1. I have considered the Chamber Summons Application dated 20 October 2023 together with the supporting affidavit sworn on even date and the replying affidavit sworn in opposition to the same dated 7th November 2023 together with the rival submissions made by the parties and applicable law.
2. The applicant is seeking a stay of court proceedings pursuant to section 6 of the Arbitration Act.
3. Section 6 of the Act provides as follows:
Stay of legal proceedings
(1)
A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it finds—
(a)
that the arbitration agreement is null and void, inoperative or incapable of being performed; or
(b)
that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.
(2)
Proceedings before the court shall not be continued after an application under subsection (1) has been made and the matter remains undetermined.
(3)
If the court declines to stay legal proceedings, any provision of the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings.
4. Based on the above, it is evident that the only inquiry required of the court prior to granting a stay of court proceedings is to ensure the following: that the application has been taken as the first step in the legal proceedings, and the applicant has therefore not waived its right to continue with the arbitral process; that there is a valid arbitration agreement; and that the dispute falls within the jurisdiction of the arbitral tribunal.
5. Further, the language in Section 6 of the Act is couched in mandatory terms, the implication being that unless there is non- compliance by the Applicant with the same, this court is obliged to grant a stay of proceedings.
6. I have considered the evidence on the record and having heard the submission of counsel, I am satisfied that the above grounds have been met. On the first ground, I find that the applicant has not waived its right to arbitration because no substantive steps have been taken so far to acknowledge the court proceeding. Entering appearance is not a substantive step, and in any event, the applicant contended it has never entered appearance.
7. Substantive steps, to my mind are pleadings. And no pleadings have been filed by the applicant in court in response to the plaintiff’s substantive claim. The court record speaks for itself in this regard.
8. As regards the contention by the respondent, that this matter is, as I understand it, is non -arbitrable, for reason that it is a derivative suit and a tribunal has no powers to grant leave; counsel for the applicant pointed out that the present matter cannot be a derivative suit because no leave has been sought to institute the same as a derivative suit. I agree with this submission, and find that the ground must fail because the plaintiff has not sought leave and no leave has been granted at this stage.
9. On the second ground, the plaintiff/ respondent submitted that the 1st respondent and the 8th respondent are not parties to the arbitration agreement and that it has claims against those parties. In this regard, I am of the view that the plaintiff may institute separate claims against those parties if need be. However, I would add that that the 1st respondent, in any event is a public entity and is mandated to abide by either a judgment of the court or an award by a tribunal. Further the 1st respondent has not participated in the present application, and its view on this issue is not known.
10. As regards the next limb, whether or not an agreement to arbitrate exists between the parties, looking at the evidence before me, I see that the Plaintiff has admitted the existence of the arbitration agreement in its reply; and further, Article 60 of the 2nd plaintiff’s Articles of Association (at page 19) incorporates the arbitration clause in question.
11. As regards to the third ground, at this stage, and based on the record before me, I am persuaded on balance, there is a dispute between the parties which falls within the scope of the agreement to arbitrate. I say so cautiously bearing in mind that the tribunal, once formed, and with the benefit of all the information before it, ought to be given the liberty to draw its own conclusions relating to the scope of its jurisdiction in the first instance.
12. Based on the reasons set out above, I find that the test as set out above has been met and I find that the application is with merit. The orders of the court are as follows:
a. Proceedings before the court are hereby stayed in order to facilitate the arbitral proceedings.
b. The Applicant shall have the costs of the application.
c. The file is accordingly marked as closed.