INTRODUCTION
Arbitration has become an increasingly preferred mechanism for resolving commercial disputes in Nigeria, offering parties a faster and more flexible alternative to litigation. However, the true effectiveness of arbitration lies in the ability to enforce arbitral awards seamlessly. While Nigeria has made significant strides in aligning its legal framework with international best practices, several challenges continue to impact the enforcement process. In Nigeria, the principal legislations on the enforcement of foreign arbitral awards are the Reciprocal Enforcement of Foreign Judgment Ordinance 1958, Foreign Judgment (Reciprocal Enforcement) Act 1961, and Arbitration and Mediation Act, 2023. This article seeks to highlight the inconsistencies inherent in these legislations that pose a threat to international best practices; and calls for a legislative amendment of those provisions.
JUDICIAL RECOGNITION AND ENFORCEMENT OF ARBITRAL AWARDS IN NIGERIA
In Nigeria, like in most other States, arbitral awards are generally considered final and "binding on all parties, and has the force of judgment." The judicial attitude is that of respect for party autonomy1 which emphasizes the liberty to agree on the 'rules of the game' and be bound by the outcome. Thus, the Nigerian Supreme Court had in Mr. Charles Mekwunye v. Mr. Christian Imoukhuede held inter alia: "An arbitral award is a final judgment on all matters referred to an arbitrator and as such courts are enjoined to, as much as possible, uphold or affirm and enforce arbitral awards when approached especially in view of the fact that parties had voluntarily resolved or agreed to submit to the jurisdiction of the arbitrator or arbitrators to resolve their dispute."2
In giving effect to arbitral awards, however, there is a duty on the courts to balance the goal of preserving the finality of arbitration with the public policy of safeguarding the integrity of arbitration as a veritable alternative to litigation.3 These public policy considerations have been codified in various instruments, including the Arbitration and Mediation Act, the Foreign Judgment (Reciprocal Enforcement) Act, etc.
ENFORCEMENT UNDER THE FOREIGN JUDGMENT (RECIPROCAL ENFORCEMENT) ACT 1961 AND RECIPROCAL ENFORCEMENT OF FOREIGN JUDGMENT ORDINANCE 1958.
A foreign arbitral award can be enforced in Nigeria through either the Foreign Judgment (Reciprocal Enforcement) Act 1961 or the Reciprocal Enforcement of Foreign Judgment Ordinance 1958 as if it were a foreign judgment. While the 4 Reciprocal Enforcement of Foreign Judgments Ordinance (REFJ Ordinance) was promulgated to5 cover the registration of judgments obtained in Nigeria, the United Kingdom, and other parts of Her Majesty's dominions and territories, the Foreign Judgment (Reciprocal Enforcement) Act (FJRE Act) 1961 is intended to have wider reach beyond6 the Commonwealth States upon positive order made by the Minister of Justice extending Part 1 of the Act to any foreign country in accordance with section 3(1) thereof. The order is to be made upon satisfaction that judgments issued in Nigeria will be7 treated with substantial reciprocity in terms of enforcement in that foreign country.8
It should be noted that the Minister of Justice has not yet issued any positive order for the full implementation of the FJRE Act as required by section 3 of the FJRE Act.
