ZAFFAR A. AMHED, Attorney-In-Fact, ZHANG GUAN FU, Appellant, v. ABU F. DONZO, Appellee.

APPEAL FROM THE CIRCUIT COURT FOR THE SIXTH JUDICIAL CIRCUIT MONTSERRADO COUNTY.

Heard: October 27, 1993. Decided: February 18, 1994.

1. Arbitration must be properly invoked by one of the parties before the verdict of the jury, or by both after the verdict, in order to empower the court to apply arbitration.

2. When the parties to an agreement named the arbitrators in the agreement, the hearing shall be before such arbitrators. If the agreement does not so provide, the party seeking arbitration and the party against whom it is sought may agree on the method of appointment which shall be followed.

3. The court, on application of a party to the arbitration agreement showing a refusal of another party to appoint arbitrator(s) in the manner agreed upon, shall appoint such arbitrators consistent with the manner agreed upon.

4. When the method of appointment of arbitrators is not specified in the agreement and if no such agreement can be reached as to said agreement, the court, on application by any party to the agreement, is empowered to appoint the arbitrator(s) with qualifications commensurate with the nature of the controversy, except on a rehearing under section 64.11(3) where the court shall appoint an arbitrator(s) with qualifications approximating as nearly as possible to those of the original arbitrator(s).

5. Where an arbitrator fails or is unable to act, his successor shall be appointed in the same as the original appointment, and if the parties cannot agree on a successor to be appointed, the court, on application of a party to the arbitration agreement, is empowered to appoint an arbitrator with qualifications commensurate with the nature of the controversy.

6. In arbitration and award proceedings, the rule is that parties to the proceedings must present evidence before a competent tribunal.

7. An award of the arbitrator(s) is a nullity if made without notice of hearing, in the absence of a waiver of notice by the party claiming to be aggrieved.

8. Although the court is empowered to affirm or reject an advisory jury; make new findings with or without taking additional testimony, or order a new hearing where less than half percent of the jurors signed the verdict, the judge is under a duty to award a new trial.

The appellee, petitioner in the court below, entered into a lease agreement with the appellant on the r d of May 1991. Two years thereafter, the appellee petitioned the court for the cancellation of the said lease agreement. In ruling on the law issues, the trial judge sua sponte ordered the trial of the case by an advisory jury and appointed a board of arbitrators to assess the damage and cost of restoring the property to its original state. When the jury failed to reach a unanimous verdict, the appellee made an application to the court to make new findings without taking additional evidence. Over the objection of the appellant, the trial judge disbanded the jury, set aside the verdict, and made his determination of the facts without the aid of a jury. On appeal, the Supreme Court held that it was reversible error for the trial judge to sua sponte order arbitration without reference to the lease agreement or without application from either or both parties to the dispute. The Court also held that since there was no hearing on the award of the arbitrators, there was no evidence. As regards the advisory jury, the Court opined that the trial judge should have disbanded the jury and awarded a new trial since a unanimous verdict was not reached; and that his failure to do so constituted reversible error. The Court accordingly reversed the judgment and remanded the case for a new trial.

H. Varney G. Sherman appeared for respondent/appellant. Roger K Martin, in association with Eugene D. M Freeman, appeared for petitioner/appellee.

MR. JUSTICE MORRIS delivered the opinion of the Court.

The records in this case reveal that Messrs Abu F. Donzo of the City of Monrovia, Liberia, and Zhang Guan Fu, a Chinese National residing in the City of Monrovia, Liberia, entered into a lease agreement on the 2n d day of May, 1991. The lessor, Mr. Abu F. Donzo, filed on December 1, 1993 a petition for the cancellation of the lease agreement. The respondents filed their returns. Since the respondent Zhang Guan Fu had to leave Liberia, he appointed an attorney-in-fact to proceed with the case and act in his behalf as though he was physically present.

In ruling on the law issues, the judge also ruled that “in so doing and in ruling the case to trial, the court hereby rules the petition and the answering affidavit to trial in their entirety and rules to trial only counts three, four, five, six, seven, nine and eleven of the respondent’s returns; count ten has already been disposed of in the court’s handling of the Ne Exeat Republica proceedings. Further, the court on its initiative, orders the trial of the matter by the court aided by the advisory jury. See Rev Code 1: 23.2. The court also hereby orders the appointment of a board of arbitrators to assess the damages and report to the court on the cost of restoring the property to the original state, so that such report may be submitted to the advisory jury for their awarding of damages as they might see fit. And it is hereby so ordered”.

