Facts:

The appellants and respondent entered into a Farm-Out and Participation Agreement which was amended by Deed of Amendment and Novation and further amended by the Deed of Amendment. The agreement was with respect to the respondent’s Oil Prospecting License 281 and it was agreed that the appellants will contribute a certain sum in exchange for the assignment of 20% participating interest.

The agreement was terminated by the appellants and the respondent instituted a suit against them at the High Court for breach of contract. In response, the appellants filed an application for stay of proceedings pending arbitration in line with the agreement of the parties. The Court refused appellant’s application on the ground that a clause in the agreement ousted the jurisdiction of the court.

Dissatisfied with the decision of the lower court, the appellants appealed to the Court of Appeal.