Nigeria: Injunctions Pending Arbitration: A Legal Myth?

Last Updated: 3 April 2014
Article by Faruq Abbas

A court grants an order of injunction at its discretion as an equitable relief either to protect the rights of the applicant or preserve the subject matter of a dispute pending the determination of a case (Anthony v. Surveyor-General, Ogun State (2007) ALL FWLR (Pt. 354) 375 at 390. Although the Courts also have the powers to grant mandatory injunctions, our focus here is to consider the powers of the court to grant preservative orders pending the hearing and determination of an arbitration proceeding.

A comparison between the provisions of the English Arbitration Act, 1996 (the "English Arbitration Act") vis-à-vis the provisions of the Arbitration and Conciliation Act, Cap A.18, Laws of the Federation of the Federal Republic of Nigeria, 2004 ("the Arbitration and Conciliation Act") together with a review of Nigerian judicial authorities aids in establishing whether or not Nigerian Courts have and exercise the powers to grant injunctive reliefs pending arbitration.

Powers of the English Court to grant an Order of Injunction Pending Arbitration

Section 44 (3) of the English Arbitration Act expressly provides that a Court may in cases of urgency; grant an order of injunction for the preservation of an asset or evidence pending the hearing and determination of an arbitration. Section 44 (5) of the English Act goes further to provide that a Court would only have the powers to grant an order of injunction pending arbitration where the arbitral tribunal lacks the power to grant the order of injunction or where the tribunal is for any reason, unable to grant same.

The provisions of the English Arbitration Act above therefore make it crystal clear that the power of the English Courts to grant injunctive reliefs pending arbitration is not in doubt.

Does A Nigerian Court Have the Power to Grant an Order of Injunction Pending Arbitration?

Generally, the position of the law is that, where a dispute is pending before an arbitral tribunal, the arbitral tribunal shall have the powers to grant interim and injunctive reliefs in favour of any of the parties pending the determination of the arbitration. (Section 13 (a) of the Arbitration and Conciliation Act

Unlike the English Arbitration Act, the Arbitration and Conciliation Act, does not contain any provision, which expressly endows the Nigerian Courts with the power to grant an injunctive relief pending arbitration. Notwithstanding this omission in the ACA, it is our view that this lacuna is cured by the provisions of Article 26 (3) of the Arbitration Rules, contained in the First Schedule of the Arbitration and Conciliation Act1which provides that a Nigerian court can grant an order of interim or preservative injunction pending the hearing and determination of an arbitration proceeding.

Thus, since the Rules of the Arbitration and Conciliation Act presumes that a party can make an application to the Court for interim measures notwithstanding the presence of an agreement to arbitrate, it is submitted that it simply goes without saying that a party to an agreement to arbitrate, can approach the Court for an order of interim measures in rare cases where the arbitral tribunal has not been constituted due to no fault of the Applicant or where the arbitral tribunal is unable to hear and grant an application for interim measures due to a logistical conundrum.

Furthermore, the power of a Nigerian Court to grant an order of injunction pending arbitration is traceable to the provisions of Section 13 of the Federal High Court Act and Section 18 of the High Court of Lagos State Law, which endows both the Federal and State High Courts with the powers to grant an order of interim injunctions where it will be just and convenient to do so.

Judicial Attitude to Applications for Injunction Pending Arbitration

The attitude of the Nigerian judiciary to applications for injunction pending arbitration can be categorized into two schools of thoughts. The first school of thought believes that a Court can only grant an injunction in support of arbitration if the entire issues in dispute between the parties are brought before the Court. Thus, this school of thought believes that an action which is instituted for the sole purpose of obtaining an injunctive relief pending the hearing and determination of an arbitration is bound to fail because the Court's jurisdiction to entertain a suit can only be invoked when the entire issues in dispute is brought before the Court.

The judicial authority, which is usually brandished in support of this school of thought is the case of NV Scheep v. MV S. Araz (2000) 15 NWLR (Pt. 691) 622 where the Supreme Court held that a Court would only be able to grant an interim measure in support of arbitration where the issues in dispute between the parties have been submitted to the Court for its determination. In this case, the Court refused to grant an interim order for security in support of an arbitration proceeding in London because the Claimant in the suit had not submitted the issues in dispute between the parties for the determination of the Court. The Court therefore held that the admiralty jurisdiction of the Federal High Court could not be validly invoked for the sole purpose of obtaining security for an award in respect of the on-going arbitration in London. In essence, the Supreme Court simply ruled that the Claimant ought to have approached the arbitral tribunal for an order for interim relief since the arbitral tribunal was responsible for determining the issues in dispute between the parties.

