Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
International Arbitration
The role of the court during an arbitration
Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Answer ... The ACA has two separate provisions (Sections 4 and 5) relating to the stay of proceedings, which can produce different effects. Section 4, which has mandatory application, provides that the court must stay proceedings and refer the parties to arbitration where an action which is the subject of an arbitration agreement is brought before it, if a party so requests no later than when submitting its first statement on the substance of the dispute. Section 5, on the other hand, grants the court discretion as to whether to stay proceedings. It provides that if a party to an arbitration agreement commences any action in any court with respect to any matter that is the subject of that arbitration agreement, a counterparty to the arbitration agreement may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings and refer the parties to arbitration. The court may stay the proceedings if it is satisfied that there are no sufficient reasons why the matter should not be referred to the arbitration.

The Lagos Arbitration Law contains no such contradiction, as Section 6 makes it mandatory for the court to grant a stay where an action brought before it is the subject of an arbitration agreement, on the application of a party by no later than submission of its first statement on the substance of the dispute, so long as it concerns that matter.

For more information about this answer please contact: Babajide Ogundipe from Sofunde Osakwe Ogundipe & Belgore
Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

Answer ... Section 34 of the ACA and Section 59(1) of the Lagos Arbitration Law limit the scope of court intervention in the arbitration process to the extent provided in the legislation. Nigerian courts have the power to assist in arbitrations by:

  • staying proceedings and referring the parties to arbitration;
  • appointing an arbitrator under the ACA;
  • issuing witness subpoenas;
  • setting aside awards; and
  • enforcing awards.

In its 2013 decision in Statoil (Nig) Ltd v NNPC ([2013] 14 NWLR (PT 1373) 1) and its 2014 decision in Nigerian Agip Exploration Limited v NNPC ((2014) 6 CLRN 150 (CA) 176), the Court of Appeal affirmed that Section 34 of the ACA limits the ability of courts to intervene in arbitration matters to the specific instances contained in the legislation. However, in its 2016 decision in The Shell Petroleum Development Company of Nigeria Limited v Crestar Integrated Natural Resources Limited ((2016) 9 NWLR (Pt 1517) page 300), the Court of Appeal, while repeating the opinion contained in Statoil and Nigerian Agip Exploration, went further to distinguish between domestic arbitration governed by the ACA and international arbitration, which it ruled is not regulated by the ACA. Having made this somewhat dubious distinction, the court went on to hold that the Nigerian courts, in exercising their general powers to grant injunctions, may issue injunctions relating to international arbitration not governed by the ACA. The court then went on to restrain the continuation of an International Chamber of Commerce arbitration that was ongoing in London. That decision has been appealed to the Supreme Court.

The present position, on the back of these decisions, is that the extent to which the Nigerian courts may intervene in domestic arbitration is limited to the express powers granted by the relevant arbitration legislation. With regard to arbitration not governed by domestic arbitration legislation, the Nigerian courts may exercise the powers that they ordinarily possess.

For more information about this answer please contact: Babajide Ogundipe from Sofunde Osakwe Ogundipe & Belgore
Can the parties exclude the court's powers by agreement?

Answer ... No provision in either law precludes the parties from excluding the court’s powers by agreement. However, agreements that oust the jurisdiction of the courts may be held to be contrary to Nigerian public policy and unenforceable.

For more information about this answer please contact: Babajide Ogundipe from Sofunde Osakwe Ogundipe & Belgore
International Arbitration