1.0 INTRODUCTION
Arbitration is a form of Alternative Dispute Resolution (ADR) mechanism whereby parties resolve their dispute themselves or with the help of an arbitrator. This mechanism is an alternative to resolve the problem of the slow process of resolving disputes in the Courts. Arbitration provides a means to resolve conflict in a faster and more flexible way. It is also more confidential than a traditional Court where the Courts are open to the general public. This article dives into the legal framework of Alternative Dispute Resolution and the impact in the emerging areas of law in Nigeria.
Arbitration proceedings can be tailored to meet the specific needs of the parties, such as selecting arbitrators with expertise in the relevant industry or subject matter. This flexibility reduces the procedural complexities and delays often associated with litigation in Nigeria.
In Nigeria, matters referred to arbitration must first be seen to be arbitrable, there are some disputes that are not arbitrable. The Court in Nigeria has distinguished between arbitrable and non-arbitrable dispute.[1] They are:
- criminal matters,
- disputes arising out of an illegal or void contract.
- disputes on Matrimonial Causes e.g., divorce petition.
- disputes concerning tax liability.
- election matters
- disputes on the declaration of title to land.
1.1 CURRENT LEGAL FRAMEWORK IN NIGERIA
Arbitration in Nigeria has experienced significant changes and development over the years. In an attempt to evolve and include emerging areas in arbitration, a new Act was enacted, the Arbitration and Mediation Act 2023. Prior to the enactment of the Arbitration and Mediation Act 2023 the Arbitration and Conciliation Act of 2004 was in force to govern all forms of Arbitration in Nigeria. The Repelled Act provides procedures for conducting domestic arbitration in Nigeria.
The new Act strengthens the resolution of disputes in commercial sectors and creates an environment where Alternative Dispute Resolution (ADR) is in line with modern and emerging industries in Nigeria. [2]
The previous Act[3] does not clearly state the objective of the Act, however, the Arbitration and Mediation Act 2023 defines that the objective of the Act is to promote fair resolution of disputes by an impartial tribunal without unnecessary delay or expenses.[4] The previous Act of 2004 did not make any provision for mediation while the New Act clearly spells out mediation in both domestic and international disputes. The Act defines Mediation as the process where parties seek the assistance of a neutral third party or parties to help them in reaching a mutually agreeable resolution for their dispute arising from a contractual or legal relationship.[5]
2.0 ARBITRATION IN EMERGING LEGAL AREAS
- Intellectual Property Disputes
Arbitration is fast becoming the means of resolving dispute in various economic sectors in Nigeria, Intellectual Property dispute is not excluded. Arbitration processes are primarily governed by the Arbitration and Mediation Act, however there are no provision in the Act that specifically provides for intellectual property dispute, but intellectual property resolutions can be gleaned from contractual provisions in the Act.
One of the major legislation governing Intellectual Property in Nigeria is the Copyright Act 2022 which provides that “any disputes arising from the exercise of a right under this Act, may be subject to arbitration and may be resolved by any means agreed to by the parties to the dispute”.[6] The provision states that any disputes that arise from the exercise of rights under the Copyright Act may be subject to arbitration. This means that parties involved in copyright-related disputes, such as disputes over infringement, licensing agreements, royalties, or any other rights under the Copyright Act, have the option to resolve these disputes through arbitration rather than through litigation in Court.
Arbitration plays a crucial role in safeguarding Intellectual Property rights in Nigeria by offering a specialized, efficient, and confidential forum for resolving disputes. By providing parties with the flexibility to choose arbitrators with relevant expertise and maintaining confidentiality over sensitive information, arbitration supports innovation, creativity, and investment in intellectual property. The enforceability of arbitral awards under international conventions enhances the attractiveness of arbitration as a preferred method for resolving cross-border Intellectual Property disputes.[7]
- Energy sector
Nigeria is blessed with a lot of natural resources and one of the major revenues for Nigeria is in energy resources such a crude oil, petroleum reserves, natural gas, hydroelectricity, and solar. In Nigeria, crude oil accounts for the major source of foreign income as Nigeria is a member of the Organization of the Petroleum Exporting Countries (OPEC).
As natural resources are owned by the Nigerian Government,[8] there are often contractual agreement between the government or its agencies and private, domestic, and foreign organizations. As a result of the contract and its complexities there are bound to be disputes and conflicts. The Nigerian Judicial system, practices an adversarial system and this can be rigid and slow, considering how prompt the energy sector is, the various Alternative Dispute Resolution (ADR) mechanisms are resulted to instead of litigation.
