IN THE HIGH COURT OF IMO STATE
IN THE OWERRI JUDICIAL DIVISION
HOLDEN AT HIGH COURT OF JUSTICE, OWERRI
BEFORE HIS LORDSHIP: – HON. JUSTICE I. M. NJAKA
ON THE 7TH DAY OF NOVEMBER 2024
HOW/53/2024
BETWEEN:
AMANN TECH NIGERIA LIMITED = PLAINTIFF
AND
NIGER DELTA DEVELOPMENT COMMISSION = DEFENDANT
JUDGMENT
The Defendant, Niger Delta Development Commission (NDDC), has filed an application seeking a stay of proceedings pending arbitration, pursuant to an arbitration clause in the “Emergency Road Repair Agreement” between the parties. This agreement was executed following the award of a contract to the Plaintiff, Amann Tech Nigeria Limited, for road repairs, with the arbitration clause (Exhibit NDDC 2) providing that disputes arising from the contract may be referred to arbitration if both parties agree. The Defendant argues that the dispute falls within the contemplation of the arbitration clause, and that it would be in the interest of justice to stay proceedings in court to allow arbitration.
The core issue for determination is whether the court should give effect to the arbitration clause and grant a stay of proceedings.
The legal basis of arbitration in Nigeria is primarily found in the Arbitration and Conciliation Act and judicial guides. Courts in Nigeria, as a matter of public policy, are inclined to uphold arbitration agreements, particularly where the parties have expressly agreed to resolve disputes through arbitration. The court’s role is to respect the autonomy of the parties and give effect to the arbitration clause unless certain exceptions apply.
In FAWEHINMI CONSTRUCTION COMPANY LTD. V. OBAFEMIAWOLOWO UNIVERSITY (1998) 6 NWLR (PT. 553) 171 AT 183, PARAS. E-F. the Supreme Court held that When parties enter into agreement and there is an arbitration clause whereby the parties must first go for arbitration before trial in court, it is natural for the defendant, in a case where the other party has filed a suit, to ask for stay of proceedings pending arbitration. That does not amount to submission to trial. In the case where such application is refused the next step is to invoke a statutory right where it exists if that right will make the suit incompetent.
This principle is further supported by THE OWNERS OF THE M. V. LUPEX V. NIGERIAN OVERSEAS CHARTERING AND SHIPPING LIMITED (2003) 15 NWLR (Pt. 844) 469 Per IGUH, J.S.C. at pages 490-491, paras. F-C: where it was emphasized that courts should not usurp the function of an arbitrator where a valid arbitration clause exists. The court stated:
“The mere fact that a dispute is of a nature eminently suitable for trial in a court is not a sufficient ground for refusing to give effect to what the parties have, by contract, expressly agreed to. So long as an arbitration clause is retained in a contract that is valid and the dispute is within the contemplation of the clause, the court ought to give due regard to the voluntary contract of the parties by enforcing the arbitration clause as agreed to by them. (P. 491, paras. G-H)
Where parties to a contract have under the terms thereof agreed to submit to arbitration, if there is any dispute arising from the contract between them, a defendant who has not taken any steps in the proceedings commenced by the other party may apply to the court for a stay of proceedings of the action to enable the parties go to arbitration as contracted. The power of the court to stay such proceedings is exercisable under and by virtue of section 5 of the Arbitration and Conciliation Act and the court is bound to stay the proceedings unless it is satisfied that there is sufficient reason to justify the refusal to refer the dispute to arbitration. The court may refuse to order a stay of proceedings where the defendant establishes that he would suffer injustice if the case is stayed or that he cannot obtain justice from the arbitration tribunal or that the agreement between the parties is null and void, inoperative and incapable of being performed. [Niger Progress Ltd. v. North East Line Corporation (1989) 3 NWLR (Pt. 107) 68 referred to.] (P. 490, paras. C-F)
Similarly, in NIGERIAN NATIONAL PETROLEUM CORPORATION V. FUNG TAI ENGINEERING COMPANY LIMITED (2023) 15 NWLR (Pt. 1906) 117 the Supreme Court reaffirmed that courts are obligated to enforce arbitration agreements as long as the contract is valid and the dispute falls within the contemplation of the arbitration clause.
Courts, in interpreting arbitration clauses, focus on the intent of the parties and the language of the clause. The court in Obmiami Brick & Stone (Nigeria) Limited v. ACB Limited (1992) held that where the arbitration clause is subject to the mutual agreement of the parties, the court cannot compel arbitration if one party objects. In this case, the Plaintiff has objected to arbitration, arguing that no dispute exists and that the arbitration clause does not apply.
