International Arbitration

The relevant legislation on arbitration is the Arbitration and Conciliation Act (Cap A18 Laws of the Federal Republic of Nigeria 2004).

The Arbitration and Conciliation Act does not appear to govern oral arbitration agreements, as Sections 1(1)(a) to (c) of the act provide that every arbitration agreement must be in writing and set out in:

• a document signed by the parties;
• an exchange of letters, telex, telegrams or other means of communication which provides a record of the arbitration agreement; or
• an exchange of points of claim and of defence in which the existence of an arbitration agreement is alleged by one party and denied by another.

However, each state of the Nigerian federation can pass its own individual arbitration laws (eg, the Lagos State Arbitration Law 2009) to govern all arbitration in that state, except where the parties have expressly agreed that another arbitration law will apply.

Yes, the Arbitration and Conciliation Act refers to international arbitration by making specific provision for when arbitration can be said to constitute international arbitration. By virtue of Section 57(2) of the Arbitration and Conciliation Act, an arbitration is international if:

• the parties to an arbitration agreement have their places of business in different countries at the time of conclusion of the agreement;
• one of the following places is situated outside the country in which the parties have their places of business:
• • the place of arbitration, if such place is determined in or pursuant to the arbitration agreement; or
  • any place where a substantial part of the obligations under the commercial relationship is to be performed; or
  • the place with which the subject matter of the dispute is most closely connected;
• the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country; or
• the parties, despite the nature of the contract, expressly agree that any dispute arising from the commercial transaction will be resolved through international arbitration.

It would appear from the language of the Arbitration and Conciliation Act that all other provisions of the act will naturally apply to international arbitration where applicable –especially the provisions of Part III, Section 43 of the act, which state that Part III will apply solely to cases relating to international commercial arbitration in addition to the other provisions of the act.

Yes, the Arbitration and Conciliation Act is modelled on the UNCITRAL Model Law on International Commercial Arbitration and has been in force since 14 March 1988.

The Lagos State Arbitration Law 2009 is also an enactment of the UNCITRAL Model Law and incorporates relevant amendments of the Model Law.

No. Mandatory provisions which are essential to having a valid arbitration proceedings include the following:

• The Arbitration Rules of the Arbitration and Conciliation Act restrict party representation to legal practitioners, who must be persons qualified to practise law in Nigeria. Parties in international commercial arbitration that elect to use rules other than those set out in the Arbitration and Conciliation Act may be able to appoint legal practitioners who are not qualified to practise law in Nigeria.
• The arbitration award must be in writing and signed by the arbitrators, with reasons stated for the absence of any signature by the non-signing arbitrator. It must also state the place and date of the award. The Lagos State Arbitration Law contains similar mandatory provisions.
• Domestic arbitrations must be conducted under the Arbitration Rules of the Arbitration and Conciliation Act.
• The arbitrators must ensure equal treatment of the parties and give the parties full opportunity to present their case.
• All documents or information supplied to the arbitral tribunal by one party must, at the same time, be communicated to the other party.

Yes. On 10 May 2022, the Senate Chambers of the National Assembly – the law-making authority in Nigeria – passed the Arbitration and Mediation Bill, which seeks to repeal the Arbitration and Conciliation Act. The bill has been passed to the Nigerian president for assent; once this has been granted, it will automatically replace the existing act and become the substantive law on arbitration in Nigeria.

Yes, Nigeria is a signatory to the New York Convention, which was ratified on 17 March 1970.

By virtue of Sections 54(1)(a) and (b) of the convention, Nigeria has made a reservation to the effect that the convention will apply to an award made in Nigeria or in any contracting state as long as:

• the contracting state has reciprocal legislation recognising the enforcement of arbitral awards made in Nigeria in accordance with the provisions of the convention; and
• the convention will apply only to differences arising from a legal relationship which is contractual.

Yes, Nigeria is a signatory to other bilateral and multilateral treaties relating to or relevant to arbitration with other countries, such as:

• Sweden (2006);
• Spain (2006);
• China (2010);
• Italy (2005);
• Korea (1999); and
• the United Kingdom and Northern Ireland (1990).

