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NICN - JUDGMENT

IN THE NATIONAL INDUSTRIAL COURT OF NIGERIA

IN THE LAGOS JUDICIAL DIVISION

HOLDEN AT LAGOS

SUIT NO NICN/LA/143/2025

BEFORE HIS LORDSHIP, HON. JUSTICE (DR.) I. J. ESSIEN 

 DATE: 21st July 2026. 

 

BETWEEN 

MR. AZEEZ AMIDA --------------------------------------------- CLAIMANT

                                          AND

PAN AFRICAN TOWERS LIMITED. ------------------- --- DEFENDANT

 

RULING .

The Claimant commenced this action by a complaint dated and filed on the 19/6/2025. Upon being served with the originating process, the Defendant filed a notice of preliminary objection on the 5/8/2025. In the Notice of  Preliminary Objection, the Defendant, seeks an Order striking out this suit for lack of jurisdiction. The preliminary objection is predicated on 5 grounds which are below reproduced:

  1. The Claimant’s action arises from the Mutual Separation Agreement (the MSA) executed between the Claimant/Respondent and the Defendant/Applicant on 13th November 2024.
  2. Clause l3(a) of the MSA provides that in the event of a dispute, controversy or claim arising from the MSA, the parties shall first attempt to resolve the dispute through good faith negotiations.
  3. Clause 13(b) of the MSA provides that where mediation does not resolve the conflict within 30 (Thirty) days from initiation, either party may refer the matter to arbitration to be conducted in accordance with the London Court of International Arbitration Rules to be administered by the Lagos Court of Arbitration.
  4. Clause 13 of the MSA operates as a “Scott V. Avery Clause” and creates an obligation to negotiate, mediate and arbitrate any dispute that may arise from the MSA and is a condition precedent to the exercise of any right of action by the Claimant/Respondent.
  5. The Claimant/Respondent has not fulfilled the condition precedent to the initiation of this action.

In support of this application, the Defendant filed a 5 paragraphs Affidavit Attached to the affidavit are Exhibits PATL 1 a document which the deponent describes as a copy of the Mutual Separation Agreement. (MSA). Also in support of this objection, The claimant counsel filed a written address.

Upon being served with the NPO the claimant counsel filed a 5 paragraph counter affidavit deposed to by one David Abutu who describes himself as a litigation officer in the firm of the Claimant Counsel. Attached to the affidavit are Exhibits A1 to A6,  B and C. The claimant also filed a written address in support of the counter affidavit. On the 4/9/2025, the Defendant Objector filed a further affidavit of 6 paragraphs. Attached to the affidavit is Exhibit OUI a copy of the Employment agreement between the parties. Also, the Defendant filed a reply on point of law to the claimant address. Counsel un-behalf of the parties adopted their processes on the 20/5/2026 and the matter was adjourned for ruling.

In this objection, The defendant contention is that by an agreement described by the parties as a Mutual Separation Agreement,(MSA) executed by the parties on the on 13th November 2024, annexed to the supporting affidavit as Exhibit PATL 1, the parties has agreed in Clause 13(a) and (b) to resolve any dispute arising from the agreement through good faith negotiation and mediation and if the dispute shall remain unresolved the parties shall resort to Arbitration before resorting to litigation in court. To this end, Counsel contends that contrary to Clauses l3(a) and (b) of the MSA, before the Claimant/Respondent instituted this suit, there was no good faith negotiations between the parties. No meeting was held by the parties to discuss and resolve the dispute. There was no arbitration of the dispute. One would have expected that in relying on Clause 13(a) and (b) of Exhibit PATL 1, The defendant objector would have produced the agreement executed by the parties before this court for the court to be certain that indeed the parties did in-fact execute the agreement for which can be binding and relied upon by either party. This is not the case here. The exhibit relied upon and attached to the affidavit in support of this objection was only executed by the claimant on record. There is no indication that the defendant executed this agreement, as the execution column of the defendant is blank. This is a clear indication that there is no agreement in Exhibit PATL-1 for which this court can enforce. To amount to an enforceable agreement the parties ought to have executed the agreement. 

Assuming there is an agreement for which the defendant seeks the enforcement clause 13 (a) and (b), which I have not seen any brought before the court in this application, I am persuaded to consider the argument of counsel on this application on the merit to determine whether this Preliminary Objection can be granted. 

The defendant Counsel in his written address in support of the preliminary objection has argued that compliance with clause 13 of the MSA imposes a condition precedent to the claimant filing a suit. He argued that the non- compliance with the condition precedent in clause 13 of MSA robs the court of the jurisdiction to entertain this action. That Clause 13 uses the words ‘shall’ which commands a mandatory and imperative duty to arbitrate, and relied on the case of Ibrahim V. Akinrinsola 18 NWLR (Pt. 1862) 455 (Pp. 496, para. D, 498, paras. A&B) Counsel relied on the case of Drexel Energy and Natural Resources Ltd. & Ors. V. Trans International Bank Ltd. & Ors. (2008) LPELR-962 (SC) to argue that ‘where a pre-condition for initiating of a legal process is in motion, any suit instituted in contravention of the said Pre-condition provision, is incompetent and a court of law, lacks jurisdiction to entertain the same’.