Now whether the court will defer to the arbitration clause depends on clear and obvious interpretation of the arbitration clause in the contract. The arbitration clause in Exhibit NDDC 2 provides that any dispute, controversy, or claim “may” be referred to arbitration if both parties agree. In COMMERCE ASSURANCE LTD VS ALHAJI BURAIMOH ALLI (1992) LLJR-SC. (1992) 3 NWLR (PT.232) 710 Supreme Court distinguished between mandatory and permissive arbitration clauses. The use of “may” makes arbitration optional Parties retain right to pursue court litigation unless both agree to arbitrate
The use of the word “may” imply that arbitration is not mandatory but discretionary, depending on mutual agreement between the parties at the time of the dispute.
Where clause requires mutual agreement, it creates no automatic right to arbitrate. Fresh consent is needed at the time of dispute and the court cannot override party’s objection to arbitration.
- NIGER PROGRESS LTD V. N.E.I. CORP (1989) 3 NWLR (PT. 107) 68.
- S.U.D.B. V. FANZ CONSTRUCTION LTD (1990) 4 NWLR (PT. 142) 1
- ROYAL EXCHANGE ASSURANCE V. BENTWORTH FINANCE (NIG) LTD (1976) 11 SC 107:
- FRONTIER OIL LIMITED V. MAI PETROLEUM LIMITED (2010) ALL FWLR (PT. 540) 1402
A permissive arbitration clause was found not to bar the plaintiff from pursuing a court action, as it did not explicitly make arbitration the sole method of dispute resolution. Unless an arbitration clause contains clear language making arbitration obligatory, the clause will not bar the parties from going to court. The permissive language in the arbitration clause will be interpreted to mean that arbitration was not a mandatory requirement. The existence of a clause suggesting arbitration as one of the dispute resolution mechanisms do not compel the court to mandate arbitration. Litigation remains available to the parties.
- SINO-AFRIC AGRICULTURE & IND. CO. LTD. V. MINISTRY OF FINANCE INCORPORATED (2013) LPELR-CA/A/208/2008
- AGIP (NIGERIA) LTD. V. KASE LAWAL (2002) 14 NWLR (PT. 787) 312
- OLAM NIGERIA LIMITED V. INTERCONTINENTAL BANK LIMITED (2009) LPELR-CA/L/686/2007
- NIGER PROGRESS LTD V. NORTH EAST LINE CORPORATION (1989) 3 NWLR (PT. 107) 68
In this case, the Plaintiff opposes the motion, arguing that there is no real dispute requiring arbitration because the contract has been fully executed, and the Defendant has already issued an Interim Payment Certificate (IPC), signifying that the contract was satisfactorily completed. The Plaintiff also argues that the arbitration clause is not binding as it is contingent upon the parties’ mutual agreement to refer the matter to arbitration.
The Plaintiff has submitted that no dispute exists that would necessitate arbitration. The Plaintiff relies on the issuance of the Interim Payment Certificate (Exhibit ATNL 1), which, according to the Plaintiff, indicates that the contract was satisfactorily completed without any unresolved issues. The Defendant, on the other hand, has raised the issue of a “dispute” that has arisen post-completion, although this is argued by the Plaintiff to be an afterthought intended to delay payment.
In cases where there is no genuine dispute, courts have held that arbitration is unnecessary. For instance, in ZAMFARA STATE GOVERNMENT V. N.C.G INTEGRATED ENG. WORKS LTD (2021)LCN/15841(CA), the court held that arbitration is inappropriate where liability is admitted or where no genuine dispute exists. This ruling supports the Plaintiff’s contention that there is no dispute requiring arbitration, as the Defendant has already issued the IPC and the road project has been completed to the Defendant’s satisfaction. The court stated:
“In the case of NIGERIA LNG LTD VS. AFRICAN DEVELOPMENT INSURANCE CO. LTD (1995) 8 NWLR (PT. 416) PAGE 677, Uwaifo, JCA (as he then was) listed five conditions for a resort to arbitration. They are: (a) that there is an agreement between the parties thereto or a statutory provision which compels arbitration in such matters; (b) that the parties before the Court are parties to the agreement or the transaction which compels arbitration; (c) that the arbitration sought is within the contemplation of the arbitration agreement or circumstances calling it; (d) that there is no sufficient reason why reference to arbitration should not be made; and (e) that the application for stay of proceedings pending arbitration was made in time as envisaged under Section 5 of the Arbitration Act.