Nigeria’s new Arbitration and Mediation Act, 2023, (AMA) introduced innovations that will positively affect dispute resolution in the energy sector.[9] The Petroleum Act 2021 made for various provision for resolution of dispute in section 73(f), 163[10]which made provision for mediation or arbitration in instances of dispute.
- Financial Technology (Fintech) Dispute.
The world of financial technology is increasingly evolving, and this poses a challenge to the current Judicial system in Nigeria as lawyers and Judges may find it difficult to navigate the evolving change in the technological sector. To solve this challenge, Alternative Dispute Resolution is offering the parties to the dispute a flexible means of resolving their dispute.
The advantages of Arbitration in Fintech are resolution of dispute timeously, confidentiality of data and information. A lot of Fintech companies have access crucial to data of people and exposing this vital information can lead to breach in Data Privacy Right. Arbitration breeds confidentiality and the autonomy of parties to select their Arbitrator or an expert in the Fintech sector.[11]
2.1 ARBITRATION AGREEMENT IN NIGERIA
The Arbitration and Mediation Act expressly state that for an Arbitration agreement to be valid, it must be in writing[12]and there must be evidence of it in writing. The arbitration agreement may be in form of an arbitration clause in a contract or in a separate complete agreement. [13] Both parties to the agreement must consent to the agreement and the agreement must clearly express the intention of the parties submitting dispute to arbitration. The Act further provide that an Arbitration Agreement shall not be invalid by reason of death of any of the parties to the agreement.[14]
In addition to the Arbitration Agreement being in writing, the act introduced the concept of Electronic communication, an Arbitration Agreement can be form of an electronic communication as fulfilment that it must be in writing.[15]Electronic communication has been defined by the Arbitration and Mediation Act to “mean any communication that the parties make by means of data messages, that is, any information generated, sent, received, or stored by electronic, magnetic, optical, or similar means, including Electronic Data Interchange (EDI), electronic mail, telegram, telex or telecopy[16]
2.2 ENFORCEMENT OF ARBITRAL AWARDS IN NIGERIA
The Act expressly made provision that parties to an arbitration agreement can agree on the number of Arbitrators to the Arbitral Tribunal, however in instances where the parties cannot agree on the number of Arbitrators, a sole Arbitrator can be appointed.[17]
In enforcing Arbitral Awards, the Arbitration and Mediation Act requires that the Court Stay in Proceeding and uphold any arbitration agreement, the Court is mandated to refer the parties to arbitration in instances where there are arbitration agreements. The only exception is if the arbitration agreement is void, inoperative and incapable of being performed.[18] When the Court order for a stay of proceedings, the Court may for the purpose of preserving the right of the parties make an interim or supplementary order.[19]
Section 34 of the AMA provides that the status of limitation that apply to judicial proceedings also apply to arbitral proceedings. In calculating the time for the commencement of proceedings to enforce an arbitral award, the period between the commencement of the arbitration and the date of the award shall be excluded.[20]
Section 55(3) of the Arbitration and Mediation Act, the Court can set aside an arbitral award where the party making the application can prove that.[21]
- A party to the arbitration agreement was under some legal incapacity.
- The arbitration agreement is not valid under the law to which the parties subjected it or, failing such indication, under the laws of Nigeria.
- The party who made the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise not able to present its case.
- The award deals with a dispute that is not contemplated by or that does not fall within the terms of the submission to arbitration.
- The award contains decisions on matters that are beyond the scope of the submission to arbitration; however, if those matters beyond the scope of the agreement can be separated from those within the scope, the part of the award containing decisions on matters that cannot be submitted to arbitration can be set aside.
3.0 CHALLENGES OF ARBITRATION IN EMEGING SECTORS IN NIGERIA
Arbitration in emerging sectors presents several unique challenges, Emerging sectors such as renewable energy, technology, Maritime are often experiencing rapid innovations, regulatory uncertainties, and other key challenges.
Some of the challenges related to arbitration include.
- Novelty of Issues and dispute: Emerging sectors are frequently involved in issues that have little or no existing legal precedent. Most of the disputes are new to the legal system, and these leaves Arbitrators with the option of making decisions on novel issues. This is because the legal frameworks governing these sectors are either underdeveloped or evolving.
