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Tag: Arbitration

  • Saving arbitration from adjudicatory delays, inefficiencies

    Saving arbitration from adjudicatory delays, inefficiencies

    Ensuring that arbitration and Alternative Dispute Resolution (ADR) do not become as protracted as litigation was a key talking point at the 2024 Annual Conference of the Nigerian Institute of Chartered Arbitrators (NICArb) in Lagos. For two days, experts dissected new trends, how ADR can be strengthened, how to address impediments and the role of courts. Deputy News Editor JOSEPH JIBUEZE reports.

    Why is Nigeria struggling to attract foreign investment?

    Many reasons have been adduced, such as corruption, weak infrastructure, harsh and inconsistent policies, and regulatory failure.

    However, for many experts, a major impediment is a poor dispute resolution process.

    “No investor will come to where the arbitration system is weak,” said Justice Ayokunle Faji of the Federal High Court.

    A Senior Advocate of Nigeria (SAN), Dr Wale Babalakin, shares this view.

    He noted that investors worldwide are looking for where to put their money, yet there is a reluctance to turn to Nigeria as a destination.

    “The greatest hindrance to investment is poor dispute resolution process,” he said.

    Justice Faji and Dr. Babalakin were among the panellists at the 2024 Annual Conference of the Nigerian Institute of Chartered Arbitrators (NICArb).

    They stressed that investments will remain elusive if the dispute resolution mechanisms remain inefficient.

    The conference had the theme: “Transformation and interventions: the evolving trends in arbitration and ADR practice in Africa.”

    The occasion, which included an investiture/award ceremony, marked the 45th anniversary of the institute.

    The NICArb Annual Conference has become a centrepoint in ADR, serving as a significant forum for addressing the pivotal issues shaping the profession.

    It plays a crucial role in propelling the practice of arbitration and ADR to new heights across the West African sub-region and globally.

    The conference, which was held at the Eko Hotels and Suites, united a diverse assembly of thought leaders, respected professionals, ADR experts, and emerging talents, fostering a dynamic environment for exchanging ideas, building networks, and deepening collective understanding of the ever-evolving landscape of arbitration and ADR.

    The first day had three plenary and two breakout sessions; the second had three plenary sessions, which included a roundtable, and two breakout sessions.

    Chief Judge and President of the Supreme Court of Kenya, Martha Koome, and Lagos State Governor Babajide Sanwo-Olu delivered goodwill messages.

    Among the over 50 panellists were former Chief Judge of Lagos Ayotunde Phillips, Aare Afe Babalola (SAN), professor of international commercial law at SOAS University of London, Emilia Onyema, Wolemi Esan (SAN), Prof Abiola Sanni (SAN), Prof Damilola Olawuyi (SAN), Prof Dorothy Ufot (SAN), former Deputy Chief of Staff to the President Ade Ipaye, and Dapo Akinosun (SAN).

    According to them and the cast of other eminent speakers, arbitration and other ADR mechanisms remain the quicker dispute resolution options.

    They have increased the ease of doing business in many countries and boosted their GDP, such as Singapore, Hong Kong and France.

    But there are fears that arbitration may fall into the same trap of endless litigations in Nigeria if urgent steps are not taken to address the slide.

    This was the concern expressed by Dr Babalakin during the first plenary session.

    According to him, arbitral awards are increasingly being subjected to the same frustrating procedures of regular courts, with enforcement also a challenge.

    “We are not dealing with substance, as most cases are decided on procedure.

    “The ADR system is gradually falling into the same trap.

    “I get worried when I see arbitration matters taking forever to be decided.

    “I am aware of an award that has been made for 10 years and it is hanging at the appellate courts.”

    The solution, Babalakin suggested, is attitudinal change.

    “Attitudinal change is needed to see arbitration as final rather than a stepping stone to litigation,” he said.

    He stressed the need to make the process more credible and trustworthy.

    “Arbitration should be final and to make it final, arbitrators themselves must display a high level of competence. Their award must be well-researched.

    “Arbitrators must develop a very high level of competence and avoid obvious errors in law.

    “That should not be allowed and can only be prevented if the faculty is strong.”

    The SAN believes arbitrators should get specialist training to avoid “errors on the face of the record.”

    Role of courts

    Justice Faji urged courts not to impede the arbitration process.

    He said: “The courts must be careful not to interfere in the arbitral process.

    “The courts should be more pro-arbitration and should be very reluctant to set aside awards.

    “We’re not sitting on appeal over an arbitral award. We’re sitting side by side with the arbitrator.

    “You must also ensure that finality in the dispute outweighs any other considerations.”

    Justice Faji, who spoke during the second plenary session, said courts should complement arbitration.

    “One of the major issues with the courts and arbitration is the misconception that arbitration is in competition with the courts.

    “Some see it as a forced cohabitation, but it’s not so.

    “Arbitration is complementary to the court system. It assists the court system in decongesting dockets, so it is complementary,” he said.

    Justice Faji explained that the court can get involved at the beginning of arbitration, where the court can assist in appointing the arbitrator if parties cannot agree, or invoke the arbitration agreement.

    He noted that arbitrators cannot issue subpoenas, grant a stay of proceedings or compel the production of documents, so the court may be needed.

    The judge added that when the arbitration is concluded, the courts are expected to give effect to the arbitral award either by way of enforcing, setting aside or reviewing it.

    “We need to look at the concepts of intervention and interference.

    “Whatever the court does outside the provisions of the law amounts to interference. That is what judges should guard against.

    “No investor will come to where the arbitration system is weak,” he said.

    Justice Faji urged his colleagues not to be afraid to award substantial costs where necessary to discourage frivolous litigation.

    Averting abuse

    A member of the NICArb governing council, Mr Rafiu Lawal-Rabana (SAN), recalled an arbitral proceeding that was hobbled by litigation, in which a leave to appeal was appealed against up to the Supreme Court.

    “It’s about attitude. Unless we change our attitude, we’ll remain in this quagmire,” he said.

    A chartered arbitrator, Folashade Alli (SAN), decried the absence of a world-class hearing centre with modern facilities in Nigeria.

    She also stressed the need to strengthen the enforcement procedure, while urging the government to show support by complying with arbitral decisions.

    “We need government support. There has to be a pro-arbitration stance. The government must comply with awards,” she said.

    ‘Arbitration, ADR still preferred option’

    Keynote speaker, President and Chairman of the African Export-Import Bank (Afreximbank), Prof Benedict Oramah, justified arbitration and ADR as the preferred options.

    He said: “Litigation is expensive, uncertain and more often than not takes time.

    “The fast-paced world of international trade and commerce cannot afford the inconveniences of trade disputes being tied up for years in courtroom battles.

    “To attract foreign investment, it is important that commercial disputes are determined quickly and finally, and that these decisions are easily enforceable.

    “ADR and arbitration stand as the preferred options due to their confidential and flexible nature, and the enforceability of arbitral awards.”

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    Oramah, represented by Senior Manager at Afreximbank Dr Enga Kameni, said most African countries are strengthening their legislative framework and arbitral institutions.

    Sanwo-Olu: arbitration guarantees certainty

    Sanwo-Olu, represented by the Attorney-General and Commissioner for Justice Lawal Pedro (SAN), underscored the role of arbitration in attracting investments.

    He said: “In an increasingly interconnected world, disputes are not merely disagreements.

    “They are interruptions to progress, challenges to relationships and threats to investments.

