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AFRICAN INSURANCE DEVELOPMENT CORPORATION V. NIGERIA LIQUIFIED NATURAL GAS LIMITED

(2000) JELR 43979 (SC)

Supreme Court  •  SC.174/95  •  11 Feb 2000  •  Nigeria

Coram
SALIHU MODIBBO ALFA BELGORE JSC; IDRIS LEGBO KUTIGI JSC; ALOYSIUS IYORGYER KATSINA-ALU JSC; AKINTOLA OLUFEMI EJIWUNMI JSC; EMMANUEL OLAYINKA AYOOLA JSC;

Judgement

AYOOLA, J.S.C.: (Delivering the Leading Judgment): The main question on this appeal is whether a person who is bound under a performance bond by which he undertook to pay to the employer damages in default of performance of a contract by the contractor, is entitled to a stay of proceedings in an action against him by the employer upon the default of performance by the contractor, on the strength of an arbitration clause in the agreement between the employer and the contractor, notwithstanding that on the face of that agreement he has not been named a party thereto.

Sometime in October, 1990, Nigeria LNG Limited, "the plaintiff'' entered into a contract with one Fedision Nigeria Limited, "the contractor", for the drilling of a water well at Bonny Island, Rivers State. Clause 19.2 of the contract contained an arbitration clause in the following terms.

"Any dispute whether in contract or at law, arising out of or in connection with the contract or the work performed there under shall b…

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