This country-specific Q&A provides an overview of the legal framework and key issues surrounding arbitration law in Nigeria.
This Q&A is part of the global guide to Arbitration.
For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/arbitration/
What legislation applies to arbitration? Are there any mandatory laws?
The Arbitration and Conciliation Act (Cap. A18, Laws of the Federation of Nigeria, 2004) (the “ACA”) is the federal law on arbitration in Nigeria. The ACA mandatorily applies to all domestic arbitrations where parties have not chosen another law to govern the arbitration.
Lagos State has also enacted the Lagos State Arbitration Law (2009) (the “Lagos Law”). Unless the parties have expressly otherwise agreed, the Lagos Law applies to all arbitrations where Lagos State is the seat of arbitration. The Lagos Law is an enactment of the UNCITRAL Model Law (the “Model Law”), and incorporates the 2006 amendments made to the Model Law.
There is some other legislation that applies to arbitration in Nigeria. Such legislation includes the Judgments Ordinance (Cap. 175) Laws of Federation of Nigeria, 1958 and the Foreign Judgments (Reciprocal Enforcement) Act (Cap. F. 35) Laws of Federation Nigeria, 2004 in which judgment has been defined to include awards. Also, rules of procedure for the recognition and enforcement of awards and other arbitration-related proceedings exist in the various rules of courts.
The legislation on arbitration has some mandatory provisions denoted by the use of the word “shall”. See C. N. Onuselogu Ent. Ltd. v. Afribank (Nig.) Ltd. (2005) 1 NWLR (Pt. 940) 577. The failure to comply with such mandatory provisions may result in the successful challenge of an arbitral proceeding or award. For instance, an arbitration agreement must be in writing. Such writing must be contained in (a) a document signed by the parties; or (b) any means of communication which provide a record of the arbitration agreement (such as exchange of letters, telex, telegrams or; or (c) in an exchange of points of claim and of defence in which the existence of an arbitration agreement is alleged by one party and not denied by another. See section 1 of the ACA.
Also, the arbitrators/arbitral tribunal must ensure that there is fair and equal treatment of the parties. See sections 14 of the ACA and 34 of the Lagos Law. An arbitral award must be in writing and signed by the arbitrators, with reasons stated for the absence of any signature by the non-signing arbitrator. It must also state the place and date of the award (sections 26, ACA and 47, Lagos Law). The award or any decision made by a tribunal consisting of three members must be made by the majority (see Article 31 of the First Schedule to the ACA (“the Arbitration Rules”).
Domestic arbitrations must be conducted in accordance with the Arbitration Rules (section 15, ACA). The Arbitration Rules are a re-enactment of the UNCITRAL Model Arbitration Rules. The arbitral tribunal must give adequate advance notice of the date, time and place of the hearings (Article 25 of the Arbitration Rules).
Is the country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
Nigeria is a signatory to the New York Convention having acceded to it on March 17, 1970. The Convention came into force on June 15, 1970. The New York Convention now forms part of the primary legislation having been made expressly applicable to Nigeria by section 54 of the ACA and is set out in the Schedule Two (2) to the ACA.
There are reservations in Nigeria to the Convention. Section 54 of the ACA emphasize the provisions of Articles IX and XI of the New York Convention. In accordance with Article I(3) of the New York Convention, the Convention is applied in Nigeria on the basis that there is a reciprocal recognition and enforcement of awards made in Nigeria in the territory of a member state whose award is to be enforced in Nigeria.
What other arbitration-related treaties and conventions is the country a party to?
Nigeria is a party to the (i) Vienna Convention on the Law of Treaties, (ii) Convention on Settlement of Investment Disputes between States and Nationals of other States and (iii) Economic Community of West African States Energy Protocol. These treaties have provisions relating to arbitration.
Nigeria has entered into several bilateral investment treaties requiring arbitration as the dispute resolution and regulating the recognition and enforcement of arbitral awards with some countries. These countries with which Nigeria has entered bilateral investment treaties include France, the United Kingdom, the Netherlands, Brazil, Finland, France, Germany, Italy, South Korea, Romania, China, Serbia, Spain, Sweden, Switzerland, and Taiwan.
Further, Nigeria has entered into Investment Promotion and Protection Agreements (IPPAs) with France, the United Kingdom, the Netherlands, Romania, Switzerland, Spain and South Africa. The aim of the IPPAs is to primarily protect investments. The IPPAs allow settlement of investment disputes through arbitration.
