Nigeria: Paper On The Enforcement Of Intra-Arbitration Awards

TABLE OF CONTENT

1. Introduction
2. Context of New York Convention
3. Enforcement of foreign awards under the ACA
4. Enforcement of foreign awards under the OHADA ACT
5. Comparison Between the ACA and The OHADA Act in Recognition and Enforcement of Arbitral Awards
6. Challenges to The Recognition and Enforcement of Foreign
7. Arbitral Awards in Nigeria
8. Recommendation

INTRODUCTION

Arbitration as a process begins by consensus of parties, made either at the point of contract, or after a dispute has arisen, that certain matters which are or may be in contention between the parties will be resolved by submitting them to arbitration and not by litigation, and that the parties will honour the valid award of the arbitrator in respect of matters referred to him in accordance with the arbitration agreement. Where a party fail to honour the award, the other party can proceed the courts for recognition and enforcement of the award. One major advantage of arbitration is that an arbitral award is internationally recognized and can be enforced in another jurisdiction as opposed to litigation.

An arbitration award, regardless of the quality of its reasoning and the terms of its decision, loses much of its value if it is not enforceable.

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention was adopted by the United Nations member states in June 1958 as a guide for the recognition and enforcement of foreign arbitral awards amongst contracting states.

Nigeria became a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards in March 17, 1970 and the New York Convention rules are domesticated by S.54 of the Arbitration and Conciliation Act (Cap A18 L.F.N. 2004). However, often times, after the arbitral proceedings and an award is given in a foreign, a successful party encounters difficulty in enforcing the award of a foreign arbitration panel, through the Nigerian Courts.

This paper seeks to discuss the enforcement of Intra African arbitral awards in Nigeria in relation with the Organization for The Harmonization of Business Law in Africa (OHADA) region.

CONTEXT OF THE NEW YORK CONVENTION

Article I of the New York Convention sets out its scope of application. Paragraph 1 of the said Article I provides that "This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought".

Article I also provides two reservations which a nation may adopt when acceding to the Convention. The first allows a nation to apply the New York

Convention on the basis of reciprocity, so that it need only recognize awards made in another State which has ratified the Convention. The second reservation allows a nation to apply the New York Convention only to those transactions considered "commercial" under its own national law.

Article IV of the New York Convention provides for the procedure for obtaining enforcement of an award. It is to the effect that to obtain the recognition and enforcement of an award in a contracting state, the party applying for recognition and enforcement shall, at the time of the application, supply:

1. The duly authenticated original award or a duly certified copy thereof;
2. The original agreement referred to in article II or a duly certified copy thereof.

Paragraph 2 of Article IV states that "If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent".

Recognition and enforcement of the award may be refused under any of the following circumstances as provided by paragraph IV of the Convention:

1. A party to the arbitration agreement was, under the law applicable to him, under some incapacity, or the arbitration agreement was not valid under its governing law;
2. A party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case;
3. The award deals with an issue not contemplated by or not falling within the terms of the submission to arbitration, or contains matters beyond the scope of the arbitration (subject to the proviso that an award which contains decisions on such matters may be enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those matters not so submitted);
4. The composition of the arbitral tribunal was not in accordance with the agreement of the parties or, failing such agreement, with the law of the place where the hearing took place (the "lex loci arbitri");
5. The award has not yet become binding upon the parties, or has been set aside or suspended by a competent authority, either in the country where the arbitration took place, or pursuant to the law of the arbitration agreement;
6. The subject matter of the award was not capable of resolution by arbitration; or
7. Enforcement would be contrary to "public policy".

ENFORCEMENT OF FOREIGN AWARDS UNDER THE ARBITRATION AND CONCILIATION ACT

The venue where an application can be made for the recognition or enforcement of foreign arbitral award in Nigeria is the Court. S. 57 (2) of the Arbitration and Conciliation Act of Nigeria defined court to mean the High Court of a State, the Federal High Court, and the High Court of Federal Capital Territory Abuja.

Section 51 of the Arbitration and Conciliation Act (CAP A18, LFN, 2004) provides a unified legal framework for recognition and enforcement of arbitral awards of both local and foreign arbitral awards thus;

1. "An arbitral award shall, irrespective of the country in which it is made, be recognized as binding and subject to section 32 of this Act, shall, upon application in writing to the court, be enforced by the court.

2. The party relying on an award or applying for its enforcement shall supply;
3. the duly authenticated original award or a duly certified copy thereof;
4. the original arbitration agreement or a duly certified copy thereof; and
5. where the award or arbitration agreement is not made in the English language, a duly certified translation thereof into the English language."

