Interventions Of Courts In Aid Of The Smooth Administration Of Arbitral Proceedings In Nigeria

INTRODUCTION:

Since colonial times, litigation has been the major means of resolving disputes between parties in Nigeria. These disputes encompass lands, chieftaincy, matrimonial, political, criminal, religious, traffic, commercial and other matters. Consequently, court dockets in Nigeria have become highly congested, making cases linger before trial courts for many years. This gets worse when cases go on appeal, and they often do. It's common to find cases lasting more than twenty years from the High Court to the Court of Appeal, and then to the Supreme Court. To decongest the court dockets, improve the efficiency of the dispute resolution machinery and to align with the increasing global trends, Alternative Dispute Resolution became imperative. Thus, the Arbitration and Conciliation Act ("the ACA, 1988") was enacted in 1988 to provide a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation, and to make applicable in Nigeria the Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention).

In Nigeria, there has been an obvious increase in the use of arbitration processes to resolve civil disputes. This surge is the outcome of disenchantment with the slow pace of the litigation process. The normal court system in Nigeria is notorious for being inefficient in resolving complex commercial disputes because of the overwhelming number of cases in the courts, coupled with the dearth of judges handling such matters and a lack of infrastructure. Our judges still take notes in long - hand, and there are no recording machines and other necessary gadgets.

The ACA, 1988 has now been repealed and replaced with the Arbitration and Mediation Act 2023 ("the AMA, 2023" or "the Act"). The Act, while retaining the objectives and most of the provisions of the ACA, 1988, introduces several new provisions aimed at improving the process of settling disputes in Nigeria through arbitration and mediation, and to align Nigeria's arbitral and mediation practices with global trends and best practices.

A major challenge to the growth of arbitration in Nigeria is the notorious trend where parties who had consented to take their disputes to arbitration subsequently approach the courts seeking to stall the arbitral proceedings or to set aside the arbitral awards that have been made. This article examines the circumstances under which the courts may rightly intervene in arbitral proceedings in Nigeria as provided in the AMA, 2023.

POWERS OF COURTS IN ARBITRAL PROCEEDINGS:

Parties to a dispute have the right to decide whether to approach the courts or choose any alternative dispute resolution means to resolve their disputes. Where parties have chosen arbitration as the means of resolving their dispute, it is the law that a court shall not intervene except where it is provided under the Act.¹ In the case of Statoil (Nig.) Ltd. v. N.N.P.C.,² the Appellant challenged the order of the Federal High Court granting an order of interim injunction restraining them from continuing with arbitral proceedings. The Court of Appeal per Akinbami, JCA, in interpreting the provisions of S. 34 of the Arbitration and Conciliation Act, which is in pari materia with S. 64 (1) of the Arbitration and Mediation Act, 2023 held that "In this instant case, the issuance of ex-parte interim injunction does not fall under the exceptions to section 34 of the Arbitration Act. It is very clear from the intendment of the legislature that the court cannot intervene in arbitral proceeding outside those specifically provided. Where there is no provision for intervention, this should not be done. The learned trial Judge of the lower court acted outside the jurisdiction conferred on him by granting the ex-parte interim order."

In a more recent decision on whether a court may intervene in arbitral proceedings, the Supreme Court per Garba, JSC in the case of N.N.P.C. v. Fung Tai Eng. Co. Ltd,³ held as follows:

From the decisions of both the Court of Appeal and the Supreme Court, it is abundantly clear that the appellate courts do not take any undue interference in arbitral proceedings by courts lightly. This attitude was aptly put by the apex court per Garba, JSC as follows:

The AMA, 2023 makes specific exceptions to the provisions of S. 64 thereof, and subsection (2) provides that applications to court in respect of any matter governed by the Act shall be in accordance with the Rules set out in the Third Schedule thereto. The exceptions are discussed hereunder.

i. Power to stay court proceedings on the same substantive claim:

Where an action is brought before a court, and the parties thereto have agreed in their contract to submit to arbitration, S. 5(1) of AMA, 2023 provides that the court at the instance of any party who has not taken any step in the proceedings refer the parties to arbitration unless it finds that the agreement is void, inoperative or incapable of being performed. This provision is in pari materia with the provisions of S. 5 of the ACA, 1988, and there is a plethora of judicial authorities on this. In the case of M. V. Lupex v. N.O.C.S. Ltd,⁵ Iguh, JSC (as he then was) held as follows:

