International Arbitration

The relevant statute is the Arbitration and Mediation Act, 2023 (AMA).

Under the AMA, the arbitration agreement must be in writing. Oral arbitration agreements are not recognised under the AMA (see Section 2(2)).

Yes, the AMA differentiates between domestic (interstate) and international arbitration.

Under Section 1(5), an arbitration is deemed international if any of the following conditions is met:

• The parties have their registered places of business in different countries;
• The seat of arbitration is outside the country in which the parties’ businesses are located;
• A substantial part of the contract is to be performed outside the parties’ locations; or
• The parties agree that the arbitration concerns multiple countries.

‘Interstate arbitration’ is defined in Section 91(5) as arbitration where:

• the parties have places of business within different states in Nigeria;
• the parties’ registered places of business are outside Nigeria but the seat of arbitration is in Nigeria;
• the contract performance or dispute arose in Nigeria; or
• the parties agree that the subject matter of the arbitration relates to more than one country.

Yes. Section 1(5) of the AMA is similar to Article 1 of the UNCITRAL Model Law on International Commercial Arbitration, 2016. Also, the preamble to the AMA alludes to the fact that the statute is modelled on the UNCITRAL Model Law on International Commercial Arbitration.

No. Most of the provisions of the AMA are subject to the parties’ agreement, except as otherwise provided. This underscores the unique characteristic of arbitration being party driven.

Currently, there are no formal plans to amend the AMA.

Yes, Nigeria is a signatory country. The convention applies only to:

• the recognition and enforcement of awards made in the territory of a state party to the convention; and
• contractual or non-contractual disputes arising from legal relationships that are considered as commercial under the laws of Nigeria.

The convention has been adopted in the AMA (see Section 60).

Nigeria is indeed a signatory to other relevant treaties, such as the following:

• New York Convention: Nigeria has signed and ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This convention ensures that arbitral awards made in Nigeria are enforceable in other countries that are party to the convention.
• International Centre for Settlement of Investment Disputes (ICSID) Convention: Nigeria is also a signatory to the ICSID Convention, which provides a framework for resolving investment disputes between foreign investors and host states.
• UNCITRAL Arbitration Rules: Additionally, Nigeria has adopted the UNCITRAL Arbitration Rules, which provide a model for arbitration proceedings.
• Bilateral investment treaties (BITs): Nigeria has also entered into BITs with several countries, including the following:
• • European countries: Finland, France, Germany, Italy, Netherlands, Romania, Serbia, Spain, Sweden, Switzerland and the United Kingdom.
  • Asian countries: China, South Korea and Taiwan.
  • African countries: Morocco and South Africa
• These BITs:
• • provide protection for foreign investments; and
  • promote arbitration as a means of resolving disputes efficiently.

In Nigeria, a dispute is generally considered arbitrable if:

• the law does not grant exclusive jurisdiction to the courts; and
• the subject matter can be resolved by agreement.

This principle is supported by the decision in United World Ltd Inc v MTS (1998) 10 NWLR (Pt 568) 106, which held that commercial transactions are typically arbitrable. Certain disputes, however, are non-arbitrable, such as the following:

• matters that would alter the legal status of the parties (see Mekwunye v Lotus Capital Ltd (2018) LPELR-45546 (CA));
• disputes regarding tax liabilities or government tax revenues (see Esso Exploration & Production (Nig) Ltd v Fedeal Inland Revenue Service (2007) LPELR-51618 (CA));
• election matters;
• criminal charges;
• matrimonial causes; and
• bankruptcy.

The parties are at liberty to choose the seat of arbitration.

The statutory requirement for an arbitration agreement to be valid and enforceable is that the arbitration agreement be in writing. This requirement is satisfied if:

• the agreement is recorded in any form; and
• the information contained therein is accessible and can be used for subsequent reference.

Under Section 2(5) of the Arbitration and Mediation Act (AMA), reference in a contract or a separate arbitration agreement to a document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is in a manner that makes it part of the contract or the arbitration agreement.

