International Arbitration Laws Applicable in Nigeria
New York Convention
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the “New York Arbitration Convention” or the “New York Convention,” is one of the key instruments in international Arbitration.
The New York Convention applies to the recognition and enforcement of foreign arbitral awards and the referral by a court to Arbitration. The Convention recognises and enforces foreign arbitral awards, and it is strictly not designed for domestic awards.
Article I (1) of the Convention establishes the foundation for two definitions of arbitral awards: “one applies to awards made in any other country, and the second applies to awards not considered as domestic awards in the State where their recognition and enforcement are sought.”
Thus, after securing an award in another sovereign state, any party can seek Nigerian courts to enforce the Award, provided that all procedural criteria are met. Under the ACA 2004, s54, the Convention has direct application in Nigeria, and it has been enacted in Nigeria in the 2nd Schedule to the Arbitration and Conciliation Act.
Prior to the advent of the Convention, there had been the 1923 Protocol and Arbitration Clauses, that is, the Geneva Protocol and the 1927 Convention on the Execution of Foreign Arbitral Awards, that is, the Geneva Convention which were produced by the then League of Nations and as brought about by the ICC.
UNCITRAL Model Law on International Commercial Arbitration
The ACA took effect on 14 March, 1988, and was based on the UNCITRAL Model Law on International Commercial Arbitration 1985 (UNCITRAL Model Law). The UNCITRAL Model Law aims to assist States in changing and modernising existing laws on arbitral procedure to reflect the unique characteristics and needs of international commercial Arbitration.
It has prompted states to substantially adjust their laws to modern requirements and trends in international business transactions, despite the states’ legal and economic systems being vastly different.
UNCITRAL Arbitration Rules
It was established by The United Nations Commission resolutions on International Trade Law (UNCITRAL) in 1966 to harmonise and unify the Law of International Trade; its objectives are to promote the New York Convention and provide a unified approach on steps to take in ad-hoc arbitrations.
The Nigerian Arbitration rules contain very similar provisions as the UNCITRAL Arbitration Rules. Article 1 of the UNCITRAL Arbitration Rules provides the scope of application of the rules. It states thus: “Where the parties to a contract have agreed in writing that disputes in relation to that contract shall be referred to arbitration under the UNCITRAL Arbitration Rules, then such disputes shall be settled in accordance with these Rules subject to such modification as the parties may agree in writing…”
The UNCITRAL Arbitration Rules amongst others, provides a model arbitration clause; “Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration under the UNCITRAL Arbitration Rules as at present in force.
Convention on the International Centre for the Settlement of Investment Disputes
Nigeria became a signatory to the International Centre for the Settlement of Investment Disputes Convention (ICSID) on 23 August 1965. Article 1(1) of the ICSID Convention provides that: “The purpose of the Centre shall be to provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of this Convention.”
It goes further to provide that each ICSID member state is required by Article 54 (1) of the ICSID Convention to:
- Recognise and award rendered under the Convention as binding.
- Enforce the pecuniary obligations imposed by that award within its territories as if it were a court’s final judgment in that state.
The Federal Government of Nigeria passed the International Centre for Settlement of Investment Disputes (Enforcement of Awards) Act in accordance with these provisions, appointing the Supreme Court as the enforcing authority for ICSID awards.
The Chief Justice of Nigeria is required under the ICSID Act 2004, s1(2) to set court rules to give effect to the provisions of the ICSID Act. If a copy of the Award duly certified by the Secretary-General of the ICSID is filed in the Supreme Court by the party seeking its enforcement in Nigeria, it will have the same effect as an award included in a final judgment of the Supreme Court. As a result, the Award will be enforceable. Nigeria has signed many bilateral investment treaties (BITs) in the last decade, with Arbitration being indicated as the preferred method of settling disputes.