However, section 10(a) of the FJRE Act states that, notwithstanding any other provision of the Act, a judgment issued before the commencement of an order under section 3—applying Part I of the FJRE Act to the foreign country where the judgment was given—can still be registered within twelve months from the date of the judgment, or within a longer period if permitted by a superior court in Nigeria.9
Section 2 of FJRE Act defines judgment to include "an award in proceedings on an arbitration if the award has in pursuance of the law in force in the place where it was made become enforceable in the same manner as a judgment given by a court in that place ..." Also, section 4 (1)(b) of the FJRE Act, provides that such judgments, including awards, would be refused registration and enforcement if at the time of the application, "it could not be enforced by execution in the country of the original court." What is clear from the above provisions is that for a foreign award to be enforceable in Nigeria under the FJRE Act, it must be capable of enforcement as a judgment at the seat. I Tulip (Nig.) Ltd. v. N.T.M.n S.A.S, the Nigerian Court of Appeal, Lagos Division held that "an arbitral award made in England can only be elevated to the status of a judgment if the party in whose favour the award was made had applied before the English High Court for leave to enforce the arbitral award in the same manner as a judgment and once the High Court in England grants such an order, it then becomes a judgment of the English High Court. It is only then that the Reciprocal Enforcement of Judgments Ordinance ... and Foreign Judgments (Reciprocal Enforcement) Act will apply."10
The implication of the above is that only awards granted exequatur at the seat can be registered, recognized, and enforced in Nigeria under the REFJ Ordinance or the FJRE Act. Without prejudice to the ideological differences of various approaches for enforcement of awards annulled at the seat, it is not in contention that annulled awards cease to exist, at least, in the seat and cannot be enforced therein. The consequence is that such annulled awards cannot be enforced in Nigeria under the REFJ Ordinance or the FJRE Act. This is because there are no provisions for the exercise of discretion to checkmate the grounds for the annulment under the above laws.
Essentially also, both the FJRE Act and REFJ Ordinance recognize as a pre-condition for the enforcement of foreign awards in Nigeria, the reciprocity treatment between Nigeria and the forum state that rendered the arbitral award.
While the REFJ Ordinance was enacted to ease the reciprocal enforcement of judgments obtained in Nigeria, the United Kingdom, and other parts of Her Majesty's dominions under the protection of the United Kingdom, the FJRE Act specifically grants authority to the Minister of Justice to make an order, expanding reciprocal treatment to any foreign country demonstrating substantial reciprocity regarding enforcement of judgment obtained in Nigeria. Unfortunately, the Minister of Justice is yet to make any positive order in this regard till date.
ENFORCEMENT UNDER THE ARBITRATION AND MEDIATION ACT, 2023
The Arbitration and Mediation Act ("AMA") was enacted in May 2023 and contains innovative improvements on the state of the erstwhile Nigerian law on arbitration (the now repealed Arbitration and Conciliation Act, Cap. A18, Laws of the Federation of Nigeria, 2004 ("ACA")) to reflect international best 11 practices. Section 57(1) of AMA explicitly recognizes the binding nature of both domestic and foreign arbitral awards on the parties. It provides that "an arbitral award shall, irrespective of the country or state in which it is made, be recognized as binding, and on an application in writing to the court, be enforced by the court..." This provision attenuates the reciprocity reservation made by Nigeria to the New York Convention. Thus, the use of irrespective of the country or State" broadens the enforceability of foreign awards with little or no attention to the country such an award emanated from. Additionally, the requirement of exequatur as per confirmation of the award by the court of the seat is dispensed with under the AMA.
Section 58 of AMA provides exhaustive grounds upon which the Nigerian courts 'may' refuse recognition and enforcement of awards. Specifically, section 58(2) provides that "irrespective of the country in which the award was made, the Court may only refuse recognition or enforcement of an award – (a)(viii) the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, the award was made;" This provision is identical with Article V(1)(e) of the New York Convention.
It is noteworthy that section 60 of AMA mandates Nigerian courts to enforce a convention award under the governance of the New York Convention but without prejudice to sections 57 and 58 of 12 AMA. This implies that a convention award is still subject to the grounds for refusing recognition and enforcement under section 58 of AMA.
THE INCONSISTENCIES IN ENFORCEMENT OF FOREIGN AWARDS UNDER THE FOREIGN JUDGMENT (RECIPROCAL ENFORCEMENT) ACT 1961, THE RECIPROCAL ENFORCEMENT OF FOREIGN JUDGMENT ORDINANCE 1958, AND THE ARBITRATION AND MEDIATION ACT, 2023.
As stated earlier, under the REFJ Ordinance and FJRE Act, recognition and enforcement of foreign awards are limited to awards obtained in the United Kingdom, other parts of Her Majesty's territories; and states whose awards have been empowered to be enforced in Nigeria pursuant to the Minister of Justice's positive order under section 3 of the FJRE Act, which executive order is yet to be given. The recognition and enforcement of awards obtained from the aforementioned countries in Nigeria is based on reciprocity treatment. Thus, such awards are recognized and enforced upon satisfaction that judgments or awards issued in Nigeria will be treated with substantial reciprocity in those countries.
