Legal hostilities resumes at Court of Appeal over N3.8bn Obudu Resort contract debt

From Godwin Tsa Abuja

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

At the last adjourned date, proceedings were stalled due to inability of the court to form a quorum.

A High Court of the Federal Capital Territory (FCT), had in 2019 refused to affirm the arbitral award to Zedici Ltd over its investment of N3.8bn in the resort.

The court in it’s 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.

Zedici has appealed to the court of Appeal while strongly stating that the court erred in law when it held same in favour of the Cross River government.

It is contending through it’s  counsel, Moses Ofeoshi, that flowing from an agreement between both parties, they invested a total sum of N3.8bn 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.

But the Cross River state government has 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.

Court documents revealed that the Cross River State Governor had on September 12, 2017 signed a Memorandum Of Understanding (MOU) between Zedici Capital Limited headed by the Honorary Consulate of Saint Vincent and the Grenadines to Nigeria, Dr.Levi O. Wilson Odoe (Hon. Consul), 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 it’s 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 same month; 20 days after the contract with Zedici was entered into”

The commissioner also noted that a new agreement which 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 7th 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.

Before the Court of Appeal, 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 N3.8bn 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 it’s  four grounds of appeal filed by it’s 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 of the relevant provisions of the law relating to the waiver of irregularities in arbitratikn 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.

Speaking after the proceedings, Ofeoshi said the arbitral award was clear that the contract was still subsisting.

“We would be asking the court to set aside the judgment because it will naturally discourage investment if investors like this, who brought in other investors, put in money, and at the end of the day, one party can come in and summarily, unilaterally take over against the spirit of the agreement; it will have collateral effect,” he said.

Speaking on the dispute, a native of Becheve, Friday Keche called on the Ben Ayade-led Government of Cross River State to urgently reopen dialogue with Zedici to resolve the dispute.

He said the company’s infrastructure and scholarship programmes  for the community by the has remained at a standstill since the commencement of the dispute.