Obajana Cement: Dangote Heads to Appeal Court in Dispute with Kogi Govt

Dangote Industries Limited has filed a suit at the Court of Appeal in Abuja to challenge a ruling of a High Court of Kogi State seeking to give priority to a filed suit by the state government in ownership dispute over Obajana Cement plant.

In its suit, the Kogi State government had sought to, among others, void the agreements, dated July 30, 2002, and February 14, 2003, between the state and Dangote Industries Limitetd on the cement plant.

The government claimed lack of due consideration, which it argues, constitutes an essential ingredient in a valid contract.

But Dangote Limited filed a motion seeking that parties be referred to arbitration, as provided for in the agreement, and to stay further proceedings in the substantive suit, pending the conclusion of the arbitration process.

In a ruling on December 8, Justice R. O. Ayoola of the Lokoja division of the High Court of Kogi State, rejected the arguments by Dangote’s lawyers, Paul Usoro (SAN) and Reuben Atabo (SAN), that it was the practice that where a motion is seeking referral to arbitration, the court is required to first determine such motion before taking any further steps.

Justice Ayoola upheld the argument by Kogi State’s lawyer, Abdulwahab Mohammed (SAN), that it was tidier to hear Dangote Limited’s motion along with the substantive suit.

In its five-ground notice of appeal filed on December 13, Dangote Limited prayed the Court of Appeal to set aside Justice Ayoola’s December 8 ruling and invoke its powers under Section 15 of the Court of Appeal Act by hearing and determining the motion separately.

In the first group of appeal, Dangote Limited faulted the trial court for electing to hear Kogi State’s suit along with its motion on notice, “praying the court for an order staying further proceedings in the suit pending reference to arbitration and the conclusion of the arbitral proceedings and settlement of the dispute declared by the claimant pursuant to and in accordance with the arbitration agreement contained in the agreement between the parties that was executed on July 30, 2002”.

The company argued that Section 5(1) of the Arbitration and Conciliation Act, under which it applied for referral to arbitration, makes it imperative for the courts to take arguments on and determine its motion on a standalone basis before proceeding with any other business in the suit.

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