Challenging And Enforcing Arbitration Awards In Nigeria - Sovereign Immunity: Public Sector Government

Applicable requirements as to form of arbitral awards

Must an award take any particular form (eg, in writing, signed, dated, place, the need for reasons, delivery)?

The primary legislation applicable to arbitration is the Arbitration and Conciliation Act, Chapter A18, Laws of the Federation of Nigeria 2004 (ACA). Section 26 of the ACA states that an arbitral award shall be in writing and signed by the arbitrator or arbitrators, and that if the arbitral tribunal comprises of more than one arbitrator, the signatures of a majority of the members of the arbitral tribunal shall suffice providedthe reason for the absence of any signature is stated.

Furthermore, the award shall state the reasons upon which its conclusions are based unless the parties have agreed that no reasons are to be given or the award is on agreed terms under section 25 of the ACA (consent award). The award shall also state the date on which it was made and the place of arbitration. A copy of the award shall be delivered to each party.

Applicable procedural law for recourse against an award

2 Are there provisions governing modification, clarification or correction of an award?

Section 28 of the ACA provides that a party may, within 30 days of receipt of an arbitral award, with notice to the other party, request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors or any errors of a similar nature, and give an interpretation of a specific point or part of the award. The tribunal shall revert within 30 days. The tribunal may also on its own volition, within 30 days of the date of the award, correct any error.

The parties can also request the arbitral tribunal to make an additional award as to the claims presented in the arbitral proceedings but omitted from the award. An additional award shall be made within 60 days of the request.

Applicable procedural law for recognition and enforcement of arbitral awards

May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?

An arbitration award is final and there is no provision for an appeal arising therefrom under Nigerian law. However, sections 29 and 30 of the ACA provide three grounds for setting aside a domestic award.

Section 29(2) provides that the court may set aside an arbitral award if a party makes an application (on notice to the other party) and furnishes proof that the award contains decisions on matters that are beyond the scope of submission to arbitration. However, if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the award that contains decisions on matters not submitted may be set aside.

Section 30(1) provides two further grounds for setting aside an arbitral award. The first ground is if an arbitrator has misconducted himself or herself. The instances of misconduct were set out by the Supreme Court of Nigeria in Taylor Woodrow (Nig.) Limited v S.E. GmbH [1993] 4 NWLR (Pt 286) 127. Second, the court may set aside an award if it was improperly procured or tainted by fraud.

Whereas an appeal attacks the merits of an arbitral award (which is not permitted under Nigerian law), a setting aside application is essentially a complaint that due process was not observed by an arbitral tribunal in making an arbitral award.

With regard to international awards, section 48 of the ACA (which mirrors article V of the New York Convention 1958) provides two grounds for setting aside the award:

if a party making the application furnishes proof that – (i) that a party to the arbitration agreement was under some incapacitation; (ii) that the arbitration agreement is not valid under the law that the parties have indicated should be applicable; (iii) that he or she 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; (iv) that the award deals with a dispute not contemplate by, or falling within the terms of the submission to arbitration; (v) that the award contains decisions on matters that are beyond the scope of the arbitration; (vi) that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; (vii) where there was no agreement within the parties under paragraph vi, that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with this Act [the ACA]; or
if the court finds that – (i) that the subject matter of the dispute is not capable of settlement by arbitration under the laws of Nigeria; or (ii) that the award is against the public policy of Nigeria.
What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

Section 51 of the ACA provides that an arbitral award shall, irrespective of the country in which it is made, be recognised as binding and shall, upon the award creditor's application, be enforced by the court.

Nigeria is a signatory to the New York Convention (NYC), and has domesticated the Convention by incorporating it as the Second Schedule to the ACA. Thus, a foreign arbitral award may be enforced in Nigeria under the ACA or, directly pursuant to the New York Convention (Tulip Nigeria Ltd v Noleggioe Transport Maritime [2011] 4 NWLR (Pt 1237) 254).

Nigeria ratified the International Centre for Settlement of Investment Disputes (ICSID) Convention in 1965, and domesticated it through the International Centre for Settlement of Investment Disputes (Enforcement of Awards) Act 1967.