    “The manner in which we resolve disputes will define the trajectory for growth.

    “Arbitration and ADR are not just tools for managing conflicts; they’re instruments for building trust, fostering partnerships and accelerating development.

    “Arbitration and ADR have become the lifeblood of international businesses and diplomacy.

    “These mechanisms provide certainty in uncertainty, offering pathways to resolving conflicts without delay.”

    He said the Lagos judiciary has embraced ADR as an integral part of justice delivery through institutions like the multi-door courthouse and others.

    Sanwo-Olu said there was no reason for African arbitration to be farmed out as Africa and Nigeria have the expertise to handle international arbitration.

    ADR rooted in Africa, says Kenya CJ

    Justice Koome called for the integration of ADR into a formal legal framework and policies.

    She noted that Kenya has provided ADR in its Constitution and made it part of the judiciary’s blueprint for social transformation through access to justice.

    Justice Koome was of the view that Africa is in a unique position to shape the future of dispute resolution.

    She said: “This is not about adopting a global trend in ADR; it’s about revitalising a great tradition and establishing innovative ways that shape a continent’s growth and promise of socio-economic landscape within ADR while recognising that Africa is the repository of knowledge on dispute resolutions.

    “Each of our societies has its own ways of resolving disputes, and this is a well-established fact with a long history of relying on community-based dispute resolution mechanisms that predate modern judicial systems.

    “Way before the formal judicial systems existed, African societies relied on mediation, dialogue, negotiation and consensus building to address disputes within our communities, which brought harmony to our society, a core value in ADR today.”

    An independent arbitrator, Mrs Funke Adekoya (SAN), stressed the need for best practices.

    She said: “Compliance with international standards is not just a formality.

    “It is a necessity that African countries must embrace international best practices in arbitration and ADR.”

    Ajogwu: theme timely

    To the President & Chairman of NICArb Governing Council, Prof Fabian Ajogwu (SAN), the theme is timely and significant.

    He said: “Whether local or international, transformations introduce disruptions and innovations to existing processes, necessitating proactive interventions by governments, institutions, and key stakeholders.

    “These interventions in regulatory, structural, and strategic matters are essential for addressing the unique challenges posed by evolving trends.

    “They may encompass process development, comprehensive reviews, or targeted reforms that promote best practices, inclusivity, and sustainability.

    “In the African context, these interventions hold particular significance.

    “The continent’s rich legal and cultural diversity presents a unique opportunity to be leveraged as a strength rather than an obstacle.

    “By strategically harmonising and integrating these diverse elements, we can catalyse dynamic shifts, foster impactful partnerships, and ultimately redefine the ADR and arbitration landscape to be more inclusive, innovative, and resilient for the future.”

    Ajogwu said NICArb stands at the forefront of this transformative effort, collaborating closely with key stakeholders, including the Organisation for the Harmonisation of Business Law in Africa (OHADA).

    The goal, he said, is to bridge the gap between common law and civil law jurisdictions while promoting regional integration within the arbitration and ADR industry.

    NICArb Registrar/Chief Executive Officer, Mrs Shola Oshodi-John, said the theme reflected the dynamic landscape of arbitration and resonated deeply with the institute’s mission of being a template for advancing arbitration and other forms of ADR proceedings in Nigeria and beyond.

    She said the 45th anniversary showed how far the institute had come, and expressed gratitude to its partners and sponsors who have, over the years, supported it in cash or kind.

    “I say a big thank you. We could not have come this far without your support,” Mrs Oshodi-John said.

    “I look forward to seeing the impact of our collective contributions in the months and years to come.

    “Let us continue leading the way in transforming the landscape of arbitration and ADR,” she added.

  • ‘Nigeria needs accountability in arbitration’

    ‘Nigeria needs accountability in arbitration’

    Director, Legal and Company Secretary, Seplat Energy Plc, Mrs. Edith Onwuchekwa, has said there is the need to drive efficiency, accountability, transparency, competency and ethics in the nation’s arbitration system.

    She made the call  at the ongoing Nigerian Bar Association Annual General Conference 2024 happening in Lagos, according to a press statement from the firm.

    The company secretary spoke during a panel session titled: ‘Making a Safe Arbitration Seat: Cultivating Trust, Efficiency, and Reliability in Dispute Resolution’, saying that the arbitration system should implement clear and consistent procedural rules that parties can easily understand, follow and be held accountable to.

    She also called for regular publication of data and reports on the outcome of arbitrations (with parties’ consent or on a no-names basis), adding that the public documents would give better visibility of the way arbitration proceedings are conducted and awards are delivered; thus, creating a system of precedence that gives greater assurance to practitioners and users of the system.

    She advocated for the establishment of a robust mechanism for providing, receiving and implementing feedback and complaints, to address parties’ concerns promptly and effectively. This, she noted, encourages engagement and builds trust in a system that is continuously improving, stressing that arbitration is very germane across sectors/facets of the country, including the energy space where Seplat Energy operates.

    To strengthen competency and ethics, Onwuchekwa said: “There is a need for practitioners in the arbitration space to have the orientation (and where necessary re-education), as the primary goal of arbitration is for disputes to be resolved in a swift and efficient manner. It is key to enforce the continuous professional development for arbitrators and practitioners, to ensure that they maintain high standards of competency and ethics, particularly in alignment with global best practice.

     “As part of professional development, it is important to encourage mentorship programmes, to ensure that less experienced practitioners are guided under the tutelage of seasoned arbitrators. Strict ethical guidelines and conflict of interest rules for arbitrators and practitioners should be enforced, and appropriate levels of consequence management should be applied to deter unethical practices.”

    She also called for the use of modern technology to enhance the efficiency and reliability of the arbitration system; thus, promoting an efficient and accessible central database on the arbitration system.

     “Nigeria is on the right path towards assuring domestic and international stakeholders. We have done this through the 2023 Arbitration and Mediation Act that adopts well-accepted international standards, such as the UNCITRAL Model Law and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. For example, mandatory compliance with arbitration agreements, interim measures, emergency arbitrator, virtual proceedings, ” Onwuchekwa added.

    She explained: “The changes made by the new Arbitration Act demonstrates Nigeria’s commitment to establishing itself as an arbitration-friendly jurisdiction, while drawing inspiration from global best practices and the experience of leading arbitral institutions. However, we need to build on the initiatives introduced by the Arbitration Act, to secure the confidence of domestic and international stakeholders.

    Read Also: Ex-AGF Aondoakaa denies testifying against FG in arbitration at ICC

     “The arbitral process must be seen to be efficient and trustworthy. A challenge with the present system is the multi-appellate stages for challenging arbitral awards. The process needs to be curtailed; else it becomes another litigation process.

    “We need to develop world-class arbitration facilities and digital infrastructure to provide efficient and accessible arbitration services; build capacity in Nigeria by promoting education and training programs for practitioners, businesses, and the public on the benefits and processes of arbitration; run public Awareness Campaigns on domestic and international platforms to highlight Nigeria’s capabilities and advancements in arbitration. Our arbitration institutions should foster strategic partnerships and collaborate with renowned international arbitration institutions to adopt best practices and provide cross-border knowledge sharing,” she submitted.