The second school of thought believes that a Court has the power to grant an order of injunction pending the hearing and determination of an arbitration proceeding. This school of thought however believes that the power to grant injunctions pending arbitration should only be exercised in rare and deserving cases. In Owners of the MV Lupex v. N.O.C.S Ltd (2003) 6 S.C. (Pt. II) 62 at 73, the Supreme Court held that a party to an arbitral proceedings would be permitted to institute an action for injunctive reliefs in Court during the pendency of the arbitral proceedings, if there is a "strong, compelling and justifiable reason" for such an action. This position was re-affirmed by the Court of Appeal in Maritime Academy of Nigeria v. A.Q.S (2008) All FWLR (Pt. 406) 1872 at 1895 Para B-C.

In Lignes Aeriennes Congolaises v. Air Atlantic Nigeria Ltd (2006) 2 NWLR (Pt. 963) 49 the Court of Appeal held that the choice of arbitration does not bar resort to the Court to obtain security for any eventual award.

Also, in the recent case of Statoil Nigeria Limited v. Star Deep Water Petroleum Limited & 3 Ors (Suit No. FHC/L/CS/1452/2013) (Unreported)2, Honourable Justice Buba held that the Federal High Court has the jurisdiction and power to grant an order of injunctive reliefs pending arbitration, and that this power would only be exercised in deserving cases. His Lordship further held that the power of the Court to grant injunctive reliefs pending arbitration is derived from the provisions of Article 26 (3) of the Rules made pursuant to the Arbitration and Conciliation Act and Section 13 of the Federal High Court Act.

Lastly, in Lagos State Government v. PHCN & 2 Ors (2012) 7 CLRN 134, the Lagos State High Court held that it had the jurisdiction to grant an order of interim reliefs pending arbitration, notwithstanding the fact that an arbitration proceedings was on-going between some parties to the action. Just like the Statoil Case cited above, the Lagos State High Court relied on the provisions of Article 26 (3) of the Rules made pursuant to the Arbitration Act in arriving at this decision.

Should the Case of NV Scheep v. MV S. Araz (2000) 15 NWLR (Pt. 691) 622 Act as a Bar Against the Granting of an Order for Injunction Pending Arbitration?

It is submitted that the case of NV Scheep v. MV S. Araz (Supra) ought not to be permitted to act as a bar against the granting of an order of injunction pending arbitration because the provision Article 26 (3) of the Rules made pursuant to the Arbitration Act is quite clear that a Court has the power to grant an order of injunction pending arbitration irrespective of the fact the entire issues in dispute between the parties have not been submitted for the determination of the Court. Also, the mere fact that Article 26 (3) of the Rules was not pronounced upon by the Supreme Court in MV S. Araz's Case goes further to show that the principal issue which was considered by the Court in MV S Araz's Case is whether the admiralty jurisdiction of the Federal High Court could be activated by an action for security for damages in respect of an on-going arbitration, and not whether the Federal High Court could grant an order of injunction pending arbitration.

Furthermore, in MV S. Araz's case, the Applicant for an order for interim reliefs pending arbitration did not adduce any evidence to show why it did not bring the application before the Arbitral Tribunal before bringing it to theCourt. Thus, the mere fact that the Applicant could have brought the application for interim reliefs before the Arbitral Tribunal, but it failed to do so, is enough ground for the Court to have refused to grant the order for interim reliefs pending arbitration. This is because an application for interim reliefs pending arbitration ought only to be made to the Court in rare cases where the Arbitral Tribunal cannot consider it or where it cannot be made before the Arbitral Tribunal due to a delay in the empanelment of the Arbitral Tribunal.

Lastly, the law is well settled that judicial precedents are not of much value in cases involving the exercise of discretion. See: Dokubo-Asari v. FRN (2007) 12 NWLR (Pt. 1048) 320 at 350. Thus, since the decision of a Court to either grant or refuse an application for injunction pending appeal/interim measures pending arbitration is based on the exercise of judicial discretion, it is submitted that the Court ought not to allow the exercise of its judicial discretion to be fettered by the decision of the Supreme Court in MV S. Araz's Case.

In conclusion, it is submitted that Nigerian Courts have the power and jurisdiction to grant interim injunctions pending arbitration (of course this is in cases where the arbitration panel is unable to do so) and this power can be exercised notwithstanding the fact that the subject matter of the dispute between the parties is not before the Court. This is because since an application for an interim relief is usually made pending the hearing and determination of an arbitration proceeding, it would be illogical for the parties to submit the dispute which they have already agreed to refer to arbitration, to the Court just because either of them wants to obtain an interim relief pending arbitration.

Thus, every application for injunction pending arbitration should be considered on its own merit and the Courts should not hesitate to grant an application for injunction pending arbitration especially in cases where there is an urgent need to preserve the subject matter of an arbitration or in cases where a party has been unable to bring an application for injunction before an arbitral tribunal due to a delay or logistical conundrum in the empanelment of the arbitral tribunal.

Footnotes

1 A request for interim measures addressed by any party to court shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
PUNUKA Attorneys & Solicitors
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
PUNUKA Attorneys & Solicitors
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions