An arbitral award is the final decision or ruling issued by an arbitral tribunal in the resolution of a dispute submitted to arbitration. It is similar to a court judgment but is rendered by arbitrators instead of judges. The award settles the dispute between the parties and may include monetary compensation, specific performance, declaratory reliefs, or other remedies, depending on the terms of the arbitration agreement and the nature of the dispute. It can be domestic (issued in the same country where enforcement is sought) or foreign (issued in another country but recognized under international conventions like the New York Convention).
Arbitral awards are ordinarily binding on the parties without the need for recourse to the courts or any other enforcement mechanism. This binding nature stems from the contractual agreement between the parties to submit their disputes to arbitration and to abide by the outcome. Ideally, once an arbitral tribunal renders its decision, the parties are expected to comply voluntarily, as arbitration is meant to be a final and conclusive method of dispute resolution.
However, in practice, enforcement is not always automatic, as parties against whom an award has been made may refuse to comply for various reasons. Losing parties who are dissatisfied with the arbitration outcome tend to try to evade compliance by raising frivolous objections to the tribunal's reasoning or employ delay tactics. In other cases, they may allege procedural irregularities, lack of jurisdiction, or violations of public policy to resist enforcement.
Nigeria, under the new Arbitration and Mediation Act 2023 (AMA) which also makes the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards applicable, provides a unified legal framework to enforce foreign and local arbitral awards in Nigeria.
Local Arbitral Awards
Section 57 of the Arbitration and Mediation Act 2023 states 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, subject to the provisions of this section and section 58 of this Act.
The party relying on the award or applying for its enforcement shall supply;
a. the original award or a certified true copy of it;
b. the original arbitration agreement or a certified true copy of it; and
c. where the award or arbitration agreement is not made in the English language, a certified translation of it into the English Language, similarly, an award may, by leave of the Court, be enforced in the same manner as a judgment or order to the same effect.
Section 91(1) of the AMA defines "Court" to mean the High Court of a State, the High Court of the Federal Capital Territory, Abuja or the Federal High Court. Again, unless the parties otherwise agree and except for the purpose of appointing an arbitrator, "Court" under the AMA would also mean the Chief Judge of any of the Courts listed above, sitting as a Judge in Chambers.
This presupposes that, any of the courts listed above or a Chief Judge of any of the courts listed above, would have the jurisdiction to entertain an action for enforcement of a local or foreign arbitral award. In practice, to enforce a local arbitral award, recourse would be made to the applicable provisions of the relevant State High Court Civil Procedure Rules on enforcement of arbitral awards. For instance, Order 28 Rule 4(1) of the High Court of Lagos State (Civil Procedure) Rules, 2019 (the Rules) provides as follows:
(1) an award made by an arbitrator or a decision reached at the Multi-Door Court-House may be enforced by leave of a Judge in the same manner as a Judgement or Order of Court.
The combined reading of Order 28 Rule 3 (1), (2)(f), (3) and (4) of the Rules is to the effect that, an application for the enforcement of an arbitral award shall be by way of Originating Motion on Notice which shall;
a. state in general terms, the grounds of the application;
b. where the motion is founded on evidence by affidavit, be accompanied by a copy of the affidavit; and
c. be supported by a written address.
Again, the Rules also provide that a party applying for enforcement of an award, shall supply;
a. Duly authenticated original copy of the original award or a certified copy of the award; and
b. A copy of the original arbitration agreement or a duly certified copy of same.
Foreign Arbitral Award
Section 60 of the Arbitration and Mediation Act 2023 states that "Without prejudice to sections 57 and 58 of the Arbitration and Mediation Act 2023, where the recognition and enforcement of any award made in arbitration 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 an award, provided that the –
a. country is part of the New York Convention; and
b. differences arise out of a legal relationship, whether contractual or not, considered commercial under the laws of Nigeria."
This means the award must be rendered in a country that is a signatory to the Convention, and the party seeking enforcement must provide a certified copy of the award and arbitration agreement subject to Section 57 of the AMA.
Interestingly, Article III of the New York Convention on the Recognition and Enforcement of Foreign Awards provides, inter alia, as follows:
Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the articles.
This entails that, where for instance, a person seeks to enforce a foreign arbitral award in Nigeria, such enforcement shall only be done in line with the applicable Civil Procedure Rules of the Court before which such award is sought to be enforced.
Additionally, and in line with Section 57 of the AMA, Article IV of the New York Convention on the Recognition and Enforcement of Foreign Awards (the Convention), provides that, to obtain the recognition and enforcement of a foreign arbitral award, the person applying for such enforcement shall at the time of application, supply:
a. the duly authenticated original award or a duly certified copy thereof;
b. the original agreement in writing under which the parties undertake to submit all disputes arising between them to arbitration, in line with Article II of the Convention or a duly certified copy thereof.
The Convention also provides that where the said award or agreement is not made in an official language of the country in which the award is to be relied upon, the party applying for the recognition and enforcement of the award shall produce a translation of same in the official language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.
Refusal to Enforce Foreign/ Local Arbitral Awards
Nigerian courts can refuse enforcement of a foreign or local award on several grounds.
Under section 58 of the AMA, the court can refuse to enforce any arbitral award irrespective of the country it was given, if;
(a) At the request of the party against whom it is invoked, the party furnishes the court with proof that:
I. a party to the arbitration agreement was under some incapacity,
II. The arbitration agreement is not valid under the law for instance Nigerian 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,
III. The parties against whom the award was invoked were not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or were otherwise not able to present their case,
IV. The award deals with a dispute not contemplated by or does not fall within the terms of the submission to arbitration,
V. The award contains decisions on matters which are beyond the scope of the submission to arbitration, however, if the decisions on the 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 recognized and enforced,
VI. Another very pertinent point is where the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement between the parties,
VII. Where there is no agreement between the parties under sub-paragraph (VI) 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, or
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, or
(b) Where the court finds:
I. That the subject matter of the dispute is otherwise not capable of settlement by arbitration under the law of Nigeria.
II. That the award is against the public policy of Nigeria.
Similar grounds for refusal to recognize and enforce a foreign award are also provided for under the Convention. For instance, Article V (1) of the Convention provides, inter alia as follows:
Recognition and enforcement of the award may be refused at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;
The Convention, under (2) of Article V, also provides that recognition and enforcement of an arbitral award may also be refused if the competent authority of the country where the recognition and enforcement is sought finds that, the subject matter of the dispute is such as not capable of settlement by arbitration under the law of that country or where the recognition or enforcement of the award would be contrary to the public policy of that country.
In conclusion, the AMA makes the enforcement of local and foreign arbitral award cohesive and straightforward to parties seeking to enforce arbitral awards. It would also appear that the provisions of the AMA—with respect to enforcement or refusal to enforce local arbitral awards—were obtained from the New York Convention on the Recognition and Enforcement of Foreign Awards.
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.
