Facts and Background
On 25th August 2011, the respondent, a legal practitioner, through his law firm of Abang Ogar & Co., entered into a Consultancy Service Agreement (the “Agreement”) with the Bayelsa State Government, followed by an addendum on 15th September 2011. The respondent recovered N18,705,308,094.83 (Eighteen Billion, Seven Hundred and Five Million, Three Hundred and Eight Thousand, Ninety-Four Naira, Eighty-Three Kobo) owed to the State by federal agencies including the Debt Management Office, Revenue Mobilization Allocation and Fiscal Commission, and Department of Petroleum Resources, entitling him to 15% fees of N2,820,796,214.22 (Two Billion, Eight Hundred Twenty Million, Seven Hundred Ninety-Six Thousand, Two Hundred Fourteen Naira, Twenty-Two Kobo.) under the Agreement. When Bayelsa State refused to honour its obligation to the respondent, the respondent declared a dispute and called for arbitration per clause 11 of the Agreement. He nominated Ms. Ikpeme Akpan, MCIArb (UK), as arbitrator and sought the appellant’s consent, who did not reply. The respondent then applied to the Chief Judge of the Federal Capital Territory (FCT) for appointment of an Arbitrator. On 19th April 2013, the Chief Judge appointed Prof. Paul Idornigie as the arbitrator. The appellant fully participated in the proceedings, where an award was made in favour of the respondent on 17th January 2014, but it refused to make payment to the respondent.
On 13 February 2014, the respondent filed an originating motion at the High Court of the Federal Capital Territory, Abuja (the “High Court of the FCT”), for recognition and enforcement of the award. The High Court of the FCT granted the respondent’s motion. An appeal by the appellant to the Court of Appeal was dismissed, informing the further appeal to the Supreme Court. The appellant contended on appeal that a business name (such as the respondent) cannot contract, and that the agreement between parties is void, despite the recovery benefits to the State.
Issues for Determination
On the merits, the Supreme Court considered two issues for determination of the appeal, to wit:
i. WHETHER an arbitral award which is founded on an arbitration agreement which is not recognizable in law can be validly recognized by the court?
ii. WHETHER the Court of Appeal was not wrong in affirming the decision of the trial court when the trial court lacked jurisdiction to entertain the action instituted for the recognition of the arbitral award?
Arguments of Counsel
On issue one, the appellant argued that the arbitral award contains an error of law on its face, making it liable to be set aside, because a business name like “Abang Odok-Ogar and Co” lacks legal capacity to contract. The appellant argued that the arbitrator erred by applying High Court and Federal High Court rules to validate the execution of the Consultancy Service Agreement, instead of the Arbitration and Conciliation Act and the Arbitration Rules. He therefore urged the court to declare the contract void as Abang Odok-Ogar and Co. lacked capacity to contract. In response, the respondent distinguished contractual capacity from juristic personality, asserting that business names can contract under ss. 558 and 573 of the Companies and Allied Matters Act 1990. The Respondent argued that none of the cases cited by the Appellant support barring business names from entering into contracts.
Arguing issue two, the appellant submitted that the High Court of the FCT lacked territorial jurisdiction to entertain the respondent’s originating motion because the affidavit in support of the application disclosed the appellant’s address is in Yenagoa, Bayelsa State, outside the court’s territory, with no facts linking the claim or appellant to the Federal Capital Territory. On the part of the respondent, it was argued that the jurisdiction for enforcing arbitral awards under ss. 31 and 57 of the Arbitration and Conciliation Act 2004, is not territorially limited as in breach of contract claims. The respondent drew the attention of the court to Clause 11 of the Consultancy Service Agreement to argue that the parties, of their own record, gave the High Court of the FCT jurisdiction over their dispute. In response to this submission, it was argued in the reply brief of the appellant that parties cannot confer jurisdiction via an agreement, as held in Babalola v. Obaoku-Ote.