Clause 47 of the parties’ agreement would have brought the instant appeal under these requisite conditions but for the circumstances surrounding this particular case. By the said clause 47, the parties elected arbitration as a convenient way of settling any dispute arising between them. However, the learned trial Judge was right not to have granted the application of the Appellants in terms of the agreement between the parties as I can see clearly from the record of appeal that the Respondents completed their own part of the contract to which the Appellants issued a satisfactory note acknowledging the completion of the contract to be 100% progress and satisfactory standard of construction. See the Exhibit A attached to the counter-affidavit to the Notice of Preliminary Objection filed by the Appellants at the trial Court at page 36 of the Record of Appeal.
The Plaintiff argues that granting a stay would result in undue delay and prejudice, as the Defendant would continue to withhold the payment due for the completed work. Courts are generally reluctant to allow parties to invoke arbitration clauses in bad faith or as a dilatory tactic to avoid fulfilling contractual obligations. If the court determines that the Defendant’s application is an attempt to delay payment, the court may refuse to stay proceedings in favor of arbitration.
Application for stay of proceeding pending arbitrating is recognizable under the law. In U.B.A. PLC V. TRIEDENT CONSULTING LTD. (2023) 14 NWLR (PT. 1903) 95 it is stated:
“By the wordings of section 5 of the Arbitration and Conciliation Act, the section is the applicable provision under which to apply for a stay of proceedings pending arbitration where the arbitral proceedings have not commenced. Under section 5 of the Act, there must be an existing court proceeding in which the applicant has not taken steps more than filing an appearance. With the existence of the court proceedings, the applicant must show that the court proceedings must stop and abide the outcome of the arbitration.
What is required of an applicant who is applying for stay pending arbitration is stated in M.V. PANORMOS BAY V. OLAM (NIG.) PLC (2004) 5 NWLR (PT. 865) 1 AT 15, PARAS. F-H. Thus:
“By virtue of section 5 of the Arbitration and Conciliation Act, a party applying for stay of proceedings of an action pending reference to arbitration in order to succeed must show in his affidavit evidence in support of the application by means of documentary evidence, the steps he took or intends to take for the proper conduct of the arbitration. It is not enough for him to merely depose that he is ready and willing to do all things necessary for causing the said matter to be decided by arbitration and for proper – conduct of such arbitration.
To take advantage of the arbitration clause in the contract, the defendant must not take any step in the proceedings. In NIGER PROGRESS LTD. V. N.E.L. CORP. (1989) 3 NWLR (PT. 107) 68 91-92, PARAS. H-A it is stated:
“Where parties to a contract have under the terms of their contract agreed to submit to arbitration, if there is any dispute between them, a defendant who has not taken any steps in the proceedings commenced by the other party may apply to the court for a stay of proceedings in the action to allow the parties go to arbitration.
This action is brought under Summary Judgment procedure and the Defendant has filed Defence and Counter affidavit to the Motion for Judgment. In K.S.U.D.B. V. FANZ CONST. LTD. (1990) 4 NWLR (PT. 142) 1 it is stated:
“An application for an order for pleadings to be filed constitutes a step in the proceedings within the provisions of section 5 of the Arbitration Law. In the instant case, since pleadings had been ordered and the statement of claim filed, the Kano State High Court is the only court with jurisdiction to resolve the dispute between the parties to the action, for by that time, the agreement providing for arbitration had been overtaken by events and rendered ineffective the Arbitration Law stipulating the time an application for reference to arbitration can be entertained and granted by the court. Thus, at that point, the court had not only jurisdiction but also the duty to settle the dispute between the parties. (P.50, paras. B-D)
The arbitration clause in Exhibit NDDC 2 (paragraph 10.1) stipulates that disputes may be referred to arbitration “if the parties both agree to such reference.” This means that arbitration is not automatic and requires mutual consent. In the present case, the defendant has sought arbitration, but there is no indication that the plaintiff has agreed to refer the matter to arbitration. Since arbitration was not mandatory without mutual consent, the defendant cannot unilaterally insist on arbitration to delay the resolution of the dispute. An arbitration clause requiring mutual consent cannot be enforced unless both parties explicitly agree to it. The defendant’s reliance on the arbitration clause without evidence of the plaintiff’s agreement weakens their application for a stay of proceedings pending arbitration.