Additionally, Nigeria also entered into a treaty with the Asian African Legal Consultative Organisation on April 26, 1999. This treaty guarantees the continued operation of the Regional Centre for International Commercial Arbitration, which was established in Lagos in 1989.
Is the law governing international arbitration based on the UNCITRAL Model Law? Are there significant differences between the two?
The ACA regulates international arbitrations. It is largely based on the UNCITRAL Model Law with slight modifications. Part I of the ACA (that is, sections 1 to 36 of the ACA) applies to domestic commercial arbitration while Part III of the ACA (containing sections 43 to 55 of the ACA) applies solely to international commercial arbitration, in addition to other provisions of the ACA. The ACA also embodies the UNCITRAL Arbitration and Conciliation Rules and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Are there any impending plans to reform the arbitration laws?
There are plans in Nigeria to reform the primary arbitration legislation (the ACA). Currently, there is a bill before the National Assembly (the equivalent of the UK Parliament) to amend the ACA by incorporating 2006 amendments to the Model Law and introduce a body to regulate arbitration in Nigeria.
What arbitral institutions (if any) exist? Have there been any amendments to their rules or are there any being considered?
The arbitral institutions in Nigeria include:
(i) Chartered Institute of Arbitrators (UK) Nigerian Branch;
(ii) Lagos Court of Arbitration;
(iii) Lagos Multi-door Courthouse;
(iv) Maritime Arbitrators Association of Nigeria;
(v) Nigerian Chartered Institute of Arbitrators;
(vi) Regional Centre for International Commercial Arbitration, Lagos;
(vii) Abuja Multi-door Courthouse; and
(viii) International Centre for Arbitration & Mediation, Abuja.
Some of these institutions have in the past amended or introduced new rules on arbitration. Most of these institutions have not recently amended their rules and there are no current plans to amend these institutions’ rules.
What are the validity requirements for an arbitration agreement?
By section 1(1) of the ACA, an arbitration agreement, to be valid, must be in writing or otherwise evidenced in writing. Further, both parties must have mutually agreed or consented to the arbitration agreement and the arbitration agreement must be in respect of a commercial relationship. The parties must have legal capacity to enter into the arbitration agreement as with every other contract, the arbitration agreement must satisfy the basic legal requirements of a valid contract of offer, acceptance, and consensus ad idem.
Are arbitration clauses considered separable from the main contract?
In Nigeria, arbitration agreements are considered separate from the main contract. In other words, arbitration clauses are generally treated as agreements independent of the other terms of the contract in which they are contained. Both the ACA and the Lagos Law recognize an arbitration agreement as an independent agreement. Section 12(2), ACA and section 19(2), Lagos Law. The fact that the main contract which contains an arbitration clause is not valid does not render the arbitration clause invalid.
Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
The ACA is silent on multiparty arbitration agreements and there are no special considerations for conducting multiparty arbitrations. There is no provision precluding multiparty arbitration agreements in Nigeria. The parties have the autonomy to agree on how to organise and present their claims. A third party may apply, and with the consent of the parties, be allowed to participate in an ongoing arbitration. The parties to an arbitration can agree to confer on the arbitrator, in the event of multiplicity of claims, power to consolidate the claims or join other claims. This is especially so if the parties are of the view that the consolidation will finally resolve all the disputes.
How is the law applicable to the substance determined?
Article 33 of the Arbitration Rules in the First Schedule to the ACA provides that the substantive law of the dispute is determined by the parties’ agreement. Where there is no express agreement, Nigerian law will apply in cases of domestic arbitration. In cases of international arbitration, the conflict of law rules applied by the tribunal will determine the law to be applied. Under such circumstances generally, the arbitral tribunal is to decide the substantive law, in accordance with the terms of the contract in all cases, taking into account the usage of the trade applicable to the transaction.
Are any types of dispute considered non-arbitrable? Has there been any evolution in this regard in recent years?