Counsel argued that Clause 13(b) is a Scott V. Avery [I856] 10 ER  1121, clause, which creates an obligation to arbitrate and secondly creates a condition precedent to a Claimant’s right of action that it must have previously arbitrated the dispute before filing a claim in Court. Counsel relied on the case of Scoa (Nig.) Plc V. Sterling Bank Plc (2016) LPELR-40566(CA) which cited with approval the decision in the case of A.I.D.C. V. Nigeria L.N.G. Ltd [2000] 4 NWLR (Pt653) 494 (SC)  City Engineering Nigeria Ltd V. Federal Housing Authority [I991] 9 NWLR (Pt.520) 224. Which decided that while Parties cannot by contract oust the jurisdiction of the Courts, they can agree that no right of action shall accrue in respect of any differences which may arise between them until such differences have been adjudicated upon by an arbitrator. Such a provision is popularly known in law as the ‘Scott V. Avery clause’ enunciated In Scott V. AVERY ‘supra’ 

 In response to argument of the defendant counsel, the claimant has argued that an Arbitration clause in an agreement does not operate as an ouster clause for which the jurisdiction of the court can be ousted. Counsel contends that the Arbitration clause in Clause 13(b) of the MSA is an optional/ discretionary obligation which the parties are at liberty to waive. Because the clause uses the word ‘MAY’ which connotes an exercise of a discretion. The word is permissive and not mandatory. It does not foist on a party a legal duty which must be performed. Counsel relied on the case of NDLEA V. Omidina (2013) 16 NWLR (Pt. 1381)589 CA; Ekanem v. Regd. Trustees, CCGS (2023) 6 NWLR (Pt. 1879) 43 SC. Counsel argued that parties were not under any legal mandate or compulsion to revert to arbitration after attempt at negotiation failed. Besides, it is preposterous to think that an Applicant who was not open to negotiation would be open to arbitration. He submitted that the mere existence of an arbitration clause in an agreement does not divest this Honourable Court of its jurisdiction to hear and determine the instant suit. Counsel relied on the case of R.C.0.S. Ltd. V. Rainbownet Ltd. (2014) 5 NWLR (Pt. 1401) 516 CA, where the court held inter-alia ‘An arbitration clause in an agreement is only procedural in that a provision whereby the parties agree that any dispute should be submitted to arbitration does not exclude or limit rights or remedies but simply provides a procedure under which the parties may settle their grievances. It is   not    an exclusion  or ouster clause properly  so  called.  Thus,   the  parties  are free, such clause notwithstanding, to pursue their claims in the courts…’

Counsel submitted that the arbitration clause does not extinguish the right of access to the court, which is a constitutional right guaranteed under Section 6(6)(b) and Section 36(1) of the 1999 Constitution (as amended). Second, the existence of an arbitration agreement does not automatically operate as a bar to litigation. Counsel finally submitted that the law is well settled that an arbitration clause, no matter how well drafted, cannot oust the jurisdiction of the Courts. See Celtel Nigeria B.V. V Econet Wireless Ltd. [2014] LPELR (22430) 1 at 58. Parties to a contractual agreement cannot, by consent and/ or agreement, confer and/ or remove from the jurisdiction of the Court. See Ajar & Anor V. Ayip [2006] LPELR-41200 (CA).

DECISION OF THE COURT.

Let me start by reproducing the provisions of Clause 13 of the Mutual Separation Agreement (MSA). The clause provides that in the event of a dispute, controversy or claim arising out of or relating to the MSA:

13(a) The parties shall first attempt to resolve the dispute through good faith negotiation either party may Initiate the negotiation Process by Providing written notice to the other party, specifying the nature of the dispute and the desired outcome. The Parties shall then meet (either in person or virtually) within 10 business days of such notice to discuss and seek a resolution. Each party agrees to make reasonable efforts to resolve the dispute amicably and expeditiously.

13(b) If the dispute is not resolved through negotiations within thirty (30) calendar days from the initiation of mediation, either Party may refer the matter to arbitration. The arbitration shall be conducted in accordance with the London Court of International Arbitration (LCIA) Rules in force at the time the dispute Is referred to arbitration, which rules are deemed to be Incorporated by reference into this clause. The arbitration shall be administered by the Logos Court of Arbitration and conducted by a sole arbitrator appointed in accordance with the LCIA Rules. The Place of arbitration shall be Logos, Nigeria, and the proceedings shall be conducted In the English language. The decision of the arbitrator shall be final and binding on the Parties.