See K.S.U.D.B. V. FANZ CONST. LTD. (1990) 4 NWLR (PT. 142) 1
There are no merits in the Defendant’s application for a stay of proceedings pending arbitration. The arbitration clause is discretionary, not mandatory, and requires mutual consent for arbitration. The Plaintiff has presented credible evidence (Exhibit ATNL 1) showing that the contract has been completed, and no real dispute exists between the parties. The Defendant’s attempt to raise a dispute after issuing an IPC appears to be an afterthought, possibly aimed at delaying payment. The Plaintiff would suffer prejudice if arbitration were pursued, as it would further delay payment for the work completed.
The preliminary objection is accordingly dismissed.
The Plaintiff filed this suit under summary judgment procedure and brought a motion for summary judgment.
The Plaintiff, Amann Tech Nigeria Limited, filed a Motion for Summary Judgment seeking the following reliefs:
- N165,541,217.18 (the unpaid sum) owed by the Defendant, NDDC, for the execution of a contract concerning the emergency repair of sections of Izombe-Mgbele Road, Oguta Local Government, Imo State.
- N1,379,510.14 as 10% interest on the unpaid sum from May 2021 until the debt is fully paid.
- The cost of this action.
- Any further orders as the court deems necessary.
The Plaintiff argues that the Defendant has no defence to the claim and has defaulted on payment despite repeated demands.
In the affidavit, sworn by Engr. Nnawuihe Nwauwa, Managing Director of the Plaintiff, the Defendant awarded the Plaintiff a contract on 4th June 2018 for road repairs. The Plaintiff executed the contract, and on 19th April 2021, the Defendant issued Interim Payment Certificate No. 0089426 for the sum of N165,541,217.18 after deductions. The Defendant has failed to make payment despite the Plaintiff’s demands since May 2021. The Plaintiff has suffered financial and material loss due to the Defendant’s failure to pay. The Plaintiff contends that the Defendant continues to withhold the money and will not pay unless the court intervenes. The Plaintiff argues that the Defendant has no defense to this claim and requests the court to order payment of the sum, interest, and costs.
In the accompanying address, the counsel stated that the Motion is brought under Order 11 Rules 1, 2, 3 and Order 31 of the Imo State High Court (Civil Procedure) Rules 2017, with reliance on the inherent jurisdiction of the court.
According to the counsel, the Plaintiff, Amann Tech, executed a contract awarded by the Defendant for road repairs. Despite issuing a payment certificate, the Defendant has failed to pay the outstanding sum of N165,541,217.18. The Plaintiff has filed this action to recover the amount, along with N1,379,510.14 in interest, due to the financial hardship caused by the delay.
The counsel raised issue for determination as: Whether the Plaintiff has provided sufficient evidence to justify granting summary judgment in favour of the Plaintiff under the High Court Rules
Summary Judgment is applicable where there is no reasonable defence to a claim. The Plaintiff relies on UBA Plc v. Aribisila and Lewis v. UBA, asserting that the Defendant has no defense and is delaying the inevitable judgment. The Defendant’s failure to honour its payment obligation, despite issuing a certificate acknowledging the debt, leaves no room for defence.
The Plaintiff urges the court to grant summary judgment, awarding the full sum of N165,541,217.18, interest, and costs.
In the Further Affidavit in Support of the Motion for Summary Judgment sworn by Engr. Nnawuihe Nwauwa, the Managing Director of the Plaintiff/Applicant, addresses various issues raised by the Defendant/Respondent. The Plaintiff is a company incorporated under Nigerian law, seeking to recover the contract sum for road repairs executed on the Izombe Mgbele Road. The contract was awarded by the Defendant, the Niger Delta Development Commission (NDDC), a statutory body, and the work was completed and certified with the issuance of an Interim Payment Certificate (IPC) in April 2021.
The affidavit denies the facts and allegations presented in the Defendant’s counter-affidavit. Specifically, it refutes claims of any controversy or breach in the contract, especially concerning mobilization obligations, which the Defendant is now raising after the work’s completion.
While the Defendant mentions an arbitration clause, the Plaintiff clarifies that arbitration was conditional upon the agreement of both parties, which has not occurred. The affidavit emphasizes that the Plaintiff strictly complied with all contractual terms, leading to the issuance of the IPC, which confirms the Defendant’s satisfaction with the work done.
The Plaintiff dismisses the Defendant’s claims of fraud or lack of genuineness in the IPC, asserting that these allegations are afterthoughts raised only after the Plaintiff initiated the lawsuit to recover the contract sum. The Plaintiff argues that the Defendant has not established any valid defence against the Plaintiff’s claims and that any allegations being raised are untimely and without merit.