These treaties are relevant to, or contain provisions on, investment arbitration.

Nigeria is also a signatory to the regional Ecowas Supplementary Act on Investments which was adopted on 19 December 2008 and also contains provisions on investment arbitration.

Yes, certain disputes have been held to be non-arbitrable in Nigeria. For instance, disputes involving tax, crime, matrimonial issues, rape, constitutional issues and bankruptcy have been held to be non-arbitrable. This will be determined by the courts, as there is no substantive law stating the types of disputes that cannot be the subject of arbitration in Nigeria. In making this determination, the courts will consider whether the dispute could be compromised lawfully by way of accord and satisfaction. Also, any matter that would lead to a change in the status of the parties is not arbitrable.

For instance, in Kano State Urban Development Board v Fanz Construction CO [1990] 4NWLR (pt 142), the Supreme Court of Nigeria stated that matters that are not arbitrable in Nigeria include:

• indictment for an offence of a public nature;
• disputes arising from an illegal contract;
• disputes relating to gaming or wagering;
• disputes leading to a change in status, such as a divorce petition, bankruptcy proceedings or winding-up proceedings; and
• any arbitral agreement that empowers the arbitrator to give a decision in property.

Similarly, in Statoil (Nigeria) Limited v Federal Inland Revenue Service [2014] LPELR-23144 (CA) and Nigerian Telecommunications Plc v Pentascope International BV Private Ltd FHC/ABJ/CS/36/2005, the Nigerian courts respectively held that contracts arising from tax matters (pursuant to the 1999 Constitution) and contracts tainted with illegality are non-arbitrable.

There are no restrictions with respect to seat or institution. Unless the parties have agreed on the place where the arbitration is to be held, this will be determined by the arbitral tribunal, having regard to the circumstances of the arbitration (Article 16 of the Arbitration Rules of the Arbitration and Conciliation Act).

To be valid, an arbitration agreement must be in writing. The Arbitration and Conciliation Act and the Lagos State Arbitration Law, in Sections 1 and 3 respectively, contain similar provisions to the effect that an arbitration agreement must be in writing and be set out in:

• a document signed by the parties;
• an exchange of letters, telex, telegrams or other means of communication which provides a record of the arbitration agreement; or
• an exchange of points of claim and of defence in which the existence of an arbitration agreement is alleged by one party and denied by another.

Yes. The Arbitration and Conciliation Act and the Lagos State Arbitration Law, at Sections 12(2) and 19(2) respectively, contain similar provisions to the effect that:

• an arbitration clause which forms part of a contract will be treated as an agreement independent of the other terms of the contract; and
• a decision by the arbitral tribunal that the contract is null and void will not affect the validity of the arbitration clause.

Where there is no agreement of the parties with respect to the seat and/or language of the arbitration, Sections 16 and 18 of the Arbitration and Conciliation Act empower the arbitral tribunal to determine the place and seat of arbitration.

Sections 36(1) and 33(1) of the Lagos State Arbitration Law provide that the default language to be used is English and that the arbitral tribunal has discretion to determine the seat where there is no agreement between the parties.

The Arbitration and Conciliation Act and the Lagos State Arbitration Law have similar provisions to the effect that an objection to the jurisdiction of the tribunal must be raised no later than the time of submission of the points of dispute/defence.

By virtue of Article 21, paragraph 3 of the Arbitration Rules of the Arbitration and Conciliation Act, a plea that the arbitral tribunal does not have jurisdiction must be raised no later than in the statement of defence or, with respect to a counterclaim, in the reply to the counterclaim.

Yes. Section 12(1) of the Arbitration and Conciliation Act and Section 19(1) of the Lagos State Arbitration Law provide that an arbitral tribunal is competent to rule on questions pertaining to its own jurisdiction with respect to the existence or validity of an arbitration agreement.

Neither the Arbitration and Conciliation Act nor the Lagos State Arbitration Law provides for instances or circumstances in which a party can apply to the courts of the seat for a ruling on the jurisdiction of the tribunal. However, Section 34 of the Arbitration and Conciliation Act states that a court will not intervene in any matter governed by the act, except where so provided in the act. Also, given that the tribunal can rule on its own jurisdiction, a party can bring an application asking that the court stay any proceedings in which it has been asked to rule on the jurisdiction of the tribunal.

