Parties often agree on how arbitrators are appointed in accordance with the concept of party autonomy. This is a critical decision for them to make because the success or failure of arbitral proceedings is determined mainly by how they are conducted.
In most cases, a third party, or the court or appointing body, can appoint a third person to serve as the tribunal or the two arbitrators. Whether the tribunal consists of a single arbitrator or two or more arbitrators, the manner of appointment varies. The organization of an arbitral tribunal is provided in the ACA from Sections 6 to 11.
Section 6 of the ACA provides: – “The parties to an arbitration agreement may determine the number of arbitrators to be appointed under the agreement, but where no such determination is made, the number of arbitrators shall be deemed to be three.”
The procedure for appointing an arbitrator can be specified in the arbitration agreement between the parties. In the situation of three arbitrators, where no procedure is mentioned in the agreement, each party appoints one arbitrator, and the two arbitrators appoint the third.
In the instance of a sole arbitrator, if the parties cannot agree on an arbitrator within thirty days, each party may apply to the High Court for a sole arbitrator’s appointment. The court’s judgment on the appointment of an arbitrator is final and cannot be appealed. In Bendex Engineering Corporation & Anor v. Efficient Petroleum Nigeria Ltd, the Court of Appeal analysed the factors to be considered when selecting arbitrators under section 7 of the ACA, and came to the following conclusion:
Where an application is made to the High Court for the appointment of arbitrators, the fundamental parameters within which the court is enjoined to exercise its discretion are defined by the following three factors: a) whether there is an arbitration agreement; b) whether the dispute alleged by the applicant falls within the nature of disputes contemplated in c) the agreement; and d) whether the parties have failed or neglected to appoint arbitrators to wade into the dispute.
Arbitrators in Nigeria must be impartial and independent. Parties may dispute an arbitrator under Section 8(3) if circumstances exist that raise reasonable doubts about his or her impartiality or independence, or if the appointed arbitrator lacks the qualifications agreed upon by the parties.
The application to dispute an arbitrator must be made within 15 days after the arbitral tribunal’s formation or the party’s discovery of any factors that give rise to his or her justified doubts. Bias can be caused by a lack of independence and impartiality.
The primary test for determining bias was formulated by Ackner L.J in Hagop Ardahalian v. Unifert International SA (The, Elissar) thus: “Do there exist grounds from which a reasonable person would think that there was a real likelihood that the arbitrator could not, or would not, fairly determine the issue on the basis of the evidence and arguments to be adduced before him?
In arbitral proceedings, where the arbitral tribunal decides the procedural rules for itself, it might either take them from national law or make them up. To ensure that the arbitral tribunal’s judgment will be legally enforceable, the arbitral tribunal must follow the mandatory requirements of national law applicable to international Arbitration in the country where the Arbitration takes place. The lex fori (the law of the country in which an action is brought) governs Arbitration since it is a procedural matter rather than a substantive one.
Read also: Sources of Nigerian Arbitration Law
In Continental Sales Limited v R. Shipping Inc, the Court of Appeal explained how an arbitration should commence thus:
“Where the arbitrator or arbitrators are bound to be appointed by the parties, arbitral proceedings are commenced in respect of a matter when one party serves on the other party or parties notice in writing requiring him or them to appoint an arbitrator or to agree to the appointment of an arbitrator in respect of that matter.”
The arbitral hearing is held in a flexible format. The parties’ discretion is always taken into consideration. Parties can decide whether or not a hearing is necessary in the first place. When the parties agree to hold a hearing in an arbitral proceeding, the arbitral tribunal must guarantee that the parties are treated equally and that each party has a fair chance to state his case.
The arbitral procedures shall be conducted in accordance with the method set forth in the First Schedule to this Act’s Arbitration Rules. Where the rules referred to provide no provision for any matter relating to or connected to any particular arbitral process, the arbitral tribunal may, subject to this Act, conduct the arbitral proceedings in whatever manner it deems appropriate to ensure a fair hearing.
The arbitral tribunal has certain powers, including the ability to decide the admissibility, relevance, materiality, and weight of any evidence presented to it. ACA 2004, s20(1) provides as follows:
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. In arbitral proceedings, the right to a fair hearing is a factor to consider.
This will not be possible unless the parties are given enough time to present their positions in person, with any legal counsel and witnesses they may wish to present. One-sided testimony should not be used to make a decision.
In ASR Co. Ltd v O.O. Biosah & Co. Ltd Salami JCA (as he then was) stated that fair hearing is a concept of justice, which should not be viewed from the prism or perspective of only one party. All parties must be given an equal opportunity to testify before a balanced and unbiased arbitrator who is regarded as fair and just by all parties. Any hearing and any meeting of the arbitral tribunal held for the purpose of inspecting documents, goods, or other property shall be given to the parties with reasonable advance notice.
Every statement, document, or other piece of information provided to the arbitral tribunal must be communicated to the other party by the party providing the statement, document, or other information, and every statement, document, or other piece of information provided by the arbitral tribunal to one party must be communicated to the other party.
The parties must be informed of any expert report or evidence material on which the arbitral tribunal may base its decision. Unless the parties agree otherwise, the arbitral tribunal has the authority to administer oaths or accept affirmations from the parties and witnesses attending.
Any party to an arbitral action may issue a writ of subpoena ad testificandum or subpoena duces tecum, but no person shall be compelled to provide any document that he could not be compelled to provide on the termination of arbitral Award on agreed conditions.