The condition to be met by an applicant in an application for stay of proceedings pending arbitration is now well settled. In Enyelike v. Ogoloma,⁶ Saulawa, JCA held as follows:

By the provisions of subsection (3) of S. 5 AMA, 2023,⁷ a court that has made an order of stay of proceedings pending arbitration may make an interim or supplementary order for the purpose of preserving the rights of parties, as it may deem necessary in the circumstances.

ii. Power to appoint an arbitrator:

The AMA, 2023⁸ provides that a court may appoint arbitrators upon the request of a party to so do in the following circumstances:

1. do from the other party, or where the two arbitrators appointed by the parties fail to agree on the third arbitrator within 30 days of their appointment.
2. Where the parties fail to agree on the appointment of a sole arbitrator within 30 days after the receipt of a written communication containing a request for the dispute to be referred to arbitration.
3. Where the parties to a dispute are more than two, and the arbitration agreement entitles each party to nominate an arbitrator, if within 30 days of the receipt of a written communication containing a request for the dispute to be referred to arbitration, and the parties have not agreed in writing that the disputing parties represent two separate sides for the formation of the arbitral tribunal as claimant and respondent respectively.

iii. Power to appoint an Emergency Arbitrator:

Under the provisions of the AMA, 2023,⁹ a party that requires emergency relief may, at the time of filing a request for a dispute to be referred to arbitration or subsequently, but before the constitution of the arbitral tribunal, bring an application before the High Court of a State, High Court of the Federal Capital Territory or the Federal High Court for the appointment of an emergency arbitrator, except where any arbitral institution is so designated by the parties.

The AMA, 2023 provides that any decision of the Emergency Arbitrator, which shall be made in writing,¹⁰ shall be in the form of an order and shall be made within 14 days from the date on which the file is received by him, except where the duration is extended by agreement of the parties.¹¹ Any decision of the Emergency Arbitrator shall be recognised and enforced in the same manner as an interim measure¹² and shall be binding on the parties when rendered.¹³

The emergency arbitration allows parties to secure urgent relief before the arbitral tribunal is constituted. It addresses situations where immediate action is necessary to preserve rights and evidence and also prevent irreparable harm.

iv. Power to grant an interim measure of protection:

Apart from its powers under section 16 of the Act, a court also has the power under the AMA, 2023¹⁴ to issue interim measures of protection in relation to arbitration proceedings as it has in relation to proceedings in court. The power to grant interim measures of protection in relation to arbitration proceedings shall be exercised within 15 days of an application for the relief sought.

v. Power to recognise and enforce interim measures issued by an arbitral tribunal:

Upon an application pursuant to AMA, 2023,¹⁵ a court shall make an order for the recognition and enforcement of an interim measure issued by an arbitral tribunal, irrespective of the country in which it was issued. The court making such an order may, if it considers it proper, order the applicant to provide appropriate security where the arbitral tribunal has not already made such an order, or to protect the rights of third parties.¹⁶ The AMA, 2023 stipulates the grounds for the refusal of an application for the recognition and enforcement of an interim measure issued by an arbitral tribunal as follows:¹⁷

1. at the instance of the party against whom it is invoked, where the Court is satisfied that:
   
   1. The refusal is warranted on the grounds set forth in section 58(2)(a) (i), (ii), (iii), (iv), (v), (vi) or (vii) of this Act,
   2. decision of the arbitral tribunal with respect to the provision of security in connection with the interim measure issued by the arbitral tribunal has not been complied with, or
   3. interim measure has been terminated or suspended by the arbitral tribunal or, where so empowered, by a competent authority in the Country in which the arbitration takes place or under the law of which that interim measure was granted; or
2. where the Court finds that –
   
   1. the interim measure is incompatible with the powers conferred upon the Court, unless the Court decides to reformulate the interim measure to the extent necessary to adapt it to its own powers and procedures for the purposes of enforcing that interim measure and without modifying its substance, or<
3. any of the grounds set forth in section 58(2)(b) apply to the recognition and enforcement of the interim measure.