A foreign arbitral award may also be enforced pursuant to the Reciprocal Enforcement of Judgments Act 1922, which was promulgated to ensure ease of registration and enforcement of court judgments obtained in the United Kingdom and certain Commonwealth countries and includes the enforcement of arbitral awards in the definition of judgments, as long as they have become enforceable as judgments of a court in the country in which the award was handed down.

Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under article I(3) of the Convention?

Nigeria is a party to the New York Convention. It acceded to the Convention on 17 March 1970, which formally came into force in the territory of Nigeria on 15 June 1970.

Nigeria made a reservation under article 1(3) of the Convention to the effect that she would apply the Convention only on the basis of: reciprocity to the recognition and enforcement of awards made only in the territory of another contracting state party to the Convention, and to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the laws of the Federal Republic of Nigeria.

Note, however, that in so far as recognition and enforcement of arbitral awards in Nigeria is concerned, the reservation made relating to reciprocity appears to have been waived by the provisions of section 51 of the ACA (discussed in question 4).

Recognition proceedings

6 Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?

Both the Federal High Court and the various state high courts have jurisdiction to entertain an application to enforce an arbitral award, be it domestic or foreign. Magbagbeola v Sanni [2002] 4 NWLR (Pt 756) 193. That said, the Court of Appeal ruled in Kabo Air Limited v The O'Corporation Limited [2014] LPELR 23616 CA, albeit in the context of the enforcement of a judgment of the High Court of Gambia, that it is the particular court that would have had original subject-matter jurisdiction over the underlying dispute that would have capacity to entertain an application to enforce a foreign judgment arising therefrom. Accordingly, it may be prudent to file an application for enforcement of an arbitral award in the particular court; Federal High Court or state high court, which would have had jurisdiction to entertain the subject matter of the dispute that was resolved in the arbitration.

However, in respect of an ICSID award, the Supreme Court of Nigeria is the only court with jurisdiction to entertain enforcement proceedings.

What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

For the court to have jurisdiction over an application for recognition and enforcement of an award it must have jurisdiction over the award debtor, either by virtue of the award debtor being present in Nigeria and being served with process or by virtue of the award debtor being amenable to service of process outside the jursidiction under the applicable rules of court for this purpose. To exercise jurisdiction, the court must be satisfied that the recognition and enforcement processes have been properly served on the award debtor.

There is no requirement that an applicant must identify assets within the jurisdiction of the Nigerian court that will be the subject of enforcement for the purpose of recognition proceedings. This matter would only come up after the enforcement order has been granted and the applicant wishes to levy execution. At this stage, specific information on the defendant's assets will be required to enable the issue of execution processes.

8 Are the recognition proceedings in your jurisdiction adversarial or ex parte?

Recognition proceedings in respect of an arbitral award are usually adversarial as most of the applicable rules of court provide that recognition proceedings shall be 'on notice'. Although Order 52, Rule 16(1) of the Federal High Court (Civil Procedure) Rules 2009 provide that the proceedings may be commenced ex parte, the court will invariably order the respondent to be put on notice since any resultant order would affect the respondent's assets.

9 What documentation is required to obtain the recognition of an arbitral award?

The following documentation is required to be attached to the enforcement application under the ACA 1988:

the duly authenticated original award or a duly certified copy thereof;
the original arbitration agreement or a duly certified copy thereof; and
if an award or arbitration agreement is not made in the English language, a duly certified translation thereof into the English language.

In addition to the above statutory requirements, the courts have also required:

the name and last known place of business of the person against whom the award is intended to be enforced; and
a statement that the award has not been complied with, or complied with only in part.

See: Imani & Sons Ltd v Bil Construction Co Ltd [1999] 12 NWLR [Pt. 630] 253.

If the required documentation is drafted in another language than the official language of your jurisdiction, is it necessary to submit a translation together with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be?

Yes, it is necessary to submit a translation as required under section 51(2)(c) of the ACA. The translation shall be certified by a court-approved translator or by a diplomatic agent. A full translation is necessary.

11 What are the other practical requirements relating to recognition and enforcement of arbitral awards?

A party seeking leave to enforce an award will have to pay the applicable filing fee. The fees will be assessed by the appropriate court registry on a scale that is reviewed from time to time. At present, the Federal High Court charges on the average, a sum equivalent to US$150 as filing fees for an application for the recognition and enforcement of a foreign arbitral award. The various state high courts charge a sum equivalent to less than US$100 as filing fees.

