Nigeria: Dispute Resolution In Nigeria: Representation Of Parties To Arbitration Proceedings In Nigeria By Foreign Counsel

Last Updated: 23 November 2018
Article by Mofesomo Tayo-Oyetibo

THE LAW

Where the seat of an arbitration is in Nigeria, the Arbitration and Conciliation Act will, by default, be the lex arbitri. The exception will be where the arbitration is seated in Lagos State in particular, in which case, the Lagos State Arbitration Law will be the lex arbitri applicable to the arbitration, unless the parties otherwise agree1. The Arbitration and Conciliation Act ("ACA") will be the considered as the primary legislation here. The ACA contains provisions concerning the legal representation of parties to an arbitration by counsel. In any arbitration to which the ACA applies, the Arbitration Rules provided in the First Schedule to the Act becomes automatically applicable to the arbitration. This is as the Arbitration Rules provides in Article 1 that:

"These Rules shall govern any arbitration proceedings except that where any of these Rules is in conflict with a provision of this Act, the provision of this Act shall prevail."

The substantive provisions of the ACA do not contain any provisions concerning legal representation of parties in arbitrations under the Act, which makes the automatic application of the Rules crucial, with regards to the issue of legal representation, because the Rules explicitly provide for legal representation of parties by counsel. Article 4 of the Arbitration Rules provides that:

"The parties may be represented or assisted by legal practitioners of their choice. The names and addresses of such legal practitioners must be communicated in writing to the other party; such communication must specify whether the appointment is being made for purposes of representation or assistance."

In other jurisdictions or even in the world of international commercial arbitration, the wording of Article 4 may not raise any particular eyebrows, especially as the provision is seemingly unambiguous and the first part of it states that the parties are entitled to pick any legal practitioner of their choice, which part is sure to excite those who advocate for the preservation of the sanctity of the hallowed arbitration principle of Party Autonomy.

In Nigeria however, that provision should become of automatic interest to a party to an arbitration who wishes to fully exercise his right to party autonomy by picking any legal practitioner of his choice, including foreign counsel. This is because as the ACA will be the lex arbitri and the Arbitration Rules will automatically apply, the term Legal Practitioner as used in Article 4 of the Rules must be interpreted in accordance with Nigerian law.

WHO IS A LEGAL PRATITIONER IN NIGERIA?

In recent times, there has been much furore in Nigerian jurisprudence as to the proper interpretation of the term Legal Practitioner. Two sections of the Legal Practitioners Act ("LPA") are particularly relevant in this regard. First is section 2(1) of the LPA which provides that:

"Subject to the provisions of this Act, a person shall be entitled to practice as a barrister and solicitor if, and only if, his name is on the roll."

The second relevant provision is contained in Section 24 of the Act, which defines "legal practitioner" as:

"a person entitled in accordance with the provisions of this Act to practise as a barrister or as a barrister and solicitor, either generally or for the purposes of any particular office or proceedings"

The above provision of the LPA has been subject to judicial pronouncements which have decided how the above provisions should be interpreted, which pronouncements are encapsulated in the now famous decision of the Supreme Court in OKAFOR V NWEKE2 where Onnoghen, JSC said of the meaning of legal practitioner at page 531 as follows:

"From the above provision, it is clear that the person who is entitled to practice as a legal practitioner must have had his name on the roll...For a person to be qualified to practice as a legal practitioner he must have his name in the roll otherwise he cannot engage in any form of legal practice in Nigeria."

The decision of the Supreme Court in OKAFOR V NWEKE3 and other similar decisions construe and have laid strict precedent for the interpretation of sections 2(1) and 24 of the LPA in the most literal and narrow manner. Considering the fact that under Section 4(1)(a) of the LPA only a citizen of Nigeria is entitled to practice as a barrister and solicitor4, the strict interpretation of the term 'legal practitioner' under Nigerian law has significant consequences on the representation of parties to a Nigerian arbitration by foreign counsel.

The provisions of the LPA on who a legal practitioner is and the rigidity of the interpretation of the sections are most likely to have arisen with the legal representation of parties in court proceedings being the principal and possibly only contemplation. Nevertheless, it is submitted the interpretation of the law on the definition of legal practitioner is unlikely to be different in arbitration proceedings conducted in Nigeria under the ACA. This has been the case in an arbitration conducted in Nigeria under the ACA where the arbitral tribunal was called upon to decide on whether a foreign counsel could represent a party to an arbitration seated in Nigeria and subject to the ACA and Nigerian law. After considering the provisions of Article 4 of the Rules in light of Nigerian authorities on how to interpret the term 'legal practitioner' the tribunal ultimately reached the conclusion that the foreign counsel was precluded from participating in the proceedings as counsel to the party who retained him.

The reasoning and conclusion of the arbitral tribunal is certainly agreeable for being seemingly sound, on the premise of the current position of the law. The position of the law as it stands is clear, as in litigation proceedings, in a Nigerian arbitration seated in Nigeria under the ACA, a foreign counsel is, by law, precluded from representing a party to the arbitral proceedings, where the leave of the Chief Justice of Nigeria is not first sought and obtained.

It is certainly conceivable that this straight jacket approach to legal representation of parties may hamper efforts aimed at attracting arbitration to Nigeria and ensuring that disputes which arise in Nigeria are not referred abroad for arbitration. The precondition under the LPA that a foreign legal practitioner has to first seek and obtain the leave of the Chief Justice of Nigeria before he can represent a party to a Nigerian arbitration is likely to be a disincentive to representatives well as arbitration practitioners seeking to resolve their disputes through arbitration from doing so in Nigeria.