The Plaintiff states that it will suffer undue financial harm if the motion for summary judgment is not granted, as the Defendant continues to withhold payment despite the completion of the contract.
The affidavit concludes by requesting the court to grant the motion for summary judgment, asserting that the Plaintiff is entitled to be paid based on the IPC, and there is no genuine issue for trial.
In the reply brief the Plaintiff stated that the Plaintiff filed a 22-paragraph further affidavit in response to the Defendant’s counter affidavit, particularly relying on paragraphs 7-21. The Plaintiff adopts the Defendant’s issues for determination:
- Whether summary judgment can be granted despite the Defendant’s motion for a stay of proceedings pending arbitration.
- Whether the Defendant has a prima facie defence that warrants dismissal of the summary judgment application.
Issue 1:
The Plaintiff argues that the arbitration clause in the contract is subject to mutual agreement and is not enforceable if either party objects to arbitration. Citing case law, the Plaintiff submits that where a party admits liability or the matter is no longer in dispute, the arbitration clause becomes inapplicable, and the party can proceed to court. The Defendant, having issued an Interim Payment Certificate (IPC) upon completion of the contract, has already compromised its position, leaving nothing to be referred to arbitration. Case law examples, such as Kano State Urban Development Board v. Fanz Construction, affirm that arbitration is unnecessary when liability is admitted but not paid.
Issue 2
The Plaintiff contends that the Defendant has failed to establish a prima facie defence under the Imo State High Court Rules, 2017, which would warrant dismissal of the summary judgment.
The Defendant’s claim that the IPC is fraudulent lacks specific particulars and supporting evidence, especially since the project was completed to the Defendant’s satisfaction and the IPC was issued without any prior complaint. Citing Sanusi Bros (Nig.) Ltd v. Cotia C.E.I.S.A, the Plaintiff argues that the Defendant’s defence is frivolous, a delaying tactic, and “moonshine” because it lacks substance and fails to meet the burden of proof required for allegations of fraud. The Plaintiff highlights that forgery must be proven with both the original and the alleged forged document, which the Defendant has failed to do, further weakening their defence.
The Plaintiff urges the court to find that the Defendant has failed to establish a good defence and requests the court to grant summary judgment in the Plaintiff’s favour.
Defendant’s case
Uno Umoekeyo Uno, a manager in the Legal Directorate of the Niger Delta Development Commission (NDDC), deposed to the affidavit on behalf of the defendant. The defendant admits paragraphs 1 to 5 of the plaintiff’s affidavit but denies paragraphs 6 to 11, providing specific rebuttals.
The contract in question is identified as an “emergency contract” governed by an Emergency Road Repairs Agreement (Exhibits NDDC 1 and 2), which includes an arbitration clause.
Emergency contracts differ from regular contracts as they are awarded under urgent circumstances without a specific contract sum, which is determined post-project completion following engineering assessments. The defendant claims the plaintiff failed to mobilize within the required 30-day timeframe and did not follow the strict terms of the award letter, resulting in a breach.
The defendant accuses the plaintiff of fraud regarding an Interim Payment Certificate, which falsely included a contract sum contrary to the nature of emergency contracts. The defendant emphasizes that any dispute should be resolved through arbitration as stipulated in Exhibit NDDC 2, requesting a stay of proceedings pending arbitration.
The defendant argues they have a prima facie defence against the plaintiff’s claims, stating the project was not completed according to specifications and deadlines. The defendant argues the court should uphold the arbitration clause in Exhibit NDDC 2 and dismiss the application for summary judgment. The defendant asserts that there are genuine triable issues, particularly the plaintiff’s failure to adhere to contract specifications and timelines, thus making the case unsuitable for summary judgment.
The defendant urges the court to dismiss the plaintiff’s application for summary judgment based on the arbitration agreement and the presented prima facie defence.
Resolution of matter:
If the defendant had the option to terminate the contract before its conclusion, it could have exercised that option if they believed the plaintiff had failed to comply with the terms of the contract. However, from the facts, the defendant did not terminate the contract but rather allowed the plaintiff to continue and complete the project, which culminated in the issuance of an Interim Payment Certificate (IPC). This suggests that despite the alleged breaches, the defendant still considered the contract to be in effect. The fact that the contract was not terminated at the material time weakens the defendant’s argument regarding non-performance by the plaintiff.