There are no restrictions on who can be a party to an arbitration agreement. However, only the parties to an arbitration agreement can benefit therefrom.

Yes. The parties have the duty to raise in a timely manner any objection to the jurisdiction of the arbitral tribunal or the fact that the arbitral tribunal is exceeding the scope of its authority under Sections 12(3)(a) and (b) of the Arbitration and Conciliation Act.

The party commencing the arbitration is obliged to give notice of arbitration to the other party by virtue of Article 3 of the Arbitration Rules of the Arbitration and Conciliation Act.

The parties are also obliged to prove the facts that they rely on to support their claim or defence (Article 24 of the Arbitration Rules).

Article 25 of the Arbitration Rules of the Arbitration and Conciliation Act provides that where there is an oral hearing, any party intending to present witnesses must communicate to the tribunal and to the other party, at least 15 days before the hearing, details which include:

• the names and addresses of the witnesses; and
• the languages in which they will give their testimonies.

Where the arbitral tribunal appoints experts, the parties must provide relevant information or document to the experts by virtue of Article 27 of the Arbitration Rules.

No.

The law of the arbitration agreement is determined according to the law designated by the parties as applicable to the substance of their dispute.

Yes. Any designation of the law or legal system will be construed to refer directly to the substantive law. Where the law to be applied has not been determined by the parties, the arbitral tribunal will apply the law determined by the conflict of the law rules which it considers applicable (Sections 47(2) and (3) of the Arbitration and Conciliation Act).

The Arbitration and Conciliation Act makes no such provision. However, Section 40(1) of the Lagos State Arbitration Law provides that the parties are free to agree that the arbitral proceedings may be consolidated with other arbitral proceedings or that concurrent hearings will be held on such terms as may be agreed.

The Arbitration and Conciliation Act is silent on the joinder of additional parties. However, Section 40(3) of the Lagos State Arbitration Law provides that a party may, by application and with the consent of the parties, be joined to arbitral proceeding.

As a general rule, an arbitration agreement will bind only the parties to the agreement. However, Section 3 of the Arbitration and Conciliation Act provides that in the event of death, an arbitration agreement will not be invalid, but will be enforced against the personal representative of the deceased.

The parties can freely determine the number of arbitrators to be appointed and specify the procedure for their appointment. However, in the absence of such procedure, Articles 6 and 7 of the Arbitration Rules of the Arbitration and Conciliation Act provide that if a sole arbitrator is to be appointed, either party may propose to the other the names of one or more persons, one of whom will serve as the sole arbitrator. If, within 30 days of receipt by a party of such a proposal, the parties have not reached agreement on the choice of a sole arbitrator, the sole arbitrator will be appointed by the court

If three arbitrators are to be appointed, each party will appoint one arbitrator and the two arbitrators thus appointed will choose the third arbitrator, who will act as the presiding arbitrator of the tribunal. If, within 30 days of receipt of a party’s notification of the appointment of an arbitrator, the other party has not notified the first party of the arbitrator it has appointed, the first party may request the court to appoint the second arbitrator.

If, within 30 days of the appointment of the second arbitrator, the two arbitrators have not agreed on the choice of presiding arbitrator, the presiding arbitrator will be appointed by the court.

The Arbitration and Conciliation Act does not stipulate the number or qualifications of arbitrators; the parties are free to select the arbitrators of their choice. However, in the absence of an agreement as to number, the default number of arbitrators is three for arbitrations under the Arbitration and Conciliation Act and one under the Lagos State Arbitration Law.

With respect to nationality, Section 44(10) of the Arbitration and Conciliation Act provides that no one may be disqualified from being appointed by reason of his or her nationality.

By virtue of Section 8(3) of the Arbitration and Conciliation Act, an arbitrator can be challenged if:

• circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence; or
• he or she does not possess the qualifications agreed by the parties.