THE REMEDY

The door is not altogether closed for parties to arbitrations seated in Nigeria who wish to be represented by foreign legal practitioners. The remedy lies in section 57(2)(d) of the ACA which provides for circumstances in which an arbitration in Nigeria will be considered to be international. Section 57(2)(d) provides as follows:

"(2) An arbitration is international if –

(d) the parties, despite the nature of the contract, expressly agree that any dispute arising from the commercial transaction shall be treated as an international arbitration."

The beauty of section 57(2)(d) is that no matter the circumstances of the case and even if there is no international element to the parties or the dispute, the parties are at liberty to, by agreement, treat the arbitration as an international one. In terms of whether or not a party to an arbitration conducted under the ACA can retain a foreign counsel to represent him in an arbitration in Nigeria, this section is crucial. The reason is that where the parties agree to conduct their arbitration under the ACA as one that is international, the Rules are not mandatorily applicable to the arbitration by reason of the operation of section 53 of the ACA which provides as follows:

Notwithstanding the provisions of this Act, the parties to an international commercial agreement may agree in writing that disputes in relation to the agreement shall be referred to arbitration in accordance with the Arbitration Rules set out in the First Schedule to this Act, or the UNCITRAL Arbitration Rules or any other international arbitration rule acceptable to the parties.

Section 53 allows the parties to incorporate the UNCITRAL Arbitration Rules or any other Rules into their agreement as the rules applicable to the arbitration. Consequently, the interpretational tightrope of Article 4 of the ACA Rules will be avoided where the parties agree to designate their arbitration as 'international' and incorporate arbitration rules with are worded differently and in a more liberal manner than Article 4. Fortunately, most notable arbitration rules are worded more liberally when compared with Article 4, even though they carry the same purport5. For example, the London Court of International Arbitration Rules provides in Article 18.1 as follows:

"Any party may be represented by legal practitioners or any other representatives"

Similarly, the 2010 UNCITRAL Arbitration Rules provides in Article 5 that:

"Each party may be represented or assisted by persons chosen by it..."

Also, like the UNCITRAL Rules, the Lagos Court of Arbitration Rules provides in Article 5 that:

"Each party may be represented or assisted by persons chosen by them"

The logical corollary of the foregoing is that where parties to an arbitration in Nigeria seek to be represented by foreign counsel not caught within the definition of 'legal practitioner' under the Legal Practitioners Act, the only way their aim can be achieved is for them to agree to designate their arbitration as international, which fortunately, under the ACA, they are allowed to do by simple agreement. Crucially, the parties will also need to by agreement, incorporate the arbitration rules to be applicable to the arbitration and such rules will have to go further than simply stating that a party can be represented by a 'legal practitioner' as seen in the rules quoted above.

NEED FOR REFORM

Advocates for the promotion and preservation of the Nigerian local content policy in legal and arbitration practice will conceivably argue that the current position of the law regarding the representation of parties to a Nigerian arbitration by foreign counsel protects Nigerian legal practitioners in the face of the trend of foreign counsel wrestling away substantial arbitration opportunities from local counsel. Frankly, there is some merit to this argument, as the need to protect the local practitioners who have the competence to handle the matters which originate in Nigeria but are being referred to foreign counsel does exist. However, from a more general perspective, the current regime which precludes foreign counsel from representing parties to a Nigerian arbitration unless the arbitration is an international arbitration under the ACA is at odds with international arbitration practice which, as a result of the effects of globalization, has made the representation of parties in arbitral proceedings almost completely unrestrained with regards to the nationality of the legal representative.

In other jurisdictions renowned for arbitration, the restrictions on legal representation by legal practitioners which exist in Nigeria are virtually if not completely non-existent. Parties in arbitration, pursuant to the party autonomy principle, will usually be at liberty to retain whichever legal practitioner they feel is best suited and capable of defending their interests in the arbitration without interference form the lex arbitri or any other applicable law or rules, on the basis of the nationality of the legal representatives.

Furthermore, in Nigeria, foreign legal practitioners are not precluded from sitting as arbitrators in purely domestic arbitrations as there is no law which operates to so preclude them. Considering this, the question then is, what is the justification for precluding foreign counsel from representing parties in domestic arbitrations in Nigeria when the same foreign counsel or any other foreigner can be validly appointed as an arbitrator? No justification readily comes to mind. The position of the arbitrator is no less important than that of the legal representative, therefore there is no reason why a purely domestic arbitration can have a foreign arbitral tribunal or arbitrator appointed by the parties, while foreign counsel cannot validly represent the parties in the arbitration.

The recent developments in Nigeria relating to arbitration have been geared towards encouraging more arbitration of disputes that arise both from within and outside Nigeria. A situation in which parties to an arbitration are, by law, indirectly disallowed from appointing certain legal representatives on the basis of the nationality of the legal representatives is sure to hamper the achievement of the goal of having an increased number of disputes arbitrated in Nigeria.

Footnotes

1. Section 2 of the Lagos State Arbitration Law

2. [2007] 10 NWLR (PT 1043) 521

3. Supra

4. Save for where an application is made to the Chief Justice by or on behalf of any person appearing to the Chief Justice to be entitled to practise as an advocate in any country where the legal system is similar to that of Nigeria

5. See also Rule 20 of the Singapore International Arbitration Centre Rules and Article 26(4) of the ICC Rules of Arbitration.

Mofesomo Tayo-Oyetibo is the Managing Partner of Twelve Legal, a Nigerian commercial law Firm.

Originally published October 2018

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.

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