- Lack of Specialized Arbitrators: Dispute in emerging sectors often require Arbitrators to have specialized knowledge in such areas. Finding appropriate and skilled Arbitrators in this area can be challenging and difficult. Some of these areas such as fintech, blockchain, renewable energy, and artificial intelligence are technical and they require specialized knowledge, arbitrators without expertise in these areas may struggle to resolve the dispute effectively.
- Cross-Border Dispute: Emerging sectors often operate domestically and globally. There can be dispute in global transactions and this may involve different legal and regulatory laws of various countries. Navigating these laws may require the consideration of international laws and treaties that both disputing countries are parties to. Where there is an arbitration agreement both parties can agree on the terms of the proceedings of their arbitration.
In approaching these challenges Arbitrators need to be innovative and respond to disputes in the unique characteristics of the emerging sectors. This might aid in developing specialized arbitration rules in such sectors which will foster collaboration between legal and technical experts.
3.1 RECOMMENDATION
To foster Arbitration as a means of Dispute Resolution in international transactions, there is need to promote international corporation and harmony in arbitration standards. The Enforcement Mechanism for arbitral awards should be strengthened considering the international nature of emerging sector disputes. Section 60[22] provides that “where enforcement of any arbitral award made in arbitration in a country other than Nigeria, the New York Convention on the Recognition and Enforcement of Foreign Awards will apply provided that the country is party to the Convention.”[23]
Education and awareness programs for key industry players about the benefits of arbitration and the importance of arbitration to resolve disputes. Publication of case studies, articles, and conducting seminars to share knowledge and best practices in arbitration within the emerging sector. Arbitrators should invest in research to understand emerging sectors and their technicalities and potential disputes in these new sectors, to effectively address the nature of the dispute.
CONCLUSION
Arbitration is unique unlike litigation, arbitration is a private process that is strictly based on the agreement between parties. Nigeria can foster an arbitration ecosystem that meets the unique challenges posed by rapidly evolving industries. It is trite knowledge that parties to dispute, especially in commercial disputes, are always in haste to resolve their disputes and continue their normal course of business, while keeping a good relationship with the other party, with the aid of education and awareness program major stakeholders and players of commercial sectors will see the need of arbitration in resolving disputes.
FOOTNOTES:
[1] United World Ltd Inc v Mobile Communication Service (1998) 10 NWLR (Pt 568)106
[2] Tiwalade Aderoju The Nigerian Arbitration and Mediation Act 2023: A comparison with the Arbitration and Conciliation Act 2004 and global practices < https://www.ibanet.org/the-nigerian-arbitration-and-mediation-act-2023#:~:text=The%20Arbitration%20and%20Mediation%20Act%20of%202023%20has%20established%20a,awards%20and%20mediation%20settlement%20agreements> accessed 18th June 2024.
[3] Arbitration and Conciliation Act 2004
[4] Section 1 (1) Arbitration and Mediation Act 2023
[5] Section 91 Arbitration and Mediation Act 2023
[6] Section 37(7) Copyright Act 2022
[7] World Intellectual Property Organisation; Why Arbitration in Intellectual Property < https://www.wipo.int/amc/en/arbitration/why-is-arb.html > accessed 18th June 2024.
[8] Section 44(3) 1999 Constitution of the Federal Republic of Nigeria.
[9] Dayo Adu, Resolving Africa’s energy disputes: Nigeria; African Legal < https://www.africa-legal.com/news-detail/resolving-africa-s-energy-disputes-nigeria// > accessed 19th June 2024.
[10] Section 163 of the Petroleum Act 2021.
[11] Rasma Legal: The use of ADR in Fintech < https://www.linkedin.com/pulse/use-adrs-fintech-rasmalegal-kwtic > accessed 23rd June, 2024
[12] Section 2(2) Arbitration and Mediation Act 2023
[13] Section 2(1) ibid
[14] Section 4(1) Ibid
[15] Section 2(4) Ibid
[16] Section 91 Ibid
[17] Section 6 Ibid
[18] Section 5(1) Ibid
[19] Section 5(3) Ibid
[20] Section 34 Ibid
[21] Baker Marine Nigeria Ltd v Chevron Nigeria Limited [2003]13 NWLR (Pt. 997)276
[22] Arbitration and Mediation Act 2023
[23] The New York Convention on the Recognition and Enforcement of Foreign Awards is contained in the second schedule of the Arbitration and Mediation Act.
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