Arbitration is a dispute resolution process where disputing parties appoint one or more neutral third parties to make a final and binding decision to resolve their conflict [1]. It has gained global recognition and has become a popular and effective method for resolving disputes worldwide. Nigeria’s primary legislation governing arbitration is the Arbitration and Mediation Act, 2023 (‘AMA’ or ‘the Act’). The AMA provides a streamlined process for granting and enforcing arbitral awards, empowering parties to assert their rights and secure remedies effectively through arbitration. This article explores the procedure for the recognition, enforcement, and setting aside of arbitral awards in Nigeria.
NATURE OF AN ARBITRAL AWARD
An arbitral award is the final decision rendered by an arbitrator or a panel of arbitrators [1]. According to the AMA, an arbitral award must be in writing and signed by the arbitrator(s)[2]. If the tribunal comprises more than one arbitrator, the signatures of the majority will suffice, provided the reason for any missing signature is explained.
Additionally, the award must state the reasons upon which it is based unless otherwise agreed by the parties. It must also specify the date the award was made and the place of arbitration (often referred to as the “seat” of arbitration) [3]. Once the award is issued, the parties are notified, and a copy is delivered to them.
PROCEDURE FOR ENFORCEMENT OF A DOMESTIC ARBITRAL AWARD
In BCC Tropical Nigeria Limited v. The Government of Yobe State & Anor, the court emphasized that parties engaged in arbitration proceedings are generally expected to honour the arbitral award, having participated in good faith. Enforcement of the award ensures that the losing party complies. The method for enforcing an arbitral award depends on the arbitration process, the location of the award, and the parties involved.
An arbitral award is recognized as binding upon written application to the court. Section 91 of the AMA defines “Court” as the High Court of a State, the High Court of the Federal Capital Territory, Abuja, or the Federal High Court. The following documents must support the application:
- The original award or a certified copy;
- The original arbitration agreement or a certified copy; and
- If the award or agreement is not in English, a certified translation
While the AMA does not specify the format for the written application, Order 28 Rule 3 of the High Court of Lagos State Civil Procedure Rules 2019 states that an arbitral award should be enforced via an Originating Motion on Notice, accompanied by an affidavit and a written address.
In summary, to enforce a domestic arbitral award, the enforcing party must apply to the High Court via a Motion on Notice, supported by an affidavit, the original or certified copy of the arbitral award and arbitration agreement, and a written address.
PROCEDURE FOR ENFORCEMENT OF AN INTERNATIONAL ARBITRAL AWARD
International arbitration involves parties whose places of business are in different countries at the time of the arbitration agreement or when substantial parts of the obligations are performed outside Nigeria.
There are several methods to enforce a foreign arbitral award in Nigeria:
- Enforcement under the Foreign Judgment (Reciprocal Enforcement) Act:
Section 2 of the Foreign Judgment (Reciprocal Enforcement) Act allows arbitral awards to be registered before a Nigerian court with jurisdiction over the dispute and enforced as a court judgment . However, this method requires reciprocity; the country where the award was rendered must afford Nigeria similar enforcement opportunities. - Enforcement under Section 57 AMA:
Regardless of the country it was made, an arbitral award is recognized as binding and enforceable by application to the court. The enforcing party must provide the following:
*The original award or a certified copy;
*The original arbitration agreement or a certified copy;
*If not in English, a certified translation. - Enforcement through an action upon the award:
In Topher Inc of New York v. Edokpolo , the Supreme Court held that a foreign arbitral award could be enforced through a lawsuit, even without reciprocal arrangements in the foreign jurisdiction. The enforcing party must prove the existence of a valid arbitration agreement, proper conduct of the proceedings, and the award’s validity. - Enforcement under the New York Convention:
Section 60 of the AMA incorporates the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention) . The Convention applies to awards made in a country that is a signatory to the Convention. Parties seeking enforcement in Nigeria must provide a duly authenticated original award or certified copy and the original or certified copy of the arbitration agreement. - Enforcement of ICSID Awards:
Awards made by the International Centre for Settlement of Investment Disputes (ICSID) can be enforced in Nigeria. A certified copy of the award filed in the Supreme Court by the enforcing party will be treated as a final judgment of the court, allowing for swift enforcement with minimal opportunity for objection Article IV Convention on the Recognition and Enforcement of Foreign Arbitral Awards June 10, 1958.
REFUSAL OF RECOGNITION AND ENFORCEMENT OF INTERNATIONAL ARBITRAL AWARDS
Recognition and enforcement of an award may be refused if:
- A party to the arbitration agreement lacked capacity;
- The arbitration agreement is invalid under the law agreed upon by the parties or where the award was made;
- The award exceeded the scope of the arbitration;
- The composition of the tribunal or the procedure was not in accordance with the parties’ agreement;
- The award is not yet binding, and a court in the country where it was made has set it aside or suspended it.
Additionally, enforcement will be refused if the dispute is not arbitrable under Nigerian law or if enforcement would be contrary to public policy.
CONCLUSION
While the New York Convention provides a robust foundation for enforcing foreign arbitral awards, domestic legislation like the Arbitration and Mediation Act 2023, ensures a conducive environment for local and international arbitration in Nigeria. Arbitral awards typically carry binding force without requiring further court intervention. However, enforcement procedures become crucial in cases where parties seek to frustrate or avoid compliance with the award, underscoring the importance of Nigeria’s legal framework in supporting domestic and international arbitral awards.
Authors
Lateefat Omotomilola Hakeem-Bakare
Principal Partner
Rosewood Legal
lhakeem-bakare@rosewoodlegal.com
Favour Ishmael
Associate
Rosewood Legal
fishmael@rosewoodlegal.com
Published on Tuesday, November 5, 2024