By: Hon. Justice Yargata B. Nimpar, JCA, FCArb
INTRODUCTION
The main advantage of Arbitration is that disagreements can be settled without going through a formal legal process or adjudicatory litigation system because it is based on mutual consent. From pre-colonial Nigeria, this has been a long-standing custom[1]. Since that time, the population of society has increased exponentially, and as a result, the rules governing human interaction have evolved. The Arbitration and Conciliation Act, of 2004, (ACA), a re-enactment of the Arbitration and Conciliation Act, of 1988, was enacted in response to this need for a more structured and official practice of Arbitration. A foundation for ratifying and upholding international laws and treaties is provided by Section 19(d) of the 1999 Constitution of the Federal Republic of Nigeria (as amended). To domesticate the Arbitration and Conciliation Act and the United Nations Commission on International Trade Law’s model law from 1985, the UNCITRAL Rules were substantially adopted.
It serves as the fundamental legal underpinning for Arbitration in Nigeria. This has had a beneficial knock-on effect that encourages the use of Arbitration as a quicker, more practical, and more adaptable dispute resolution method in several laws and institutions. The judiciary encourages negotiation, as evidenced by the Federal High Court Act[2], the Court of Appeal (ADR) Rules, and several High Court Rules.
Even while progress has been achieved over the years, it has been at a snail’s pace, and there is still much to be done because the Judiciary still has a difficult time managing appeals and issues involving Arbitration.
CHALLENGES THE JUDICIARY CONFRONTS
In 2018, the Queen Mary’s University of London, and the White and Case law firm, conducted a survey of their respective student bodies, and the results showed that 64% of those polled thought that “avoiding specific legal systems/national courts” was one of the main motivations for choosing Arbitration for the settlement of commercial disputes. A neutral court system and one with experience upholding arbitral rulings are also vital, according to the respondents, when choosing the location of the Arbitration. Some of the difficulties that the judiciary encounters when it comes to Arbitration are influenced by these elements, which also affect the appropriate Arbitration seat selection.
- Judicial Interference/ Non-Neutrality
The Judge is typically expected to deal with the Arbitration process impartially. The winning party would not need to use the judicial system established to enforce the award through litigation if the losing party willingly accepts and complies with the award as decided or issued by the arbitral tribunal. But as we all know, this is not the case. Due to the assumption that it infringes on Arbitration by applying burdensome rules and moving slowly, even though parties intend to settle their disputes through alternative means devoid of technicalities, the Nigerian judiciary has been viewed as reluctant to accommodate Arbitration/ADR as a means of dispute resolution.
Judges have previously invalidated Arbitration agreements in several cases arising from Arbitration processes, undermining the concept of judicial neutrality towards Arbitration. This “apathy” toward Arbitration is made worse by the parties’ long-held belief that Nigerian courts’ extensive engagement in Arbitration—including their issuance of injunctions, enforcement of judgments, and nomination of arbitrators—has discouraged people from using it. After all, it serves as a substitute for litigation and, in some ways, is devoid of it. But it would appear that the courts’ overbearing intervention says otherwise.
- Delayed Judicial Actions
The judicial system is not sufficiently prepared to play an impartial and supporting role when it comes to commercial Arbitration, particularly international commercial Arbitration, and there is no simple way to put it. By isolating their participation in arbitral procedures, courts should work with Arbitration organizations. Instead, we discover that litigation moves very slowly and appears to be the last step in Arbitration. The parties prefer Arbitration as a method of settling their business conflicts for a variety of reasons, including the rapid conclusion of proceedings. However, this leads to issues when the judiciary is substantially involved in the Arbitration sector, as it is in Nigeria and under the regular procedures of the court.
The Supreme Court ruled as follows in IPCO (NIG) LTD.V. NNPC, an 11-year-long Arbitration award enforcement proceeding:
“… the mill of Justice can grind very slowly in Nigeria. In particular, Nigeria is not geared towards Arbitration in the manner which meets the international standards it agreed to”.[3]
The legal proceedings in Mekwunye v. Imoukhuede[4] lasted a total of 12 years. The law firm Templars published a study last year detailing its examination of 19 Supreme Court appeals involving the implementation of arbitral awards, showing that the slowest case took 17 years to get a resolution[5]. This utterly negates the purpose of Arbitration, which is to save time, and stands in dismal contrast to other jurisdictions, which embraced Arbitration to the advantage of their countries through economic and commercial benefits. Courts are frequently beset with backed-up cause lists, overwhelming caseloads, and inadequate physical and technological resources, which results in protracted delays and additional backlog.
Lawyers who represent parties in court have made matters worse by intentionally delaying proceedings and coming up with new ways to do so. Since the disciplinary process in some jurisdictions is strict and lawyers fear losing their licenses, some of the practices cannot even be contemplated in more civilized environments. Nigeria’s disciplinary process is a subject for another day.