  • What a party applying for stay of proceedings pending arbitration must demonstrate

    What a party applying for stay of proceedings pending arbitration must demonstrate

    UBA PLC v. TRIEDENT CONSULTING LTD
    CITATION: (2023) LPELR-60643(SC)

    In the Supreme Court of Nigeria

    ON FRIDAY, 7TH JULY, 2023

    Suit No: SC.CV/405/2013
    Before Their Lordships    :

    JOHN INYANG OKORO Justice of the Supreme Court
    UWANI MUSA ABBA AJI Justice of the Supreme Court
    HELEN MORONKEJI OGUNWUMIJU Justice of the Supreme Court
    ADAMU JAURO Justice of the Supreme Court
    EMMANUEL AKOMAYE AGIM Justice of the Supreme Court

    Between
    UNITED BANK FOR AFRICA PLC – Appellant(s)

    And
    TRIEDENT CONSULTING LIMITED – Respondent(s)

    Leading judgment delivered by
    Helen Moronkeji Ogunwumiju, j.S.C.

    This is an appeal against the decision of the Court of Appeal in Appeal No: CA/L/103/2010 coram: I. M Saulawa (as he then was), I. S Ikyegh and R. N Pemu JJCA, delivered on March 15, 2013.

    The short facts of the case leading to the appeal are that the respondent began an action on February 4, 2009 against the Appellant for recovery of unpaid value of invoices amounting to the sum of 489,168.45 USD allegedly owed by the Appellant for work done in the line of contract between them. The Respondent also claimed 25 per cent interest on the judgment sum, N250 million as special and general damages for libel and N32 million as solicitor’s fee. Upon receipt of the originating Court process, the Appellant filed a motion on notice pursuant to Order 4(1) and (2) of the Arbitration and Conciliation Act, 2004 seeking an order of stay of proceedings pending arbitration. It did not attach thereto a notice of arbitration neither did it demonstrate any willingness to commence arbitral proceedings. The trial Court and the Court of Appeal concurrently dismissed its application mainly for failure to demonstrate the willingness to commence arbitral proceedings, hence this appeal and cross-appeal.

    ISSUES FOR DETERMINATION

    The court determined the appeal/cross-appeal on a sole issue for determination:

    “Whether the Court below was right to hold that before a stay can be granted pending arbitration, the party applying (the Appellant in this case) must demonstrate unequivocally by documentary evidence its willingness to submit the dispute to arbitration”.

    APPELLANT’S SUBMISSION

    Counsel for the Appellant argued that the suit falls within the ambit of Section 4 the Arbitration and Conciliation Act and not Section 5 of the same Act. Counsel argued that under Section 4, there is no need to satisfy the Court of the willingness and readiness to arbitrate. Counsel argued that under Section 4, the Court orders a stay of proceedings and referral to arbitration whereas only a stay of proceedings is ordered under Section 5 and therefore, there being no order of the Court to arbitrate under Section 5, one of the parties could decide not to arbitrate and would not be in contempt. Counsel submitted that submission to arbitration is not a condition precedent for a Court’s exercise of jurisdiction in this matter.

    RESPONDENT’S SUBMISSION

    In response, counsel to the Respondent argued that the suit falls under the ambit of Section 5 of the Arbitration and Conciliation Act. Counsel argued that by the provisions of Section 5(2) of the Arbitration and Conciliation Act, it can be inferred that where sufficient reasons on why the matter should not be referred to arbitration are adduced, stay of proceedings pending arbitration will be refused.

    Counsel argued that a party seeking the exercise of the equitable jurisdiction of the Court in its favour must place sufficient materials upon which the Court may exercise such discretion in the party’s favour. Counsel relied on ADIGWE v. FRN (2015) LPELR – 24694 (SC), DONGTOE v. CIVIL SERVICE COMMISSION, PLATEAU STATE (2001) 9 NWLR Pt. 717 Pg. 132; (2001) LPELR-959(SC), WILLIAMS v. HOPE RISING VOLUNTARY FUNDS SOCIETY (1982) ANLR 1, CBN v. OKOJIE (2002) 3 SC 99; (2002) LPELR-836(SC). Counsel argued that the Appellant’s affidavit in support of the application at the trial Court was bereft of any material to warrant the Court of Appeal to set aside the decision of the trial Court, relying on MENAKAYA v. MENAKAYA (2001) 16 NWLR Pt. 738 Pg. 203 at 253; (2001) LPELR-1859(SC), GENERAL & AVIATION SERVICES LTD v. THAHAL (2004) LPELR-1317(SC).

     APPELLANT’S REPLY

    In reply, counsel argued that the fact that the Appellant brought the application under Section 4 of the Act did not prevent the trial Court from having recourse to the extant provision which mandates stay of proceedings pending arbitration. On this, Counsel stated that the heading of a statute can be relied upon to clarify ambiguity.

    Counsel further argued that Section 5 which is titled “stay of proceedings” is the applicable section for the instant case. Counsel relied on OGBONNA v. A.G IMO STATE (1992) 1 NWLR Pt. 220 Pg. 647; (1992) LPELR-2287(SC), OYO STATE BOARD OF INTERNAL REVENUE v. UNIVERSITY OF IBADAN (2013) LPELR-2215 (CA). Counsel submitted that under Section 5, the Court can refer the matter to arbitration while making the order for stay of proceedings.

    RESOLUTION OF THE ISSUE

    In resolving the issue, the Court first determined whether the contention between the parties was ab initio arbitrable and was such that should have been referred to arbitration and a stay of proceedings granted.

    The Court examined the breach of the contract, the subject matter of the dispute, and held that the action which can signify the finality of the termination of the contract is the final payment of all monies due and the discharge of all obligations on both sides. The Respondent claimed that the Appellant was yet to pay the outstanding sum due to the Respondent on certain invoices, while the Appellant claimed that the Respondent had already been overpaid.

    The Court held that this constitutes clear evidence of an arbitrable dispute between both parties. The Court further held, disagreeing with counsel for the Appellant, that where an arbitration clause is part of the contract, it is nevertheless regarded in law as a separate contract, relying on HEYMAN v. DARWIN LTD (1942) A.C 356 at pp. 373-4.

    Thus, the termination of the of the contract did not amount to a termination of the arbitration clause and the contention between the parties could be referred to arbitration.

    Going further, the Court considered whether there were elements in the dispute that could not be referred to arbitration thus rendering the matter inarbitrable.

    Examining the contract between the parties, the Court stated that the question to be determined is whether the issue of the alleged defamatory words in the letter terminating the contract and the claim for costs of the litigation can be said to arise from the original agreement of the parties which the said parties were obliged to submit to arbitration.

    In determining this, the Court stated the position of the law that a claim for defamation arising out of libel is a claim at common law. It remains a question of law. A claim for defamation can only be effectively determined by a Court of law. An arbitrator or an arbitral panel is not imbued with the powers to answer legal questions.

    Thus, before a dispute can be referred to arbitration, same must first and foremost be seen to be arbitrable. Applying the foregoing to the case, the Court held that what arises from the Arbitration agreement can only be predicated upon matters that take their root from the arbitral agreement. If the issue of costs had been the costs of the arbitration, that would be a different consideration.

    The issue of costs in the case however is costs incurred in the prosecution of the civil claim for unpaid invoices and interest thereon in regular Court. The phrase “arising from this agreement” in the arbitration clause therefore excludes the said costs incurred in the prosecution of the civil claim.

    In support of this position the Court cited the cases of AFRICAN INSURANCE DEVELOPMENT CORPORATION v. NIGERIAN LNG LTD (2000) 2SC 57 at Pg. 60; (2000) LPELR-210(SC) and BAKER MARINE (NIG) v. CHEVRON NIG. LTD (2006) 6 SC 21 at Pg. 31 &37; (2006) LPELR-715(SC) which held that any claim sought to be incorporated into the arbitration must be the subject of the original contract from which the arbitration clause emanated.

