Sources of Nigerian Arbitration Law

Sources of Nigerian Arbitration Law

 It is worth noting that the regulations that govern the functioning of Arbitration in Nigeria can be broken down into two categories. The sources are as follows:

  1. a) Common-Law & Doctrines of Equity
  2. b) Trade Usages & Custom and;
  3. c) Statutes

Common Law & Doctrines of Equity

Nigerian Arbitration Laws are based on common law and equity concepts, including Nigerian case law and other English common law and equity doctrines still in effect in Nigeria. During the colonial administration of the country, the English common law and equity doctrines, as well as English statutes of general application, were received into the country by local legislations.

In general, the English common law and equity concepts apply in Nigeria unless amended or rejected in Nigeria by statute or by the courts. Common law and the doctrines of equity become necessary when the existing national laws and rules lack provision for resolving particular unanticipated issues.

Trade Usages & Custom

Complementing the common law and doctrine of equity are the rules and regulations applicable to a specific trade. These trade rules and regulations, also referred to as trade usages, are information resources that aid Arbitration when there is no provision to decide statutes or common law and doctrine of equity.

They guide the arbitration process and aid in making appropriate decisions according to the law while also agreeing with the trade rules. An arbitral tribunal may consider the provisions of a contract and trade usages applicable to the particular transaction in issue. The Construction Industry Arbitration Association of Nigeria promotes construction industry arbitration.

Under this, the services of construction professionals can be enlisted if arbitrators require expert advice or expert witnesses. Adopting the age-old practice of customary Arbitration by the courts is the basis for its recognition by the courts. Nigerian courts have also acknowledged the legality and applicability of customary Arbitration, where all of the critical elements of an arbitration procedure have been met.

Statutes

Nigerian arbitration laws are primarily derived from local and international statutes. Statutes serve to guide the operation of citizens and residents and provide means for delivering equity, justice and judgment. The local statutes include; the Arbitration and Conciliation Act and the Foreign Judgments (Reciprocal Enforcement) Act. The foreign statutes include; the New York Convention 1958, the UNCITRAL Model Law 1985 and UNCITRAL Arbitration Rules.

Domestic Arbitration Law

In Nigeria, two central legislations govern domestic Arbitration: the federally enacted Arbitration and Conciliation Act, which is found in Chapter A18 of the Laws of the Federation of Nigeria 2004 (ACA), and the Lagos State Arbitration Law (Lagos State Law) 2009.

The existence of a federal law governing Arbitration is historical: prior to Nigeria’s federal military administration promulgating the ACA as a federal decree in 1988, most states in the federation had their laws governing Arbitration within their respective territory.

In order to provide a unified legal framework on the law of Arbitration in the entirety of the Nigerian states concerning the settlement of commercial disputes through Arbitration, the Federal Military Government passed the Arbitration and Conciliation Decree No 11 of 1988 on 14 March, 1988 and all State arbitration laws were repealed under Section 58 of this decree, which extended across the federation.

Nigeria’s democratic regime assumed control in May 1999, and a new constitution was enacted. The 1999 Constitution gave the federal government exclusive legislative jurisdiction over matters on the exclusive legislative list, while the state governments controlled the concurrent legislative list, not on the exclusive legislative list.

The legitimacy of the 1988 Decree was protected, and it was once again possible for state legislatures to pass legislation governing Arbitration in their respective jurisdictions Sections 315 (1) (a) and (b) respectively of the 1999 Constitution.

It is worthy to note that the Arbitration and Conciliation Act is an Act of the National Assembly and on the strength of the doctrine of covering the field will be superior to the state Arbitration Laws where there is a conflict as provided in the CFRN 1999 s4(5).

The case of CG DE Geophysique v Etuk is a clear-cut demonstration of the prevalence of the Arbitration and Conciliation Act over the Arbitration Law Cap 12 Laws of Cross Rivers State which applied to Akwa-Ibom State.