vi. Power to order attendance of witness:

A court may, upon the request of a party to arbitral proceedings, make an order that a writ of subpoena ad testificandum or subpoena duces tecum shall be issued to compel a witness anywhere within Nigeria to attend the proceedings before an arbitral tribunal.¹⁸ A court also has the power to order that a writ of habeas corpus ad testificandum shall be issued to bring up a prisoner for examination before any arbitral tribunal.¹⁹

vii. Power to order arbitral tribunal to deliver award:

An arbitral tribunal or arbitration institution is entitled to refuse to deliver an award to the parties except on full payment of the fees and expenses of the arbitrators or the arbitral institution.²⁰ However, in that circumstance, the court may, upon the application of a party, make an order that the arbitral tribunal or arbitral institution shall deliver the award where the applicant pays the fees and expenses demanded into court, or pays such lesser amount as the Court may specify.²¹

viii. Power to set aside an arbitral award:

A court has the power to set aside an arbitral award under the AMA, 2023²² where an applicant satisfies the conditions stipulated thereunder.²³ An application for setting aside an arbitral award must be made within three months of receipt of the arbitral award.²⁴ An order setting aside an arbitral award may be made by a court where an applicant is able to establish any of the following:

1. A party to the arbitration agreement was under some legal incapacity.
2. 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.
3. The party who makes the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise not able to present its case.
4. The award deals with a dispute not contemplated by or does not fall within the terms of the submission to arbitration.
5. The award contains decisions on matters which are beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside.
6. The composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties, unless the agreement was in conflict with a provision of this Act from which the parties cannot derogate.
7. Where there is no agreement between the parties under subparagraph (vi), that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with this Act.

The court may also make an order of setting aside where it finds that the subject matter of the dispute is otherwise not capable of settlement by arbitration under the laws of Nigeria, or the award is against public policy of Nigeria. The grounds for setting aside an arbitral award as contained in the AMA, 2023²⁵ are wider than those contained in the ACA, 1988.²⁶ Under the ACA, 1988,²⁷ provision was made for the setting aside of an arbitral award where an arbitrator has misconducted himself or where the arbitral proceedings or award have been improperly procured. It should be noted that this provision in the ACA, 1988 is not retained in AMA, 2023.

It is the law that an arbitral award is final and binding on the parties. Courts do not, therefore, have the jurisdiction to review the decisions contained in an arbitral award. The apex court per Kekere-Ekun, JSC (as he then was) stated that succinctly in NITEL Ltd. v. Okeke²⁸ when it held that "An application to set aside an arbitral award is not in the nature of an appeal against the award. An arbitral award is regarded as a final and conclusive judgment on all matters referred and the courts are enjoined, as far as possible to uphold and enforce arbitral awards, having regard to the fact that it is a mode of dispute resolution voluntarily agreed upon by the parties." (emphasis supplied)

ix. Power to recognise and enforce arbitral award made by an arbitral tribunal:

The AMA, 2023²⁹ provides that irrespective of the country or state in which an arbitral award is made, it shall be recognised as binding, and on application in writing shall be enforced by the Court. There shall be attached to an application for the recognition and enforcement of an arbitral award the following:

1. The original award or a certified copy of it;
2. The original arbitration agreement or a certified copy of it; and
3. where the award or arbitration agreement is not made in the English language, a certified translation of it into the English Language.

A court may refuse an application for the recognition and enforcement of an arbitral award where the Respondent(s) establishes any of the following:

1. A party to the arbitration agreement was under some incapacity.
2. The arbitration agreement is not valid under the law to which the parties have indicated should be applied, or that the arbitration agreement is not valid under the law of the country where the award was made.
3. The party against whom the award was invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise not able to present his case.
4. The award deals with a dispute not contemplated by or does not fall within the terms of the submission to arbitration.
5. The award contains decisions on matters which are beyond the scope of the submission to arbitration, so however that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced.
6. The composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties
7. Where there is no agreement between the parties under sub-paragraph (f), that the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the law of the country where the arbitration took place.
8. 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;
9. The subject matter of the dispute is otherwise not capable of settlement by arbitration under the laws of Nigeria.
10. That the award is against public policy of Nigeria.