Section 14(2) of the AMA provides for separability. Under this provision:

• an arbitration clause which forms part of a contract will be treated as an agreement independent of the other terms of the contract; and
• a decision by the arbitral tribunal that the contract is void does not entail ipso jure the invalidity of the arbitration clause.

In other words, an arbitration clause contained in the main contract is severable (as a separate arbitration agreement) and has a life of its own. If appropriately worded, it confers jurisdiction on an arbitral tribunal to rule that the underlying contract is void ab initio and decide on the consequences of the contract’s invalidity and unenforceability.

Yes. Ordinarily, the parties are expected to designate the seat of arbitration. Under Section 32(2) of the AMA, where the parties have not designated the seat of the arbitration and have not authorised any arbitral or other institution to designate the seat of the arbitration, the seat of the arbitration will be any place in Nigeria as the arbitral tribunal may determine, unless the arbitral tribunal decides that a place in another country should be the seat of the arbitration having regard to all relevant circumstances, taking into account parameters such as:

• the proximity of the place of performance of the contract;
• the laws selected by the parties to govern their substantive rights under the contract; and
• the law that the parties have chosen to govern the arbitration.

As regards the language of the arbitral tribunal, under Section 35(1) of the AMA:

• the parties are at liberty to agree on the language to be used; and
• where none has been agreed upon, the English language will be used.

Where there are documents to be tendered in a different language from that agreed upon by the parties or determined by the tribunal, the court may order such evidence to be accompanied by a translation in the appropriate language in the circumstances (see Section 35(3) of the AMA).

In an arbitral proceeding:

• a plea that the tribunal does not have jurisdiction must be raised no later than submission of the points of defence; and
• a party is not precluded from raising such a plea by the fact that it has appointed or participated in in the appointment of an arbitrator.

(See Sections 14(1) and (3) of the Arbitration and Mediation Act (AMA)).

Yes. This principle is known as ‘competence-competence’. The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement (see Section 14(1) of the AMA).

Yes, a party may apply to the court for a ruling on the tribunal’s jurisdiction if it is dissatisfied with the tribunal’s decision. This application must be made within 30 days of the tribunal’s ruling. According to Section 14(7), such a challenge to the court on jurisdiction does not prevent the tribunal from continuing with the proceedings and issuing an award, even if a party has sought recourse to the court regarding the ruling on jurisdiction.

Under the Arbitration and Mediation Act (AMA), only the parties to the arbitration agreement may participate in or commence an action before an arbitration tribunal. However, the law allows an additional party to be joined to the arbitration provided that, prima facie, the additional party is bound by the arbitration agreement giving rise to the arbitration (see Section 40 of the AMA).

Yes, under Sections 36(1) and 41(1) of the AMA, parties are obliged to:

• clearly state their claims; and
• avoid causing delays that may prejudice the other party.

Yes, the AMA includes provisions for multi-party disputes, including:

• joinder of parties; and
• consolidation of proceedings.

(See Sections 40 and 39 of the AMA respectively.)

The parties to an arbitration agreement have the autonomy to select the governing law for resolving their dispute. If the parties do not specify a choice of law, the arbitral tribunal may apply the law that it deems most appropriate based on conflict of law principles (see Section 15 of the Arbitration and Mediation Act (AMA)).

Whether or not the parties specify a governing law, by virtue of Section 15(5) of the AMA, the tribunal is mandated to:

• decide on the law in accordance with the terms of contract; and
• consider the relevant trade usages in the circumstance.

Section 15(1) of the AMA requires the arbitral tribunal to resolve disputes according to the rules of law chosen by the parties.

In rare cases where the chosen substantive law is unclear, the tribunal may rely on Section 15(5) of the AMA, which directs it to consider the nature of the contract and the trade practices of the parties when selecting an appropriate law to resolve the dispute.

According to Section 39(1) the Arbitration and Mediation Act (AMA), parties may agree to consolidate arbitral proceedings, even if they involve different parties, or to hold concurrent hearings, subject to terms agreed by the parties.

The key condition is that consolidation requires mutual agreement by the parties; the tribunal cannot order consolidation on its own initiative.

Additionally, Article 32(1) of the First Schedule to the AMA provides guidance on whether to consolidate or hold concurrent hearings, directing the tribunal to consider factors such as:

• whether all claims arise under the same arbitration agreement; and
• whether either:
• • common legal or factual issues exist across the arbitrations; or
  • the claims stem from the same transaction or series of transactions and are otherwise compatible.

Yes, Section 40(1) of the AMA grants the arbitral tribunal the authority to allow the joinder of an additional party, provided that the additional party is bound by the arbitration agreement that initiated the proceedings.

Pursuant to Section 91 of the AMA, the term ‘party’ includes any person claiming through or under a party to the agreement. Thus, an arbitration agreement can bind assignees of a party.

However, third parties that are not part of the arbitration proceedings are not bound by the agreement.

Section 7 of the Arbitration and Mediation Act (AMA) outlines the process for appointing arbitrators.

The parties can agree on their own appointment procedure, subject to the provisions in Sections 7(4) and 7(5) of the AMA.

However, if the parties do not select an arbitrator, Section 7(3) provides as follows:

• In a three-member tribunal, each party appoints one arbitrator and those two arbitrators appoint the third. If a third arbitrator is not appointed within 30 days, upon receiving a written request, an arbitrator is appointed by:
• • an appointing authority designated by the parties;
  • an arbitral institution in Nigeria; or
  • the court.
• For a sole arbitrator, upon receiving a written request, an arbitrator is appointed by:
• • an appointing authority designated by the parties;
  • an arbitral institution in Nigeria; or
  • the court.
• For multi-party disputes where each party is entitled to nominate an arbitrator but no agreement has been reached, any party may request that an arbitral institution in Nigeria or the court appoint the tribunal.

In international arbitration, if no procedure is specified in the arbitration agreement, Section 59(b) designates the director of the Regional Centre for International Commercial Arbitration, Lagos, as the appointing authority, pursuant to Section 7(2) of the AMA.

The parties to an arbitration agreement in Nigeria may agree on the number of arbitrators (see Section 6(1) of the AMA). If the parties do not specify a number, Section 6(2) of the AMA stipulates that the tribunal will consist of a sole arbitrator by default.

There is no specific statutory qualification for arbitrators under the AMA, which allows parties the flexibility to appoint individuals with the appropriate expertise or qualifications for their dispute.

Under Section 8(3) of the AMA, an arbitrator may be challenged if:

• there are justifiable doubts regarding their impartiality or independence; or
• they lack the qualifications agreed by the parties.

Section 8(4) of the AMA further specifies that a party may challenge an arbitrator whom it appointed (or was involved in appointing) only based on reasons discovered after the appointment was made.

The AMA provides that if an arbitrator’s mandate is terminated – whether due to a successful challenge, voluntary withdrawal, revocation by agreement or other reasons – a substitute arbitrator will be appointed following the same rules that applied to the original arbitrator’s appointment (see Section 11 of the AMA).

Under Section 7(5)(b) of the AMA, arbitrators must act with independence and impartiality.

(a) Procedure, including evidence?

Under Section 31 of the AMA, parties are free to agree on the procedural rules to be followed by the arbitral tribunal. In the absence of an agreed procedure, the tribunal will conduct proceedings according to the Arbitration Rules in the First Schedule to the AMA. Additionally, unless otherwise agreed by the parties, Section 38(1) of the AMA gives the tribunal discretion to decide whether proceedings will be conducted through:

• oral hearings;
• written submissions; or
• a combination of both.

Section 31(3) of the AMA grants the tribunal the authority to determine the admissibility, relevance, materiality and weight of any evidence presented.

(b) Interim relief?

Section 20 of the AMA empowers the arbitral tribunal to make interim reliefs or orders to:

• maintain or restore the status quo between the parties;
• take actions to prevent or refrain from actions that are likely to cause imminent harm or prejudice to the arbitral process;
• preserve assets that could be used to satisfy a potential award; and
• protect evidence that is relevant to the dispute.