The ACA does not set out the disputes that are considered non-arbitrable. However, section 57 of the ACA defines arbitration to mean commercial arbitration, and “commercial” entails all relationships of a commercial nature. Further, the full title of the ACA states that it is an Act to provide a unified legal framework for the fair settlement of commercial disputes by arbitration and conciliation. Disputes arising from non-commercial transactions may not be referred to arbitration under the ACA. Criminal prosecutions, proceedings for the judicial review of administrative action and proceedings to dissolve marriages, for example, are unabitrable. See United World Ltd Inc v MTS (1998) 10 NWLR (Pt. 568) 106. One can find broader suggestions that issues as to whether a conduct amounts to a crime or a payment or transaction is taxable, or whether given parties are or were truly married are all non-arbitrable, but these all appear, strictly speaking, to be overbroad.
Are there any restrictions in the appointment of arbitrators?
The ACA does not provide for any qualifications as to who can act as an arbitrator. However, before persons can be appointed as arbitrators, certain factors are usually considered such as the relationship of the intended arbitrator to the issues and parties, the nature of dispute, the technical and commercial experience and ability of the arbitrator to resolve the dispute, ability to take charge and to conduct the proceedings expeditiously, arbitral experience in relation to reasonable legal knowledge and special qualification or expertise as stipulated in the arbitration agreement. Serving judges cannot act as arbitrators but retired judges can act as arbitrators.
Are there any default requirements as to the selection of a tribunal?
The law makes default provisions on the appointment of arbitrators. Under the ACA, where the parties cannot agree on the number of arbitrators, the default number will be three (section 6, ACA). The Lagos Law stipulates the default number of arbitrators to be one (section 7, Lagos Law).
Can the local courts intervene in the selection of arbitrators? If so, how?
A party may apply to the court for the appointment of an arbitrator where (a) a party fails to act as required under the procedure by appointing an arbitrator; or (b) the parties or two arbitrators are unable to reach agreement as required under the procedure; or (c) a third party, including an institution, fails to perform any duty imposed on it under the procedure. See section 7(3) of the ACA. In such situation, the High Court is the default appointing authority (section 7, ACA). Where the arbitration is international in nature and the nationality of the arbitrator(s) is not stated, it is recommended to appoint an arbitrator of a nationality other than the nationality of the parties (section 44(4), ACA). The parties might have also agreed in international arbitrations that the appointing authority, being the Secretary-General of the Permanent Court of Arbitration at the Hague, should appoint the arbitrator in the event of default. Under the Lagos Law, the default appointing authority is the Lagos Court of Arbitration (section 8, Lagos Law).
Can the appointment of an arbitrator be challenged? What is the procedure for such challenge? Has there been an increase in number of challenges in your jurisdiction?
The appointment of an arbitrator can be challenged if circumstances exist that raise justifiable doubts as to his/her impartiality or independence; or that he/she does not possess the qualifications agreed by the parties. See section 8 of the ACA. The parties are at liberty to determine the procedure to be followed in challenging the appointment of an arbitrator. Under the ACA, where no such procedure was agreed, the party intending to challenge the arbitrator must forward a written statement of the reasons for the challenge to the arbitral tribunal within 15 days of becoming aware of the constitution of the arbitral tribunal or the circumstances for the challenge.
Unless the arbitrator whose appointment has been challenged withdraws or the other party agrees to the challenge, the arbitral tribunal will decide on the challenge. See section 9 of the ACA. Under the Lagos Law, the arbitral tribunal or the appointing authority (if there is one) will determine the challenge. There has been a rise in number of challenges to the appointments of arbitrators of late but such challenges are largely unreported. Nigeria does not have comprehensive reporting of appellate cases, and cases in the trial court are rarely reported at all. There is increasing awareness of the importance of arbitration and the need for expediency in the process.
What happens in the case of a truncated tribunal? Is the tribunal able to continue with the proceedings?
Under the ACA, where the appointment of an arbitrator is terminated by the parties, or an arbitrator dies or resigns in the course of the arbitral proceedings, or fails to act or is unable to perform his or her functions, a substitute arbitrator will be chosen in accordance with the rules and procedure by which the replaced arbitrator was appointed. Under the Lagos Law, an application to remove an arbitrator can also be made to the court on any of the above grounds. However, the court will not act until the arbitral tribunal has exercised its powers to resolve the issue. Once the replacement is made, the tribunal will continue with the proceedings.
Are arbitrators immune from liability?
Arbitrators are not accorded any statutory immunity under the ACA. There is no provision governing liability for negligence of the arbitrator and in such a circumstance an action is likely to be maintainable. The Lagos Law grants arbitrators statutory immunity unless they act in bad faith. Generally, public policy favours immunity for arbitrators from liability for their judicial acts. The recourse that parties have against arbitrators that do not perform their tasks with all due diligence is to terminate the mandate of such arbitrators.
Is the principle of competence-competence recognised? What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?
By the provisions of section 12(1) of the ACA, an arbitral tribunal is competent to rule on questions pertaining to its own jurisdiction and on any objections with respect to the existence or validity of an arbitration agreement. An objection that the arbitral tribunal lacks jurisdiction must be raised no later than the time of submission of the points of defence, and a party is not precluded from raising such plea by reason that he or she has appointed, or participated in the appointment of, an arbitrator.
Furthermore, an objection that the arbitral tribunal is exceeding the scope of its authority can be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the proceedings. However, an arbitral tribunal shall rule on any such objections either as a preliminary question or in an award on the merits, and such ruling is final and binding. The ACA makes no provision for circumstances in which parties can be precluded from raising jurisdictional objections.
Even though the ACA does not specifically state that a court can determine the issue of an arbitral tribunal’s jurisdiction, it is not precluded from doing so if any of the parties approaches it. This is particularly so where an arbitrator proceeds with arbitration even where circumstances exist that could give rise to justifiable doubts as to his or her impartiality or independence (section 8(3)(a) ACA).
Further, the court can be asked to determine the issue of jurisdiction and competence of an arbitral tribunal after the award has been made and proceedings have been commenced in such instances seeking to set aside or refuse the recognition and enforcement of arbitral awards. Arbitrators exceeding their mandate have been held to constitute misconduct on the part of the tribunal for which an award may be set aside under section 30 of the ACA. See Taylor Woodrow Ltd v GMBH (1991) 2 NWLR (Pt. 175) 604.
Nigerian courts consider arbitration agreements to be binding on the parties and have been consistent in holding parties to their arbitration agreements. See M.V Lupex v NOC & S Ltd. (2003) 15 NWLR (Pt. 844) 469. Where a party to an arbitration agreement commences an action in court with respect to any matter that is the subject of an arbitration agreement, any party to the arbitration agreement may, at any time after appearance or before delivering any pleadings or taking any other steps on the proceedings, apply to the court for an order of stay of proceedings. If the court is satisfied that there is no reason why the matter should not be referred to arbitration in accordance with the arbitration agreement and that the applicant is still willing and ready to submit to arbitration, the court may order a stay of proceedings. See sections 4 and 5, ACA. Recently, the Chief Justice of Nigeria in collaboration with the National Judicial Institute issued a policy statement and directives mandating Nigerian courts to insist on enforcing arbitration agreements.
How are arbitral proceedings commenced? Are there any key provisions under the arbitration laws relating to limitation periods or time bars of which the parties should be aware?
The procedure for the commencement of arbitral proceedings is set out in Article 3 of the Arbitration Rules. To commence arbitration, the claimant must serve a notice of arbitration on the respondent. The arbitral proceedings are deemed to commence on the date on which the notice of arbitration was received by the respondent, unless otherwise agreed by the parties. See Section 17 of the ACA. Arbitrations are to commence within six (6) years of the accrual of the cause of action just like the commencement of actions concerning contracts.
The limitation period within which to bring an application to enforce an arbitral award is six (6) years. This six-year rule, however, applies to an award pursuant to an arbitration agreement which is not under seal or where the arbitration is pursuant to any statute other than the ACA. An application to enforce an arbitral award in the categories referred to above must be brought within six (6) years. This provision has been interpreted to mean that the six-year limitation period starts to count from the day of the accrual of the cause of action resulting in the arbitral award and not from the day the arbitral award was delivered. See Murmansk Steamship Line v Kano Oil Millers (1974) 12 SC 1; City Engineering Nigeria Limited v. Federal Housing Authority (1997) 9 NWLR (Pt. 520) 224. This implies that the accrual of the cause of action, the arbitration proceedings, the award and application for enforcement of the award must all occur within six years.
In a bid to ameliorate the hardship that may arise from the decision in Murmansk Steamship Line and City Engineering Nigeria Limited (supra), the Lagos Law provides that in computation of the time for the commencement of proceedings seeking to enforce an arbitral awards, the period between the commencement of the arbitration and the date of delivery of the award shall not be reckoned with. This means that under the Lagos Law, the six-year limitation period starts to run from the day the award is delivered.