In that case, the Court of Appeal held that Section 7 (1) (b) of the Arbitration Law of Cross-Rivers State was inconsistent with the Arbitration and Conciliation Act, and the latter must prevail in the face of such inconsistency. The following are some of the different provisions in domestic legislation that deal with Arbitration:

1999 Constitution of the Federal Republic of Nigeria

Arbitration is permitted by the 1999 constitution, which is the supreme law of the state in s19(d). It states thus: “The foreign policy objectives shall be -… respect for international law and treaty obligations as well as the seeking of settlement of international disputes by negotiation, mediation, conciliation, arbitration and adjudication….”

Arbitration and Conciliation Act 2004

The Arbitration and Conciliation Act in its preamble provides that the Act establishes a unified legal framework for the fair and efficient resolution of commercial disputes through Arbitration and conciliation, as well as to apply the New York Convention on the Recognition and Enforcement of Arbitral Awards to any award made in Nigeria or any contracting State arising out of international commercial Arbitration.

The First Schedule contains various mandatory legislative elements that, if not followed, can lead to a successful set aside of a non-compliant arbitration award. The Arbitration Rules are a re-enactment of the Model Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).

The ACA 2004, which is based on the UNCITRAL Model Law, governs both domestic and international Arbitration. Domestic commercial Arbitration is covered by Part I of the ACA, while Part III of the ACA covers overseas commercial Arbitration.

The following are regulations found in mandatory sections of the ACA that support the conduct of arbitral proceedings in Nigeria:

ACA 2004, s14 states that arbitrators must ensure that all parties to the arbitration proceeding are treated equally.

  1. ii) ACA 2004, s26 provides that the arbitration award must be in writing and signed by the arbitrators, with reasons stated for the absence of any signature by the non-signing arbitrator and that it must also state the place and date of the Award.

The Nigerian Investment Promotion Commission Act 

The Act intends to encourage foreign investment in Nigeria. In light of the preceding, it incorporates particular provisions for resolving disputes between a Nigerian or foreign investor and any government of the Nigerian federation.

The NIPC Act 2004, s26 states that if a disagreement arises between an investor and any Government of the Federation over an enterprise, all attempts must be taken to seek an amicable resolution by mutual discussion. If an acceptable settlement cannot be achieved, the aggrieved party has the option of proceeding to Arbitration.

Foreign Judgments (Reciprocal Enforcement) Act

The Foreign Judgments (Reciprocal Enforcement) Act’s goal is to provide provisions for the enforcement in Nigeria of judgments issued in foreign countries that regard Nigerian judgments in the same way. According to the Foreign Judgments (Reciprocal Enforcement) Act 1990, s2 a judgment to which the Act applies includes “…an award in proceedings in an arbitration if the award has become enforceable in the same manner as a decision rendered by a Court in that place….”

However, under this Act, only decisions issued by the country’s Superior Courts issuing the judgment can be executed in Nigeria. Awards to be enforced in Nigeria under this Act must have become enforceable by the Superior Court of the country where the award was made to be enforced under this Act, as a result of the combined impact of ss2 and 3(2).

Read also: Historical Development of Arbitration in Nigeria

Lagos State Arbitration Law 2009 

The Lagos State Law 2009 draws mainly on the English Arbitration Act and absorbs some of the 2006 modifications to the UNCITRAL Model Law and establishes no distinction between domestic and international Arbitration. Unless the parties agree otherwise, the statute governs all arbitration references in Lagos State.

Sections 21 to 30 of the Lagos State Law, which empower the court to issue interim measures, whether in the form of an award or another form or to maintain or restore the status quo pending the resolution of a dispute, are notable provisions introduced by the Lagos State Law to remedy perceived shortfalls in the ACA. Lagos State Arbitration Law 2009 (LSAL), ss 34 and contain similar mandatory provisions as the ACA 2004, ss 14 and 26.

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