If the court recognises an award and grants leave to enforce, the mode of enforcement will determine the fees that are payable. For instance, if the award creditor chooses the route of filing garnishee proceedings to attach the monies in the bank accounts of the award debtor, the filing fee payable for a garnishee proceeding is about 3,000 naira. However, if there are no available funds, the award creditor would have to apply for a writ of fieri facias to execute the award against the movable assets of the award debtor. This route is quite expensive as the court sheriff may have to enlist the assistance of recovery specialists and other external agents to secure these assets. The costs of this exercise will lie between 150,000 and 200,000 naira.

12 Do courts recognise and enforce partial or interim awards?

Yes, the courts will recognise and enforce partial or interim awards in so far as it is a final determination of the substantive issues and questions in a reference, as distinct from procedural orders and directions. Indeed, a partial award was enforced in Celtel Nigeria BV v Econet Wireless Ltd & Ors [2014] 2 CLRN 63.

What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under article V of the Convention?

Section 52 (2) of the ACA 1988 list the grounds for refusal of enforcement. These grounds are essentially drawn from article V of the NYC and can be broadly split into two.

First, if the party against whom an award is sought to be enforced furnishes proof of the presence of vitiating elements, such as: that the arbitration agreement was invalid by reason of the incapacity of one of the parties thereto, or that it was not valid under the governing law of the jurisdiction of either the contract or the seat of arbitration; or that the award deals with a dispute that does not fall within the terms of the submission to arbitration; or that the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties; or that the award has been set aside by a court at the seat of arbitration.

Second, if the court finds that the subject matter of the dispute is not arbitrable under Nigerian law, or that enforcement of the award would be against public policy.

Apart from the statutory grounds, the courts have ruled that an arbitral award (domestic or foreign) will not be recognised or enforced if it is statute barred. The enforcement application must be filed within the six years after the cause of action arose (City Engineering Nigeria Limited v Federal Housing Authority [1997] 9 NWLR (Pt 520) 244).

What is the effect of a decision recognising the award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?

Once the proceedings for recognition and enforcement of an award are properly initiated, and the award is recognised; it is immediately enforceable as if it were a judgment of the court in Nigeria. Shell Trustees (Nig.) Ltd v Imani & Sons (Nig.) Ltd [2000] 6 NWLR (Pt 662) 639.

The award debtor is entitled to challenge the recognition decision on its merits before the appellate courts.

What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?

Any final decision of the state high court or Federal High Court refusing recognition can be challenged by an appeal to the Court of Appeal, and subsequently to the Supreme Court if necessary.

Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?

Considering that one of the grounds for refusal of enforcement of an award is that the award has been set aside or suspended by a court in which, or under the law of which, the award was made, it is highly likely that the courts will adjourn recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration.

There are no reported cases we are aware of in which this issue has arisen in Nigeria.

If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?

Section 52 (3) of the ACA 1988 provides that if an application for setting aside of the award has been made at the seat, the court before which the recognition or enforcement is sought may, if it considers it proper, postpone its decision and may on the application of the party claiming recognition or enforcement of the award, order the other party to provide appropriate security.

We are not aware of any case law in Nigeria in which this specific issue has been determined. However, drawing on the analogous situation in maritime practice where a defendant may be ordered to provide security for the release of an arrested vessel, it has been held that the factors which would be considered by the court in ordering security for costs include: (i) whether the plaintiff's claim is bona fide and not a sham; (ii) if there is an admission by the defendant on the pleadings or elsewhere which shows that the defence (or the annulment application as the case may be) is weak; (iii) if it appears by credible evidence that there is reason to believe that the defendant will be unable to pay the costs of the action if the defence (or annulment application) is unsuccessful; (iv) if the residence of the defendant is incorrectly stated in its papers, unless the misstatement is innocent and made without any intention to deceive; (v) if a defendant is only temporarily resident in the jurisdiction and has no known assets therein which can be attached; (vi) whether the application for security for costs is being used oppressively so as to stifle an otherwise genuine claim. Oduba v Houtmangracht [1997] 6 NWLR (Pt 508) 185.

Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? In case the award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?

Although there is no reported case law on this issue; given the provisions of section 52(2) of the ACA 1988 (listed above), it is safe to say that the Nigerian courts will not ordinarily entertain an application to recognise and enforce an award that has been set aside at the seat.