The above clause requires parties to the MSA to fist attempt to resolve the dispute by good faith negotiation and where the dispute, controversy or claim is not resolved, parties would then resort to Arbitration. The defendant has argued that before a suit can be filed in respect of a dispute arising from the MSA, (i)A notice of dispute and requestion for negotiation must be issued by one party to the other. The notice must state the nature of the dispute and the desired outcome. (ii)The parties shall meet (either in person or virtually) within ten (l0) business days of such notice to discuss and seek a resolution. (iii)If negotiation fails, parties must explore mediation (iv) If mediation fails, after 30 days, the parties are to go to arbitration. Counsel position is that There were no good faith negotiations between the parties. No meeting was held by the parties to discuss and resolve the dispute. There was no arbitration of the dispute. The evidence before the court does not support this position. Paragraph 4 (f) of the counter affidavit show that the Claimant/Respondent wrote Exhibit B attached to the affidavit in which the claimant solicitor made a demand for the payment of a certain sum of money as the terminal benefit. the 2nd to the last paragraph of the letter states 

In light of the foregoing, we are instructed to, and hereby do, demand the immediate payment of the Terminal Bonus in the sum of N150,000,000.00 (One Hundred and Fifty Million Naira), which is now due and payable to our client. Kindly ensure payment is made within seven (7) days of your receipt of this letter.

Without prejudice to the above demand, and in keeping with the requirements of the Lagos State High Court (Civil Procedure) Rules, which mandate parties to explore amicable resolution prior to litigation, our client is willing to consider an amicable settlement. This letter is issued in that spirit and in compliance with the applicable Pre-Action Protocols. 

In the response to the above-mentioned letter, the defendant in Exhibit C stated that the defendant is not liable to pay the terminal benefits. The defendant completely ignored the call for amicable settlement. Thus foreclosing the possibility of a good faith negotiation which may lead to the mediation and to a possible arbitration. Exhibit B was sufficiently clear enough in its wording to give details of the nature of the dispute, controversy or claim. The claimant therefore was within his right to commence an action in the face of the rejection of the amicable settlement by the defendant. 

 

The defendant has also argued that Clause 13(b) of the MSA is a Scot V. Avery (I856) 10 ER 1121. Clause that imposes a condition precedent which must be discharged before claimant can file a suit in court. Counsel contend that this is so because clause 13(b) of the MSA uses the word ‘shall’ which has been interpreted to connote a mandatory stipulation which excludes the exercise of any discretion. I have examined the text of Clause 13 of the MSA the word shall only appears in Clause 13(a) to the effect that ‘parties shall first attempt to resolve the dispute’ which the claimant attempted to comply there-with, when the claimant counsel wrote Exhibit B but the defendant refused to accept the proposal for amicable settlement. Clause 13(b) uses the word ‘May’ and provides; ‘either Party may refer the matter to arbitration’. The word may connote an exercise of a discretion it is generally permissible and not mandatory See the case of NDLEA V. Omidina [2013] 16 NWLR (Pt.1381). See also Ekanem V. Regd. Trustees, CCGS [2023] 6 NWLR (Pt.1879) 43 SC. 

On the strength of the above cited authorities, it is the finding of this court that Clause 13 of the MSA does not justify the strict application of principle in Scot V. Avery Therefore parties were not under any legal compulsion to revert to arbitration after attempt at negotiation failed. 

Let me also note that the defendant/Applicant to this PO, by their position appears to suggest that the arbitration clause contained in the underlying agreement operates as an ouster clause, seeking to strip the Court of its constitutional jurisdiction. And seeks to prevent the parties to the MSA from exercising their right to access to court as guaranteed by Section 6(6)(b) of the 199 Constitution as amended. This position is completely flawed. The settled position of the law as enunciated in the case of R.C.O.S. Ltd. V. Rainbownet Ltd. (2014) 5 NWLR (Pt. 1401) 516 , the Court of Appeal settled the position when it held;

Arbitration clause in an agreement is only procedural in that a provision whereby the parties agree that any dispute should be submitted to arbitration does not exclude or limit rights or remedies but simply provides a procedure under which the parties may settle their grievances.    It is not  an exclusion   or ouster clause properly  so   called.  Thus, the parties  are free, such clause notwithstanding, to pursue their claims in the courts…

See also Celtel Nigeria B.V. V.  Econet Wireless Ltd [2014] LPELR (22430) 1 at 58.

This position is even more true when it is of legal notoriety that Parties to a contractual agreement cannot, by consent and/ or agreement, confer and/ or remove from the jurisdiction of the Court. See Ajar & Anor V. Ayip [2006] LPELR-41200 (CA).

The defendant counsel has sought to rely on section 6 of the Arbitration law of Lagos State, The section of that law, in as much as it regulates the power of the court to stay proceedings in a matter subject to arbitration, has no application to the present action. And cannot support an application such as the PO which seeks an order striking out of this suit for lack of jurisdiction. Section 6 of the Arbitration law envisages that there is an arbitration proceedings that has already commenced which is not the case here. 

On the strength of the above findings, It is the decision of this court that this preliminary objection is misconceived. It is without any merit. It is accordingly dismissed. 

The defendant shall pay a cost of N500,000 (Five hundred thousand Naira) to the claimant. 

Ruling is hereby entered. 

 

----------------------------------------------------

Hon. Justice (Dr.) I. J. Essien

(Presiding Judge)

 

REPRESENTATION

B. A. Kadiri Esq with E. Ekweaozor Esq. and U. Ali Esq. for Claimant/Respondent. 

M. T .Oyetibo SAN with C. Nwadike Esq and A. Momoh. For Defendant/ Applicant.