by Chimezie Victor C. Ihekweazu San, Fbr, Fcarb
INTRODUCTION
Arbitration must be seen as a contract, certainly in form with the potential legal effect of the potential consequence of the breach. The process and nature predetermined by parties for settlement of business disputes or other disputes in their relationship and engagement. The Arbitration Agreement, clause or provisions as may be, must bind the parties in the sense that will extract due compliance and discipline, of adherence to the decision, in the form of the award made by the Arbitral Tribunal. The Constitution, control, processes, final award and ultimate enforcement are guided by legally enforceable principles of law and practice.
A final Award is an Arbitral decision that determines all the issues in controversy cum dispute in the Arbitral proceedings after a conclusive hearing. The award will normally extinguish any right of action in respect of the dispute[1]. Under Section 31(1) of the Arbitration and Conciliation Act 1988 (hereinafter referred to as “ACA.”), an arbitral award is final and binding. This provision of the statutory law has wide judicial recognition[2] though it remains subject to some provisions of the law[3]while retaining restrictive elements under certain circumstances.
CONTENTS OF AN AWARD
Every award must be in writing[4] and in the agreed language. The award must be duly signed by the Arbitrator or Arbitrators[5]and dated as the case may be. It is also important that the award contains the reasons for the award as well as the date and place the award was made[6]. This normally is based on the agreement of the parties and in line with the provisions of Section 16(1) of the ACA. It is important that the award states the particulars and details of the Parties to the dispute arising from the agreement, subject matter of the award. The award must in all contain the details of reasons[7] as well as requisite resolutions cum decisions arrived at by the arbitrator (s), which in terms must show the finality of the decision between the parties as binding and enforceable.
In all, an award must show clarity, certainty, completeness in terms of all issues of dispute between the parties. Finally, the reliefs, cost and damages granted must be certain and apt[8].In relation to the basic contents of an Award, the failure to ensure completeness in its requisite contents can be a ground for setting aside the award. Thus, issues like the chronology of the hearing as well as resolved facts and requisite peculiarities of the type or nature of institutional reference, duration of proceedings and Constitution may be necessary to be stated in the award.
ENFORCEMENT OF ARBITRAL AWARDS
Arbitral Awards are enforceable in Nigeria and allow parties to take benefit of their agreement, having been predetermined in line with their intention as in the form of a valid contract. Every award is recognized as enforceable under the ACA[9]. Consequently, the award can be enforced by the Court as recognized under the Act[10]. The procedure is by an Application[11], which can be made before the same Court that ordered the arbitration where an action is pending[12] or an Originating Application[13]. Under the Lagos State Arbitration Law 2009, enforcement of an Award shall be by Originating Motion[14].
The law[15] provides that a person relying on an Award for enforcement must accompany the application by the authenticated original Award or duly Certified Copy[16]. Under Section 31(3) of the ACA, enforcement of an Arbitral Award can take any form for enforcement of a judgment or order of a Court[17]. However, this procedure must be with leave of Court[18]. In the event of failure to obtain the requisite leave of Court by a party seeking such enforcement, the application may be rendered defective[19]. In Ebokan v Akwenibe & Sons Trading Co[20]. The Court of Appeal stated the relevant contents of an application to enforce an award to include:
- The making of the contract, which contains the submission
- That the dispute arose within the terms of the submission
- That Arbitrators were appointed in accordance with the clause which contains the submission;
- The making of the award and
- That the amount awarded has not been paid.”
His Lordship[21] relied heavily on the decision of the English Queen Bench Division of Derlin J, in CHRISTOPHER BROWN LTD VS GENOSSENSCHAFT DESTERREICHISCHER WALIDBESITZER ETC[22] –. However, if the validity of the award is in question, the leave will not be granted to enforce the award.