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    The Court then went ahead to consider whether the action of the Appellant falls under Section 4 or Section 5 of the Arbitration and Conciliation Act and whether the Appellant ought to have shown the willingness and readiness to arbitrate before the Court can make an order staying proceedings.

    On this, the Court held, agreeing with Appellant’s Counsel that essentially whereas under Section 4, it is the Court that makes an order that the parties should submit to arbitration, under Section 5 the Court does not order the parties to submit to arbitration, hence the need to satisfy the Court of the willingness and readiness to arbitrate.

    The implication of an order made under Section 4 is that a party who fails and or refuses to submit to arbitration flouts an order of Court and contempt proceedings could be commenced against him. On the other hand, under Section 5, there being no order of Court to arbitrate, one of the parties could decide not to arbitrate and would not be in contempt.

    The Court went further to hold that that Section 4 will only apply where the arbitration proceedings has in fact been initiated i.e. either party may have filed their statement before the arbitral tribunal. This simply means that the arbitral proceedings must have already come alive at the time the application for stay of proceedings is being brought before the Court.

    In view of the foregoing, the Court held that Section 5 was the applicable provision in the instant case as it was apparent that the arbitral proceedings was yet to commence and as such, it was the duty of the Appellant to have shown by documentary evidence that it was ready and willing to submit to the arbitration and that the application sought was not a ruse or a sham to deprive the Respondent its right of access to Court.

    The Appellant should have shown and taken definite steps to commence arbitration before bringing the motion for stay of proceedings.

    On the cross-appeal, the Court held that all the arguments on the issues had already been extensively argued by the parties in their briefs. As such, there was no reason for the Court to further expound on them. The Court therefore declared the cross-appeal unmeritorious.

    HELD

    The Court held that both the appeal and cross-appeal were grossly lacking in merit and consequently dismissed same.

     Appearances:

    Chima Okereke, with him, Paul Omotosho               

    For Appellant(s)

    Francis Agunbiade                                                     

    For Respondent(s)

    Compiled by LawPavilion.

  • Wanted: high ethical standards in arbitration

    Wanted: high ethical standards in arbitration

    Leading arbitration practitioners in the country have called for a significant change in attitude towards accountability and integrity within the practice of arbitration in Nigeria.

    They spoke at the 2023 annual Dinner of the Arbitration Committee of the International Law Association (ILA) Nigeria, held at the Oriental Hotel in Victoria Island, Lagos.

    The theme was: ‘International Arbitration: Putting Our House in Order’, and it brought together leading experts to reflect upon the current state of arbitration in Nigeria.

    While opening the conference, the President of the International Law Association,(ILA) Nigerian Branch, Prof. Damilola Olawuyi (SAN), praised the efforts of the arbitration committee in spearheading change within the Nigerian arbitration landscape.

    The  international law expert stressed the importance of aligning arbitration practices in Nigeria with international standards and best practices, as it serves as a crucial platform for resolving international commercial disputes.

    Mr. Tolulope Aderemi, Chairman of the Arbitration Committee, took centre stage in advocating for change.

    He lamented the decline in the reputation of arbitration practitioners and emphasised the need for a universal code of ethics.

     Aderemi proposed the idea of practitioners having accountability partners to ensure adherence to ethical standards.

    He dispelled the notion that Nigerian arbitrators are incompetent, highlighting the presence of experienced and diligent professionals with impeccable character.

    However, he urged stakeholders to hold themselves to high standards and be accountable to one another.

    Aderemi also expressed concerns about the increasing number of arbitration-related appeals reaching the Supreme Court.

    He called for a reconsideration of such appeals on weak grounds, stating that they hinder Nigeria’s potential as a preferred foreign investment destination.

    Aderemi advocated for the imposition of strict penalties on those who violate the industry’s ethics.

    The keynote speaker, Prof. Babatunde Fagbohunlu, (SAN), delivered a in his paper titled ‘International Commercial Arbitration: Putting Our House in Order’focused on the challenges faced by African arbitrators in accessing the global arbitration market and the significant arbitral awards against the Nigerian government.

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    He emphasised the need for Nigerian arbitrators to equip themselves for global opportunities.

    Fagbohunlu proposed the establishment of a single arbitration institution for the African Continent to enhance its attractiveness and participation in international arbitration.

    He also stressed the importance of supporting the judiciary in enforcing arbitration agreements and awards by acting as amicus curiae in related cases.

    The Fireside Chat featured Mrs. Hairat Balogun, a Life Bencher and the first female Attorney General and Commissioner for Justice, Lagos State, who addressed the ethical issues plaguing the legal profession.

    Balogun attributed the loss of the profession’s standing in society to the lack of adherence to ethical rules and the diluted training of lawyers in the country.

    She criticized the current method of admission into the Nigerian Law School and urged the responsible body to reconsider the suggestion of admitting only students from accredited (not online) schools.

    The 2023 ILA Dinner concluded with a unanimous recognition that for arbitration to thrive in Nigeria, practitioners must uphold the highest levels of integrity, probity, and diligence. Thanking the participants, the Committee Secretary, Mrs Foluke Akinmoladun, also acknowledged the need to implement a universal or national code of ethics to govern the conduct of its members.

     This is seen as essential for Nigeria to continue attracting foreign direct investments.

    The discussions during the event highlighted the crucial role that arbitration plays in economic development, emphasizing the importance of practitioners supporting governments worldwide by practicing with diligence and integrity.

    The ILA was founded in Brussels in 1873. The ILA now has some 4,500 members in 45 national and regional branches around the world. It is headquartered in London under the leadership of the global chair, Professor Christine Chinkin. The Nigerian Branch of the ILA regularly hosts innovative lectures, seminars, conferences, and other capacity development programs to advance the study and understanding of international law in Nigeria.

    Amongst the dignitaries in attendance were a former Justice of the Supreme Court of Nigeria,  Justice Olabode Rhodes-Vivour, CFR, the Attorney General of Lagos State, Mr. Lawal Pedro, (SAN), the Attorney General of Oyo State, Mr. Biodun Aikomo, immediate past Chairperson of the Arbitration Committee of the ILA, Mrs. Doyin Rhodes-Vivour (SAN), Folashade Alli (SAN), Mr. Musa Sanusi, (SAN), and Mrs. Jean Chiazor Anichere (SAN) amongst other eminent speakers while the event was moderated by Shola Soyele of Channels Television.

  • ‘African arbitration helping continent to be fit for future’

    Hogan Lovells Africa Practice Head Andrew Skipper, in this article, examines the rise of arbitration practice in Africa.

    Building capacity in Africa, ore free trade and further growth in African arbitration are some of the recent positive developments on the continent.
    These developments can further help in making Africa “fit for the future” – increasing economic growth in a sustainable way and addressing issues of unemployment and poverty.
    Already Africa’s economic growth is picking up pace and is expected to reach 6.3 per cent in East Africa and 3.4 per cent in Sub-Saharan Africa by the end of this year.
    Foreign direct investment into Africa is also expected to increase from $41.8 billion to $50 billion, due in part to the signing of the historic African Continental Free Trade Afea (AfCFTA) agreement in March.

