FOR failing to deliver its own part of a tripartite agreement that would have delivered 5,000 housing units at Mbora District, Abuja, an Arbitration Panel has held an Abuja based firm, CITEC International Estates Limited, liable and consequently ordered it to refund a sum of N401, 407,000, to the Federal Housing Authority (FHA).

Cumulatively, the award is both the initial sum deposited by FHA to the developer and an agreed accrued interest due on the total outstanding sum at six per cent for five years.  While FHA deposited N300, 000,000 for the housing estate, a total of N101, 467,000 was the agreed interest.

Mainly, the case involves a dispute between the FHA, the claimant and CITEC, being the respondent relating to a tripartite agreement between the Ministry of the Federal Capital Territory and FHA both named the “client” on one hand and the respondent named the “developer” on the other hand.

Simply put, CITEC was to construct 5,000 housing units at Mbora District, Abuja within a period of 18 months in accordance with the terms of Exhibit A in furtherance of the agreement, and the claimant paid the respondent the sum of N300 million but the respondent allegedly did not fulfill its side of the bargain. The claimant then wanted the respondent to refund the said sum of money to it, failure of which it went to court and consequently arbitration.

FHA filed its points of claim and bundle of documents dated September 7, 2011 and CITEC filed its points of defence, bundle of documents and cross claim dated March 1,  2012.

The claimant’s claims against the respondent is for the sum of N401, 407,000 with effect from January 1,  2009 until delivery of the award and thereafter interest at 10 per cent per annum until the award is satisfied. It also claimed the cost of the arbitration. In the alternative, the claimant claimed damages in the sum of N401, 407,000 from the developer.

The respondent denied liability for all the claims and counter (cross) claimed (hereinafter referred to as counter claim) for the sum of N193, 883,000 naira “being the net amount due to the respondent in all the circumstances of the transaction subject matter of this reference and balance of set-off, if any, and the cost of the arbitration which it puts at N300 million.

Also, it argued in the alternative that the Joint Venture Partnership Agreement for the construction of and completion of 308 housing units in Gwarinpa was sufficiently close and tied to the respective rights of the claimant and respondent under the construction agreement of August 6,  2001, Exhibit A and it would be unfair to enforce the latter without taking into consideration obligations and rights under the former.

Following the parties’ inability to resolve their differences, FHA in May 2010, instituted a legal action against the respondent at the FCT High Court, Abuja but the respondent applied for stay of proceedings pending arbitration in accordance with Sections 4 and 5 of the Arbitration and Conciliation Act. On March 15, 2011, the court granted an order for stay of proceedings pending arbitration.

By a letter dated June 26, 2011, the claimant appointed Chief Felix A. Okereke-Onyeri as arbitrator while the respondent appointed Chief Okey Jim Nwagbara as arbitrator. By a letter dated August 5, 2011, both party arbitrators appointed former Nigerian Bar Association (NBA) president, Chief Bayo Ojo, as the third and presiding arbitrator, which appointment he accepted

A preliminary meeting with the parties and their representatives was held on August 12, 2011 at the FCT High Court Multi Door Court to establish a procedure and timetable for the reference.

Determining the case, three issues were brought forward including whether the claimant had a separate and district interest under the tripartite construction agreement of August 6,  2001; whether the settlement in the court amounted to a novation of the tripartite agreement, thereby entitling the respondent to its counter claim and whether taking into consideration the circumstances of the arbitral reference, the claimant is entitled to the claims and reliefs sought?

On these three issues, arguments were taken from both counsels for the claimant and the respondent.

Justifying its alleged non-performance, the respondent said it had another related construction project from the same client and that the deposited sum had been used to provide infrastructure in the Gwarimpa project, but the panel held otherwise, saying: “We therefore find without any difficulty that Exhibit A is different, distinct, separate, unconnected and is not traceable to Exhibits R28 and R29 (Gwarimpa project)”, adding “We also find that the subject matter of the dispute before us is the Tripartite Agreement dated August 6, 2001, Exhibit A for the provision for the provision of 5, 000 housing units in Mbora District and not the agreement on the provision of infrastructure in the Gwarimpa project of March 19,  2003.”

According to the panel, any attempt to act outside Exhibit A amounted to misconduct and on that note the claimant’s preliminary objection to the respondent’s counter claim was upheld, as entertaining the said counter claim would mean acting without jurisdiction.

The two other issues were resolved against the respondent.

Four months after the award, the stalemate still remains and FHA at the weekend said its solicitors have already commenced the process to enforce the arbitration award through the FCT High Court.