In a situation where the fact that the award has been set aside at the seat of the arbitration was not brought to the court's attention during the recognition proceedings; the award debtor can, before the award was enforced, apply to the enforcing court to set aside the decision on grounds premised upon the annulment of the award. However, once the award has been enforced and satisfied, it will not be possible to reverse the enforcement on this basis.

Service

What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?

The different State High Courts and the Federal High Court have different rules for service. Thus, the procedure for service of extrajudicial and judicial documents to a defendant in Nigeria will depend on the applicable State High Court Rules or the Federal High Court Rules. In most instances, the rules require judicial processes to be personally served on the award debtor (if a natural person), or to be served at the award debtor's registered office or advertised place of business (if a juridical entity) within the jurisdiction. It is important to note however that where the documents to be served are issued by a court or tribunal outside Nigeria, it is the procedure prescribed by the Federal High Court Rules that will apply.

What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?

The various rules of court require the applicant to file a without-notice application to obtain leave of the court to serve extrajudicial and judicial documents on a defendant who is out of jurisdiction. The grounds upon which such leave will be granted are stated in the various rules of court and generally require that the applicant establish a nexus between the defendant and/or the cause of action and the forum. Once leave is granted, the court will require satisfactory proof of service (ie, an acknowledgement slip duly signed or stamped, or other reliable document that evidences service).

Identification of assets

Are there any databases or publicly available registers allowing the identification of an award debtor's assets within your jurisdiction?

There are no publicly available registers allowing the identification of an award debtor's assets in Nigeria in a situation where no information exists as to the identity of these assets. There are publicly available registers by which the status of known assets may be confirmed or verified. For example, information about land ownership can be found at the land registry in each state.

Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

Order IX (Judgment Summons) of the Judgment Enforcement Rules made pursuant to section 94 of the Sheriffs and Civil Processes Act (SCPA) 1945 empowers a court, upon a judgment (or award) creditor's application, to issue a summons to compel a judgment (or award) debtor to disclose his or her assets within the jurisdiction.

Section 9 of Order IX provides that upon the issue of a judgment summons, the judgment debtor may file in duplicate a full statement and account of all property of whatever nature belonging to him, whether in expectancy or possession, and whether held exclusively by him or jointly with others, or by others in trust for him, excepting the necessary wearing apparel of himself and his family and the necessary implements of his trade, if any, to the value of ten naira, and of the places respectively where such property is to be found.

If at the hearing of the summons the judgment debtor shall satisfy the court that he or she has made a full surrender and discharge of his property, failing which he or she may be committed to prison.

Enforcement proceedings

Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?

Interim measures are available in Nigeria. An applicant can invoke the powers of the courts to grant injunctive orders in all cases in which it appears to the court to be just or convenient so to do. These powers can be exercised to grant injunctive orders to preserve assets both before and during enforcement proceedings. Any such interim measure may be made either unconditionally or upon such terms and conditions as the court may consider appropriate.

In practice, the applicant may be required to demonstrate that there is a real risk of dissipation of these assets before the enforcement proceedings are initiated and completed.

The above relief would not be exercised against assets owned by a sovereign state. Nigerian law upholds the doctrine of sovereign immunity, which protects the assets of a foreign sovereign from execution.

What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?

An application for interim measures will be commenced ex parte on grounds that the assets may be irretrievably dissipated if the award debtor is given notice of the application. Any interim order made by the court will be served on the award debtor alongside a substantive application for interlocutory relief. The interim order will abate after a fixed period (seven or 14 days in most instances). The court may grant an extension for a further period. Within this period, it is expected that the substantive application will be argued and, if successful, an interlocutory injunctive order restraining dealing with the asset will be issued by the court to preserve the asset until the final determination of the enforcement proceedings.

What is the procedure for interim measures against immovable property within your jurisdiction?

The procedure for obtaining interim measures against immoveable property is same as the procedure in question 24.

What is the procedure for interim measures against movable property within your jurisdiction?

The procedure for obtaining interim measures against movable property is same as the procedure outlined in question 24.

27 What is the procedure for interim measures against intangible property within your jurisdiction?

On the assumption that intangible property as referred to here relates to property such as shares in a company, etc; the procedure for obtaining interim measures against such property will be fact specific and depend on the type of intangible property involved. This procedure will be a modified version of the procedure outlined in question 24.