On the contrary, section 57(1) of AMA (which replicated the provision of section 51 of ACA) explicitly recognizes the binding nature and enforceability of foreign awards "irrespective of the country or state" in which it was made. The AMA dispenses with the requirement of reciprocity as a pre-condition for the recognition and enforcement of foreign awards. This provision resonates with the objectives of the New York Convention which promotes cross-border arbitrations of which Nigeria is a signatory. In Calais Shipholding Company v. Bronwen Energy Trading Ltd, the Court of Appeal giving credence to13 Section 51 of ACA held that "...the Arbitration and Conciliation Act provided a simpler and much easier approach to the registration in Nigeria, of such foreign awards. ... Thus, subject to Section 32 and 51(2) of the Arbitration and Conciliation Act, an arbitral award obtained anywhere in the world can be registered and recognized by any Court in Nigeria ..."
Furthermore, under the REFJ Ordinance or FJRE Act, foreign judgments (including arbitral awards) must be registered in Nigeria as a prerequisite for recognition and enforcement. However, the position14 under the AMA (as well as the repealed ACA), is that the requirement of registration of a foreign arbitral award as a condition precedent is not necessary. Hence, in Ogbuneke Sons and Company Ltd v. ED & F Man Nigeria Ltd & Ors, the Court of Appeal held thus: "truly, and as was pointed out by the learned counsel for the appellant, the requirement of registration before recognition is not contained in the provision of section 51(1) of the Arbitration and Conciliation Act 1988. ... In relation to the present case, the implication of the provision of section 51(1) of the Arbitration and Conciliation Act 1988, is that a foreign award remains binding, without any requirement of registration and even before an application in writing for enforcement is made to the court."15
It is also important to state that under the FJRE Act, an application for the registration of the foreign award must be filed within 6 years (where the Minister of Justice has made a positive order under section 3) or 12 months (where the Minister of Justice has not made a positive order under section 3) of the delivery of the award to the appropriate court.
It follows that where the award creditor fails to apply for the registration of the award within the time frame provided by the FJRE Act, such an award cannot be enforced. However, under the AMA, there is no provision for registration or time frame for registration of an award. This implies that enforcement of foreign arbitral awards can be initiated at any time without impediment as to timeframe.
Further, Section 4(1)(b) of the FJRE Act provides that judgments, including awards, will be denied registration and enforcement if, at the time of the application, they "could not be enforced by execution in the country of the original court." The FJRE Act's above provisions align with the double exequatur prerequisite inherent in the 1927 Geneva Convention, which the New York Convention abolished. It is important to note that the double exequatur prerequisite is non-existent under the AMA (as well as repealed ACA). The Court of Appeal in Emerald Energy Resources Ltd v. Signet Advisors Ltd held that "the relevant provision to determine how an arbitral award from England or anywhere in the world can be enforced is Section 51 of the ACA which I had reproduced above. The relevant provision is Section 51 and once this provision is adhered to, the foreign arbitration award will be enforced in Nigeria. ... Thus, subject to Section 32 and 51(2) of the Arbitration and Conciliation Act, an arbitral award obtained anywhere in the world can be registered and recognized by any Court in Nigeria without recourse to a foreign Court to first adopt same as its judgment."16
Whereas the above position is consistent with the policy objectives of the New York Convention, it must be noted that the Court in Emerald's case did not strike down or void sections 2, 3(1), and 4(1)(b) of the FJRE Act for being inconsistent with ACA nor did the court hold them inapplicable to enforcement of foreign arbitral awards in Nigeria. Also, there is nothing in AMA to suggest that the position has changed. Accordingly, an award debtor may seek to rely on the FJRE Act to resist enforcement of an award and there is no clear direction on how the courts should resolve the dilemma.
