Nigeria: Enforcement Of Choice Of Foreign Law And Jurisdiction In Transaction Agreements

Last Updated: 24 April 2014
Article by Afoke Igwe

The Nigerian courts recognise parties' choice of foreign (non-Nigerian) law and jurisdiction. The Nigerian courts will, as a general rule, give effect to the parties' choice of a foreign governing law and will, accordingly, apply such law in the determination of any claims that come within their jurisdiction. For instance, where parties have English law as the governing law of the contract, Nigerian courts, will, generally give effect to the choice of English law as the governing law of the contract if any claim in relation to the contract were to come under their jurisdiction.

Nigerian courts will, however, only interfere with parties contract in circumstances where the terms of the contract are contrary to Nigerian public policy, inconsistent with Nigerian law or where there are vitiating elements (for example, mistake, misrepresentation, undue influence, illegality, etc.) in the terms and conditions of the contract. The Supreme Court of Nigeria has ruled in Sonnar & Anor. v. Partnenreedri M.S Nordwind & Anor (1988) N.S.C.C. pps. 28-49 that the parties' choice of law is not conclusive and that to be effective the choice of law must be "real, genuine, bona fide, and reasonable". The Nigerian Supreme Court has also held that the foreign law chosen by parties as the proper law of their contract" must have some relationship to and must also be connected with the realities of the contract considered as a whole".

As with the case of the parties' choice of law, the Nigerian courts have demonstrated that in certain limited circumstances they will be prepared to assume jurisdiction notwithstanding the express choice of some other jurisdiction by the parties. Oputa, JSC in the Sonnar Case above stated that:

"our courts should not be too eager to divest themselves of jurisdiction conferred on them by the constitution and by other laws simply because parties in their private contract chose a foreign forum and a foreign law".

The factors which the courts will consider in determining whether to assume jurisdiction were also set out in the Sonnar Case and include:

  1. the countries with which the parties are connected;
  2. the location of the evidence, the convenience in terms of accessibility and expenses between the domestic and foreign courts;
  3. whether the party seeking to stay the proceedings is only seeking procedural advantages; and
  4. whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would:

    1. be deprived of security for that claim;
    2. be unable to enforce any judgment obtained;
    3. be faced with a time-bar not applicable to the domestic court or;
    4. for political, racial, religious or other reasons be unlikely to get a fair trial.

Recognition and enforcement of foreign judgments

Where a party has obtained a judgment (a "foreign judgment") in a court other than a Nigerian court, the party can enforce the judgment in the Nigerian courts in either of 2 (two) ways:

  1. By the registration and enforcement of the foreign judgment as a judgment of the Nigerian court:

    Where the judgment has been obtained in the courts of a country that accords reciprocal treatment to the judgments of Nigerian courts, the party can enforce such judgment in the Nigerian courts by virtue of either the Reciprocal Enforcement of Judgments Act, Chapter 175, Laws of the Federation of Nigeria, 1958 (the "1958 Ordinance") (in the case of the judgments of an English court) or the Foreign Judgments (Reciprocal Enforcement) Act, Chapter 35, Laws of the Federation of Nigeria, 2004.

    The procedure for the enforcement of foreign judgments, as laid down by the 1958 Ordinance, which is applicable to the enforcement of English judgments, is as follows:

    1. An application for leave to register a foreign judgment must be made by way of a petition ex-parte, supported by an affidavit, within 12 (twelve) months after the date of the judgment or any longer period as may be allowed by the registering High Court.
    2. When an order granting leave to register the judgment is made on notice by the court, the order shall be served on the judgment debtor.
    3. Notice in writing of the registration of the judgment must be served on the judgment debtor within a reasonable time after registration.
    4. Upon registration, the foreign judgment can be enforced the same way that a domestic judgment may be enforced.
    Under the Foreign Judgment (Reciprocal Enforcement) Act, the procedure for enforcing foreign judgments is as follows:

    1. An application must be made by a Motion on Notice to a High Court in Nigeria within 6 (six) years after the date of the judgment, or where there is an appeal against the judgment, after the date of the last judgment given in the appeal, to have the judgment registered in the High Court.
    2. On the registration of the judgment by the court, the judgment will have the same force and effect as a judgment given by the court in which the foreign judgment is registered and can be enforced in the same way that a domestic judgment may be enforced.
    A foreign judgment will, however, not be enforced if it is contrary to Nigeria's public policy, or does not relate to a definite sum; or if it is made by a court of the foreign country that has no jurisdiction over the matter or where the defendant was not given an opportunity to present its case.
  2. A foreign party also has the option of suing upon or bringing a fresh action for the recovery of a debt, based on the foreign judgment.

Enforcement of foreign arbitral awards

As regards foreign arbitral awards, Nigeria is a signatory to and has ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has been incorporated into Nigerian law through the Arbitration and Conciliation Act, Chapter 19, Laws of the Federation of Nigeria, 2004. The Nigeria's Arbitration Act is modelled very closely upon the UNCITRAL model law and rules. What this means is that arbitral awards made by a recognised international arbitration, such as the London Court of International Arbitration, will be recognised and enforced by Nigerian courts subject to the provisions of the Arbitration Act.

The procedure for obtaining recognition or enforcement of a foreign arbitral award requires the party applying for enforcement of such foreign award to at the time of the application to provide:

  1. the duly authenticated original award or a certified copy of it,
  2. the original arbitration agreement or a certified copy of it, and
  3. a translation of (i) and (ii) above into the English language if they are in a language other than English language.

The foreign arbitral award may be set aside in Nigeria in the following circumstances:

  1. a party to the arbitration agreement is under some legal incapacity;
  2. the arbitration agreement is invalid under the parties' choice of law;
  3. the party against whom the award is sought to be enforced was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
  4. the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;
  5. the award contains decisions on matters which are beyond the scope of the submission to arbitration, provided however that where 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 to arbitration may be set aside;
  6. the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties, unless such agreement (i.e. of the parties) was in conflict with a provision of the Arbitration Act from which the parties cannot derogate;
  7. the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, the award was made;
  8. the subject matter of the dispute is not capable of settlement by arbitration in Nigeria, or
  9. the recognition or enforcement of the award will be against public policy.

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
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
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