What happens when a respondent fails to participate in the arbitration? Can the local courts compel parties to arbitrate? Can they order third parties to participate in arbitration proceedings?
Where a respondent fails to state his/her defence as required under the ACA, the arbitral tribunal can continue the proceedings without treating such failure in itself as an admission of the claimant’s allegations. See section 21(b) of the ACA. Also, where any party fails to appear at a hearing or to produce evidence, the arbitral tribunal may proceed with the proceedings and make an award. See section 21(c) of the ACA.
Nigerian courts cannot compel the parties to arbitrate but may stay proceedings and direct the parties to arbitrate where a party to the arbitration agreement has commenced litigation instead of arbitration. Except with the consent of the parties and third-party, a third party cannot be made a party to an arbitration. It is essential that a person must be a party to an arbitration agreement before he is made a party to an arbitration unless he submits to arbitration. The court may command third parties within Nigeria to appear as witnesses or produce evidence. See section 23 of the ACA.
In what circumstances is it possible for a state or state entity to invoke state immunity in connection with the commencement of arbitration proceedings?
Where an arbitration has been commenced in respect of disputes where the State has acted as a State and not as a commercial actor, state immunity may be successfully invoked. The restricted doctrine of immunity applies in Nigeria. African Re-insurance Corporation v. AIM Consultants Ltd. (2004) 12 NWLR (Pt. 884) 223. State immunity can also be claimed where it is clearly granted by statute.
In what instances can third parties or non-signatories be bound by an arbitration agreement or award?
Generally, under the ACA, a third party cannot be bound by an arbitration agreement or award. However, an arbitral tribunal may assume jurisdiction over individuals or entities that are not themselves parties to an agreement to arbitrate, if the parties to the arbitration agreement consent to the participation of such third parties and if such third parties themselves voluntarily submit to the jurisdiction of the arbitral tribunal. Also, in the event of the death of any party to the agreement, the arbitration agreement is enforceable by or against the personal representative of the deceased. See section 3 of the ACA. Where the assets and liabilities of a contracting party are being liquidated by a court order, the liquidator may be authorized by the court to bring or defend any arbitration proceedings and therefore would be bound by the decision in such arbitral proceedings. Further, third parties or non-signatories would be bound by an arbitration agreement where there exist any rights and obligations under assignment and agency contracts.
What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal?
Interim measures that are available include measures for the conservation of goods or preservation of properties forming the subject-matter of the dispute and for the security of costs (section 13 of the ACA). The High Courts have powers to issue interim measures pending the constitution of an arbitral tribunal. Further, Article 26 of the Arbitration Rules empowers a court approached by a party to arbitral proceedings to grant interim relief and such a request will not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.
Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence?
Evidence in Nigeria is generally regulated by the Evidence Act, 2011. There are other statutes and various rules of courts regulating the taking of evidence in Nigeria. However, these statutes do not apply to proceedings before an arbitral tribunal. The rules of evidence that would be applied by an arbitral tribunal therefore are (a) any rules arising from or referred to in the parties’ arbitration agreement, (b) evidential principles, (c) such rules as the arbitral tribunal may direct or (d) a combination of these rules and principles.
Subject to any agreement to the contrary, the arbitral tribunal will decide whether the arbitral proceedings will be conducted: (i) by holding oral hearings for the presentation of evidence or oral arguments; (ii) on the basis of documents and other materials; or (iii) by both holding oral hearings and on the basis of documents. The tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence placed before it.
Where there is a need to compel the attendance of any person to give evidence at the arbitral proceedings, whether to testify or produce document, an application can be made to court to compel such person to appear and give evidence in the arbitration. Nigerian courts are empowered to compel attendance of witnesses or production of documents before arbitral tribunals. See section 23 of the ACA.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings?
Nigerian lawyers conducting proceedings as counsel are bound by the Rules of Professional Conduct for Legal Practitioners, 2007 in carrying out their services.
How are the costs of arbitration proceedings estimated and allocated?
There is no legislation on the award of interest in arbitrations and as such the arbitrators will adopt the practice that they consider to be fair to both parties. Usually, the costs are fixed by the arbitral tribunal in its award. These costs include the (a) fees of the arbitrators, (b) travel and other expenses incurred by the arbitrators, (c) cost of expert advice and other assistance required by the arbitral tribunal, (d) travel and other expenses of witnesses to the extent that such expenses are approved by the arbitral tribunal and (e) reasonable costs for legal representation and assistance.