In addition, the Lagos State Arbitration Law provides in Section 10(3) that an arbitrator can be challenged if:

• he or she is physically or mentally incapable of conducting the proceedings, or there are justifiable doubts as to his or her capacity to do so; or
• he or she has refused or failed to use all reasonable despatch in conducting the proceedings or making an award, and substantial injustice has been or will be caused to the applicant as a result.

Neither the Arbitration and Conciliation Act nor the Lagos State Arbitration Law imposes any restrictions on challenging an arbitrator

By virtue of Section 11 of the Arbitration and Conciliation Act and Section 11(4) of the Lagos State Arbitration Law, where the mandate of an arbitrator terminates, a substitute arbitrator will be appointed in accordance with the same rules and procedure as applied to the appointment of the arbitrator who is being replaced.

The arbitrators must accord equal treatment to the parties and ensure that each party is provided with the full opportunity to present its case.

(a) Procedure, including evidence?

The powers of the arbitrator include:

• the power to conduct the proceeding in an appropriate manner and in a way that ensures a fair hearing where the Arbitration Rules contain no provisions with respect to any particular matter (Section 15(2) of the Arbitration and Conciliation Act);
• the power to determine the admissibility, relevance, materiality and weight of any evidence (Section 15(3) of the Arbitration and Conciliation Act);
• the power to determine the language to be used in the proceedings where the parties have not done so (Section 18(1) of the Arbitration and Conciliation Act);
• the power to order the translation of documentary evidence into the language to be used at the proceedings; and
• the power to administer oath or take affirmation of the parties and witnesses (Section 20(6) of the Arbitration and Conciliation Act).

(b) Interim relief?

The arbitrator’s powers in relation to interim relief are set out in Section 13(a) of the Arbitration and Conciliation Act, which provides that the arbitral tribunal may order any party to take such interim measure of protection as the tribunal may consider necessary in respect of the subject matter.

Section 21 of the Lagos State Arbitration Law also empowers the arbitrator to make an order for interim relief or measures.

(c) Parties which do not comply with its orders?

The powers of an arbitrator with respect to any party which does not comply with its orders are not manifestly provided for in the Arbitration and Conciliation Act. Failure to comply with an arbitral orders may go to the issue of costs.

However, Section 41(2) of the Lagos State Arbitration Law provides that the parties are free to agree on the powers of the arbitral tribunal where a party fails to do anything necessary for the proper and expeditious conduct of the arbitration.

(d) Issuing partial final awards?

Article 32(1) of the Arbitration Rules of the Arbitration and Conciliation Act provides that the arbitral tribunal is entitled to make interim, interlocutory or partial awards in addition to a final award.

(e) The remedies it can grant in a final award?

The powers of the arbitral tribunal with respect to the remedies it can grant in a final award are not manifestly provided for in the Arbitration and Conciliation Act.

(f) Interest?

The powers of the arbitrator with respect to interest are not manifestly provided for in the Arbitration and Conciliation Act; much will depend on the agreement of the parties in this respect.

Section 46(1) of the Lagos State Arbitration Law provides that the parties are free to agree on the powers of the arbitral tribunal as regards the award of interest. Where this is so, the arbitral tribunal may award simple or compound interest (Section 46(2) of the Lagos State Arbitration Law).

Section 21 and Article 28(2) of the Arbitration Rules of the Arbitration and Conciliation Act empower the tribunal to terminate the proceedings if:

• the claimant fails without sufficient cause to state its claim; or
• the respondent fails to state its defence without sufficient cause, in which case the tribunal will continue the proceedings without treating such failure in itself as an admission of the claimant’s allegations.

Also, if any party fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make an award. Section 41 of the Lagos State Arbitration Law has similar provisions.

The Arbitration and Conciliation Act contains no provisions relating to the immunity of arbitrators from liability.

Section 18(1) of the Lagos State Arbitration Law provides that an arbitrator is not liable for anything done or omitted in the discharge or purported discharge of his or her functions as arbitrator, unless the act or omission is determined to have been in bad faith.

