An arbitral award is a determination on the merits by an arbitration tribunal in an arbitral proceeding, and is analogous to a judgment in a court of law. In arbitral proceedings, the panel is required to deliver its Award at the completion of the proceedings, just as it would in a court.
In this case, the Award symbolises the tribunal’s decision. In Taylor Woodrow v GMBH, Babalakin JCA (as he then was) defined the nature of arbitral awards as follows: “The nature of the Arbitration Award is that parties choose their own Judge and a party is not entitled to object to the final decision reached in the Award simply because the Award is not in his favour”.
The nature of awards in Arbitration proceedings was clearly shown in the case of Foli v Akese, where the West African Court of Appeal stated as follows: “It will be as well to consider the principles by which the court is guided in setting aside the award of an arbitrator whose decision it has been agreed shall be final.
These may be summed up in the statement that in submission in Arbitration, the general rule is that parties choose their own arbitrator to be the Judge in the dispute between them, they cannot when the Award is good on its face, object to his decision either upon law or facts.
The ACA 2004, ss29 and 30 provide that a party who is aggrieved by an arbitral award may apply to the court to set aside the award within 3 months of the date of the Award or, in the case of a case falling within s28 of the ACA, from the date the request for additional Award is disposed of by the arbitral tribunal.
As a result, ACA 2004, s30 adds the following circumstances to the conditions under which the court may grant a party’s application to set aside an award: “where an arbitrator has misconducted himself or where the arbitral proceedings or award has been improperly procured, the court may on the application of a party set aside the award.
Categories of Arbitral Awards
The categories of Arbitral Awards include the following:
- Provisional Award: This is a provisional award that will be finalized after the merits have been determined.
- Interim or partial Award: This is an award of only a portion of the claims or cross-claims made or a decision on only a few issues between the parties.
iii. An agreed award: It usually takes the form of an agreement between the disputing parties (equivalent of a consent judgment).
- An additional award: It is an award made by the tribunal on its own initiative or at the request of a party in relation to any claim that was filed to the tribunal but did not receive a resolution under the major Award.
- Final Award: This determines the issues in dispute. The arbitral tribunal becomes functus officio after a final award is delivered, subject to certain exceptions. It loses all jurisdiction over the case, and the special relationship between the tribunal and the parties that existed during the Arbitration’s duration terminates.
Formal Requirements of an Award
There are no formal requirements for the form of an award unless the contract specifies differently. In practice, however, a number of desired formalities must be maintained, notably for the purposes of court enforcement.
The ACA 2004, s26 made provisions for the form and contents of Award and it is as follows:
(1) any award made by the arbitral tribunal shall be in writing and signed by the arbitrator or arbitrators.
(2) where the arbitral tribunal comprises of more than one arbitrator, the signatures of a majority of all the members of the arbitral tribunal shall suffice if the reason for the absence of any signature is stated.
(3) the arbitral tribunal shall state on the Award (a) the reasons upon which it is based, unless the parties have agreed that no reason are to be given or the Award is an award on agreed terms under section 25 of this Act; (b) the date it was made; and (c) the place of the Arbitration as agreed or determined under section 16(1) of this Act which place shall be deemed to be the place where the Award was made. (4) A copy of the Award, made and signed by the arbitrators in accordance with and signed by the arbitrators in accordance with subsection (1) and (2) of this section, shall be delivered to each party.
Substantive Requirements of an Award
Legal counsel is required while making an award in arbitral proceedings, especially when the panel is made up of non-lawyers. Other substantive conditions exist in addition to the formal requirements of an award outlined in statutes. Given the possibility of a court application setting aside or withholding acceptance of an award, the Award must typically demonstrate that its findings are logical consequences from the evidence presented.
The tribunal must not go beyond its powers, and the Award must not be gained through deception or in violation of public policy. Aside from temporary or interim awards, the Award must demonstrate that it has resolved all matters in dispute, ensuring certainty, finality, and completeness.
Fundamentally, an award must be enforceable, and the arbitrator’s jurisdiction should not be exceeded. This is only possible if all the legal criteria for form and content are met. It should be emphasized that the importance of meeting these standards is underscored by the fact that a lawful award will serve as a res judicata defense. A court has no jurisdiction to make an arbitral award, its judgment.
Enforcement of Arbitral Awards
The parties to an arbitration are obligated to follow the arbitral tribunal’s decision unless a court of competent jurisdiction overturns it. The issue of recognition and enforcement will emerge only when the losing party fails to comply with the Award. The ACA includes detailed measures for recognizing and enforcement of both domestic and foreign awards to aid the winning party.