The costs of arbitration are in principle borne by the unsuccessful party as the unsuccessful party will be required to indemnify the successful party. The tribunal may, however, apportion such costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case. No additional fees may be charged by an arbitral tribunal for the interpretation, correction or completion of the award.
Can pre- and post-award interest be included on the principal claim and costs incurred?
The ACA does not limit the power of the arbitrator to order interest. Interest can be awarded based on the parties’ agreements in this regard, at a rate agreed by the parties or proved before the arbitral tribunal. The arbitrator would, however, be duty-bound to award interest based on evidence presented to the tribunal and upon such legal indices as may be fair and just in the circumstances. In practice, interest is usually guided by the Nigeria Inter Bank Official Rate (NIBOR), plus any reasonable amount depending on the peculiarities of the case.
What legal requirements are there for the recognition of an award?
Arbitral awards are recognized as binding and will be enforced by the court upon application in writing. The award to be so recognized must be in writing and signed by the arbitrators. Where the tribunal comprises of more than one arbitrator, the majority’s signatures will suffice if the reason for the absence of any signature is stated. The award must contain the reasons on which it is based, unless the parties have agreed that the reasons are not to be stated or the award is an award on agreed terms. The award must also contain the date it was made and state the place of the arbitration, as agreed by the parties or determined by the tribunal. Every award must be a decision (not, for example, a suggestion or recommendation) of the arbitral tribunal and must be certain and final (not provisional). A copy of the award signed by the arbitrators must be delivered to each party.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?
All of the remedies recognised under the relevant laws and granted in arbitral awards are enforceable by the courts. Unless the parties agree otherwise, an arbitral tribunal may make an award on whichever types of remedies it sees fit, including declarations, injunctions, damages (including punitive and exemplary damages) and rectification.
Can arbitration proceedings and awards be appealed or challenged in local courts? What are the grounds and procedure?
The law does not allow an appeal to be lodged against an arbitral award. However, a party to a domestic arbitration may within three (3) months from the date of the award apply to a High Court to have an award set aside on grounds that the: (i) tribunal exceeded its mandate or jurisdiction; (ii) tribunal was guilty of misconduct; or (iii) award was improperly procured. See sections 29-30, the ACA. Misconduct entails a wide range of violations such as breach of fair hearing, corruption, taking of bribes, partiality of the arbitrators, failure to comply with the terms, express or implied, of the arbitration agreement. See A. Savoia Ltd. v. Sonubi (2000) 12 NWLR (Pt. 682) 539. In fact, challenges regarding the misconduct of the tribunal or an arbitrator are open to a wide range of interpretations and parties are generally able to allege several grounds of challenge. Stabilini Visinoni Ltd. v. Mallinson & Partners Ltd. (2014) LPELR-23090(CA).
In addition to the foregoing grounds, arbitral awards made in international arbitrations may be challenged or set aside on the following additional grounds: (i) incapacity of a party to the arbitration agreement; (ii) invalidity of the arbitration agreement under the law which the parties have indicated should apply under the laws of Nigeria; (iii) the party seeking to set aside the award is not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; (iv) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration under the laws of Nigeria; (v) the award contains decisions on matters which are beyond the scope of the submission to arbitration, (however if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced); (vi) the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties; (vii) there is no agreement between the parties that the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the law of the country where the arbitration took place; or (viii) that the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, the award was made; or (ix) that the recognition or enforcement of the award is against public policy of Nigeria. See sections 48 and 52 of the ACA.
A party that is aggrieved by an arbitral award can apply to a High Court usually by way of an originating motion seeking to set aside the award within three months of the date of the award or after the correction of the award. The High Court may set aside the award or part of the award if the party making the application proves that the award or a part of it contains decisions on matters which were beyond the scope of the submission to arbitration. Where an application to set aside an award is brought, the High Court may, at the request of a party, suspend its proceedings for a period that it deems appropriate so that the arbitral tribunal can resume the arbitral proceedings or take other actions to eliminate the grounds for the setting aside of the award.
Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?
