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Advancing Arbitration in Nigeria: Challenges and Opportunities
Advancing Arbitration in Nigeria: Challenges and Opportunities
Arbitration is a procedure wherein disputes are mutually referred to an Arbitral Tribunal for settlement. Professional arbitrators, rather than a court with appropriate authority, then present their case for the ultimate conclusion. Subject to the parties' consent, it is an alternate conflict resolution process that often takes place in secret. Arbitration agreements are final unless both parties agree otherwise or a judge with appropriate authority grants permission to modify them. The number of arbitrators engaged in the procedure is usually agreed upon by the parties; however, in cases where the necessary agreement does not contain such a provision, the number of arbitrators will be assumed to be three. Any of the arbitrating parties may, at any time after appearing in court but before filing pleadings, ask the court to halt proceedings if any of the parties to an arbitration agreement start legal action in any court. When the presiding court determines that there is no good reason why the matter should not be brought before an arbitration panel by the current arbitration agreement, it may issue such an order.
Certain jurisdictions in Nigeria have determined that it is necessary to include certain provisions for Alternative Dispute Resolution in their Civil Procedures Rules. These include the Federal Capital Territory Abuja High Court (S. 259 of the 1999 Constitution of the Federal Republic of Nigeria), the Lagos State High Court (Order 25, High Court of Lagos State (Civil Procedure) Rules 2012), and the Rivers State High Court, which have all made it mandatory for the resolution of non-contentious commercial disputes. The first law governing arbitration in Nigeria was the Arbitration Act of 1914, which was later renamed Cap. 13 of the Amended Laws of Nigeria in 1985. The main law governing arbitration in Nigeria is the Arbitration and Conciliation Act of 2004, which domesticated the United Nations Conventions on the Recognition and Enforcement of Foreign Arbitration Awards 1958. A contract's arbitration clauses or a separate agreement signed by the parties may give rise to an arbitration process as a result of the parties' agreement. All arbitral procedures within Lagos State are governed by the Lagos State Arbitration Law 2009 unless all parties have specifically agreed that another arbitration law would apply. Nigeria is bound by the 1985 Convention on Recognition and Enforcement of Foreign Arbitral Awards. A model legislation called UNCITRAL Arbitration was created by the United Nations Commission on International Trade to assist member countries in arbitration processes. All individuals, except babies, mentally retarded individuals, and bankrupts, have the legal capacity to engage in an arbitration agreement. Parties to arbitration agreements must possess contractual capacity. In Nigeria, arbitration procedures are often private, and parties who feel wronged frequently challenge arbitrators' rulings in court.
Numerous obstacles stand in the way of Nigeria's adoption of arbitration as a commercial dispute resolution process, including the requirement to expand the authority of arbitral tribunals and their limited enforcement capabilities. International countries find it easier to enforce arbitration rulings, and the New York Convention on the Recognition and Enforcement of Foreign Arbitration rulings in 1985 lays out specific guidelines. Because parties must pay arbitrators according to the total number of arbitrators appointed, arbitration procedures may be more costly than litigation. The Federal and State governments should reenergize already-existing institutions to provide greater access to arbitration and other alternative dispute resolution procedures to guarantee affordability.
The inability of the arbitration procedure to compel the consolidation of lawsuits, which is necessary for justice and a fair trial, is another disadvantage. It is recommended that the Arbitration and Conciliation Act, Cap. 18, Laws of the Federation of Nigeria, 2004 be modified to include modern business advancements and enhance the authority of certified arbitrators in Nigeria. For Nigerian judges and solicitors, required training in mediation, arbitration, and other alternative conflict resolution techniques is also necessary. The Lagos State government's intention to create operational Multi-Door Court House facilities in their various regions has the potential to expedite the resolution of business disputes and offer ancillary advantages. The developing legal system and statutory organisations established to oversee arbitration processes in Nigeria provide witness to the unrealized potential of the country's legal system.
Written by: Vaishnavi Rastogi
Supervised by: Adv. Kalyan Khrishna Bandaru
- Arbitration in Nigeria faces obstacles including limited tribunal authority and enforcement capabilities.
- Costliness of arbitration, lack of consolidation of lawsuits, and outdated arbitration laws hinder its widespread adoption.
- Training judges and solicitors in alternative dispute resolution and enhancing arbitration laws are crucial steps for improving the arbitration landscape in Nigeria.