Intentionally approaching courts to contest the appointment of arbitrators and even the enforcement of arbitral rulings through appeals, even when it is clear that they are unjust, is permitted by the parties’ unlimited right to challenge the arbitral award. A problem for the court is presented by the use of litigation to thwart arbitral processes and the already overburdened judicial proceedings.[6] While courts now have pro-Arbitration outlooks, as exemplified in Mekwunye. v. Imoukhuede[7] and NITEL v. Okeke[8], where the Supreme Court has declared that a court should not upset the expectation of the parties unless there is the clearest evidence of wrongdoing or manifest illegality on the part of the arbitrators, it is impossible to outlaw a party’s right to approach the court for redress[9], and while courts now have pro-Arbitration outlooks as exemplified in Mekwunye v. Imoukhuede[10], and NITEL v. Okeke[11], where the Supreme Court has pronounced that a court should not upset the expectation of the parties except for the clearest evidence of wrongdoing or manifest illegality on the arbitrators’ part. We still see the judiciary facing this heavy involvement in arbitral proceedings, in part with no deliberate intention of the courts.
- Tedious Enforcement of Arbitral Awards Guidelines
This pertains to international Arbitration specifically. We are all aware of the procedures and guidelines for enforcing foreign judgments by Nigerian courts under the Foreign Judgment Registration and Enforcement Statutes, but as we are all well aware, this procedure is not simple. An international arbitral award must be made enforceable in the country where it was issued by a court with that country’s proper jurisdiction before the courts will register it. The overseas prize must also be a monetary award for a specific amount, or one that can be determined using a straightforward mathematical procedure, to be eligible for registration.
Additionally, this entire procedure is prone to get mired down in litigation by failed parties from Arbitration, which would negate the objective of Arbitration and result in processes lasting for years.
NEW DISRUPTIONS AND THE FUTURE
There is a bright side, though, as numerous judicial training sessions have been held recently by important Arbitration stakeholders, like the Nigerian Institute of Chartered Arbitrators (NICArb), to educate the judiciary on the benefits of using Arbitration to resolve commercial disputes. This has been done to dispel the notion that the judiciary is in danger from Arbitration and other forms of alternative dispute resolution. Today’s courts are taking a pro-Arbitration stance, honoring the parties’ preferences for Arbitration and other dispute settlement methods, and refusing to stay proceedings or waive their jurisdiction entirely.
The Arbitration & Mediation Bill, 2022 (referred to as “the bill”) is more in line with the most recent global best practices, as laid out in UNCITRAL 2006. If this innovation becomes law, it may increase the effectiveness of Arbitration in Nigeria. The bill stipulates that there shall be an Arbitration Review Tribunal, giving parties the choice to specify in their Arbitration agreement that awards made in Arbitrations with a Nigerian seat may be reviewed by a second arbitral tribunal, within 60 days of the tribunal’s formation, before turning to courts. Domestic awards may now be granted and set aside, declared ineffectual, or partially remitted to the tribunal without regard to misconduct or unlawful procurement. When put into practice, these and other innovations will improve the quality of arbitral proceedings in Nigeria and make them more effective and efficient. But there are other ways to get rid of or lessen these difficulties.
Arbitration proceedings should be subject to strict norms and timetables with limited room for the judges to wiggle. In addition, the party that tries to unfairly thwart arbitral awards shall be penalized with costs. The heads of the court should only allocate Arbitration cases to judges who have received specialized training in Arbitration while fully explaining the role of the judiciary in Arbitration and alternative dispute resolution processes to others.
CONCLUSION
There is little doubt that Arbitration has grown significantly both inside and outside of Nigeria’s judicial system. Nigeria must not fall behind. Delays hurt our sense of national pride. Timely resolution is encouraging because it allows parties—especially those involved in business transactions—to resolve disputes quickly and more conveniently. When unhappy, parties still have the option to use the judicial system to request enforcement or remedy. However, the current Arbitration and Conciliation Act, which the Courts have made steps to make less technical and more progressive, suffers from significant judicial intrusion that appears to truncate the essence of ADR. The Nigerian Constitution, which provides access to courts, informs this, and it cannot be outlawed.
Through the Arbitration and Mediation Bill, of 2022, the National Assembly is also making a determined effort to bring legal work into line with current international best practices. However, to considerably lessen the issue on a national basis, these improvements are still not widely acknowledged. The cooperation and coordinated efforts to lessen these difficulties must not be discouraged, but rather strengthened.
[1] Okpuruwu v. Okpokam (1988)4 NWLR (Pt 90) 554
[2] Section 17 Federal High Court Act
[3] 3 (No. 3) [2015] EWCA Civ 1144 and 1145
[4] (2019) 13 NWLR (PT 1690) 439
[5] TEMPLARS Arbitration Report On Nigeria; www.templars.law.com ; October 2021
[6] SECTION 6(6) and 36(1),1999, Constitution of the Federal Republic of Nigeria (as amended).
[7] Supra
[8] (2017) 9 NWLR (PT 1571)439
[9] Metroline (Nig) Ltd & Ors v. Dikko (2021) 2 NWLR (Pt. 1761) 422 at 445
[10] Supra
[11] Supra
