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31 July 2025

Legal Framework For The Enforcement Of Foreign Arbitral Awards In Nigeria

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Arbitration is an alternative dispute resolution mechanism to litigation, giving the opportunity for Parties to resolve disputes without having to file a suit in the Court.
Nigeria Litigation, Mediation & Arbitration

Arbitration is an alternative dispute resolution mechanism to litigation, giving the opportunity for Parties to resolve disputes without having to file a suit in the Court. Arbitration is a mechanism used in resolving commercial disputes. It is widely seen that commercial arbitration is now popular in international transactions due to its short timeframe and effectiveness in resolving disputes. Arbitral Awards are the end game for both domestic and international arbitration proceedings; that is, it is the decision of an Arbitral Tribunal.

An international Arbitration is one comprising parties from different countries or nationalities. It also applies where the subject matter of dispute arises from a foreign jurisdiction or the seat of Arbitration was in a foreign jurisdiction. Once the Arbitral Tribunal in an international Arbitration has delivered its Arbitral Award, the successful party has the right to have it recognised and enforced against the opposing party in a domestic Court in their country or jurisdiction. The Arbitral Award obtained by a successful Party in international arbitration proceedings is called a foreign Award.

For the purpose of this Article, we shall consider the following legal framework for the recognition and enforcement of foreign arbitral Awards in Nigeria:

1. The International Centre for the Settlement of Investment Disputes (ICSID) Convention

2. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards

3. The Arbitration and Mediation Act of Nigeria, 2023

4. The Foreign Judgments (Reciprocal Enforcement) Act Cap F35 LFN, 2004

A. The International Centre for the Settlement of Investment Disputes (ICSID) Convention

The International Centre for the Settlement of Investment Disputes (ICSID) is a neutral forum for dispute resolution between nations and foreign investors1. The ICSID is an independent international institution created under the Convention on the Settlement of Investment Disputes between States and Nationals of other States, with over 140 member States.2 The Convention was ratified by Nigeria on August 23, 1965, and domesticated in the year 1967, through the International Centre for Settlement of Investment Disputes (Enforcement of Awards) Act3.

An arbitration proceeding can be conducted under the Convention where the parties to the dispute mutually agree to submit the dispute for resolution under the platform of the International Centre for Settlement of Investment dispute; the dispute between the parties must centre on investment; and only a contracting state and nationals of other contracting states qualify as proper parties under the ICSID. However, it is worth noting that there is also a special provision known as the ICSID Additional Facility. This is a facility established for parties who do not fall within the ambit of the purpose of ICSID. An ICSID award must, unless the period is extended, be made within 60 days after the closure of the proceedings. The Tribunal can extend this period by an additional 60 (Sixty) days.4

It is provided under Article 54 of the Convention that: "Each contracting state shall recognise an award rendered pursuant to this Convention as binding and enforce the pecuniary obligation imposed by that award within its territories as if it were a final judgment of a court in that state. A contracting State with a Federal Constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state". It can be seen from Article 54 of the Convention that an ICSID Award cannot be challenged in the courts of the place of Arbitration or before any other court. The Award is enforced at the apex Court of the contracting states, and it is absolute and binding on all parties.

B. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (The New York Convention)

Article 1(1) of the New York Convention states: "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".5

Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958. Hence, the Convention applies in Nigeria. The New York Convention has been incorporated into the second Schedule of the Arbitration and Mediation Act of Nigeria, 2023. Enforcement under this Convention is subject to 2 reservations, viz, the reciprocal reservation and the commercial reservation.

A successful party that seeks the recognition and enforcement of a Convention Award in Nigeria shall file and attach the following documents with the application:

i. The duly authenticated original Award, or a duly certified true copy;

ii. The original Arbitration agreement, or a duly certified true copy;6

iii. Where the Award or the Arbitration agreement has not been made in English, the successful party shall produce a translation of those documents into the English language. Such translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.7

C. Arbitration and Mediation Act of Nigeria, 2023

The legislation in Nigeria providing for the recognition and enforcement of foreign Arbitral Awards is the Arbitration and Mediation Act, which was enacted in the year 2023. This legislation was enacted to establish a comprehensive legal framework for the fair and efficient resolution of commercial disputes through Arbitration and Mediation and to render applicable the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly referred to as the New York Convention, to any Award rendered in Nigeria.

The Arbitration and Mediation Act provides that "An Arbitral Award shall, irrespective of the country or state in which it was made, be recognized as binding, and on application in writing to the Court, be enforced by the Court subject to the provisions of this section and section 58 of this Act." In addition to this, the party seeking to enforce the Award shall supply the original Award or a certified true copy of it, the original Arbitration agreement or a certified copy of it, and in the situation where the agreement or Award is not delivered in the English language, a certified translation of it into the English language. This will give the court the power to proceed in granting the application for recognition and enforcement.

In addition, a foreign arbitral award may be enforced directly pursuant to the New York Convention. Thus, the Act provides that, without prejudice to Sections 57 and 58 of the Act, where the recognition and enforcement of any Award made in an Arbitration proceeding in a country other than Nigeria is sought, the New York Convention on the Recognition and Enforcement of Foreign Awards, set out in the second schedule to the Act, applies to the Award, provided the country is part of the New York Convention and the differences arise out of a legal relationship, whether contractual or not, considered commercial under the laws of Nigeria.