(c) Parties which do not comply with its orders?

Under Section 41(4) of the AMA, if a party fails to comply with an order from the arbitral tribunal without showing cause, the tribunal can issue a peremptory order with a specified deadline for compliance.

In case of non-compliance with a peremptory order to provide security for costs, Section 41(5) of the AMA empowers the tribunal to dismiss the claim. In other cases of non-compliance, the tribunal may:

• bar the non-compliant party from relying on specific allegations or evidence;
• draw adverse inferences based on the non-compliance;
• proceed to make an award based on the evidence provided; or
• issue orders regarding costs incurred due to non-compliance.

An arbitration award holds the same authority as a court order. A party may apply to enforce the award under Sections 57 and 58 of the AMA, and non-compliance can lead to contempt proceedings.

(d) Issuing partial final awards?

The AMA is not explicit on this point; however, Section 56 states that an award review tribunal may partially or wholly set aside an award.

(e) The remedies it can grant in a final award?

Unless otherwise agreed by the parties, the tribunal, under Section 37(2) of the AMA, has broad powers to grant various remedies in a final award, including:

• issuing declarations on matters to be resolved in the proceedings;
• ordering payment of a monetary sum in any currency claimed by a party; and
• requesting court orders for specific remedies such as:
• • injunctive relief;
  • specific performance;
  • rectification;
  • setting aside; or
  • cancellation of a deed or other document.

(f) Interest?

Under Section 46 of the AMA, a tribunal may order the payment of interest, unless otherwise agreed by the parties. The tribunal’s powers regarding interest include the authority to:

• award simple or compound interest;
• set the date from which interest will apply, determine the applicable rate and specify the amount on which interest is calculated; and
• award both pre-award and post-award interest.

The AMA provides that parties may agree on what will happen where a party fails to participate in the arbitration proceedings.

In the absence of such agreement by the parties, the AMA provides that where the claimant fails to state its claims in accordance with Section 36(1) of the AMA, the proceedings will terminate, except where the respondent has a counterclaim (see Section 41(1)(a) of the AMA).

Also, in accordance with Section 41(1)(b) of the AMA, where the respondent fails to respond – that is, file its defence – in accordance with Section 36(1) of the AMA, the tribunal is empowered to carry on the proceeding without treating such non-compliance as an admission to the claimant’s claim.

Furthermore, where any party fails to appear at a hearing or to produce documentary evidence, the tribunal may continue the proceedings and make an award based on the evidence before it (see Section 41(1)(c) of the AMA).

Arbitrators generally enjoy immunity from civil liability under Section 13(1) of the AMA for any bona fide acts or omissions made in the performance of their functions.

However, Section 12(1)(b) of the AMA provides that an arbitrator is not immune from liability concerning the consequences of their withdrawal from office, unless the parties have agreed otherwise. If there is no such agreement between the parties, Section 12(2)(a)(i) allows the arbitrator to apply to the court for relief from any liability incurred due to their withdrawal from office.

Pursuant to Section 5 of the Arbitration and Mediation Act (AMA), if an action is brought before a Nigerian court on a matter that is covered by an arbitration agreement, the court must refer the parties to arbitration. The court may also:

• stay proceedings to preserve the rights of the parties; and
• make any necessary interim or supplementary orders.

The Nigerian Supreme Court in MV Lupex v NOC & S Ltd (2003) 15 NWLR (Pt 844) 469 affirmed that courts must honour arbitration agreements by staying proceedings initiated in violation of such agreements.

Additionally, in 2017, the chief justice of Nigeria advised heads of courts to issue practice directions to enforce arbitration agreements, with judges potentially imposing significant costs on parties that initiate court actions contrary to these agreements.

Based on Section 1(7) of the AMA, the courts in Nigeria can intervene in arbitrations seated outside the jurisdiction for the following reasons:

• to stay court proceedings (Section 5);
• to grant interim measures of protection (Section 19);
• for the recognition and enforcement of interim measures (Section 28);
• to refuse the recognition and enforcement of interim measures (Section 29);
• to secure the attendance of witnesses (Section 43);
• for the recognition and enforcement of awards (Section 57); and
• to refuse recognition and enforcement of awards (Section 58).