    AfCFTA signals new era

    Broadly, the objectives of the AfCFTA are the establishment of a single continent-wide common market for both goods and services, the free movement of capital across the continent and, eventually, the establishment of a continent-wide customs union.
    This has the potential to reshape African economies and promote economic diversification and make African economies more resilient.
    Many of the AfCFTA’s details have yet to be ironed out and it remains to be seen whether it will be ratified by 22 countries, the number necessary for it to come into force by January 2019, as is the aim of the African Union.
    Despite its challenges and the uncertainties which remain, the AfCFTA presents a monumental opportunity for Africa to move forward with economic integration.

    Further growth in African
    arbitration

    As international investment and trade in Africa increases, so does the number and frequency of commercial disputes, with arbitration increasingly becoming a preferred means of resolution.
    The rise in arbitration in Africa can be seen by looking at the ICC’s recent caseload figures; in 2017, the institution saw the largest number of cases (87) and parties (153) from Sub-Saharan Africa in its history.
    Three new organisations aim to facilitate the further expansion of arbitration on the continent: the African Arbitration Association (AfAA); the ICC’s African Commission; and AfricArb, a Paris-based association of lawyers.
    The AfAA, established in June, is a long-awaited response to calls for the establishment of a single organisation to promote the existing capacity for arbitration in Africa. It intends to encourage the regionalisation of arbitration, by promoting the appointment of African practitioners, arbitrators and institutions.
    In July, the ICC announced that it will establish an African Commission to coordinate its activities and continued growth on the continent. Alexis Mourre, President of the ICC, said that the “relevance of Africa for the Court’s future cannot be overstated”.
    In addition to a rise in both cases and parties from Sub-Saharan Africa in 2017, the ICC also saw an increase in the number of arbitrators from North and Sub-Saharan Africa.
    It’s not just arbitral institutions that are focusing on Africa. Lawyers have also recognised that Africa is a distinct market requiring specific expertise and a tailored approach. AfricArb, a non-profit organisation launched in July, is an example of continuing international enthusiasm for the development of African arbitration. It was founded by a group of international practitioners and aims to promote the use of arbitration through the involvement of actors both inside and outside of Africa.
    These recent developments demonstrate the determination, of both African and international institutions and practitioners, to further strengthen African arbitration.
    These, and similar organisations, will be vital in ensuring that arbitration is used as a dispute resolution mechanism across the whole of Africa, in a way that promotes and strengthens the continent’s ever growing capacity and expertise. The ICC’s African Commission intends to further this trend through awareness-raising and other outreach activities, as well as capacity building and development.

    Capacity development

    Capacity development is “the process through which individuals, groups and organisations, and societies deploy, adapt, strengthen, and maintain the capabilities to define, plan and achieve their own development objectives on an inclusive, participatory, and sustainable basis”, according to the United Nations Economic Commission for Africa.
    While achieving sustainable development goals is an important challenge, a very practical problem must also be solved – how to implement a legally sound operation in the host country.
    One important factor is to respect Africa’s country-by-country uniqueness. Each country’s distinct political, social, and historical framework informs the modern regulatory climate. To overlook these distinctions and to paint with a broad brush is hazardous.
    A legal strategy in one country is not necessarily transferable to another country, and legal solutions that make sense from a western law perspective may be completely unworkable in African jurisdictions.
    Assertions offered by local contacts, such as “This is the way it’s usually done” is no substitute for proper advice from reputable local counsel. Respect for Africa demands no less.
    Trial and error can be costly in capacity building initiatives. The regulatory environment in many African countries is opaque, even as reforms are underway.
    The practical challenge in addressing the issues is not the particular difficulty of any one of them, but the difficulty of learning what the rules are for all of them and threading the necessary paths through the local regulatory processes.
    Several pieces of the puzzle must fit together before large capacity building projects can properly begin, and orchestrating the necessary actions efficiently, so that they come together in a reasonable and timely manner, is much more difficult than one might reasonably expect. But making a permanent difference in Africa’s future is worth the effort.

  • ‘Slow legal systems discourage foreign investors, unlike arbitration’

    From a very humble beginning as a newspaper vendor and messenger at Ilesa Grammar School, Mr Adebayo Adenipekun (SAN) rose to become Managing Partner at Afe Babalola & Co, one of Nigeria’s leading law firms. After obtaining a degree in Education and English from the Adeyemi College of Education, Ondo State, his determination to be a lawyer saw him pursue admission to the University of Ibadan (UI), where he studied Law. Adenipekun, who has handled several high-profile election petitions and commercial litigations, is an expert in arbitration. Last year, the Federal Government appointed him Nigeria’s representative at the Permanent Court of Arbitration (PCA) at The Hague, the Netherlands. In this interview with OSEHEYE OKWUOFU, Adenipekun speaks on arbitration, its processes, its potential for lawyers and how economies can benefit from it. 

    Last year, you were appointed to the Permanent Court of Arbitration (PCA) by the Federal Government. Can you tell us about it?

    The Permanent Court of Arbitration (PCA) at the Hague, the Netherlands, is an inter-governmental organisation. It was established sometime in 1899; some countries came together and formed it. By agreement of the state parties at the 1899 Peace Conference, as contained in the 1899 Hague Convention for the Pacific Settlement of International Disputes, the PCA was to serve as a platform where disputes among state parties may be referred for third party dispute settlement. These disputes were to be submitted to a panel consisting of arbitrators selected from a pool of potential arbitrators, known as members of the court. The members are appointed as representatives by each member state. So, what we have is a court, not in the traditional sense of the word, but a tribunal consisting of four representatives from each member state. Disputes arising between states and international organisations can be referred to the PCA.

    How do PCA’s functions differ from that of a regular court?

    Let me start by defining arbitration. Arbitration is a process whereby parties to a contract can submit their differences or dispute for the consideration of one or more independent persons. It is different from the traditional court system in the sense that the court is a public system where the government has the responsibility of appointing the judges and the judges preside over the cases submitted to them. But  arbitration is a private process. Parties to a contract can agree that, in the event of any dispute, they would submit the dispute to arbitration before the PCA. The decision rendered by the arbitral tribunal is binding on the parties and has the force of law. The arbitral award may be enforced after some municipal processes have been complied with for the enforcement of an award in the state concerned. Once those processes have been complied with, an arbitral award has the same character as a judgment obtained in a traditional court. The difference is that in the traditional court we have judges appointed by the government, while in arbitration, we have arbitrators appointed by the parties pursuant to the agreement they had earlier reached.

    What is PCA’s jurisdiction?

    Well, we have different forms of arbitrations. We have what we can call domestic arbitration, international arbitration, investment arbitration, or maritime arbitration. There are so many types of arbitration. Domestic arbitration involves parties, who are residents or carry out business within the country, whereas international arbitration involves at least, a party who is not resident within the country – a foreign party. Take for example, a Nigerian company enters into an agreement with a company in Europe or in America, a dispute submitted to arbitration in that instance is an international arbitration. The PCA as earlier noted is a forum whereby parties submit their disputes to panels consisting of independent arbitrators selected from the pool of arbitrators. It adjudicates on matters relating to territorial and maritime boundaries, state sovereignty, human rights, national investment, international and regional trade. So, the forum is referred to for dispute resolution, all depends on the nature of the dispute and the agreement of parties.

    How are arbitrators selected for international arbitration?

