In Capsule Form: The Enforcement of Arbitral Awards In Nigeria

Introduction

Arbitration is a dispute resolution process agreed between parties that involves the submission of a dispute to one or more arbitrators who issue an award.[1] It is an alternative dispute resolution (ADR) mechanism because it enables the parties to settle their conflict amicably and outside of the jurisdiction of the courts. Arbitration is ideally suited for the resolution of business and contractual disputes. In arbitration, the parties to the dispute are given a final, legally-binding decision known as ‘award’ that establishes their rights and obligations.[2]

The Arbitration and Conciliation Act 1988 is currently the governing legislation in Nigeria regarding arbitration.[3] The Act was enacted to provide a unified legal framework for the fair and effective resolution of commercial disputes via arbitration. The Act was also enacted to give force to the application of the Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) widely regarded as the cornerstone of current international commercial arbitration, to any award made in Nigeria or that which arises from international commercial arbitration.

• Enforcement of Arbitral Award

In the case of BCC Tropical Nigeria Limited v. The Government of Yobe State & Anor,[4] the court stated that, the disputing parties are normally required to give effect to the arbitral award, as a result of their participation in the arbitration proceedings in good faith. There are however instances where the party against whom an arbitral award was given would make attempt to renege from abiding by the award. When such situation arises, the party in whose favour the award was given can take steps to ensure the enforcement of the award.

With respect to the enforcement of an arbitral award, the limitation period provided for the enforcement opens from the time of the accrual of the cause of action and not when the arbitral award was given.[5] This seems unreasonable contrary to the time-saving feature ascribed to arbitration as disputing parties are not able to determine when an arbitral proceedings is going to be completed.

It should also be noted that the finality and binding force of an award over the parties is subject to the aggrieved party’s right of recourse to appeal to set aside the award.[6] This right of appeal against the enforcement of an award makes the award susceptible to litigation. Since the enforcement period starts counting from the time the dispute which led to the arbitration arose and not when the award was delivered, by the time the issue of validity of the award is determined by the apex court, the limitation period might have expired, thereby automatically rendering the award sterile by depriving the successful party the benefits provided for in the award.[7]

The Arbitration and Conciliation Act[8] does not provide for a time limit to conduct an arbitration. This absence of time limit can be exploited by a mischievous party by laying hold on needless appeals to occasion a delay and cause an expiration of the limitation period, with the goal of depriving the successful party from enforcing the award. [9]

The Arbitration and Conciliation Act[10] provides for the recognition and enforcement of both domestic and foreign arbitral awards in Nigeria. Section 31 (1) of the Act provides that,

“An arbitral award shall be recognised as binding and subject to this section 32 of this Act, shall, upon application in writing to the court, be enforced by the court.”

By this provision of the Act, a party who wants an award delivered in the arbitral proceedings to be enforced must make an application to the court for its enforcement.

There are certain documents that must be supplied by the party seeking the enforcement of an award. These documents include the duly authenticated original award or duly certified copy thereof, and the original arbitration agreement or a duly certified copy thereof.[11]

Section 51 of the Act provides for the procedure for the enforcement of a foreign award. A party who wants to ensure the recognition and enforcement of a foreign award must apply for the registration of the foreign award as a judgment of High Court in Nigeria. Where the award or arbitration agreement is not made in the English language, a duly certified translation of such into the English language must be made available.[12]

It is pertinent to note that any of the parties to an arbitration agreement may request that the court should not grant the recognition nor the enforcement of the award delivered in the arbitral proceedings.[13] Consequent upon this provision are certain conditions to be fulfilled by the party requesting for the refusal of the recognition and enforcement of the award in question.

The court where recognition or enforcement of an award is sought or where application for refusal of recognition or enforcement thereof is brought may, irrespective of the country in which the award is made, refuse to recognise or enforce any award if the party against whom it is invoked furnishes the court proof

• that a party to the arbitration agreement was under some incapacity,[14] or
• that the arbitration agreement is not valid under the law which the parties have indicated should be applied, or failing such indication, that the arbitration agreement is not valid under the law of the country where the award was made,[15] or
• that he was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise not able to present his case,[16] or
• that the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration,[17] or
• that the award contains decisions on matters which are beyond the scope of submission to arbitration, so however that if the decision on matters submitted to arbitration can be separated from those not submitted, only that part of the award which contains decisions on maters submitted to arbitration may be recognised and enforced,[18] or
• that the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties,[19]
• where there is no agreement within 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,[20] or
• that the award has not yet become binding on the parties or has been set aside or suspended by a court in which, or under the law of which, the award was made.[21]

The court may also refuse to grant the recognition and enforcement an award if the court finds (i) that the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Nigeria,[22] or (ii) that the recognition or enforcement of the award is against public policy of Nigeria.[23]

• Conclusion

Arbitration without doubt has gained a wide acceptance in facilitating the resolution of disputes and has provided an alternative to avoid the protracted difficulties experienced in litigation. Where an award is delivered in arbitral proceedings, an application for the enforcement of the award must be made to the court by the party seeking its enforcement, coupled with the supply of the duly authenticated original award or its certified copy, and the arbitration agreement of the parties. However, the court may refuse to recognise or enforce an award where certain facts are established or proven by the party against which the award is invoked, as provided in the Arbitration and Conciliation Act of 1988.

FOOTNOTES:

[1] https://www.international-arbitration-attorney.com/definition-of-arbitration/ Accessed on 24^th December, 2022.

[2] Idornigie, P. (2016). Arbitrating Intellectual Property Disputes: Issues and Perspectives. The Gravitas Review of Business & Property Law, 7(1), 1-19.

[3] This Act came into effect on 13th March, 1988.

[4] (2011) LPELR-9230 (CA)

[5] City Engineering Nig. Ltd v. Federal Housing Authority (1997) 9 NWLR (Pt. 520) 224.

[6] David T. Eyongndi (2021). Enforcement of Arbitral Awards in Nigeria and the Jigsaw of Limitation Period: The Need for Compliance with Global Best Practices. Mizan Law Review, 15(1), 107-138

[7] Kayili v. Yilbuk & Ors (2015) 2 SCM, 161.

[8] Cap A18, Laws of the Federation of Nigeria, 2004.

[9] Ibid footnote 7

[10] Ibid footnote 9

[11] Section 31 (2) of the Arbitration and Conciliation Act 1988 Cap A18, Laws of the Federation of Nigeria, 2004.

[12] Section 51 (2) (c) Ibid.

[13] Section 52 (1) Ibid.

[14] Section 52 (2) (a) (i) Ibid.

[15] Section 52 (2) (a) (ii) Ibid.

[16] Section 52 (2) (a) (iii) Ibid.

[17] Section 52 (2) (a) (iv) Ibid.

[18] Section 52 (2) (a) (v) Ibid.

[19] Section 52 (2) (a) (vi) Ibid.

[20] Section 52 (2) (a) (vii) Ibid.

[21] Section 52 (2) (a) (viii) Ibid.

[22] Section 52 (2) (b) (i) Ibid.

[23] Section 52 (2) (b) (ii) Ibid.