Parties do not have the right or power to exclude the court’s powers to hear or determine any issue by agreement.

The general rule is that costs are borne by the unsuccessful party in arbitration. However, the tribunal has the discretion to apportion costs between the parties where it considers such an arrangement reasonable (see Article 50 of the First Schedule to the Arbitration and Mediation Act (AMA)).

Section 50(1) of the AMA outlines the factors that the tribunal will consider in reaching a decision on costs, including:

• the fees of the arbitrators, which must be reasonable and reflective of the complexity of the dispute;
• travel and other expenses incurred by the arbitrators;
• the costs of expert advice or other assistance required by the arbitral tribunal;
• the travel and other expenses of the parties, witnesses and experts, to the extent that these expenses are approved by the tribunal, considering what is reasonable in the circumstances;
• the costs of legal representation and assistance of the successful party:
• • provided that such costs were claimed during the arbitral proceedings; and
  • only to the extent that the tribunal determines these costs to be reasonable;
• administrative costs, including those of the arbitral institution or appointing authority, venue costs and correspondence-related expenses;
• the costs of obtaining third-party funding, if applicable; and
• any other costs as approved by the arbitral tribunal.

Additionally, the tribunal may request a deposit for costs to be paid by the parties.

The AMA is silent on specific restrictions regarding what parties can agree upon in terms of costs. Therefore, the parties have flexibility in agreeing on cost arrangements, subject to the tribunal’s approval where necessary.

Yes, third-party funding is permitted under the Arbitration and Mediation Act (AMA). A ‘third-party funding agreement’ is defined as a contract between a third-party funder and:

• a disputing party;
• an affiliate of that party; or
• a law firm representing the party.

The purpose of the agreement is to finance part or all the costs of the arbitration proceedings, either for an individual case or as part of a portfolio of selected cases. The financing may be provided:

• through a donation;
• through a grant;
• in return for reimbursement that is contingent on the outcome of the dispute; or
• in exchange for a premium payment.

(See Section 91 of the AMA.)

A party benefiting from a third-party funding agreement must disclose the existence of such funding to the other party and the arbitral tribunal or arbitral institution. This disclosure must be made via a written notice, ensuring transparency in the proceedings (see Section 62(1) of the AMA).

By virtue of Section 47 of the Arbitration and Mediation Act (AMA), the following procedural and substantive requirements must be met for an award:

• The award must be in writing and signed by the arbitrator(s).
• The award must state the reasons for the decision, unless:
• • the parties have agreed that no reasons are necessary; or
  • the award is made on agreed terms.
• The award must indicate the date on which it was made.
• The award must specify the seat of arbitration, either:
• • as agreed by the parties; or
  • as determined by the tribunal.
• A signed copy of the award must be delivered to each party.
• The arbitral tribunal may make separate awards on different issues at different times.

See Article 42 of the Arbitration Rules.

The AMA is silent on the specific timeframe within which an award must be produced. However, it does provide a timeframe for the issuance of an additional award (see Section 45(1)). Upon a request for an additional award, the arbitral tribunal must issue the award within 60 days. This timeframe may be extended by the arbitral tribunal if necessary.

Under Section 31 of the AMA, parties are given the liberty to determine the conduct of the arbitral proceedings. Where this is not provided for, the procedure set out in the First Schedule will apply.

The First Schedule gives the tribunal the discretion to conduct the proceeding in a manner that is appropriate without delay and the tribunal can invite the parties to draw up a timetable for the conduct of the proceeding.

See Articles 17(1) and (2) of the First Schedule to the AMA.

Yes, arbitral awards are enforced in Nigeria, regardless of the country in which they were made. The procedure for enforcement requires:

• an application to the court by way of an originating motion;
• an affidavit in support; and
• the following supporting documents:
• • the original arbitral award or a certified copy thereof;
  • the original arbitration agreement or a certified copy thereof; and
  • where the award was not made in English, a certified translation of the award into English.