    There is the International Centre for the Settlement of Investment Dispute (ICSID). That is another body entirely. It is an international body where disputes relating to investment can also be submitted for adjudication. It is an arm of the World Bank. It was established sometimes in 1966 by the World Bank to encourage settlement of investment dispute between foreign investors and a sovereign country. ICSID is also different from the Permanent Court of Arbitration. So, all these are available fora for disputing parties to present their disputes for third party settlement. Where the dispute is domestic, the disputing parties may appoint an arbitrator within the country, and this results in what may be termed a domestic arbitration. Where one of the disputing parties is a foreign company in dispute with a domestic company, both parties may appoint an arbitrator to settle the dispute. This may be referred to as an international arbitration. If two states have a dispute over maritime delimitation, they may agree to submit the dispute to the PCA. Where one of the disputing parties is an investor, and there is a dispute with the state where it has invested, the parties may agree to submit the dispute to the ICSID, which is based in Washington DC, United States.

    Why is arbitration a prefered option?

    Every country wants foreign investments. And that is the truth – every country desires to attract foreign investors. But one of the challenges, which often discourage foreign investors from investing in a country, is the issue of dispute resolution. Foreign investors are often reluctant to invest in developing countries or what are often referred to as third world countries because the legal systems in those countries are usually slow. In a recent survey, it was discovered that whereas in some developed countries, it will take only about 18 months to dispose off a matter in court, in developing countries or third world countries like Nigeria, cases can be in court for up to seven, eight, nine or even 15 years. The solution to that is arbitration. Parties when entering into agreements agree that in the event of any dispute, they will submit same to arbitration. Both parties agree on the mode of appointing the arbitrator and other procedural issues, thereby having full control over the entire process. The arbitrators devote their maximum resources to adjudicating the dispute and are able to dispose of the dispute within a matter of days, weeks or months.

    What are the advantages?

    One advantage of arbitration is that it helps to attract foreign investors. Secondly, if parties want cases to be disposed of quickly it is better to employ arbitration as a dispute settlement mechanism. Thirdly, it removes the question of undue publicity. Most business people prefer their disputes and the intricacies of their settlement to be left out of public domain. They want to settle their dispute privately and move on with their businesses. So, if a party is mindful of keeping the dispute confidential and private, arbitration may be the way to go. There are so many other benefits.

    Are there any benefits for legal practitioners?

    There are many benefits for lawyers too. Legal practice is a dynamic one and it keeps evolving every day. Even, before we started practicing, those, who practiced before us specialised in land disputes, chieftaincy disputes, other civil matters and so on. Today, we have lawyers, who specialise in arbitration and that forms the core of their legal practice. If you are in arbitration as a legal practitioner, the opportunities are many. You can practice as counsel before the arbitral body – the tribunal. You can also be appointed as a sole arbitrator, who can preside over matters or you can be the presiding arbitrator of a panel consisting of more than one arbitrator. So, a lawyer can derive a lot of benefits if he specialises in arbitration.

    Are there any benefits for the common man?

    Yes, they do. In fact, arbitration has developed to a level where it will benefit the common man, and I can see in the nearest future that it will be more beneficial to the common man than any other person. For example, a dispute involving landlord and tenant may be referred to arbitration rather than instituting an action before a court of law. The traditional litigation may put the case on the court’s docket for four to five years meanwhile, that dispute may be resolved through arbitration within a shorter time. The tenancy agreement may specify that in the event of any dispute, an arbitrator will be appointed by the parties to adjudicate on the dispute and whatever decision is reached by the arbitrator will be final. Other instances include family disputes and disputes involving small claims. These are disputes involving the common man, which can be submitted to arbitration. So, it is very useful to the common man.

    In international disputes, how are arbitral proceedings initiated?

    For the PCA, the ICSID and in arbitration generally, the first step is to issue a notice of dispute. In fact, we call it notice of arbitration. Once a party gives that notice, the next thing is to constitute a tribunal, which involves appointing the arbitrator(s), who will constitute the tribunal. There are many ways parties arrive at the appointment of arbitrators. Perhaps, parties might in the agreement nominate an institution to appoint the arbitrators. For instance, parties in an agreement may state that in the event of a dispute, the  Secretary-General of the PCA should appoint members of the court to preside over the matter. Parties may each appoint one arbitrator and state that the appointed arbitrators agree on an umpire arbitrator, or may as well state that the presiding arbitrator be appointed by the Secretary-General of the PCA. The same principle applies in other forms of arbitration, whereby parties nominate, say the Chartered Institute of Arbitrators (UK) Nigeria Branch, to be responsible for the appointment of the arbitrator. These are the instruments you can use to initiate an arbitral proceeding.

    What are the challenges or constraints of arbitration?

    Well, the major problem is the enforcement of arbitral awards. It is one thing to agree to arbitrate, but when dispute arises a party can decide not to cooperate again and this is the normal tendency. If parties submit to arbitration and an award is delivered, until same is enforced the award is useless and the winning party will be unable to realise the fruits of the award. In most cases parties against whom judgment or award had been delivered would not want to honour the decision. There are procedures for the enforcement the tribunal’s award. This can take some time, and in most cases, parties have to go back to court to enforce it. And in some cases, we have to use diplomatic moves to enforce it. Sometimes, parties involve some international bodies like the ICSID or PCA. In some cases, the matter may be reported to the United Nations. That is also a diplomatic means. So, the major challenge facing arbitration is the enforcement of the award.

    What is your advice for young lawyers in arbitration?

    When we started, there were no opportunities as we have them today. Then, arbitration was hardly known; it was not popular. So, those of us who had interest in it were looking for where to get the training and this was difficult. But nowadays, we have the training everywhere. So, my advice is – arbitration is good. And why I like arbitration is that it is less rancorous unlike traditional litigation. In traditional litigation, there is a hostile environment and by nature I don’t like anything hostile. But when you go to arbitration there is a different atmosphere.

    Do you remember your first experience in arbitration?

    The first experience I had about arbitration was before the late Honorable Justice Kayode Eso. You know he acted as an arbitrator for the latter part of his life for close to 25 to 30 years when he retired from the Supreme Court. So, I appeared before him and it was my first time. I was led by my boss. When we started the proceedings I noticed it was very peaceful, and a jovial environment, the presiding arbitrator and counsel were throwing banters. Within some minutes, food was brought in with soft drinks and after some time we went into the business. After the proceedings, we went for lunch and we were all relaxed.  I compared it with what I always witnessed at the traditional courts. There you are expected to be in a combative mood, shouting at the top of your voices. If you don’t do that, your clients may start doubting you. Some lawyers do not help matters. They like to play to the gallery to impress their client. I don’t like it. So, for young lawyers and upcoming legal practitioners, arbitration is a good thing that they can try. They will enjoy it.

    What opportunities are there for lawyers in arbitration?

    Arbitration has no boundaries. If you are a lawyer, you can only practice in Nigeria. If you want to practice in the United Kingdom you have to get their license. If you don’t get the license you can’t practice. But in Arbitration, there is no boundary; you can practice anywhere in the world without having to get any license. So, you can see that it is more of a free world. You can practice anywhere in the world. So, that is why I like arbitration.

  • ‘Why it’s quicker to enforce rights through arbitration’

    ‘Why it’s quicker to enforce rights through arbitration’

    Rashida Abdulai is a Senior Associate and Solicitor-Advocate within the Hogan Lovells International Arbitration Practice. She obtained an LL.M from the New York University and an LL.B from the Kings College, London. A key member of Hogan Lovells’ Africa practice, Rashida has represented multinational companies in disputes arising from their operations across the continent. She shares her thoughts with ROBERT EGBE on the state of arbitration in Africa and how Nigeria can become an arbitral hub on the continent. 

