a Specialist Hospital in Minna. By a sub-contract dated 21st September, 1981, supplemental to this contract (known in these proceedings as the main contract) the said company (who is now the appellant before us and shall hereinafter be so referred to) appointed Suddeutsche Etna- Werk GMBH, a company based in Germany (hereinafter shall be referred to as the respondent) to execute the supply of installation and commissioning of air-conditioning work of the Specialist Hospital for a contract sum of N885,920,00. By Appendix II of the sub-contract, part of the contract sum of N885,920.00, that is, N430,000.00 was to be paid for by the establishment of irrevocable letters of credit on stated dates to enable the respondent bring in fabricated materials and equipment needed for the air-conditioning work, into Nigeria. Appendix II reads:

"MINNA GENERAL HOSPITAL

APPENDIX II TO ETNA SUB - CONTRACT AGREEMENT

TAYLOR WOODROW OF NIGERIA WILL PROVIDE IRREVOCABLE LETTER OF CREDITS AND NECESSARY DOCUMENTS UP TO THE FOLLOWING MAXIMUM AMOUNT

SHIPMENT 1 MAX. NAIRA 165.00 DATE NOV. 1981

SHIPMENT 2 150.00 FEBR. 1982

SHIPMENT 3 115.00 MAY 1982

THE IRREVOCABLE LETTER OF CREDITS MUST BE ACKNOWLEDGED BY A GERMAN BANK AND MUST BE PAYABLE AT THIS BANK BY SHOWING THE NECESSARY DOCUMENTS. THE MONTHS STATED ARE THOSE IN WHICH

THE LETTER IS TO BE RAISED.

T.W.N. WILL HAVE ACCESS TO ALL QUOTATIONS AND L.P.O. MATERIALS TO BE IN ACCORDANCE WITH SPEC.

AND APPROVED BY THE ENGINEER. ETNA TO HAVE FREE CHOICE BY SELECTING THE MANUFACTURER.

ETNA AGREES TO PAY THE 4 HANDLING CHARGE REQUIRED BY THE L.O.C

DUE TO ETNA'S NON REGISTRATION IN NIGERIA, ETNA WILL OPERATE AS A DIRECT SUB-CONTRACTOR TO TAYLOR WOODROW. THEY WILL OPERATE UNDER THE COMPANY NAME OF T.W. THIS RELATIONSHIP IS PURELY FOR CONVENIENCE AND DOES NOT IN ANYWAY NEGATE ETNA'S RESPONSIBILITIES UNDER THE SIGNED SUBCONTRACT (NON - NOMINATED) AGREEMENT."

By exchange of letters between the parties, the appellant requested the respondent to commence fabrication of the materials for shipment. The respondent performed its part of the bargain and had the materials fabricated to specifications and packaged ready for shipment. The appellant, despite efforts made, failed, however, to obtain the necessary import licence and Form M and to establish irrevocable letters of credit thereby making it impossible for the equipment to be brought into Nigeria. The respondent was thus unable to continue performance of the sub-contract and claimed there was a breach of contract on the part of the appellant. The main contract was subsequently suspended by the Niger State Government.

It was this breach that was the subject matter of the arbitration conducted by Professor A.B. Kasumu, S.A.N. The Arbitrator found in favour of the respondent and made an award in its favour in the sum of "DM 1,229, 092.52 or its equivalent in Naira at the date of payment in addition to the sum of N57.092.00" with costs assessed at N 10,000.00.

The appellant subsequently applied to the High Court of Lagos State by originating motion to set aside the award or, alternatively, remit the same to the said Arbitrator for reconsideration on the following grounds:

"(1) The Arbitrator misconducted himself and/or the proceedings by misinterpreting the provisions of Clause 13 particularly Clause 13(5) of the sub-contract, thereby grossly failed by holding that the obligation on the applicant to open the letters of credit does not arise after the issuance of an interim certificate in respect of the equipment/materials but before. Thus the Arbitrator further failed to appreciate the correct intention/interpretation of Clause 13(5) as contained in the applicant's final address, before the Arbitrator.

(2) The Arbitrator misconducted himself and/or the proceedings in holding that the payment Clause as set out in Clause 13 of the subcontract must be read subject to the modification and obligations imposed on the applicant in Appendix II of the sub-contract when in fact no such submission was ever made at any time by the respondent and there exist no evidence to support this interpretation as set out in the award.

(3) The Arbitrator misconducted himself and/or the proceedings by not considering at all the issue of waiver of rights as submitted by applicant as the issue of waiver would have determined at what period the applicant could have been guilty of breach of contract if guilty at all

(4) The Arbitrator misconducted himself and/or the proceedings by not holding that the sub-contract had been frustrated and thereby decided the issue on the ground that the Applicant failed to obtain the Import Licence, Form M and open documentary evidence that the Import Licence and Form M had been obtained by the applicant, contrary to the letters in the Arbitrator's award.

(5) The Arbitrator misconducted himself and/or the proceedings in holding that the provisions of Clause 7(1) of the sub-contract is limited only to cases of loss or damage whereas the provisions extend beyond the Arbitrator's interpretation.

(6) The applicant holds that the Arbitral Award made in favour of the claimant is excessive."

Grounds (3) & (4) were abandoned at the trial and were accordingly struck out. The learned trial Judge, after considering the submissions of learned counsel for the parties, in a reserved ruling, dismissed the application with costs. Being dissatisfied with this decision, the appellant appealed unsuccessfully to the Court of Appeal.

The appellant has further appealed to this Court.

Appeal dismissed

   
Appearances
 
Adeniran Ogunsanya (Jnr) For the Appelants
 
Chief Chuks Ikokwu
U. Alihonwu (Miss)
For the Respondents