(See Article 1, Third Schedule to the Arbitration Proceeding Rules and Section 57(1)(2) of the Arbitration and Mediation Act (AMA).)

With the court’s approval, the arbitral award, by leave of the court, may be enforced in the same manner as a judgment or order with the same effect (see Section 57(3) of the AMA).

Additionally, a party may apply to the court to refuse recognition or enforcement of an award (see Section 58 of the AMA and Article 47 of the Arbitration Rules respectively).

Where the recognition and enforcement of any award made in an arbitration in a country other than Nigeria is sought, the New York Convention on Recognition and Enforcement of Foreign Awards provides that:

• the country in which the award was made must be a party to the New York Convention; and
• the dispute must arise from a legal relationship, whether contractual or not, which is considered ‘commercial’ under Nigerian law (see Section 60 of the AMA).

Under Sections 55(1) and (2) of the Arbitration and Mediation Act (AMA), an application to set aside an award cannot be based on an error on the face of the award or any other ground except those enumerated below:

• A party to the arbitration agreement was under some legal incapacity.
• The arbitration agreement is not valid:
• • under the law to which the parties have subjected it; or
  • failing such indication, under the laws of Nigeria.
• The party making the application:
• • was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings; or
  • was otherwise unable to present its case.
• The award deals with a dispute not contemplated by or not falling within the terms of submission to arbitration.
• The award contains decisions on matters that are beyond the scope of the submission to arbitration.
• The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless the agreement conflicts with provisions of the AMA from which the parties cannot derogate.
• There is no agreement between the parties regarding the composition of the arbitral tribunal or arbitral proceedings and the procedure adopted was contrary to the AMA.

Additionally, a court can, on its own motion, set aside an award on the following grounds:

• The subject matter of the dispute is not capable of settlement by arbitration under Nigerian law; or
• The award is against public policy.

In accordance with Section 56 of the AMA, where the parties have agreed that an award will be reviewed by an award review tribunal, an aggrieved party must serve a notice to challenge the award within three months of receiving it. The notice must be accompanied by the following documents:

• the original award or a certified copy thereof;
• the original arbitration agreement or a certified copy thereof; or
• where the award is not in English, a certified translation of the award into English.

If the parties do not agree on a procedure for the award review tribunal, it will follow the proper conduct of proceedings and deliver its decision within 60 days from the date of its constitution.

Yes, pursuant to Section 55(4) of the AMA, a party seeking to challenge an arbitral award must do so within three months of receiving the award.

The AMA is silent on whether parties can exclude rights of challenge or appeal. However, in practice, parties may have the flexibility to agree on such limitations, provided that they do not conflict with mandatory provisions of the law.

The Arbitration and Mediation Act (AMA) is silent on the explicit duty of confidentiality in arbitration proceedings. However, the AMA provides for confidentiality in the mediation process under Section 76. By implication, it can be inferred that arbitration proceedings should be treated as confidential, even though this is not expressly stated in the legislation. Arbitration proceedings are generally private and arbitrators can only make an award public with the consent of the parties involved, suggesting an implied rule of confidentiality in arbitration.

Yes, under Sections 76 (a)-(d) of the AMA, which address mediation, certain exceptions to confidentiality are stipulated. These exceptions, which could potentially apply by analogy to arbitration, include the following:

• where the law requires disclosure to be made;
• for the purpose of implementing or enforcing a settlement agreement;
• where disclosure is necessary to prevent or reveal:
• • the commission of a crime.
  • the concealment of a crime; or
  • a threat to a party; or
• where disclosure is necessary to protect public order, but only under conditions and within the scope prescribed by law.

Also, Article 42(5) of the Arbitration Rules states that an award may be made public only:

• with the consent of all parties; or
• where and to the extent disclosure is required of a party:
• • by legal duty;
  • to protect or pursue a legal right; or
  • in relation to legal proceedings before a court or other competent authority.