Upon satisfaction of the above requirement, the Honourable Court must allow for the enforcement of an Arbitral Award. The required professional discipline is to accept an Award as the fruitful of an enforceable contract by the parties, free in terms and intentions to be bound. Unfortunately, this does not seem to be the case with the parties to an Arbitration Agreement as in most cases; parties have resorted to protracted Legal dispute in Courts even up to the Supreme Court in the challenge of most Arbitral Awards in Nigeria. This is the reason why many are now calling for a reform in the legal framework to extract a more committed undertaking from parties to an Arbitration Agreement to aid its smooth enforcement and avoid needless litigation in satisfaction of a fruitful agreement in good faith.
SETTING ASIDE AN ARBITRAL AWARD
The law provides for the setting aside of an Arbitral Award. Under Section 32 of ACA, any of the parties to an Award from a dispute under an arbitration agreement may request the Court to refuse recognition or enforcement of the award.
The Act under Sections 29(2), 30, 48 and 52 provides extensively instances where the Court can set aside an Arbitral Award and or refuse to recognize and allow for enforcement of an Award. Thus, it is provided that “The Court may set aside an arbitral award if the parties making the application furnish proof that the award contains decisions on matters which are beyond the scope of the submission to arbitration. So, however, that if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the award which contains decisions on matters not submitted may be set aside”[23]. Also, 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[24]. These provisions enjoy judicial approval[25], and the Court will give due to effect in justified circumstances and as appropriate, bearing in mind the evidence as may be proved[26] by the alleging party.
In concluding that the Arbitral Tribunal may have exceeded its authority to justify setting aside the award, the Court will be satisfied on the following: –
- Whether the arbitration or award has been improperly procured; an example of which whether the arbitrator has been deceived or material evidence has been fraudulently concealed.
- Whether the arbitrator has misconducted himself or the proceedings
- Whether there is an error of law on the face of the award[27].
Consequently, where these conditions are not satisfied, the Court will refuse to set aside the award.
Section 30 of the ACA recognizes the power of the Court to set aside an Arbitral Award. This will normally result in instances of misconduct on the part of the arbitrator (s). In TOTAL ENGINEERING SERVICES TEAM INC VS CHEVRON NIGERIA LIMITED[28], the Supreme Court, per Kekere-Ekun, J.S.C. gave an insight as to what could constitute misconduct on the part of an Arbitrator, to wit:
- Where the arbitrator fails to comply with terms, express or implied, of the Arbitration Agreement
- Where even if the arbitrator complies with the terms of the arbitration agreement, the arbitrator makes an award, which on the grounds of public policy ought not to be enforced.
- Where the arbitrator has been bribed or corrupted
- Technical misconduct such as where the arbitrator makes a Mistake as to the scope of the authority conferred by the agreement of reference.
- Where the arbitrator or umpire fails to decide all the matters, which were referred to him
- Where the arbitrator or umpire has breached the rules of natural justice
- If the umpire has failed to act fairly towards both parties, as for example:
- By hearing one party but refusing to hear the other; or
- By deciding the case on a point not put by the parties
Any award devoid of these conditions must be recognized and enforced by the Court to the benefit of the parties as per the decisions contained in the awards[29]. Parties in a show of professional discipline and compliance must be ready to accept the outcome of the proceedings.
In the light of the above, it is most appropriate for every arbitrator to conduct himself in a manner that will display the highest professional discipline in the discharge of the responsibility of the office he holds. Every element that will bring the acts constituting misconduct must be rejected and avoided. Any failing in this regard will bring the consequence of setting aside the award.
SETTING ASIDE ARBITRAL AWARDS IN RESPECT OF CROSS-BORDER TRANSACTIONS
Under the ACA, where the transactions relate to international Commercial Arbitration, the Court may set it aside under Nigerian Law.[30] This situation will arise where the Applicant will satisfactorily show to the Honourable Court that a party to the Arbitration Agreement was under some incapacity.[31] Other conditions include invalidity of the Agreement or non-applicability of the Arbitration Agreement under Nigerian Law[32], lack of Notice of Appointment of the Arbitrator or proceedings to a party,[33] that the award extends beyond the dispute contemplated under the arbitration agreement,[34] matters beyond the submission of the parties to the Arbitration Agreement,[35] the composition of the tribunal was defective and contrary to the Arbitration Agreement[36] and or where the Arbitration Agreement was not in accordance with the ACA.[37]These conditions can apply both jointly and severally under the circumstances of each particular case.
