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A. SAVOIA LIMITED V. A. O. SONUBI (2000)

case summary

Supreme Court of Nigeria

Before Their Lordships:

  • Salihu Modibbo Alfa Belgore, J.S.C.
  • Michael Ekundayo Ogundare, J.S.C.
  • Uthman Mohammed, J.S.C.
  • Aloysius Iyorgyer Katsina-Alu, J.S.C.
  • Akintola Olufemi Ejiwunmi, J.S.C.

Parties:

Appellant:

  • A. Savoia Limited

Respondent:

  • A. O. Sonubi
Suit number: SC. 40/1996

Background

This case involves a dispute stemming from a building contract between A. Savoia Limited (the Appellant) and A. O. Sonubi (the Respondent) regarding the construction of two blocks of flats at Parkview Estate, Ikoyi, Lagos State. Following a series of disagreements over the project, the Appellant terminated the contract, leading to a referral of the dispute to arbitration. Dr. T. M. Aluko, a civil engineer, was appointed as the arbitrator, and he issued his award on March 8, 1985. The Appellant later sought to have this award set aside, alleging various forms of misconduct by the arbitrator.

Issues

The primary issues under consideration were:

  1. Whether the Court of Appeal erred in not setting aside the trial court’s judgment based on claims that the arbitrator failed to adhere to the principles of natural justice.
  2. Whether the arbitrator engaged in misconduct by applying personal expertise instead of the evidence presented during the arbitration.

Ratio Decidendi

The Supreme Court unanimously held that:

  1. The provisions of the Arbitration Law and the Arbitration and Conciliation Act permit interference with an arbitrator's award only in cases of misconduct or improper procurement.
  2. Misconduct includes failure to comply with arbitration terms, breach of natural justice, or exceeding jurisdiction.

Court Findings

The court found that:

  1. The allegations of misconduct against the arbitrator by the Appellant were unfounded. The arbitrator had appropriately based his decision on the evidence presented.
  2. The claim of wrongful termination did not absolve the Appellant from the consequences of contract disputes.

Conclusion

The appeal was dismissed. The court reinforced that the jurisdiction of the courts over arbitration awards is limited, emphasizing respect for the arbitration process and the importance of adherence to established legal principles.

Significance

This case is significant in the realm of arbitration in Nigeria as it clarifies the standards and limits of judicial intervention in arbitration proceedings. It underlines the necessity of adhering to natural justice in arbitration and reaffirms the legitimacy of arbitrators' decisions when based on evidentiary grounds. This decision serves as a reference point for future arbitration cases, emphasizing the integrity of the arbitration process.

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