CONCLUSION:

Arbitration is a private dispute resolution mechanism. However, arbitral tribunals require the support of the courts for efficient adjudication over disputes. Thus, though the AMA, 2023 clearly provides that a court shall not intervene in any matter governed by the Act, it made exceptions. The exceptions seem imperative for the smooth administration of arbitral proceedings in Nigeria, considering that arbitral tribunals are mostly ad hoc, and arbitration institutions lack the requisite machinery and powers of coercion. It is the law that where parties choose to submit to arbitration in case of a dispute and agree on an Arbitrator(s) to be the Judge(s) in the dispute, they cannot when the award is good on its face, object to the decision of the Arbitrator(s) either upon law or the facts.³⁰ Courts are therefore urged to heed the pronouncement of the apex court when it enjoined courts, "as far as possible to uphold and enforce arbitral awards, having regard to the fact that it is a mode of dispute resolution voluntarily agreed upon by the parties."³¹ It is, therefore, recommended as follows: i. In addition to the requirement in the Civil Procedure Rules in most High Courts in Nigeria that claimants file an affidavit of non-multiplicity of suit, such affidavits should also show that there are no arbitration agreements in respect of the subject matters of the suits; ii. Practice Directions should be issued imposing substantial costs against applicants and/or their counsel personally in respect of matters brought before the courts which the courts find frivolous and merely intended to terminate the arbitral proceedings or to frustrate the recognition and enforcement of the arbitral award contrary to the provisions of the Act; and iii. Appeal in respect of all arbitration matters should not be as of right but by leave of court. These recommendations, if implemented, will certainly discourage the trend of frivolous lawsuits arising from arbitral awards or matters governed by the AMA, 2023. The result will be that arbitration will become more attractive as a mode of dispute resolution in Nigeria.

Footnotes

1. Section 64(1), Arbitration and Mediation Act, 2023.

2. (2013) 14 NWLR (Pt. 1373) 1 at 29D – G.

3. (2023) 15 NWLR (Pt. 1906) 117 at 210A – D.

4. N.N.P.C. v. Fung Tai Eng. Co. Ltd (2023) 15 NWLR (Pt. 1906) 117 at 210E – G.

5. (2003) 15 NWLR (Pt. 844) 469 at 490C–F.

6. (2008) 14 NWLR (Pt. 1107) 247 at 258-259D-A.

7. Section 5(3), Arbitration and Mediation Act 2023.

8. Section 7(3)(a)-(c), Arbitration and Mediation Act 2023.

9. Section 16(1), Arbitration and Mediation Act 2023.

10. Article 27(4)(a), First Schedule to the Arbitration and Mediation Act 2023.

11. Article 27(2), First Schedule to the Arbitration and Mediation Act 2023.

12. Section 28, Arbitration and Mediation Act 2023.

13. Article 27(6), First Schedule to the Arbitration and Mediation Act 2023.

14. Section 19, Arbitration and Mediation Act 2023.

15. Section 28(1), Arbitration and Mediation Act 2023.

16. Section 28(3), Arbitration and Mediation Act 2023.

17. Section 29(1)(a) & (b), Arbitration and Mediation Act 2023.

18. Section 43(1), Arbitration and Mediation Act 2023.

19. Section 43(2), Arbitration and Mediation Act 2023.

20. Section 54(1), Arbitration and Mediation Act 2023.

21. Section 54(2)(a), Arbitration and Mediation Act 2023.

22. Section 55(1), Arbitration and Mediation Act 2023.

23. Section 55(3), Arbitration and Mediation Act 2023.

24. Section 55(4), Arbitration and Mediation Act 2023.

25. Section 55(3), Arbitration and Mediation Act 2023.

26. Section 29(2), Arbitration and Conciliation Act, 1988.

27. Section 30, Arbitration and Conciliation Act, 1988.

28. (2017) 9 NWLR (Pt. 1571) 439 at page 473AA-C.

29. Section 57(1), Arbitration and Mediation Act 2023.

30. R.M.A.F.C. v. U.E.S. Ltd. (2011) 9 NWLR (Pt. 1252) 379 at 406G.

31. NITEL Ltd. v. Okeke (2017) 9 NWLR (Pt. 1571) 439 at page 473AA-C.

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.