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Obudu contract debt: Appeal court reserves judgment against Cross River

Obudu contract debt: Appeal court reserves judgment against Cross River

The Abuja division of the Court of Appeal has reserved judgment in the appeal filed by a private firm, Zedici Capital Ltd, against the Cross River State Government over a N3.8 billion contract debt.

The appellant, Zedici Capital Ltd, is the firm that remodelled the Obudu Mountain Resort in Cross River State, now a subject of litigation.

The three-member panel of the Court of Appeal, headed by Justice Peter Ige, reserved the date after counsel to the parties had adopted their legal submissions for and against the appeal, that is challenging the judgment of a High Court of the Federal Capital Territory (FCT), which had in 2019, refused to affirm the arbitral award to Zedici Ltd over its investment of N3.8 billion in the resort.

Justice Ige announced that a date for the judgment would be communicated to all the parties.

The trial court had in its judgment held that the replacement of the arbitrator for the state after the withdrawal of its arbitrator Nella Andem-Rabana was not in compliance with the Arbitration and Conciliation Act, 2004.

However, Zedici has strongly stated that the court erred in law when it held the same in favour of the Cross River Government.

It is contending through its counsel, Moses Ofeoshi, that flowing from an agreement between both parties, they invested a total sum of N3.8 billion for the renovation and reconstruction of the Obudu Resort.

They stated that the funds were used in fixing all the facilities and providing infrastructures and security at the resort and host community.

Zidici Capital Limited (appellant) is seeking to set aside an Abuja high court judgement which in 2019, refused to affirm arbitral award to it with respect to the N3.8 billion it invested in the Obudu resort in Cross River State which it was engaged to remodel.

The firm maintained that trial Justice Angela Otaluka of the FCT High Court erred in law when she held that the replacement of the arbitrator for Cross River State after the withdrawal of its previous counsel, Mr Nella Andem-Rabana, SAN, was not in compliance with the Arbitration and Conciliation Act, 2004.

In its four grounds of appeal filed by its counsel, Moses Ofeoshi, the appellant argued that the high court misdirected itself to presuppose that Zedici appointed an arbitrator for the respondents after their arbitrator withdrew.

‘The trial court fails to take cognisance the relevant provisions of the law relating to the waiver of irregularities in arbitration proceedings,’ it averred.

Zedici invoked the arbitration clause after the State Government breached the 25-year concession agreement made on March 1, 2018, for the rehabilitation, remodelling, finance, operation, and transfer of the mountain resort in Obanliku under a Public-Private Partnership (PPP) model.

Zedici averred that as a result of the agreement, it invested N3.8 billion fixing all the facilities and providing infrastructure and security at the resort and the host Becheve community.

The judge had upheld the submission of the State Government and the attorney general that the said withdrawal of their arbitrator denied them the opportunity to participate in the arbitration proceedings.

But the Cross River State Government has through its counsel, Taiwo Taiwo, SAN, opposed the Appeal stating that the Arbitration Tribunal was not properly constituted and could not have given a valid award. The State Government also stated that the withdrawal of the arbitrator denied them the opportunity to participate in the arbitration proceeding.

It, therefore, urged the appellate court to dismiss the appeal and affirmed the judgment of the trial court.

Court documents revealed that the Cross River State Governor had on September 12, 2017, signed a Memorandum Of Understanding (MOU) between Zedici Capital Limited, to reactivate the Obudu Ranch Resort in Obaniku Local Government Area of the state.

After three months, the State Government signed another MOU with Mac Creeds and Tom Consortium for the upgrade of Tinapa Lakeside Hotel in Calabar and Obudu Ranch Resort.

The Government of Cross River State, thereafter, terminated its contract with Zedici Capital, the company it earlier engaged to run the resort.

In a letter signed by Eric Anderson, Commissioner for Culture and Tourism and made public to the media, the State Government said ‘the Cross River State Government has with immediate effect terminated the concession contract, entered with Zedici Capital Limited to rehabilitate, remodel, finance, manage and transfer the Obudu Ranch Resort.’

According to Anderson, ‘I inherited the presence of Zedici on the ranch because an initial MOU was signed by the governor on September 7th 2017 and I was made a commissioner on the September 27th of the same month; 20 days after the contract with Zedici was entered into.’

The commissioner also noted that a new agreement that was entered under a public-private partnership (PPP) arrangement was signed on the 1st of March, 2018 after Zedici failed to impress in the first six months of probation that ran from September 7, 2017, to March to 2018.

In the same vein, the letter noted that ‘also your company has failed, refused and neglected to comply with or fulfil the necessary preconditions in the said concession agreement.

‘Consequent upon the foregoing there, Cross River State Government is constrained to and hereby terminates your contract entered on the 1st day of March 2018; with immediate effect.

‘You are to vacate the Ranch Resort premises and its appurtenances within 24 hours from and including the date of the receipt of this letter. You are to hand over all Ranch Resort keys, properties and belongings to the appropriate Government agent or representative and put the property in the state at which it was before your forcible entry into the resort,’ it added.

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