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Arbitration is a private dispute resolution method that usually results in an arbitral award. An award, once made, is binding on the parties to the arbitral proceedings. Thus, the Supreme Court held in Ras Pal Gazi Construction Co. Ltd v F.C.D. A[i] that “it is very clear and without any iota of doubt, that an arbitral award made by an Arbitrator to whom a voluntary submission was made by the parties to the arbitration, is binding between the parties.”
However, Arbitrators lack the authority and institutional framework to enforce their awards. It is against this backdrop that statutory and international framework has been put in place for the enforcement of arbitral awards made in Nigeria and outside the jurisdiction of Nigeria. Therefore, this paper examines Nigeria’s legal framework for enforcing domestic and international arbitral awards.
ENFORCEMENT OF DOMESTIC ARBITRAL AWARDS
The available means of enforcing an arbitral award depends on the laws of the place where the award is to be implemented. Nigerian Arbitration and Conciliation Act[ii] (ACA) provides frameworks for enforcing arbitral awards in Nigeria. Similarly, the Lagos Arbitration Law 2011 provides for modes of enforcement arbitral awards and interim measures. The appropriate procedure for enforcing an arbitral award depends on the type of arbitral proceedings and the parties involved.
Section 31(1) of ACA states that an arbitral award shall be recognized as binding and, upon application in writing to the Court, be enforced by the Court. Section 57 ACA defines Court as the High Court of a State, the High Court of a Federal Capital Territory, Abuja, or the Federal High Court. An arbitral award can be enforced in either the State High Court or Federal High Court[iii] depending on the Court that would have had jurisdiction had the matter been litigated[iv]
Order 39 Rule 4 of the High Court of Lagos State Civil Procedure Rules 2012 provides that an arbitral award shall be enforced with a Motion on Notice accompanied by an affidavit. The provision was omitted in the High Court of Lagos State Civil Procedure Rules 2019. However, Order 43 Rule 1 of the 2019 Rules states that all applications shall be by Motion. In addition, order 43 Rule 3(1) states that except otherwise provided or permitted by any law or rules, every motion shall be by a Motion on Notice. Therefore, an application for enforcement of an arbitral award can be made by Motion on Notice under the High Court of Lagos State Civil Procedure Rules 2019.
Order 52, Rule 16(1) of the Federal High Court (Civil Procedure) Rules 2019, provides that an application for enforcement of an award can be made through a Motion ex parte. It has been submitted that the Court would most likely order that the application be brought to notice because it will affect the Respondent’s rights.[v]
Section 32(2) ACA states that the parties seeking to enforce an award must provide the arbitration agreement or, in the alternative, a true certified copy of the arbitration agreement and the original arbitration award or a certified true copy of the initial arbitration award.
In conclusion, a party seeking to enforce an arbitral award in Nigeria shall apply to the High Court with a Motion on Notice supported by an affidavit exhibiting the arbitration agreement or a certified true copy of it, the original arbitral award or a certified true copy of it and a written address.
ENFORCEMENT OF INTERNATIONAL ARBITRAL AWARDS
Section.57 ACA describes international arbitration as when the parties to an arbitration agreement have, at the time of the conclusion of the contract, their places of business in different countries; or one of the places where the deal is to be executed, the home of the arbitration or the class most connected with the subject matter of the dispute is situated outside Nigeria; or the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country; or the parties, despite the nature of the contract, expressly agree that any dispute arising from the commercial transaction shall be treated as international arbitration.
The award emanating from an international arbitration can be enforced using any of the procedures stated below:
Conclusion
In conclusion, arbitral awards are ordinarily binding without recourse to court or any other procedure for enforcement. However, in practice, it is not uncommon for the parties whom the award was made against to become recalcitrant, and that is when the procedure highlighted above is instrumental for enforcing international and domestic recognition in Nigeria.
[i] (2001) LPELR-SC.45/96
[ii] Cap A18, Law of the Federation of Nigeria, 2004
[iii] Magbagbeola v Sanni [2002] 4 NWLR (Pt 756) 193
[iv] Kabo Air Limited v The O’Corporation Limited [2014] LPELR 23616 CA
[v] Challenging And Enforcing Arbitration Awards In Nigeria Available at https://spaajibade.com/challenging-and-enforcing-arbitration-awards-in-nigeria/ Accessed 17th October 2022
[vi] S.51 Arbitration and Conciliation Act Cap A18, Law of the Federation of Nigeria, 2004
[vii] Cap I 20, Laws of the Federation of Nigeria, 2004
Written by Olufe Popoola and Badmus AbdulRasheed for The Trusted Advisors
Email us: info@cms.trustedadvisorslaw.com