As discussed above, there is still a yearning gap on the state of the law in Nigeria on enforcement of foreign arbitral awards, especially if annulled at the seat. The provision of the FJRE Act requiring that a foreign award should not be registered in Nigeria if "it could not be enforced by execution in the country of the original court" constitutes an imposition of more onerous conditions for recognition and enforcement of foreign arbitral award in Nigeria and in effect negates the obligation under Article III of the New York Convention. Apparently, the freedom of a State to "recognize and enforce awards pursuant to conditions it determines for itself" is made17 "subject only to compliance with the international obligations it has undertaken in this respect"18 including obligations under the Convention.
Thus, in resolving the conundrum, it is important to observe that Nigeria has signed, ratified, and domesticated the New York Convention, with an obligation to comply with its provisions. Therefore, Nigeria cannot shirk or justify a breach of the obligations on the altar of municipal legislation. The Nigerian Supreme Court has held in Abacha & Ors v. Fawehinmi, that when a treaty has been enacted into law by the Nigerian National Assembly, it becomes "elevated to higher pedestal" in relation to other municipal legislations and "if there is a conflict between it and another statute, its provisions will prevail over those of that other statute for the reason that it is presumed that the legislature does not intend to breach an international obligation."19 Consequently, the obligations created under the Convention should prevail over the specifications of the FJRE Act on compulsory exequatur of the seat and reciprocity requirement.
Secondly, the AMA is a specific legislation in terms of arbitration and arbitral awards and was enacted later in time than the FJRE Act with the effect that the AMA's provisions should prevail over the FJRE Act in the event of conflict. In AMCON v. Canvass Farms Ltd, (where the author represented the respondent) the Nigerian Court of Appeal held that the AMCON Act 2010 is a specific legal regime enacted later in time than the Companies and Allied Matters Act. 2004 "and should therefore, in the event of any conflict or inconsistency between the two enactments ... prevail."20 Accordingly, sections 57 and 58 of AMA should be interpreted in a manner that will prevail and override the provisions of sections 2, 3(1), and 4(1)(b) of FJRE.
Footnotes
1 Kano State Urban Development Board vs. Fanz Construction Co Ltd (1990) 6 Supreme Court Cases (hereinafter "S.C."), P.103
2 (2019) 13 NWLR (PT. 1690) PAGE 439 at P. 501
3 Ecobank v. Admiral Environmental Care Ltd & Ors (2021) Law Pavilion Electronic Law Report (hereinafter "LPELR")-56130(CA)
4 Section 2 of the 1961 Act defines the term "judgment" to include an arbitral award
5 Cap 175, Laws of the Federation of Nigeria and Lagos, 1958, hereinafter referred to as the "REFJ Ordinance"
6 Cap 152, Laws of the Federation of Nigeria, 1990, hereinafter referred to as the" FJRE Act"
7 FJRE Act, Section 9(1)
8 FJRE Act, Section 3(1)
9 See, Macaulay V R. Z. B. Austria (2003) 18 NWLR (Pt.852) 282
10 Tulip (Nig.) Ltd. v N.T.M. S.A.S supra at Note 156
11 Harrison Ogalagu & Nnamdi Ezekwem, "The Nigerian Arbitration And Mediation Act, 2023 - The Dawn Of A New Era For Arbitration And Mediation Practices In Nigeria, accessed on 6th September 2024
12 The Convention has been domesticated into Nigerian law by Section 60 and the Second Schedule to the AMA 2023
13 (2014) LPELR – 23122(CA). See also, Emerald Energy Resources Ltd v. Signet Advisors Ltd (2020) LPELR – 51385(CA)
14 Orojo J.O & Ajomo M.A, (1999) Law and Practice of Arbitration and Conciliation in Nigeria, Mbeyi & Associates (Nig.), p. 304
15(2010) LPELR – 4688(CA)
16 (2020) LPELR – 51385(CA)
17 Gaillard, E. supra at note 17, p. 136
18 Ibid
19 (2000) LPELR – 14(SC)
20 (2021) LPELR-54651(CA)
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