CASE DIGEST - ARBITRATION: PARTIES ARE BOUND BY THE OUTCOME OF ARBITRATION PURSUANT TO A VALID AGREEMENT TO ARBITRATE

CHEVRON NIGERIAN LTD v. OWAH UNIK CONSULTANTS

COURT OF APPEAL (NIGERIA) (LAGOS DIVISION)

(DANIEL-KALIO; BANJOKO; AFFEN, JJ.CA)

Chevron Nigerian Ltd. (the Appellant) and Owah Unik Consultants (the Respondent) having entered into an Agreement for architectural and engineering services had a dispute in relation to the performance of certain terms, and in accordance with the Agreement, referred the dispute to a Sole Arbitrator. Upon the conclusion of the arbitral proceedings, the Arbitrator decided in favour of the Respondent, stating that payments due to the Respondent shall be calculated at the rate of US $1: N116 being the Central Bank of Nigeria (CBN) foreign exchange rate prevailing at the date of the award, as against US$1: N4.2 found in the Agreement, consequent upon which the Appellant approached the lower Court by way of an Originating motion, to set aside the arbitral award. The learned trial Judge, after considering the application of the Appellant, refused to set aside the award of the sole arbitrator and consequently, dismissed the Originating Motion.

Dissatised, the Appellant appealed to the Court of Appeal. One of the issues for determination is Whether the lower Court was right when it held that the arbitrator had given sufficient reason for the application of the prevailing rate of exchange to the contract between the parties.

Learned counsel for the Appellant argued that the rate of exchange of US $1: N4.2 did not apply to any of the payments due to the Respondent. He submitted that the arbitrator found that the Respondent is entitled to payment by reference to US Dollars and the reference exchange rate of US$1: N4.2 in the Agreement, is applicable in computing the value of services rendered by the Respondent to the Appellant. It was submitted that the Appellant has no grouse against that nding but has a grouse that having made that nding, the arbitrator failed to put it into effect and instead, went outside/beyond the scope of the Agreement of the parties to base his award on another exchange rate. Learned counsel further contended that it was the error of the arbitrator in basing his award on the prevailing exchange rate, that the Appellant sought to remedy at the lower Court unsuccessfully.