City Engineering Nigeria Ltd v. Federal Housing Authority (1997)

City Engineering Nigeria Ltd v. Federal Housing Authority (1997)

This SabiLaw case summary of City Engineering sets out the facts, the issue, the decision of the Supreme Court of Nigeria and the lesson for lawyers and students who draft arbitration and dispute resolution clauses.

Click to download the City Engineering case summary (PDF)

Court	Supreme Court of Nigeria
Suit No.	SC.204/1992
Judgment	17 July 1997
Report	(1997) 9 NWLR (Pt 520) 224
Lead judgment	Ogundare, JSC
Area	Arbitration: limitation period for enforcing an award

City Engineering: Facts of the Case

On 17 December 1974, the parties signed a contract for housing units at Festac Town, Lagos. The contract had an arbitration clause and made any award final and binding.

The Authority terminated the contract on 12 December 1980. Arbitration began in December 1981, and in November 1985 the arbitrator awarded N3,722,118.75 to City Engineering.

When the award was not paid, City Engineering applied to the High Court of Lagos State to enforce it. The High Court held the application statute-barred because the cause of action arose in 1980, and the Court of Appeal agreed.

Issue for Determination in City Engineering

Whether the six-year limitation period for enforcing an arbitral award runs from the date the original cause of action accrued or from the date of the award.

Decision of the Supreme Court in City Engineering

The appeal was dismissed.
Following Murmansk State Steamship Line v. Kano Oil Millers Ltd (1974), the Supreme Court held that time runs from the date the original cause of action accrued, not from the date of the award. The Murmansk decision was correctly decided and binding on the lower courts.
Because the cause of action arose in 1980, the application to enforce the 1985 award was out of time.

Lesson for Drafters from City Engineering

Time matters in dispute resolution clauses. Keep negotiation and other pre-arbitration steps short, and check how the Arbitration and Mediation Act 2023 now treats limitation before advising on enforcement. Note that section 34(4) of the Arbitration and Mediation Act 2023 now excludes the period between the commencement of the arbitration and the date of the award when computing time to enforce an award.

The decision in City Engineering is taught in the SabiLaw Academy course Drafting Arbitration and Dispute Resolution Clauses. Read the full text of the Arbitration and Mediation Act 2023 on SabiLaw.

Click to download the City Engineering case summary (PDF)

This City Engineering summary was prepared by SabiLaw for learning purposes. It is not the judgment of the court and is not legal advice. Refer to the full judgment before relying on it.

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