The case was called for hearing on the 7t h of February, 1992 at the hour of 10:38 a.m: The assignment was allegedly served on both parties for the hearing at 9:00 a.m. that morning, but the respondents and their counsel were absent. The court ordered that the respondents be called three times at the door of the courtroom upon application of petitioner’s counsel. They were accordingly called three times at the door of the courtroom but failed to answer. The counsel for petitioner then made application for default judgment, which was granted. Then the counsel for petitioner said “counsel for petitioner brings to the attention of the court that in its ruling on the law issues handed down on January 29, 1992 in the case, it was ruled that an advisory jury will be appointed to assist the judge…. counsel therefore prays your honor to constitute said advisory jury. And submits”.

The court then proceeded to appoint an advisory jury of fifteen members. At the conclusion of the hearing, the jury did not agree on a unanimous verdict. Instead, only five signed the verdict including the foreman, and seven did not sign. The verdict is dated Wednesday, March 25, 1992 and was delivered during the March term of the Civil Law Court. The respondents moved that since the verdict was not unanimous, the counsel prayed that the jury be disbanded and a new trial be awarded. This application was resisted by petitioner’s counsel on the ground that according to the Civil Procedure Law, Rev. Code 1: 23.2, the court, upon motion of any party or the verdict of any advisory jury, may make new findings without taking additional testimony, or may order a new hearing. Therefore, counsel for petitioner prays court to make the appropriate findings and award damages to petitioner as proved during the course of the trial. The court, having heard arguments, concluded as follows:

“In view of that, the application by counsel for respondents to disband the jury and award a new trial not being supported by law, the same is hereby denied; however, the court takes note of the fact that the jury was not unanimous in their decision and therefore the court in exercise of its right and discretion under sections 23.2 and 23.3 hereby rejects in whole and sets aside this verdict and the court at this time under section 23.3 will make its own determination of the facts and shall accordingly enter the appropriate judgment.

In view of the above, the court hereby disbands the jury and sets aside the verdict and the court will make its own determination based upon the facts and the evidence adduced during the trial and the law controlling. And it is hereby so ordered.”

Counts 1, 2, 3 and 4 of the bill of exceptions have already been disposed of by this court when passing on the motion to dismiss the appeal during the March Term of Court, A.D. 1993.

With reference to the court sua sponte setting up arbitrators, this court has held that “arbitration must properly be invoked by one of the parties before the verdict of the jury, or by both, after a verdict, in order to empower the court to apply arbitration”. Shoemaker-Deline, v. Shoemaker-Porte, [1969] LRSC 17; 19 LLR 221 (1969).

Our statute also makes the following provisions under appointment of arbitrators. “….Where the parties have named the arbitrators in their agreement the hearing shall be before such arbitrators. If the agreement provides a method for appointment of arbitrators, such method shall be followed. If the agreement does not so provide, the party to the agreement who seeks arbitration and the party against whom arbitration is sought may agree on a method of appointing arbitrators and that method shall be followed. The court on application of a party to the arbitration agreement showing the refusal of another party thereto to appoint arbitration in the manner agreed upon, shall appoint them in such manner. If the method of appointment or designation of the arbitrators is not specified in the agreement and cannot be agreed upon by the parties, the court, on application of a party to the arbitration agreement, is empowered to appoint an arbitrator or arbitrators with qualifications commensurate with the nature of the controversy, except on rehearing under Rev. Code 1: 64.11(3) where the court shall appoint an arbitrator or arbitrators with qualifications approximating as nearly as possible those of the original arbitrator or arbitrators. Where an arbitrator fails or is unable to act, his successor shall be appointed in the same manner as the original appointment. The court, on application of a party to the arbitration agreement, is empowered to appoint an arbitrator with qualifications commensurate with the nature of the controversy.” Civil Procedure Law, Rev. Code 1: 64.3.

In view of the above provision of the statute, it is clear that the judge sua sponte ordered the appointment of a board of arbitrators with no request from any of the parties nor under the terms of an agreement, and against the statutory provision governing the appointment of a board of arbitrators. Besides, this Court also observed that there was no hearing on the award of the arbitrators; that is, there was no evidence.

In the case Union National Bank, SAC v. MCC INC., [1971] LRSC 71; 20 LLR 525 (1971), this Court held that “according to the weight of legal authority, in arbitration and award proceeding, it is a universally recognized rule that the parties to arbitration proceedings must present evidence before a competent tribunal. The Court therefore held that an award of arbitrators is a nullity if made without notice of hearing, in the absence of a waiver of notice by the party claiming to be aggrieved.” Although the statute authorizes the court to affirm or reject an advisory jury, make new findings, with or without taking additional testimony, or order a new hearing, the Court says that in the case at bar, the judge as a neutral referee should have disbanded the jury and awarded a new trial in face of the fact that only five of the jurors signed said verdict. Hence, his act in this respect was questionable.

In view of the foregoing, and all that we have said, the judgment of the lower court is hereby reversed and the case remanded to the court below for a new trial. Costs to abide final determination of this case. And it is hereby so ordered.

Reversed and remanded