RECOGNITION AND ENFORCEMENT OF CROSS-BORDER ARBITRAL AWARDS
Recognition and enforcement of international Arbitral awards are effective in Nigeria irrespective of the state of decision. This is applicable under the ACA[38] However, it is mandatory for the party relying on the award to provide the following: –
- The duly authenticated award or its certified copy
- The original Arbitration Agreement or its Certified Copy
- A duly certified translation of the award, where the award is not made in English Language.[39]
The use of the word “shall”[40] implies a strict obligation that is mandatory, and failure to satisfy these conditions will lead to a refusal by the Court to recognize and or enforce it.[41]
REFUSAL OF RECOGNITION OR ENFORCEMENT OF CROSS-BORDER AWARDS
A cross-border Arbitral Award may be denied recognition and enforcement under certain circumstances. This option to seek such relief or order denying recognition or enforcement is open to any of the parties to the Arbitration contract.[42] The Nigerian Court can refuse to recognize or enforce an Arbitral award[43] under certain circumstances irrespective of the Courts the Award is made.[44] This normally will occur where any party to the agreement suffers any incapacity,[45] the Arbitration Agreement is not valid under the relevant law agreed to by the parties or the Law of the Country where the award was made[46] without due notice of appointment of the arbitrator or the Arbitral proceedings,[47] the award involves a dispute outside the contemplation of the parties or not within the terms of submission of parties to arbitration,[48] or the award contains matters beyond the scope of submission of parties to the arbitration.[49]
The Court will refuse to recognize and or enforce an Arbitral award, where the composition of the tribunal or arbitral procedure was not in line with the agreement of the parties to the Arbitration Agreement,[50] and also where the composition or procedure was contrary to the law of the country where the arbitration proceedings were heard.[51] The same result of refusal will also occur where the award has been set aside or suspended or yet to be binding under the Law the Award was made.
The Court may refuse recognition or enforcement under section 52(2) of ACA if the subject matter of the dispute is not one within arbitral settlement under Nigerian Law or contrary to public policy of Nigeria.[52] Notwithstanding, the Court, in exercising its powers under Section 52(2) (2) (viii) of ACA, may postpone its decision and order appropriate security to be provided by the other party affected.[53]This will allow for the due realization of the fruit of the arbitration according to law.
CONCLUSION
The fruit of the Arbitration contract lies in the principle of its fruitfulness agreed and accepted by the parties. In the words of a renowned Nigerian Legal Practitioner, “Arbitration is simply a process for the settlement of disputes under which the parties agree to appoint their own judge or judges (arbitrator or arbitrators) who will decide according to their agreement and the law; and the parties agree to be bound by their decision”[54]The binding nature and acceptability of an award resulting from an Arbitration proceeding are most desirable. In the words of two distinguished writers, “the essence of an award in arbitration is that it is binding on the parties. It is implied in the arbitration agreement that the parties will accept the decision (Award) of the arbitrations regularly given”.[55] The challenges in some circumstances regarding acceptability recognition and enforcement of Arbitral Awards need not be if professional adherence is observed. It promotes dispute resolutions and allows for effective economic activity within our society to support growth and development. There is, therefore, a need for professional and ethical re-evaluation for professionals who practice under the present regime.
[1] Stabilini Visinoni Limited Vs. Mallinson& Partners Limited (2014) 12 NWLR (PART 1420) 134 AT 183-184, 185-186
[2] Adamen Publishers (NIG.) Ltd Vs Abhulimen (2016) 6 NWLR (PART 1509) P. 431 AT 453
[3] Sections 29, 30, 32 and 34 of the Arbitration and Conciliation Act. Cap A18 LFN (hereinafter referred to as ACA
[4] Section 26 of the ACA
[5] Section 26 Ibid
[6] Section 26 Ibid
[7] Section 26(3) Ibid
[8] For further reading see Commercial Arbitration in Nigeria: Law and Practice Second Edition by Prof Fabian Ajogwu, SAN, ibid pages 126 to 128.