A party that seeks to enforce an Award under the Arbitration and Mediation Act can apply to the court to enforce the Award as a Judgment of the court. The application must set out the grounds on which the Award is sought to be enforced. The application must be filed along with a supporting affidavit exhibiting an authenticated original Award or certified true copy , and original Arbitration agreement or a certified true copy.

There are categories of Awards that are unenforceable, that is, the court can refuse to enforce such Awards. These are provided for in section 52 of the Arbitration and Mediation Act. These grounds where the enforcement of a foreign Arbitral Award will be refused are as follows:

A. Incapacity of a party to enter the Arbitration agreement.

B. Invalidity of the Arbitration Agreement.

C. The party against whom it was made was not given due notice on the appointment of the Arbitrators.

D. The Award contains matters beyond the submission to Arbitration.

E. The Award contains matters beyond the scope of Arbitration or incapable of settlement by Arbitration under Nigerian law.

F. The Arbitration procedure or Tribunal was not in line with the parties' agreement.

G. The Award has not yet become binding or has been set aside, or has been suspended.

H. The Award was not made in compliance with the applicable law.

I. The Award is against public policy.

D. The Foreign Judgments (Reciprocal Enforcement) Act Cap F35 LFN, 2004

An Arbitral Award is considered a judgment in Nigeria. According to section 2(1) of the Foreign Judgments (Reciprocal Enforcement) Act 1960 (Foreign Judgments Act), a Judgment means a judgment or order given or made by a court in any civil proceedings and shall 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, or a judgment or order given or made by a court in any criminal proceedings for the payment of a sum of money in respect of compensation or damages to an injured party.8 However, for a foreign Award to qualify for enforcement under the Act, it must be an award relating to money.

According to Section 4 of the Foreign Judgments Act, a judgment creditor, may apply to a superior court in Nigeria at any time within six years after the date of the judgment, or, where there have been proceedings by way of appeal against the judgment, after the date of the last judgment given in those proceedings, to have the judgment registered in such court.

However, the Arbitration and Mediation Act of 2023 made a provision with respect to the limitation period for the enforcement of Awards. It provides that: "An applicable statute of limitation shall apply to arbitral proceedings as it applies to judicial proceedings." This provision means that the same time limits (statutes of limitation) that apply to judicial proceedings (lawsuits in court) will also apply to arbitral proceedings (arbitration).

Foreign judgments that qualify for enforcement under this Act are in three categories:

a. Judgments made in the courts of any part of the Commonwealth other than Nigeria or in relation to those parts of Her Majesty's Dominions.9

b. Foreign Judgments of a Superior Court given by an original court in a country, which the Minister of Justice in Nigeria recognizes pursuant to an Order under section 3 of the Act, if the Minister is satisfied that substantial reciprocity of treatment will be accorded to the enforcement of judgments of superior courts in Nigeria in such foreign country.10

c. Foreign judgments which had been registered under the Reciprocal Enforcement of Judgments Ordinance of 1958 at the time of the coming into operation of any powers vested by section 3 of the Act. Such judgments are to be treated as if they were registered under the Act and once compliance with the provisions of the Ordinance had already been met; the judgment(s) shall be taken to have satisfied the requirements of the Foreign Judgments (Reciprocal Enforcement) Act by operation of law11.

E. Conclusion

The recognition and enforcement of foreign Arbitral Awards in Nigeria is direct and clear. This shows Nigeria's creation of a positive environment for international commercial Arbitration and reliability in the country's dispute resolution management. The Arbitration and Mediation Act 2023, which also brought an encouraging provision in respect to the limitation of time of enforcement of Award,s is also a positive act for the development of domestic and international arbitration in Nigeria.

Footnotes

1 McArthur and Ormachea, International-State Arbitration: An Empirical Analysis of ICSID Decisions on Jurisdiction, 28 Rev. Litig. 5559 (2009); Comment: ICSID's Resurgence in International Investment Arbitration: Can the Momentum Hold? 23 Penn. St. Int' 'l L. Rev. 147 (2004); Amerasinghe, The International Centre for Settlement of Investment Disputes and Development Through the Multinational Corporation, 9 Vand. J. Transnat' 'l L. 793 (1976).

2 ML Moses (n.2)

3 1967 No 49. This is currently contained in Cap. I 20, Laws of the Federation of Nigeria, 2004.

4 Arbitration Rule 38 and 46

5 New York Convention of 1958, Article III

6 New York Convention, Article IV.1 (a) & (b)

7 Ibid., article IV.2

8 Foreign Judgments (Reciprocal Enforcement) Act 1960, Section 2(1)

9 s 9(1) of the Foreign Judgment (Reciprocal Enforcement) Act.

10 s 3 of the Foreign Judgment (Reciprocal Enforcement) Act.

11 Cap 175, s 3 of the Foreign Judgment (Reciprocal Enforcement) Act.

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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