    As an international arbitration expert, what is your opinion on the evolution of arbitration and Alternative Dispute Resolution (ADR) in Africa and Nigeria in particular?

    There are a few key things to take into consideration when you’re trying to create an environment where arbitration can flourish. Perhaps the most important of those is creating an arbitration-friendly legal regime within the country. That includes both the laws or legal framework, and judicial support of arbitration.

    Here in Nigeria, modern arbitration laws have been put in place which reflect international standards and provide the legal framework for arbitration. The next important step is ensuring that there is increased acceptance and knowledge of arbitration and how it works within the judicial system, to ensure that when parties need to use the courts to either enforce their award or seek assistance throughout the course of the arbitration proceedings, they are able to get that assistance in an effective and efficient manner.

    We have seen the growth of arbitration institutions in Nigeria recently, such as the Lagos Court of Arbitration and the Lagos Chamber of Commerce International Arbitration Centre, both of which have their own institutional arbitration rules which are up to international standards. The Lagos Court of Arbitration has amazing facilities and I’ve had the pleasure to visit the building a few times. It actually rivals and surpass some of the facilities I’ve seen in other arbitration centres around the world. It’s an amazing facility and one that Lagos should be very proud of.

    Another thing that I’m seeing more and more is arbitration expertise in the form of legal practitioners and arbitrators on the continent, and I think Nigeria is one of the countries that leads the way. There are Nigerian law firms with teams of arbitration specialists now, and there are individual lawyers with an international reputation in arbitration, lawyers who sit on the boards of some of the largest arbitration institutions in the world. So, the building blocks are in place, it’s just a matter of further developing each of these aspects to make sure the environment is truly arbitration-friendly and encourage people to seat their arbitrations here in Nigeria.

    What can Nigeria do to become a more attractive arbitral seat for the African sub region?

    There are a few countries that are seeking to develop themselves as hubs of arbitration in their respective regions. Historically, one of the oldest arbitration institutions in Africa is the Cairo Regional Centre for International Arbitration in Egypt and in many ways that may be seen as a hub for the region. But more recently, we’re seeing a proliferation of arbitration centres in the hopes of creating further hubs for the region. So, there’s a bit of competition! There are centres in Mauritius, Kenya, Rwanda, South Africa and in Nigeria to name just a few, all vying for that position as the regional hub.

    But, given the size of the market we’re talking about – Africa is a huge continent with many countries in it and lots of businesses operating here who will need to use their services – I think it’s less a question of trying to develop one hub than realizing that there is enough demand for all of these countries to have thriving arbitration centres. I would say operating an arbitration centre in Nigeria for businesses operating in Nigeria and in neighboring countries to the extent that they also want to use the court, is great. Nigeria in itself has got a lot of business, trade and activity going on and trying to service that, as the first step, will be quite a challenge.

    What, in your view, should be the basis of Nigeria’s arbitration policy?

    The important thing is to think about why parties use arbitration: it’s because they are looking for more cost-effective, quicker, more flexible way of resolving their disputes. So, the key issues are around those three points; how can we make sure that arbitration is more cost-effective, provides for efficient resolution of disputes and is flexible for the parties? For us to ensure those things, the legal framework for arbitration needs to preserve party autonomy, allowing them to create the process that they would like for their arbitration. The judiciary and state courts have to support arbitration in terms of making sure that when the parties do need to use the court system, their cases do not get held up or unduly delayed, which would then mean that they’ve lost the benefit of the case being resolved slightly faster in arbitration. In relation to cost-effectiveness, that also means ensuring that there are arbitration institutions here on the ground, there are facilities, there are arbitration experts here in Nigeria who are able to assist them, such that they don’t have to look to London or to Paris for lawyers to help them with their case. They don’t need to travel to find a suitable hearing venue, everything is here and ready to go. I think things are already in place in most of these areas, it’s just a matter of further developing them to make sure that they fully support arbitration.

    Despite arbitration’s obvious advantages, litigation remains the most common method of resolving commercial disputes in Nigeria and Africa generally. Why do you think this is the case?

    I think it’s the case everywhere. Litigation is firmly established, everybody understands that they have the option to enforce their rights in court should things go wrong. Arbitration is essentially a private arrangement usually between two business entities where one or both of them prefer not to use the court system, and instead have a private dispute resolution process with arbitrators of their choice. Usually, that is because the two companies are from different jurisdictions, so there would be a question of, ‘okay, if we have to go to court, whose court? The court in my jurisdiction or in yours?’ And, so, to overcome that issue, arbitration allows them to provide for a neutral venue to resolve their dispute. But, if you’re talking about two companies in the same jurisdiction, you don’t have that issue. They may decide that litigation is fine and they don’t need to resort to arbitration.

    Another reason why I think people opt for arbitration is the cost and time element: it might be that in some jurisdictions it is quicker for them to resolve their disputes through arbitration than litigation. But that’s not always the case. In the United Kingdom, the commercial courts are very efficient and you can usually get your commercial case heard quite quickly. In Sierra Leone they’ve recently instituted a new commercial court which hears cases on a fast track basis, so, again that might be suitable for businesses operating in Sierra Leone who have recourse to that court. I would say arbitration is not intended to replace litigation as such; it is seen more as an alternative which may suit some people better in certain situations.

    Usually, litigation and arbitration are regarded as mutually exclusive dispute resolution methods, is it possible to combine both to develop an effective strategy?

    I don’t know what the benefit of that would be. What I have seen is courts encouraging the parties to settle their disputes through Alternative Dispute Resolution (ADR). This is known to take pressure off the courts system, because of the sheer volume of cases which would otherwise need to be heard. Where I’ve seen ADR used most successfully is when parties are encouraged to resolve their disputes through mediation, which is a consensual process with no decision maker. The mediator is there to facilitate discussions between the parties and to help them reach their own settlement. Because there’s no decision-maker, it’s very possible that the parties may not agree, and if they don’t agree they then need to go to a decision-maker, whether an arbitrator or a judge in a court. So, litigation or arbitration would then be the next step to provide the parties with a binding decision that they have to respect.

    Also, given that one of the key drivers for arbitration is speed, if you were to give parties the right to litigate after they’ve gone through the arbitration process, it completely negates the benefits of arbitration.

    Arbitration seems to be the trend these days in Nigeria and across Africa. Why do you think its gaining popularity now?

    I think this is because arbitration has gained recognition as a more efficient way of being able to enforce your rights. If you are in business and somebody has not paid your invoice and you have an option of trying to enforce your contract in court knowing that this may take a period of years – and I’ve heard in some instances, potentially even 10 years in Nigeria- when somebody tells you that you can instead opt for arbitration whereby you will choose your tribunal and you will determine the process they follow and get your award within a year, of course you are going to opt for arbitration. It has given people more choice and allows them to focus on the profitable activities that keep them in business. This means they can employ more people, they can continue to flourish, and they can contribute more to the economy. So, for me it’s very clear why governments are picking up on this and saying, yes, resolving business disputes this way makes sense.

    What common mistakes do parties make in drafting arbitration clauses for domestic or international arbitration?

