Clause 20 of the GSPA, so far as relevant, provides:
"The Agreement shall be governed by, and construed in accordance with the laws of the Federal Republic of Nigeria.
The Parties agree that if any difference or dispute arises between them concerning the interpretation or performance of this Agreement and if they fail to such difference or dispute amicably, then a Party may serve on the other a notice of arbitration under the rules of the Nigerian Arbitration and Conciliation Act (Cap A18 LFN 2004) which, except as otherwise provided herein, shall apply to any dispute between such Parties under this Agreement. Within thirty (30) days of the notice of arbitration being issued by the initiating Party, the Parties shall each appoint an arbitrator and the arbitrators thus appointed by the Parties shall within fifteen (15) days from the date the last arbitrator was appointed, appoint a third arbitrator to complete the tribunal...
The arbitration award shall be final and binding upon the Parties. The award shall be delivered within two months after the appointment of the third arbitrator or within such extended period as may be agreed by the Parties. The costs of the arbitration shall be borne equally by the Parties. Each party shall, however, bear its own lawyers’ fees.
The venue of the arbitration shall be London, England or otherwise as agreed by the Parties. The arbitration proceedings and record shall be in the English language..."
On 13 May 2013 Messrs Twenty Marina Solicitors, on behalf of the Respondent, agreed a procedural timetable as follows:
1. The Claimant shall serve a Statement of Claim complying with Article 18 of the Rules of the Nigerian Arbitration and Conciliation Act 1990 ("the Rules") on or before [28 June 2013],
2. The Respondent shall serve a Statement of Defence complying with Article 19 of the Rules on or before [31 July 2013].
3. There shall be a Procedural Conference on the earliest convenient date after [31 July 2013],
4. For the purpose of Article 2 of the Rules all timings shall be at London, United Kingdom.
On 7 August 2013 the Presiding Arbitrator sent an e-mail to the parties in the following terms:
The Tribunal notes with concern that the Respondent has neither complied with Procedural Order No 1, requiring it to serve a Statement of Defence on or before 30 July 2013, or applied for an extension of the time within which to do so.
The Tribunal proposes to discuss the future progress of the arbitration with the parties at a telephone conference on 21 August 2013. The parties are requested to arrange a convenient time on that date with my clerk, Ms Kate Trott.
On 16 August 2013 the Respondent’s solicitors sent an e-mail to the Tribunal and the Claimant in the following terms:
We regret to bring to your attention the fact that it has only become apparent to us as counsel that we will not have complete instructions that will enable us provide proper representation for the Respondent at the telephone hearing scheduled for 21 August 2013.
Indeed the need to secure detailed information correspondence, reports and further instructions is also responsible for the delay in the submission of our statement of defence.
In the circumstances, we are constrained to seek for a postponement of the telephone hearing to a date in the week commencing 2 September 2013. We also seek an extension of time within which to submit a statement of defence by 30 days from the date of the telephone hearing.
On 19 August 2013 the Claimant sent an e-mail to the Tribunal and the Respondent proposing that the Tribunal should make Procedural Order No 2 in the following terms:
UPON the Respondent having failed to serve any Statement of Defence on or before 31 July 2013;
AND UPON the Respondent having failed, on or before 31 July 2013, to show sufficient cause for such failure, as required by Article 28 of the Arbitration Rules set out in the First Schedule to the Arbitration and Conciliation Act of Nigeria ("the Rules").
IT IS ORDERED [BY CONSENT] THAT
1. The arbitral proceedings shall continue;
2. The Respondent shall serve a Statement of Defence complying with Article 19 of the Rules on or before Friday 4 October 2013;
3. There shall be a Procedural Conference on a date after Friday 4 October 2013;
4. In the event that the Respondent fails to serve a Statement of Defence in accordance with paragraph 2 above, the Arbitral Tribunal shall be entitled to continue the proceedings in accordance with section 21(b) of the Nigerian Arbitration and Conciliation Act 1990;
5. For the purpose of Article 2 of the Rules all timings shall be at London, United Kingdom.
On 19 August 2013 the Presiding Arbitrator sent an e-mail to the parties in the following terms:
1. The Tribunal is minded to make an order in the terms of the draft submitted by the Claimant's solicitors in their e-mail of 19 August 2013. If the Respondent has any objection, the Tribunal should receive it before 6 pm London time on Friday 23 August 2013.
2. The telephone conference arranged for 21 August 2013 is vacated.
On 11 October 2013 the Claimant’s solicitors wrote to the Respondent’s solicitors inviting them to agree that the Tribunal should rule upon its jurisdiction pursuant to section 31(4) of the Arbitration Act 1996 (England and Wales):
Where an objection is duly taken to the tribunal’s substantive jurisdiction and the tribunal has power to rule on its own jurisdiction, it may-
(a) rule on the matter in an award as to jurisdiction, or
(b) deal with the objection in its award on the merits.
If the parties agree which of these courses the tribunal should take, the tribunal shall proceed accordingly.
On 6 November 2013 the Presiding Arbitrator sent an e-mail to the parties in the following terms:
1. The Tribunal agrees with the parties that it would be desirable that it should rule, as a preliminary issue, as to whether or not it has jurisdiction to decide upon the validity of the arbitration clause.
