Nigeria: Enforcement Of Arbitral Awards

Last Updated: 27 December 2018

In the age of globalisation, increasing commercial transactions and trade is not without the prospect of dispute. To guarantee a fair playing ground and the continuity of tranquil market space, it is in commonplace to find dispute resolution clause inserted into agreement between parties, especially when it involves multinationals. In the event of breach of the agreement, the dispute resolution clause defines the path the parties will chart in resolving their dispute.

Arbitration has emerged as a popular and effective mechanism for resolving commercial and trade disputes. Arbitration is favourable to parties because of its neutrality, confidentiality, speed, flexibility and the awards are easily enforced. The Supreme Court has held on the effect of arbitral award that "It is very clear and without any iota of doubt, that an arbitral award made by an arbitrator to whom a voluntary submission was made by the parties to the arbitration, is binding between the parties". Ras Pal Gazi Construction Co. Ltd v F.C.D.A (2001) LPELR-SC.45/96

Arbitral award granted outside Nigeria is enforceable and binding on parties to it. A seamless ecosystem for enforcement of foreign judgement or arbitral awards boost investors' confidence. According to World Bank ease of doing business index 2018, Nigeria ranked 96th on enforcement of contract index and it takes about 454 days to enforce a contract through the court. The length and stress involved will hurt business interest. Consequently, it is imperative that the arbitral award be enforced and respected in a seamless fashion.

This article discusses the procedure for enforcement of arbitral awards in Nigeria.

ENFORCEMENT OF AWARD GRANTED OUTSIDE NIGERIA

1. Registering the award under the Foreign Judgment (Reciprocal Enforcement) Act 1990

The Act allows the enforcement and recognition of foreign judgement within sis yeas of the judgement. The purport of the law is to accord recognition and enforcement to judgement of foreign court that accords reciprocal respect to judgements of the Nigerian court.

Section 2 of the Act defines judgement to include arbitral award. Such judgment or award would have to be registered in a Nigeria court with the jurisdiction to hear the dispute. The judgment must be final and conclusive between the parties. The court will enforce monetary award payable and not fine or penalty.

The Federal High Court Civil Procedure Rules 2009 provides for the enforcement of foreign arbitral award. Order 52 Rule 17 stipulates that "where an award is made in proceedings on an arbitration in a foreign territory to which the foreign Judgment (Reciprocal Enforcement) Act extends, if the award was in pursuance of the law in force in the place where it was made; it shall become enforceable in the same manner as a Judgment given by a court in the place and the proceedings of the Foreign Judgments (reciprocal Enforcement) Act shall apply in relation to the award as it applies in relation to a Judgment given by that court."

The Supreme Court in the case of Macaulay v R.Z.B of Austria (2003) 18 NWLR (Pt. 852) 282 has held that only judgments from superior courts in the United Kingdom and other commonwealth countries that are recognised and enforced in Nigeria.

2. Under Section 51 of the Arbitration & Conciliation Act,1990

Section 51 of the Arbitration and Conciliation Act guarantees the recognition of an arbitral award regardless of the jurisdiction it was granted and binding on the parties to it.

Party seeking to enforce the award shall apply to the court. According to Section 32 of the Act, the party relying on an award or applying for its enforcement shall supply the court with:

  1. a duly authenticated original award or a duly certified copy;
  2. copy of the original arbitration agreement or a duly certified copy;
  3. a duly certified translation in the English language if the award was not granted in English language.

In addition, Section 52 of the act itemise the list of grounds for refusing recognition or enforcement.

3. Enforcement under Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention)

Nigeria is a signatory to the New York Convention on the Recognition and

Enforcement of Foreign Arbitral Award 1958. Hence, the convention applies in Nigeria. Section 54 of the Arbitration and Conciliation Act 1990 domesticates the convention. Nigeria has a reciprocal obligation under the convention to recognise and enforce arbitral award granted in other co-signatory states.

4. Instituting an action upon the award

A plaintiff can bring an action upon the award in Nigerian court and it would have effect like it is the judgement of the court. The plaintiff will need to establish that: there is an existence of arbitration clause in the agreement; the arbitration was properly conducted in compliance with the agreement; and the award is valid.

A defendant is left to challenge the award, the conduct of the arbitration or the jurisdiction of the arbitral tribunal.

5. Enforcement under the International Centre for Settlement of Investment Disputes (ICSID)

Nigeria domesticated International Centre for Settlement of Investment Disputes (Enforcement of Awards) Act on 29th November, 1967 for enforcement of awards given by ICSID. The ISCID Act allows for the recognition and enforcement of arbitral awards granted by ICSID.

A copy of the award duly certified by the Secretary-General of the Centre is deposited with the Supreme Court by the party seeking its recognition and shall be enforced like a judgement of the Apex court.

ENFORCEMENT OF DOMESTIC AWARDS IN NIGERIA

The Arbitration and Conciliation Act provides the legal framework for arbitration proceedings in Nigeria. According to Section 31 (3) of the Act, a party seeking to enforce a domestic award may with the leave of the court be enforced as a judgment or order of the court. The application to the court for enforcement and recognition of a domestic award is convoyed with a duly authenticated original award and arbitration agreement or a duly certified copy.

According to Order 39 Rule 4 of the High Court of Lagos State Civil Procedure Rules 2012, provides that a party seeking to enforce or remit or set aside an arbitral award can do so with a motion on notice accompanied with an affidavit. Consequently, section 31 (2) of the Arbitration and Reconciliation Act and Order 39 Rule 4(2) provides that such application should be supported with the duly authenticated original award and arbitration agreement or the certified true copies. The award is enforced like a judgment of the Court.

Though the potency of a motion on notice has been questioned as an attempt by the High court to convert an arbitration award from a foreign country to its own judgement. The contention is that an arbitral award has a similar status with a judgement of the court. Ras Pal Gazi Construction Co. Ltd v F.C.D.A (2001) LPELR-SC.45/96

A dissatisfied party with an award can apply to the court to set aside such award. However, the dissatisfied party has to show the court that the award contains decisions exceeding the scope of the issues submitted to the panel or outside the purview of the arbitration agreement.

Conclusion

Arbitration saves reasonable time that would have been lost in laborious and timeconsuming strip of litigation. A party seeking to enforce an arbitral award would need the advice of a legal representative to chart the strategy that will aid swift enforcement.

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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