Relying on breaches after contract completion is a big blow to the sanctity of contract. Once a contract is fulfilled, parties cannot typically claim breaches unless there are ongoing obligations or warranties that extend beyond completion. The courts emphasize that parties should not seek to enforce claims based on alleged breaches after the contract has been executed unless such claims are explicitly supported by the contractual terms.
The principle here is that by allowing the plaintiff to continue work without termination, the defendant could be seen as having waived its right to terminate the contract at that stage. It is important for parties to act in accordance with contract terms, including provisions for termination, and not relying on breaches post-completion.
Issuance of the Interim Payment Certificate (IPC): The issuance of the IPC by the defendant is a significant fact because it acknowledges that work was done by the plaintiff. This creates a presumption that the plaintiff substantially performed its obligations under the contract. The IPC usually represents an acknowledgment of work completed to the point of that payment, and the defendant would be estopped from denying the validity of the IPC without compelling reasons, such as fraud.
The defendant has not exercised its option to terminate the contract and instead issued an IPC, which suggests that the Plaintiff performed as expected.
The issuance of the IPC and the failure to terminate the contract at the appropriate time suggest that these issues are not sufficient to defeat the plaintiff’s claim.
The defendant’s allegations of fraud seem to contradict the fact that they acknowledged the plaintiff’s performance by issuing the certificate.
In the absence of strong evidence supporting the defendant’s fraud allegations, the IPC stands as a valid acknowledgment of work done. An IPC creates an immediate obligation to pay the certified sum. The employer cannot unilaterally withhold payment of a certified sum.
Before I conclude on this point, let me state that the Defendant has argued that Emergency Contracts differ from regular contracts as they are awarded under urgent circumstances without a specific contract sum, which is determined post-project completion following engineering assessments. The defendant equally accuses the plaintiff of fraud regarding an Interim Payment Certificate, which falsely included a contract sum contrary to the nature of emergency contracts. Now the implication of this submission, in my view, is that the contract sum is not stated at the point of the award of the contract. The contract sum is only arrived at after the completion of contract and its assessment by the engineers. That been the case the only proper place to find the contract sum should be in the IPC. I do not comprehend the argument that the IPC is fraud because it contains the contract sum. The argument proffered by the Defendant in this respect, in my view, is approbating and reprobating. A person is not allowed in law to approbate and reprobate. As stated in the maxim “Quad approbo non reporbo” meaning that which I approve, I cannot disapprove.” See EGBO V. CANDID (2023) 16 NWLR (PT. 1911) 417 AT 433, PARAS. D-E) REFERRING TO THOMAS W. & SON (NIG. LTD) V. P.I. LTD (2019) 12 NWLR (PT. 1687) 540
I also hold the view that the mere fact that the IPC contains additional information (contractual sum) that is not usually included doesn’t void the document, especially when the Defendant’s authorized personnel issued it. The Defendant is not saying that it was not issued by them or authorised personnel
Assuming, but not conceding, that the Plaintiff did not meet up with time lines, given that the defendant did not terminate the contract and issued the IPC, the alleged non-compliance with timelines does not constitute a material breach. The defendant’s actions suggest that any breach was not considered material enough to terminate the contract. The defendant’s failure to terminate the contract and issuance of the IPC indicate that the plaintiff’s alleged breach may not be material. An IPC is typically issued after a review and verification by the project’s supervising engineers or consultants.
The Defendant’s issuance of IPC after completion indicates acceptance despite any delay. Acceptance of performance after time stipulated waives the right to rely on breach of time condition.
In R.C.C. (NIG.) LTD. V. EDOMWONYI (2003) 4 NWLR (PT. 811) 513 AT 553-534, PARAS. H-C) it is stated:
“When a stipulation as to time is made of the essence of a contract, failure to perform at the stipulated time entitles the innocent party to elect to terminate the contract for breach of a condition with the consequences that:(a)the innocent party thereby puts an end to all primary obligations which have not already been performed; and(b)the innocent party may claim damages from the defaulting party on the basis that he has committed a fundamental breach of contract.”
The Defendant did not terminate the contract but went ahead to issue IPC after the completion.
The defendant’s motion for a stay of proceedings pending arbitration is dismissed due to the absence of mutual consent. The court finds that the Defendant has failed to establish a good defence. Judgment is accordingly entered in favour of the Plaintiff.
I so hold
I.M.Njaka
Judge
7-11-2024
Appearances:
A.I Nwamadu Esq., for the Plaintiff
A.F Okpako Esq., for the Respondent.