United Bank For Africa plc. V Trident Consulting Limited Qualified

In a recent decision, the Court of Appeal sitting in Lagos, in Dr. Charles D. Mekwunye v. Lotus Capital Limited & 4 Ors. (SUIT NO: CA/L/1349/2016 – judgment delivered on April 20, 2018), clarified its earlier decision in UBA v. Trident Consulting Limited (2013) 4 CLRN 119.

The decision in Trident is often cited as authority for the proposition that an applicant, seeking to stay court proceedings in favour of arbitration, must show by documentary evidence, that he has taken steps to refer the dispute to arbitration, at the time of filing the application. Further, Trident has also been used to support the argument that a deposition of an intention or willingness to submit to arbitration, without further action, is not sufficient for the purpose of granting a stay order. Many commentators have interrogated the rationale for the decision in Trident on the basis that the requirement laid down by the court is not a statutory requirement.

In Lotus, the Court of Appeal held that there is no statutory requirement for an applicant to present documentary evidence to show steps taken to refer the dispute to arbitration and that such requirement is unnecessary in circumstances where there are unchallenged averments in the supporting affidavit demonstrating a willingness to submit to arbitration. The court also held that the requirement to provide documentary evidence would be relevant where there is a dispute over the applicant’s willingness to submit to arbitration.

Lotus is significant because it removes the (unnecessary) burden placed on an applicant by Trident, and ultimately facilitates the referral of disputes to arbitration.

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