2. The Tribunal also considers that as this question is bound to involve an investigation of whether the contract was in fact void for the reasons advanced by the Respondent, the Tribunal should also (but only in the event that it decides that it has jurisdiction to do so) proceed as a preliminary issue to decide whether the contract was void or not.
The Respondent agrees that the question on whether or not the Tribunal has jurisdiction to decide upon the validity of the arbitration clause, is bound to involve an investigation of whether the contract was in fact void, therefore the Tribunal may decide on this latter point as a preliminary issue (but only in the event that it decides that it has jurisdiction to do so).
The Claimant’s solicitors also agreed and on 7 January 2014 the Tribunal accordingly made the following Procedural Order No 3:
IT IS ORDERED BY CONSENT THAT:
1. The arbitral proceedings shall continue;
2. The following questions shall be decided as preliminary issues ("the Preliminary Issues"):
(a) Whether the Tribunal has jurisdiction to rule upon its own jurisdiction to decide any of the matters in issue in the arbitration;
(b) If the answer to question (a) is yes, whether it has jurisdiction to decide whether the contract is valid and binding upon the parties;
(c) If the answer to question (b) is yes, whether the contract is void for any of the reasons stated in the Notice of Preliminary Objection;
3. The Respondent shall serve its submissions in relation to the Preliminary Objection and the Preliminary Issue with documents and evidence in support on or before Friday 24 January 2014;
4. The Claimant shall serve its Response to the Respondent's submissions with documents and evidence in support on or before Friday 14 February 2014;
5. The Respondent shall serve its Reply to the Claimant's Response with documents and evidence in support on or before Friday 28 February 2014;
6. There shall be a telephone conference upon a date to be arranged not later than 25 January 2014 to fix a date for an oral hearing on the preliminary issues and to deal with any other procedural matters.
7. The parties shall exchange skeleton arguments and serve them upon the Tribunal four clear days before the date of the oral hearing.
8. For the purpose of Article 2 of the Rules all timings shall be at London, United Kingdom.
9. The parties have leave to apply to vary the provisions of this Order.
This question did not appear to be in dispute. Article 21 of the Arbitration Rules scheduled to the Nigerian Arbitration and Conciliation Act is clear upon the point:
1. The arbitral tribunal shall have the power to rule on objections that it has no jurisdiction, including any objections with respect to the existence or validity of the arbitration clause or of separate arbitration agreement.
2. The arbitral tribunal shall have the power to determine the existence or the validity of the contract of which an arbitration clause forms a part...
4. In general, the arbitral tribunal should rule on a plea concerning its jurisdiction as a preliminary question. However, the arbitral tribunal may proceed with the arbitration and rule on such a plea in their final award.
By the law of the seat of arbitration, England, section 30(1) of the Arbitration Act 1996 confers a similar jurisdiction:
30. Competence of tribunal to rule on its own jurisdiction.
(1) Unless otherwise agreed by the parties, the arbitral tribunal may rule on its own substantive jurisdiction, that is, as to—
(a) whether there is a valid arbitration agreement,
(b) whether the tribunal is properly constituted, and
(c) what matters have been submitted to arbitration in accordance with the arbitration agreement.
Section 54 of the Companies and Allied Matters Act 2004 ("CAMA") deals with foreign companies "intending to carry on business in Nigeria":
(1) [E]very foreign company which before or after the commencement of this Decree was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Decree.
(2) Any act of the company in contravention of subsection (1) of this section shall be void.
The Respondent relies upon the decision of the Court of Appeal (Abuja Division) in Pawa Complex International Inc and Pawa Associates (Nig) Ltd v Petroleum (Special) Trust Fund (2008) 9 CLRN 16. The first appellant ("Pawa Florida") was incorporated in Florida and the second appellant ("Pawa Nigeria") in Nigeria. The Trust Fund appointed Pawa Florida as consultant in connection with a development project. It caused Pawa Nigeria to be incorporated and at some indeterminate date gave it power of attorney to perform the consultancy contract. However, the judge found3 that -
"apart from not effecting the legalization of [Pawa Nigeria] prior to commencing its intended business [Pawa Florida] went ahead to run that business itself despite the appointment of [Pawa Nigeria] as its attorney. Despite that purported appointment, [Pawa Florida] continued to run the business as if the irrevocable power of attorney had not been donated..."
At pp. 24-25.
We, Leonard, Lord Hoffmann, Chief Bayo Ojo and Sir Anthony Evans, having read the parties submissions and pleadings and written evidence, and having carefully considered the same and for the reasons stated above, make our Part Final Award as follows:
(1) We declare that -
(a) The Tribunal has jurisdiction to rule upon its own jurisdiction to decide any of the matters in issue in the arbitration;
(b) The Tribunal has jurisdiction to decide whether the contract (i.e the GSPA) is valid and binding between the parties;
(c) The contract (i.e. the GSPA) is not void for any of the reasons stated in the Notice of Preliminary Objections.
(2) We reserve for later decision all other matters in dispute in the reference.