In Ebokam v. Ekwenibe & Sons Trading Company, (2001) NWLR 2 (Pt. 696),32, the Nigerian Court of Appeal listed the following requirements needed for a party seeking recognition and enforcement under the New York Convention. The requirements are as follows:

1. The arbitration agreement;

2. That the dispute arose within the terms of the submission;

3. That arbitrators were appointed in accordance with the clause which contains the submission;

4. The making of the award; and

5. That the amount awarded has not been paid.

Application to court for recognition and enforcement of an award is to be made by a Motion on Notice. Once the Court recognizes the award by granting leave to the creditor to register same, it shall be enforced as a judgment of that Court.

Under S.52 of the ACA, the application for enforcement may be refused if the respondent against whom enforcement is sought provides proof of the following facts:

1. That a party to the arbitration agreement was under some incapacity.
2. That the arbitration agreement is not valid under the law in which the parties have indicated should be applied.
3. That he was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings.
4. That the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration.
5. That the award contains decisions on matters which are beyond the scope of the submission to arbitration.

ENFORCEMENT OF FOREIGN AWARDS UNDER THE OHADA UNIFORM ACT ON ARBITRATION

Article 30 of the OHADA provides that an arbitral award may be forcefully executed only by virtue of an order of exequatur granted by the competent Judge of a Member State.

Article 31 provides that a party that wishes to enforce an arbitration award in a member state must produce the following:

1. The original award;
2. the arbitration agreement or copies of the documents meeting the conditions required to establish their authenticity.
3. Where those documents are not written in one of the original language(s) of the Member State where the exequatur is demanded, the party shall submit a translation certified by a translator registered on the list of experts established by the competent courts.

Where the award is manifestly contrary to international public policy of the member states, recognition and the exequatur shall be denied by the court.

COMPARISM BETWEEN THE ACA AND THE OHADA ACT IN RECOGNITION AND ENFORCMENT OF ARBITRAL AWARDS

One major variance in enforcement of an award under the ACA and that of the OHADA Act is that under the OHADA Act, an award may be forcefully enforced only when an order of exequatur granted by the competent judge of a Member State, while under the ACA, an application is made to the court for enforcement as provided under S.51 of the Act.

Also, under the OHADA ACT, the major ground for refusal to grant an exequatur is that the award is contrary to public policy of member states. While under the ACA the court will refuse to recognize and enforce an award where that the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Nigeria, or that the recognition or enforcement of the award is against public policy of Nigeria and also the other grounds sated in S.52 (2)(a) (paragraph i to viii) of the ACA.

S.51 of the ACA provides that an arbitral award shall, irrespective of the country in which it is made, be recognized as binding and subject to section 32 of this Act, shall, upon application in writing to the court, be enforced by the court. However, the scope of the OHADA act is within the OHADA region.

There is no time limit when recognition and enforcement of an arbitral award may be sought under the OHADA Act before the courts of a member state. Although the ACA does not state any limitation of time, however, In City Engineering Nig. Ltd v F.H.A. (1997) NWLR (Pt 520)224, the Supreme Court decided that the limitation period for the enforcement of an arbitral award is six years and that time starts to run from the date of the accrual of the cause of action in the arbitration agreement and not from the date of making the arbitration award except where the arbitration is one under Scott v Avery provision in which case right of action is suspended until after the making of an award and in which case time shall run from the making of an award.

CHALLENGES TO THE RECOGNITION AND ENFORCEMENT OF FOREIGN

ARBITRAL AWARDS IN NIGERIA

1. Statutory Limitation Periods:

As stated earlier, under Nigerian Law, the limitation period for the enforcement of an arbitral award is six years which starts to run from the date of the accrual of the cause of action in the arbitration agreement. See City Engineering Nig. Ltd v F.H.A. (Supra).

2. Jurisdiction of the Enforcing Court:

A party seeking to enforce a foreign arbitral award may also be faced with an objection to the jurisdiction of the enforcing court, this is because the subject matter of the arbitration could affect the jurisdiction of the court to enforce an arbitral award.

3. Unrestricted appeals against orders enforcing arbitral awards:

One of the greatest challenges facing the enforcement of foreign arbitral awards is the penchant for unsuccessful parties to appeal orders of the enforcing court. This causes unnecessary delay to the Successful party from enjoying the benefit of the award.

RECOMMENDATIONS

1. It is imperative for our Arbitration laws to be reviewed in line with international best practices. The Supreme Court decision on the computation of time for limitation period within which to enforce an arbitral award does not conform with international best practice. There is a need to review the law.

2. With regards to which Court has jurisdiction to enforce an award, the issue of subject matter should not be a consideration at all when it comes to the enforcement proceedings.

3. In an bid to promote trade and commerce across the African Continent, A uniform arbitration treaty that will apply to both the Anglophone and Francophone States should be considered.