Justice Akintayo Aluko of a Federal High Court sitting in Ikoyi, Lagos, has granted an order recognising and enforcing the arbitral award of $196,330 made by Barrister Haroon Dugal, having its office at 73 Bridge Colony Cantt, Lahore Pakistan against a Nigerian company CG Biostadt Company and in favour of a Pakistani company, Ferozons Laboratories Limited.
The court equally granted an order entering the award dated December 28, 2017, as the judgement of the court.
Justice Aluko arrived at the conclusion sequel to an application filed on behalf of Ferozsons Laboratories Limited by a Lagos lawyer, Chief Aloy Ezenduka, who had prayed the court to grant the same.
According to an affidavit sworn to by a legal practitioner, Michael Nwigbo, and filed and argued before the court by Chief Aloy Ezenduka, the deponent alleged that the relationship between the parties is regulated by the Distribution Agreement dated June 9, 2010, and that CG Biostadt’s delayed in payment of due invoices has been the norm rather than the exception in the course of their business relationship and several promises on the part of the respondent to make payment have remained unfulfilled.
Nwigbo, insisted, that this has not only increased their finished goods inventory unnecessarily but has also resulted in a stock-out situation in the Nigerian market with the disastrous consequence of losing the market shares and loyalty already built with its cost implications in the past seven years.
The deponent further stated that every year, a mutually agreed business plan was developed, and a forecast was committed by the respondent in writing, but since 2010, the respondent has continuously failed to meet the said forecast each year.
Nwigbo posited that to date, and as at the time of filling the application, the outstanding amount due to the applicant remains unpaid, neither has the follow-up meeting held with the defendant on May 22, 2017, yielded any positive result, rather the defendant has continued to brazenly threaten that it will use its contacts in the industry and the regulatory authorities to disrupt any import of the Applicants’ goods into Nigeria and Ghana except the Applicants pays them off as was done by General Electric when the latter severed business relationship with the respondent in 2015.
The applicant activated Clause 24.1 of the Distribution Agreement dated June 9, 2010, by instructing its Legal Practitioner Chief Aloy C. Ezenduka to inform the respondent by a Notice dated June 6, 2017, which was dispatched by courier on July 10, 2017, of the appointment of Barrister Haroon Dugal as its Arbitrator, venue, and time of arbitration in accordance with the agreement executed by the parties and requested the respondent to within 30 days appoint its Arbitrator within the time allowed by the Distribution Agreement.
The Respondent was further informed that in the case of default on its part in any respect, the Arbitrator shall proceed to adjudicate upon the dispute and make an arbitration award in terms of the Agreement. The receipt of the notice was acknowledged by the Respondent’s Solicitors by way of a letter dated July 28, 2017.
The affidavit states that: “The applicant has satisfied the precondition provided under Section 31 and 51 of the Arbitration and Conciliation Act, CAP A18, L.F.N, 2004 and is entitled to the kind consideration of the court to recognise and enforce the Arbitral Award made by the Arbitrator, Barrister Haroon Dugal on the 28th day of December 2017. Consequently, it will be in the interest of justice to grant this application.
“That the respondent is indebted to the Applicant and is in dire financial stress and unable to pay its debts.
“That it is the right of the Applicant to mitigate, ameliorate and protect itself from avoidable losses by bringing this application on time before the respondent goes into liquidation or a Receiver/Manager is appointed to oversee the affairs of the Respondent.”
However, in its counter affidavit sworn to by its Head, Business Group, Olufemi Dawodu and filed before the court by Richard Oguntade, the deponent averred that on March 27, 2018, the defendant received a letter dated March 26, 2018, from the Plaintiff’s counsel, informing it of the award dated December 28, 2017, made by Haroon Dugal, Advocate High Court, having an office at 73-Bridge Colony, Lahore Cantt, Lahore, Pakistan.
It was stated in the counter affidavit that, “It is untrue that a second Arbitration Notice dated September 19, 2017, was served on the defendant.
“The defendant was only served with a letter by the plaintiff’s counsel dated July 10, 2017, with the attached letter of the plaintiff dated July 6, 2017, notifying the defendant of Arbitration and the appointment of Haroon Dugal as plaintiff’s appointed Arbitrator.
“The defendant’s Solicitor by his letter dated July 28, 2017, replied to the plaintiff Solicitor’s letter informing him that the Notice of Arbitration by the Plaintiff was premature as it has not fully complied with the provision of Clause 24.1 of the Distribution agreement between the parties to the effect that the disputes between the parties shall be settled in the first instance amicably between them.
“That since the receipt of the plaintiff’s legal practitioner’s letter dated July 10, 2017, with the attached letter of the plaintiff dated July 6, 2017, notifying the defendant that the plaintiff has initiated arbitration proceedings, the defendant has not received any other document(s) from the plaintiff or the Arbitrator.
“That Defendant was not served document(s) submitted or filed by the plaintiff with the Arbitrator.
“That the appointment of Haroon Dugal, as the sole Arbitrator, is a breach of Clause 24.1 of the Distribution Agreement entered into between the defendant and the plaintiff.
“That the Arbitrator considered the documents that were not submitted before him in his award.
“The Arbitrator, Haroon Ducel lacks the jurisdiction to have made the award dated December 28, 2017.
The award made by the arbitrator is incompetent.”
Consequently, the defendant urged the court to dismiss the suit.
Having listened to the argument and submissions canvassed by the counsels of the two parties, the presiding Judge declared: “Going by the affidavit evidence and documentary exhibits placed before the court by the plaintiff, it has sufficiently met and complied with the above provisions of Section 31 of the Act and Order 52 Rule 16 of the extant Civil Procedure Rule of this court.
“The plaintiff is entitled to the reliefs in its motion exparte, but converted into motion on notice dated March 26, 2018.
“Accordingly, reliefs 1 and 2 are hereby granted. Relief 3 is declined.
“Cost of this action assessed in the sum of Five Hundred Thousand Naira (N500,000) only is awarded in favour of the Plaintiff against the defendant.
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