Court halts arbitration process in MT Sea Power dispute

By Fredrick Ameh

The Federal High Court of Nigeria has halted foreign arbitration in Prompton Trading DMCC v. MT Sea Power dispute, ruling that parties cannot abandon domestic court proceedings after voluntarily submitting to its jurisdiction.

Delivering the judgment in Lagos, Justice Akintayo Aluko restrained the defendants from continuing arbitration in London and dismissed their application to stay proceedings in Nigeria.

The case, docketed as Suit No: FHC/L/CS/1554/2022 between Prompton Trading DMCC and MT Sea Power (along with others), originated from the arrest of a vessel and subsequent maritime claims.

At the center of the dispute were two opposing legal maneuvers.

The plaintiffs, represented by Ben Awurum of Elthon Partners, sought an injunction to stop arbitration already initiated in the United Kingdom.

Conversely, the defendants requested that the court suspend the Nigerian proceedings pending the outcome of the London arbitration.

Justice Aluko held that the defendants, by participating in the Nigerian proceedings for nearly two years, had effectively waived their right to seek arbitration abroad.

The court emphasized that by engaging in the litigation process for such an extended period, the defendants had surrendered any entitlement to pursue an alternative forum.

The court subsequently dismissed the defendants’ application for a stay of proceedings as lacking merit.

Justice Aluko granted the plaintiffs’ request, declaring the London arbitration proceedings irregular, incompetent, and an abuse of the court process.
Legal analysts suggest that this ruling reinforces a fundamental judicial principle, parties cannot oscillate between litigation and arbitration once they have committed to a specific legal path.

The decision also strengthens the jurisdictional authority of Nigerian courts in maritime disputes, particularly those involving vessel arrests within its waters.

With the preliminary objections resolved, the substantive matter is set to continue as stakeholders monitor the broader implications for cross-border dispute resolution in Nigeria’s maritime sector.