Arbitration has been globally accepted as an amicable dispute settlement mechanism. Over the years, arbitration has attained a high level of influence as an effective mechanism for resolving commercial and trade disputes in the Nigerian justice system. The reason for this is not farfetched as arbitration by its nature is relatively faster in the dispensation of justice compared to litigation. Arbitration is attractive to parties to a dispute for several reasons ranging from confidentiality to neutrality and flexibility.
At the end of arbitral proceedings, successful parties would be granted a final and binding decision known as an arbitral award, which can only be set aside by an order of a competent court on the grounds stated in the Arbitration and Conciliation Act1988. See Sections 29 and 30 ACA. The courts with jurisdiction over applications for enforcement of arbitral awards are the Federal High courts and High courts of states. See Sections 29,30 and 57 ACA. The Supreme court also has original jurisdiction to entertain enforcement proceedings in relation to Section 1 of the ICSID Convention which Nigeria ratified in 1965. In Nigeria, the applicable law governing the enforcement of an arbitration award is The Arbitration and Conciliation Act of 1988.
An action to enforce an arbitral award accrues from the date the dispute leading to the arbitration arose instead of when the award was rendered. This is in accordance with Section 7(1)(d) of the Limitation Law. The courts enforce arbitral proceedings when it is a final determination of substantive issues. Applicants must pay the applicable filing fee as assessed by the registrar in court, depending on the court written submissions are not to exceed 20 pages. See Order 35, rule 3 Lagos State High Court Rules. An originating motion, affidavit and written submission alongside copies of same must be attached in accordance with the Order 52 rule 15 Federal High Court Rules 2019 where applicable.
Section 31, 51 and 52 of the ACA 1988 provide for the recognition and enforcement of arbitral awards in Nigeria. A successful party can enforce arbitral awards in Nigeria through the following steps and conditions:
- Presence of a valid award
Before an applicant can enforce an arbitral award there must have been a dispute which arose, the dispute must have led to submission to an arbitral tribunal, which both parties submit to, there must have been awarded to successful party a valid award. A valid award must be in writing and must be signed by the arbitrators. Where there is more than one arbitrator signature of the majority is sufficient. See Section 26 ACA. This method of enforcement is a common one, it is based on the fact that parties to an arbitration agreement agree to perform a valid award and when the same is not performed, the successful party can proceed in court for the action of breach of promise.
- Enforcement Under Section 31 ACA
This section provides for enforcement of domestic awards, to the effect that an arbitral award shall be recognized as binding subject to Section 32 and shall upon application in writing to the court will be enforced by the court. It states that a party relying on an award or applying for its enforcement is to supply a duly authenticated award or a certified copy of the same. While Section 31(3) is to the effect that an award may by leave of the court or a judge be enforced in the same manner as a judgement or order to the same effect.
- Applications for Enforcement of International awards
International awards are enforceable in Nigeria under the Arbitration and Conciliation Act, and they may be enforced under the Foreign Judgement Act. The procedure for the enforcement under the two Acts are summarized below.
- Enforcement under Section 51 ACA
Section 51 provides for the enforcement of foreign awards. It provides that an arbitral award shall, irrespective of the country in which it is made, be recognized as binding and subject to Section 32 of the ACA shall upon application in writing to the court be enforced by the court. The party relying on an award or applying for its enforcement shall supply a duly authenticated original award or a duly certified copy thereof, the original arbitration agreement or a duly certified copy of same, a duly certified translation in the English language in the case of an award or arbitration agreement not made in the English language. The Court of Appeal in Imani & Sons Ltd v. Bil Construction held that asides from the filing of motion on notice by the party seeking enforcement, the party is required to attach the arbitral agreement, the original award, the name and place of business of the person whom the award is enforced against and a statement that the award has not been complied with.
- Enforcement under Foreign Statutes
Awards may also be enforced under the Foreign Judgment Act 1961 and the Reciprocal Enforcement Judgement Act 1922 and The New York Convention 1958 (Convention on the Recognition and Enforcement of Foreign Award). For enforcement of an arbitral award, the period it starts to run is from the date of award, unlike the domestic one that starts to run from when the dispute arose. Section 54 of the ACA domesticates the New York convention, this convention did not specify a time limit for enforcement and leaves the same open to the court the enforcement is sought.
Notwithstanding the above, an aggrieved party may request the court to refuse an award in accordance with the provisions of Section 52 ACA.
Arbitration is an important part of Nigerian jurisprudence; however, the Arbitration and Conciliation Act of Nigeria is not without fault, as it has several loopholes ranging from the limitation period to the lack of timeframe as to the commencement and conclusion of arbitral proceedings. Nevertheless, arbitration still remains one of the best means to resolve commercial disputes in Nigeria due to its speedy conclusion.
By Litigation & Dispute Resolution Team at Resolution Law Firm