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Court grants $196,330 Dollars arbitral award against top Nigerian company

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2 years ago

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A Federal high court sitting in Lagos south west Nigeria has granted an order recognising and enforcing the arbitral award of $196,330 United State Dollars made by Barrister Haroon Dugal Advocate of the high court, having it’s office at 73 Bridge Colony Cantt, Lahore, Pakistan against a Nigerian company; C G Biostadt company and in favour of a Pakistani company Ferozons Laboratories Limited.
     The Presiding Judge, Akintayo Aluko, also granted an order entering the award dated 28th of December, 2017 as the judgement of the court.
       The order of the court recognising and enforcing the arbitral award, was sequel to an application filed before the court  on behalf of Ferozsons Laboratories Limited by a Lagos lawyer, Chief Aloy Ezenduka, urging the court to grant same.
     In an affidavit sworn to by a lawyer, Mr Michael Nwigbo 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 9th June, 2010, but the C G Biostadt’s delays 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.
   This did not only increase their finished goods inventory unnecessarily,  but also resulted in stock-out situation in the Nigeria market with the disastrous consequence of losing the market shares and loyalty already built with it’s cost implications in the past seven years.
      In fact, every year a mutually agreed business plan was developed and a forecast was committed by the respondent by the respondent in writing, but since 2010 the respondent was alleged to have continuously failed to meet the said forecast each year.
       Till date and as at the time of filling this application, the outstanding amount due to the applicant remained unpaid neither has the follow up meeting held with the defendant on the 22nd of May, 2017 yielded any positive result rather the defendant has continued to brazenly threatened 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 Applicant 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 9th June 2010 by instructing its lawyer, Chief Aloy C. Ezenduka to inform the Respondent by Notice dated 6th June, 2017 which was dispatched by courier on the 10th of July, 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 requesting the Respondent to within 30 days appoint its own 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 letter dated 28th July, 2017.
     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 recognize 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 dare 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 it’s head business group, Olufemi Dawodu and  filed before the court by Barrister Richard Oguntade , the deponent averred that
on the 27th March 2018, the Defendant received a letter dated 26h March 2018 from the Plaintiff’s Counsel informing it of the award dated 28th of December 2017 made by Haroon Dugal, Advocate High Court, having office a: 73-Bridge Colony, Lahore Cantt, Lahore, Pakistan.
      He said that it is untrue that a second Arbitration Notice dated 19th September, 2017 was served on the Defendant.
   The Defendant was only served with a letter by the Plaintiff’s Counsel dated 10th July 2017, with the attached letter of the Plaintiff dated 6th, July 2017, notifying the Defendant of Arbitration and the appointment of Haroon Dugal as Plaintif’s appointed Arbitrator.
The Defendant’s Solicitor, by his letter dated 28th July 2017, replied 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 lawyer’s letter dated 10thJuly 2017, with the attached letter of the Plaintiff dated 6″ July 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 the 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 was not submitted before him in  his award.
The Arbitrator. Haroon Ducel lacks the jurisdiction to have made the award dated 28th of December 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 submission canvassed by the counsels of the two parties; the Presiding Judge, Akintayo Aluko said; “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 26 March, 2018.
Accordingly, reliefs 1 and 2 are hereby granted. Relief 3 is declined.
      1. An order for leave of the court to recognise and enforce the arbitral award made by Barrister Haroon Dugal,Advocate of the high court, having office at 73 Bridge Colony Lahore cantt, Pakistan, an Arbitrator in accordance with clause 24 of the agreement dated 9th of June 2010 in the same manner as a Judgement or order of the Federal High court.
      2. An order entering the award dated 28th December, 2017 as the Judgement of the court.
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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