Yes. By virtue of Section 5(1) and (2) of the Arbitration and Conciliation Act, the party seeking to take advantage of the powers of the court to grant a stay of proceedings may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the court to stay the proceedings. The court will make an order staying the proceedings if it is satisfied that:

• there is no sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement; and
• the applicant was, at the time when the action was commenced, and remains ready and willing to do all things necessary for the proper conduct of the arbitration.

The Lagos State Arbitration Law has similar provisions in Section 6.

Yes, the Nigerian courts have certain powers in relations to arbitration seated in or outside Nigeria. These include the power:

• to stay proceedings;
• to appoint arbitrators;
• to enforce an arbitral award; and
• to set aside an award.

Accordingly, Section 34 of the Arbitration and Conciliation Act provides that the court will not intervene in any matter governed by the Arbitration and Conciliation Act, except where so provided in the act.

The parties cannot wish away the ordinary jurisdiction of a court by agreement.

The tribunal is empowered to fix the cost of arbitration in its award. The components that can make up the costs include:

• the fees of the arbitration tribunal, to be stated separately as to each arbitrator;
• the travel and other expenses incurred by the arbitrators;
• the cost of expert advice and of other assistance required by the arbitral tribunal;
• the travel and other expenses of witnesses, to the extent that these are approved by the arbitral tribunal; and
• the costs of legal representation and assistance of the successful party, if these costs were claimed during the arbitral proceedings, and only to the extent that the arbitral tribunal determines that the amount is reasonable.

The costs of arbitration are usually borne by the unsuccessful party; but the arbitral tribunal may apportion such costs between the parties if it determines that apportionment is reasonable taking into account the circumstances of the case.

There are no restrictions and as such the parties can agree for each party to bear its respective costs.

Third-party funding is not provided for in the Arbitration and Conciliation Act or the Lagos State Arbitration Law. However, the Arbitration and Mediation Bill 2022, which is pending before the president for assent, includes provisions in this regard.

Pursuant to Section 26 of the Arbitration and Conciliation Act, an award must comply with the following procedural and substantive requirements:

• The arbitral award must be in writing and be signed by the arbitrator or arbitrators;
• Where the arbitral tribunal comprises more than one arbitrator, the signatures of a majority of all members of the arbitral tribunal will suffice if the reason for the absence of any signature is stated;
• Unless the award is on agreed terms or the parties have agreed that no reasons are to be given, the award must contain the reasons, as well as the place at which and the date on which it was made; and
• A copy of the award made and signed by the arbitrators must be delivered to each party.

There is no specified timeframe within which an award must be produced under the Arbitration and Conciliation Act.

Arbitration awards are enforceable in Nigeria. The procedure for enforcement will require the party seeking to enforce the award to apply to the High Court within the jurisdiction where it wishes to enforce for recognition and enforcement of the award.

The applicant must present the original or a certified true copy of the arbitration agreement and final award, and must take steps to put the other party on notice.

The grounds on which an award can be challenged, appealed or otherwise set aside include the following:

• The award contains decisions on matters which are not contemplated by or 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 which contains decisions on matters not submitted may be set aside;
• An arbitrator has misconducted himself or herself, or the arbitral proceedings or the arbitral award was improperly procured;
• The award is contrary to public policy; or
• The applicant was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise not given a fair opportunity to present its case.

(Sections 29 and 30 of the Arbitration and Conciliation Act and Section 57 of the Lagos State Arbitration Law.)

A party that is aggrieved by an arbitral award may, within three months of the date of the award, apply to the court to have the award set aside (Section 29(1) of the Arbitration and Conciliation Act).

The right to challenge an award cannot be excluded where such challenge falls within Sections 29 and 30 of the Arbitration and Conciliation Act.

The Arbitration and Conciliation Act does not provide for any duties of confidentiality. However, Article 32(5) of the Arbitration Rules of the Arbitration and Conciliation Act states that an award can only be made public with the consent of both parties; and Article 25(4) provides that hearings will be heard in camera unless the parties have agreed otherwise. It may thus be reasonably inferred that there is an implied duty on parties not to disclose.

The exceptions are where:

• the parties agree to make the hearing or award public; or
• any of the parties seeks to set aside the award in court.

In this way, the award forms part of the court’s public records accessible to members of the public.