Obi Obembe v. Wemabod Estates Ltd (1977)

Obi Obembe v. Wemabod Estates Ltd (1977)

This SabiLaw case summary of Obembe v Wemabod 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 Obembe v Wemabod case summary (PDF)

Court	Supreme Court of Nigeria
Suit No.	SC.466/75
Judgment	20 May 1977
Report	(1977) 5 SC 115; [1977] NGSC 17
Lead judgment	Fatayi-Williams, JSC
Area	Arbitration: effect of an arbitration clause on the court’s jurisdiction

Obembe v Wemabod: Facts of the Case

In May 1969, Wemabod Estates appointed Obi Obembe, a consulting engineer, for the building of Unity House, 37 Marina, Lagos. The appointment was on the Association of Consulting Engineers’ conditions, which provided for arbitration of any dispute or difference.

Wemabod terminated the appointment in October 1970. Obembe sued in the High Court of Lagos State for his fees and expenses. Wemabod did not apply for a stay of proceedings.

The trial judge dismissed the claim and also said that the arbitration clause would in any event have prevented judgment in Obembe’s favour.

Issue for Determination in Obembe v Wemabod

Whether the arbitration clause barred the court from deciding the claim.

Decision of the Supreme Court in Obembe v Wemabod

The appeal was allowed in part.
The court distinguished two kinds of arbitration clause: an ordinary clause, which leaves a party free to sue subject to the other party’s right to apply for a discretionary stay; and a Scott v. Avery clause, which makes an award a condition precedent to any action.
The clause here was of the ordinary kind. It did not oust the jurisdiction of the court, and as no stay had been asked for, the trial judge was wrong to treat the clause as a bar to judgment.
On the evidence, the claim for structural and civil engineering fees failed for want of proof, but judgment was entered for the claim relating to resident engineers.

Lesson for Drafters from Obembe v Wemabod

An ordinary arbitration clause does not by itself stop a court action. A party who wants the dispute arbitrated must apply promptly for a stay or referral; parties who want an award first must say so expressly. Under section 5(1) of the Arbitration and Mediation Act 2023, the request for referral must be made not later than when the party submits its first statement on the substance of the dispute.

The decision in Obembe v Wemabod 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 Obembe v Wemabod case summary (PDF)

This Obembe v Wemabod 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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