Domestic awards can be enforced in Nigeria under the summary procedure in the ACA 2004, s31 and by common law action, while foreign awards are enforced by ACA 2004, ss51 and 52, and s54 of the ACA, which deals with the New York Convention. The court enforces domestic awards upon an application in writing to the court, according to the ACA 2004, s31 unless any of the parties request the court to refuse recognition or enforcement of the award under section 32.
In the same vein, international awards are enforced by the court upon an application in writing to the court irrespective of the country in which it is made. In Imani & Sons Ltd. v BIL Construction Co. Ltd, the Court of Appeal held that in addition to the Motion on Notice that the party seeking enforcement is required to file, the party must also comply with the following simple conditions:
- The Arbitration Agreement;
- The Original Award;
- The name and last place of business of the person against whom it is intended to be enforced;
- Statement that the Award has not been complied with, or complied with only in part.
The ACA 2004, in ss31(2) and 51(2), provides the documents that the applicant seeking to enforce an award must provide before the court. In Ebokan v. Ekwenibe & Sons Trading Co, one of the issues before the court was the proper interpretation of section 31 of the Act. In other words, how is an arbitral award enforced and what documents must the applicant put before the court? While the applicant tried to enforce the Award, the respondent tried to set it aside. The trial court struck out the two applications because the arbitrator was not correctly appointed and the arbitral Award was not filed as part of the record of proceedings before the trial court.
In determining the appeal, the Court of Appeal considered the provisions of section 31 of the Act and held per Oguntade, JCA (as he then was) thus:
In the instant case, the appellant only needed to bring before the trial court the original Award or a certified thereof and the original arbitration agreement or a duly certified copy thereof. In the course of the proceedings before the trial court, the appointed arbitrator, Mr. Uche Chigbo filed the Award and the arbitration agreement. Therefore, there was no doubt that all the necessary documents as prescribed under section 31 of Cap 19, Laws of the Federation, 1990 were before the trial court. Therefore, it could be no valid excuse to the trial court that the relevant proceedings were not before it. In the case of international awards, there is an added document that the applicant needs to supply to the court; “where the award or arbitration agreement is not made in the English language, a duly certified translation thereof into the English language.”
In terms of award enforcement, the Nigerian state and appellate courts have continued promoting Arbitration and implementing valid awards. A typical example is the remarkable pronouncement of Rhodes-Vivour, JSC in Metroline (Nig.) Ltd. v. Dikko. He held inter alia that: …Arbitration is widely acknowledged as an alternative to litigation which enables expeditious dispute resolution. Commendably, the legal framework provides for court interference in specified circumstances only.
However, the unfortunate trend in which litigants, with the assistance of counsel who fail to appreciate their duties as officers of the court, all in a bid to win their clients’ case by all means, bring unsubstantiated and spurious challenges against otherwise good arbitration awards and the arbitration tribunal, ought to be frowned upon and discouraged. The courts should not allow itself to be used as a tool to set aside otherwise good awards or frustrate legitimate arbitration awards.
Also, the Nigerian Courts have demonstrated acceptance of the settled principle in arbitration of judicial non-interference except as provided in the ACA. In the Nigerian Agip Exploration Ltd v National Petroleum Corporation & Anor the court restrained an arbitral tribunal from continuing with arbitral proceedings.
On appeal to the Court of Appeal, the court restated the import of ACA 2004, s34 dealing with the extent of the court’s intervention in arbitral proceedings. In Arbico Nigeria Limited v. Nigeria Machine Tools Limited, the Court of Appeal reaffirmed the High Court’s recognition of an arbitral award and reminded the court that it may not interfere with the jurisdiction of the arbitral panel.
Factors that hinder the effectiveness of Arbitration in Nigeria
Some factors hinder the effective enforcement of arbitral awards irrespective of the fact that arbitral awards are being enforced in Nigeria. These factors include the following:
- Undue delay by the courts: Enforcing awards may be challenging because of the slowness of the legal system. For instance, the enforcement proceedings in Mutual Life & General Insurance Ltd v. Iheme took thirteen (13) years from the High Court to the Court of Appeal, whereas the enforcement proceedings in NNPC v. CLIFCO Nigeria Ltd took eleven (11) years from the High Court to the Supreme Court.
- Unrestricted appeals against orders enforcing arbitral awards: The Nigerian Constitution protects the right to appeal a High Court’s decision. Unsuccessful arbitration parties have a habit of exercising this right arbitrarily. Many litigants are still trying to dethrone Arbitration from its prestigious position in order to satisfy their insatiable desire for courtroom battles.
The losing party in Arbitration frequently tries to use the courts to prevent the winning party from benefiting from Arbitration. They decide to contest the Award in the hopes of having it set aside. The desire to annul the Award stems from the belief that an arbitral award is final and cannot be appealed.