[9] Section 31(1) of the ACA
[10] Section 57 Ibid
[11] Section 31 Ibid
[12] Section 31 Ibid
[13] Section 31(1) and (2) of Ibid; Adamen Publishers (Nig.) Ltd Vs Abhulimen (Supra) At Page 431
[14] Rule7(1) of Arbitration Application Rules 2009 (made pursuant to the Lagos State Arbitration Law 2009
[15] Section 31(2) of the ACA (Similar provisions are contained in the Lagos State Arbitration Law 2009, Ibid Section 56)
[16] Section 31(2)a Ibid; Clement C. Ebokan Ekwenibe & Sons Trading Company (2001) 2 NWLR (Part 696) Page 32 At Page 41
[17] K.S.U.D.B. Vs Fanz Construction Co Ltd (1990) 4 N.W.L.R. (Part 142) PAGE 134.
[18] Clement C. Ebokan Ekwenibe& Sons Trading Company (Supra) At Page 43-44
[19] This is subject to the Courts discretion as the Court can grant leave for enforcement of an award. Ras Pal Gazi Construction Company Ltd vs FCDA (2001) LPELR SC
[20] (2001) 2 NWLR Part 696 Page 32 at 41-42 Per Oguntade JSC (as he then was)
[21] For Further reading see Commercial Arbitration in Nigeria: Law and Practice Second Edition by Prof Fabian Ajogwu, SAN, Ibid pages 126 to 128.
[22] (1953) 2 ALL ER 1039 AT 1040
[23] African Re-Insurance Corporation Vs. Aim Consultants Ltd (Supra) page 115
[24] Section 30 (1) of the ACA
[25] Ibid Section 31
[26] Ibid Section 31
[27] African Re-Insurance Corporation Vs. Aim Consultants Ltd (2004) 12 CLRN 107 at page 114 Per Adeyemi JCA (as he then was)
[28] (2017) 2 S.C. (Part Ii) Page 61
[29] Ebokan Vs Ekwenibe & Sons Trading Co (2001)2 N.W.L.R. (Part 696) Page 32 at Page 44 And K.S.U.D. Vs Fanz Construction Company Ltd (1990) 4 NWLR (Part 142) 1 Of 43 (Sc), Middlemiss & Gould Vs Hartlepool (1973)1 A.E.R. 172
[30] Section 48 of the ACA
[31] Section 48(1) of the ACA
[32] Section 48 (ii)
[33] Section 48 (iii) of ACA
[34] Section 48 (iv) of ACA
[35] Section 48 (v) of ACA
[36] Section 48 (vi) of ACA
[37] Section 48(vii) of ACA
[38] Section 32 and 51 of the ACA
[39] Section 51(2) of the ACA
[40] Adamu Akun VS Mangu Local Government Council &Anor (1996) 4 NWLR (Part 441) Page 207 at 217
[41] Section 52(1) of ACA
[42] Section 52(1) Ibid
[43] Section 52(2) Ibid
[44] Section 52(2) (a) Ibid
[45] Section 52(2) (a) i Ibid
[46] Section 52(2) (a) ii Ibid
[47] Section 52(2) (a) iii Ibid
[48] Section 52(2) (a) iv Ibid
[49] Section 52(2) (a) v Ibid
[50] Section 52(2) (a) vi Ibid
[51] Section 52(2) (a) vii Ibid
[52] Section 52(2)b(ii) Ibid
[53] Section 52(3) of Ibid
[54] Arbitration Practice in Nigeria by Anthony Idigbe, SAN, Distinct universal Limited, Lagos, 2010, page 3
[55] Law and Practice of Arbitration and Conciliation in Nigeria by J. Olakunleorojo and M. Ayodele Ajomo Mbeyi & Associates (Nigeria) Limited, Lagos, 1999, page 267
