The recent decision of the Federal High Court, Lagos
Judicial Division (the “Court”) on the recognition and enforcement of an
arbitral award handed down in London confirms that Nigeria now sits
well within international standards and norms for the recognition and
enforcement of foreign arbitral awards.
A dispute arose between two parties (hereinafter referred
to as “A” and “B,” respectively) in connection with a Charterparty.
Pursuant to the relevant provision of the Charterparty, A commenced
arbitration proceedings against B in London, United Kingdom. On November 14, 2014, the Arbitral Tribunal handed down a final award in favour of A (the “Award”). Under the Award, sums in excess of US$1,000,000 (One Million US Dollars) were due and payable by B to A.
A made several requests, without success, to B for payment of the sums due to A under
the Award, following which A commenced proceedings in Nigeria for the
recognition and enforcement of the Award pursuant to section 51 of the
Arbitration and Conciliation Act, Cap A. 18, Laws of the Federation of
Nigeria, 2004 (the “ACA”).
Section 51 of the ACA provides as follows:
“ An arbitral award shall, irrespective of the country in
which it is made, be recognised as binding and subject to this section
and section 32 of this Act shall, upon application in writing be
enforced by the court”Pursuant to the above provision, recognition and
enforcement of foreign arbitral awards are granted (or refused) on the
basis of an exparte application, without any adversarial proceedings
between the parties. However, prior to a determination, the court may
summon the other party where the court considers it necessary.
The exparte application for the recognition and
enforcement of the Award was filed on December 15, 2014. Eight days
later, the Court heard and granted the application. A then took
effective steps to enforce the Award which had become a judgment of the
Court following the grant of the application.
The judicial process in Nigeria is generally perceived to
be dilatory. Therefore, the timely manner for the assigning, listing and
hearing of A’s application for the recognition and enforcement of the
Award is groundbreaking.
In Baker Marine Nigeria Ltd v Chevron Nigeria Limited
(2000) 13 NWLR (Pt. 997) 276, the Appellant filed an originating summons
for the recognition and enforcement of an arbitral award handed down in
its favour on March 25, 1996. The application was heard and ruling in
respect thereof delivered in November 14, 1996, 8 months after the
application was filed. In Kano State Development Board v Fanz
Construction Company Limited (1990) 4 NWLR (Pt. 142) 137, the
application for leave to enforce an arbitral award was filed on April
23, 1982. On January 29, 1983, 9 months after the application was filed, the court delivered its ruling. In
Tulip (Nig) Ltd v N.T.M.A.S.A.S (2011) 4 NWLR (Pt1237) 254, the
Respondent’s application for leave to recognise and enforce an arbitral
award was filed on November 20, 2003. The court delivered its ruling in respect of the said application on November 23, 2006.
Nigeria is a signatory to the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the “New
York Convention”). As a signatory to the New York Convention, Nigeria is
obliged to recognise arbitral awards as binding and enforce them in
accordance with the rules of procedure of the territory where the award
is relied on and in accordance with the articles of the New York
Convention.
Nigeria enacted the ACA in 1988. The ACA is based on the
UNCITRAL Model Law and expressly sets out the process to be followed by a
party seeking the recognition or enforcement of an international
arbitration award.
The English case of IOT Engineering Projects Limited v
Dangote Fertilizer Limited & Anr. (2014) EWHC 901, turned on the
alleged difficulties and delays encountered by parties seeking to
enforce foreign arbitral awards in Nigeria. The Court of Appeal rejected
the notion that a party who is desirous of frustrating the enforcement
of a foreign award or judgment in Nigeria could do so successfully for
many years.
In the author’s view, provided that the arbitration
agreement has been properly and validly entered into, the procedure and
process of arbitration duly adhered to, the subject matter of the
foreign arbitral award is not contrary to public policy and there is no
misconduct on the part of the tribunal, foreign arbitral awards will be
registered and enforced in Nigeria, as a matter of course. Further,
Nigeria is very supportive of international arbitration and recognises
and gives effect to foreign arbitral awards validly made. This is
acknowledged by the International Bar Association (See Arbitration –
Guide IBA Arbitration Committee, Nigeria, February 2012, p. 15), as well
as by a large number of commentators and practitioners (See, for
example, E. Onyema, Nigeria in Lise Bosman (ed), Arbitration in Africa:
A Practitioner’s Guide, Kluwer Law International 2013, pp. 164-169;
Amazu A. Asouzu, The UN, the UNCITRAL Model Arbitration Law and the Lex
Arbitri of Nigeria, Journal of International Arbitration, Kluwer Law
International 2000, Volume 17 Issue 5, p. 104). As another commentator
puts it: “Nigerian law on the enforcement of arbitral awards is simple,
straightforward and unambiguous. The legal process for enforcement of
arbitral awards is also simple. Nigerian arbitration law is therefore in
tandem with international attitudes on easy enforceability of arbitral
awards” (U. H. Azikiwe, Country Chapter: Nigeria, in The European,
Middle Eastern and African Arbitration Review 2014, Global Arbitration
Review).
The recent decisions by the Federal High Court and the
Court of Appeal not only solidify the commitment of Nigerian
jurisprudence to the universal enforcement of foreign arbitral awards,
but also the growing trend toward speedy adjudication in Nigerian courts
where such legal issues are concerned. The decision of the Court of
Appeal in IOT Engineering Projects Limited v Dangote Fertilizer Limited,
for example, confirms the position that Nigerian arbitration law
continues to evolve in perfect alignment with international standards of
recognition and enforcement. What is also clear is the effect that the
efficient claims process for enforcement has on Nigerian courts’ ability
to render speedy determinations. Since
the ex-parte application for enforcement is not coupled with the burden
of undergoing prolonged adversarial proceedings, claimants can be
confident that where the underlying arbitration agreement is valid, the
subject matter of the award aligns with public policy, and there is no
misconduct on the part of the tribunal, foreign arbitral awards will be
registered and enforced in Nigeria as a matter of course.
Chinedum Umeche
Umeche, a Lawyer, writes from Lagos
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