What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?

Any party who has been granted leave to enforce an award by the court will be able to enforce it as though it were a court judgment. If there is no stay of execution or of proceedings because of a pending appeal or challenge to the award, the award creditor will apply to attach assets belonging to the award debtor. An application will need to be made by the judgment creditor to the court for the issuance of a writ of attachment, which will need to be signed by the judge.

Note that there are some statutory limitations in place against attachment or execution against certain state property. For example, section 84 of the Sheriffs and Civil Processes Act (SCPA) 1945, the consent of the Attorney General of either the Federation or individual state must be obtained before attaching public funds. This can be a difficult process as the consent of the Attorney General to attach state funds is notoriously difficult to obtain. That said, a writ of mandamus to compel the Attorney General's consent may be obtained from the courts if such consent is unreasonably refused (Onjewu v Kogi State Ministry of Commerce and Industry & Ors [2003] 10 NWLR (Pt. 827) 40).

29 What is the procedure for enforcement measures against immovable property within your jurisdiction?

An award creditor can apply to the court for a writ of execution against the immovable property of the award debtor if no moveable property of the judgment debtor can, with reasonable diligence, be found, or if the movable property is insufficient to satisfy the award and the costs of execution (section 44 of the SCPA).

30 What is the procedure for enforcement measures against movable property within your jurisdiction?

The SCPA details various methods of execution of a judgment debt. First, a writ of fieri facias (fifa) can issue against movable property. The writ empowers the Sheriff to seize and sell an adequate quantity of goods belonging to the award debtor until the judgment debt is satisfied.

Second, garnishee proceedings may be commenced to order a third party who is indebted to, or in custody of funds belonging to the award debtor to pay directly to the judgment creditor the debt due or so much of the debt as may be sufficient to satisfy the award and the costs of the enforcement proceedings.

Third, a judgment summons can be issued to cause the award debtor to attend court and be examined on oath concerning his ability to pay the debt. If the court is satisfied that the debtor can pay but chooses not to, he or she may be committed to prison. If, however, it is proven that the debtor has genuine difficulty in paying, the court can make orders such as payment of the debt in instalments.

31 What is the procedure for enforcement measures against intangible property within your jurisdiction?

On the assumption that intangible property as referred to here relates to property such as shares in a company, that property can be attached by a court order in satisfaction of the award debt. The court's order to divest ownership of such shares from the award debtor for the purpose of satisfying the debt would be served on the company secretary and the company's registrars to ensure compliance. Indeed, section 151(2) of the Nigerian Companies and Allied Matters Act, Chapter C20, Laws of the Federation of Nigeria 2004, provides that company shares can be transferred by an instrument of share transfer, or by operation of law.

Enforcement against foreign states

Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

There are no specific rules.

33 What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?

Diplomatic channels are used for the service of legal documents on a foreign state. Such documents are transmitted through the Nigerian Ministry of Justice and the Nigerian Ministry of Foreign Affairs to the government of the foreign state (Order 7, Rule 18 of the Federal High Court Rules 2009).

Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?

The Diplomatic Immunities and Privileges Act (DIPA) 1962 protects the official residence and offices of the envoy of a foreign state from attachment or seizure by judicial process in Nigeria.

Aside from the limited diplomatic immunity contained in the DIPA, the common law doctrine of sovereign immunity will avail, in the absence of an express waiver, to protect the assets of foreign sovereigns from execution in Nigeria.

Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?

Section 2 of the DIPA allows a foreign state entitled to immunity to waive such immunity in the same way that a person who is entitled to the benefit of a statutory provision can decide to waive it and allow the transaction to proceed as though the provision did not exist.

Having said that, while it is settled that jurisdictional sovereign immunity can be waived, as was done in the cases of African Reinsurance Corporation v Fantaye [1986] 3 NWLR (Pt 32) 811, African Reinsurance Corporation v AIM Consult Ltd [2004] 11 NWLR (Pt 884) 223 and Oluwalogbon v Government of UK [2005] 14 NWLR (Pt 946) 760, it is doubtful that these authorities support, or are applicable to the issue of, waiver of sovereign immunity against the attachment of sovereign assets, if the initial jurisdictional hurdle is cleared.

Originally published 28 April, 2020

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.

Nigeria: Challenging And Enforcing Arbitration Awards In Nigeria