The parties are free to insert any terms in their contract and would be bound by the terms of their agreement. The fact that the parties are empowered to waive their right to challenge an arbitral award is buttressed by the fact that the statutory provisions on challenges to arbitral awards are not mandatory. The validity of such provisions may be challenged in view of the fact that there is a right to approach courts in Nigeria. The Nigerian courts have held in other circumstances that access to the judicial system is a public right which cannot be waived or ousted by agreement.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
A state or state entity may successfully raise the defence of immunity at the enforcement stage only if the arbitral award was not published in a dispute emanating from commercial transactions. Nigerian courts recognize and enforce the doctrine of restricted immunity. See African Re-insurance Corporation v. AIM Consultants Ltd. (2004) 12 NWLR (Pt. 884) 223. Because arbitral awards that will be recognised and enforced must have been made in respect of disputes arising from commercial transactions, a state or state-entity may not be able to successfully raise the defence of immunity.
To what extent might a third party challenge the recognition of an award?
Both the Lagos Law and the ACA make no provisions on the right or the extent to which third party can challenge the recognition of arbitral awards. However, Nigerian courts have held that a third party that is likely to be affected by the outcome or the recognition of an arbitral award has the right to challenge an arbitral award on that basis. See Statoil (Nigeria) Limited et al. v FIRS (2014) LPELR-23144(CA).
Have there been any significant developments with regard to third party funding recently?
There are no rules on third-party funding in Nigeria. Third-party funding in arbitration is not prohibited in Nigeria. However, there are no known third party funders that are active in the Nigerian market.
Is emergency arbitrator relief available? Is this frequently used?
The Lagos Court of Arbitration Rules 2013 (the “LCA Rules”) make provisions for emergency arbitrators. Under the LCA Rules, interim measures can be requested prior to the constitution of an arbitral tribunal. The idea of an emergency arbitrator was on the need to bridge the gap between the commencement of an arbitration and constitution of the arbitral tribunal. Under the LCA Rules, a party in need of urgent, preservatory or special measures prior to the constitution of the arbitral tribunal may apply to the LCA Secretariat for such measures and for the appointment of a Special Measures Arbitrator. This move will certainly contribute in widening the scope of interim measures available to parties to arbitration.
Are there arbitral laws or arbitration institutional rules providing for simplified or expedited procedures for claims under a certain value? Are they often used?
There are such rules. The Nigerian arbitration community has acknowledged the need to simplify arbitral laws under claims of certain values. For instance, the Chartered Institute of Arbitration, (UK) Nigeria Branch (the “CIA”) recently launched on June 30, 2017 the Micro, Small and Medium Enterprises (the “MSME”) Arbitration Scheme. The MSME scheme is for small claims ranging from N250,000.00 to N5,000,000.00. The scheme is not, however, restricted to the stated monetary range, so long as the disputants apply to the Chairman of the CIA to have their disputes resolved through the scheme. The cost effectiveness of the scheme is ensured by a set of rules designed to guide proceedings through simple, quick and affordable paths to resolution. The scheme provides simple cost effective and timely resolution of disputes, and an outcome within ninety (90) days of the appointment of the arbitrator. The outcome is a final, legally binding and enforceable award. Under the MSME scheme, the arbitrators’ fees have been capped to ensure that the expense does not prevent MSMEs from accessing arbitration.
Have measures been taken by arbitral institutions to promote transparency in arbitration?
There are no measures known to us that have been taken by the arbitral institutions in Nigeria to promote transparency in arbitrations. Although arbitral institutions have been admonished to consider amending their rules to incorporate principles that will foster transparency in the arbitral process, the arbitration institutions continue to ensure the confidentialty of arbitration process.
Is diversity in the choice of arbitrators and counsel (e.g. gender, age, origin) actively promoted? If so, how?
This diversity is not promoted. Arbitrators and counsel are appointed based on their credentials, experience, credibility and availability to carry out the task.
Have there been any developments regarding mediation?
There is a growing awareness on the need to encourage and patronize other forms of Alternative Dispute Resolution (ADR) such as mediation. Court rules have provisions empowering the judges to encourage parties to explore mediation especially before the suit can proceed to trial. Currently, in Lagos State, any suit instituted must go through the ADR screening proccess and any case found suitable would be referred to mediation at the Lagos Multi-door Court House.
Have there been any recent court decisions considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?
There are no such decisions. However, arbitral awards will be set aside by courts provided there are good grounds for such setting aside as provided in the law.