    They mostly stem from the fact that drafting arbitration clauses is usually something that is done at the eleventh hour, after the parties have really thrashed out the commercial terms, negotiated hard on things like price and quantity, and then start to think about the ‘boilerplate’ provisions. People don’t often enter into agreements thinking about what will happen if it all goes wrong, they always hope that things will go as planned. But, of course, they do go wrong sometimes, that is inevitable. So, it is important to really think about your dispute resolution clause. Leaving it till the eleventh hour and not giving it proper attention can lead to more problems.

    For an arbitration agreement to be effective, there are certain things that parties have to include in the agreement to make it clear that they want to give up their right to go to court completely and ensure that all of their disputes are resolved through arbitration. If the arbitration clause is not drafted clearly to reflect this, the whole thing will be invalid and the parties will be forced to go to court. So, making sure that the arbitration clause actually works is important but alongside that are issues like, where should the arbitration be seated? For example, if both business are operating in the same country, why would you choose a seat in a foreign country, which both parties would have to pay an exorbitant amount of money to travel to in order for the case to be heard? Also something that parties don’t necessarily think about is, once you have the award, your decision which says that the other party needs to pay you, where do you actually want to enforce it, where are that party’s asset located? If their assets are located in a country that is not a party to the New York Convention, which is the convention that allows parties to have their award recognised in any country that is signed up, then the real issue is going to be whether you are going to be able to get your money at the end of the day. So, making sure that you draft your arbitration clause with these sorts of issues in mind is important.

    It is useful to have a legal adviser at this point but, at the very least, most arbitration institutions, including the Lagos Court of Arbitration, the Kigali International Arbitration Centre and the London Court of International Arbitration, have model arbitration clauses available on their websites which highlight the things you need to think about including in the clause. The model clauses are free of charge and available on every reputable arbitral institution’s website.

    Is there a best method for appointing an arbitral tribunal?

    Yes, I would say that the constitution of the tribunal is one of the most important things for parties to consider when they are commencing arbitration. These are the people who are going to decide your dispute, so some of the key considerations, I think, when choosing an arbitrator to sit on that panel, are their experience and expertise. If it is a really technical legal dispute, then you may want someone who has sufficient years of relevant legal experience. If it’s a more technical engineering type dispute, you may want someone with more engineering knowledge rather than legal knowledge by virtue of their experience in the industry. If you are in an industry that has specialist knowledge attached to it, say for example the oil and gas, then you may want someone with experience in that industry as well. You may also want to think about someone who understands the business culture and context in which you operate so that they get where you are coming from. All of this is just to make sure that you have a tribunal that can decide your dispute most efficiently and most in line with the parties’ expectations.

    Do ethics rules apply in international arbitration?

    Yes, the way that it applies is the same as in domestic litigation or arbitration, in the sense that the lawyers must adhere to their professional conduct regulations. Even if you, as a Nigerian lawyer, are actually conducting an international arbitration in London, you are still bound by your professional obligations as a Nigerian lawyer and those include all the ethical considerations. You should not, no matter where you practice in the world, act in contravention of those.

    Let’s say two Nigerian firms take their dispute to the UK for instance, what rules of ethics would apply, Nigeria’s or the UK’s?

    It would depend on the lawyers they choose to instruct to assist them. If they choose English lawyers based in London, then the English lawyers will be bound by English rules. If they instruct Nigerian lawyers, which is permissible for arbitration in London, then the Nigerian lawyers will be bound by their professional obligations under the Nigerian regulations. As a lawyer you carry your professional obligations around with you, you have to continue to uphold the profession in your home jurisdiction and that includes adhering to the professional conducts regulations that apply to you when working abroad.

    It is often said that a majority of arbitrations involving African parties take place outside the continent. If this is true, why is that that the case?

    I can’t say whether or not it’s true for certain. I think that a lot of this is anecdotal, I don’t think there is any empirical evidence or data that we can point to, but I have seen multinational companies that have Nigerian entities choosing to seat their arbitrations in jurisdictions other than Nigeria and there may be a number of reasons for this. I think a key reason is what I mentioned earlier, the fact that parties want to seat their arbitration in a jurisdiction that is arbitration-friendly, in terms of the arbitration laws that apply and the judicial assistance available to help them throughout the arbitration proceedings.

    So, if you got a really efficient judicial system and a legal framework for arbitration that has been tried and tested and is reliable and certain, of course parties are going to want to use it because at the end of the day all they care about is getting an award which is enforceable, which did not cost them an arm and a leg to obtain and which did not take many years to be rendered.

  • Minister takes oil workers’ case to arbitration panel

    Minister takes oil workers’ case to arbitration panel

    Minister of Labour and Productivity Chris Ngige has referred the case of striking workers of Mobil Producing Nigeria Unlimited (MPNU) to Industrial Arbitration Panel.

    By the minister’s action, the workers cannot continue with the strike as statutorily provided by the law.

    A letter to the Managing Director and lead Country Manager, MPNU, dated May 12 and signed by Mrs. M.O. Ike of the Trade Union Services and Industrial Relations Department of Labour and Productivity Ministry on behalf of the minister, indicated that Ngige has invoked the powers conferred on him by law by taken the dispute to the Industrial Arbitration Panel.

    The letter reads: “I am directed to inform you that the Honourable Minister of Labour and Employment in exercise of the power conferred upon him by Section 9 (1) of the Trade Disputes Act, Cap T8, Laws of the Federation of Nigeria (LFN), 2004, has referred the trade dispute now existing between the management of MPN and PENGASSAN to the Industrial Arbitration Panel.

    “The Registrar of the panel will address further correspondence to you in due course.

    “You are hereby reminded of the provisions of the Trade Disputes Act, which stipulates inter alia, that there shall be no strike or lockout where a trade dispute has been referred to the Industrial Arbitration Panel. You are, therefore, advised accordingly.”

    The striking Mobil workers had shunned a mediatory meeting called by the minister last Thursday without an explanation. They also rejected a directive by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to suspend the strike.

    The action of the oil workers was considered as discourteous. The workers rather pledged loyalty to the national body of PENGASSAN and every position it takes on the matter.

  • ‘Arbitration a better option in real estate dispute’

    ‘Arbitration a better option in real estate dispute’

    Nathan Searle is a partner in Hogan Lovells International Arbitration Group, who acts for multi-nationals and high-value international arbitrators in cross-border disputes. In an email chat with MUYIWA LUCAS, Searle speaks on the role of arbitration in the real estate sector. 

    What is the role of arbitration in real estate dispute resolution?

    As urbanisation increases and the size, value and complexity of real estate developments rise, the potential for disputes heightens. In particular, real estate developments are increasingly involving provision of key infrastructure such as power, water and roads. Real estate projects involve many parties including investors, lenders, construction firms, materials suppliers and the purchasers, who may be businesses or individuals.

    Arbitration is a means of resolving disputes in a fast, efficient, cost-effective and confidential manner.

    One key advantage of arbitration is parties can choose arbitrators with experience in the real estate sector. This means that the parties’ dispute will be determined by someone, who can bring to bear his expertise in understanding and deciding the matters in dispute.  This can lead to a more efficient process and be helpful, particularly regarding issues that are technical or relate to industry practice.

    Another advantage of arbitration is parties can determine, to a large extent, how they want the proceedings to be handled whereas court proceedings are conducted in accordance with court rules.  In the context of an ongoing real estate development project, it may be necessary for a dispute to be resolved quickly so that work on the project can continue. Arbitration enables the parties to agree to put in place procedures to ensure that an award is made quickly to prevent a dispute from derailing the project.

    Does Nigeria have trained personnel to handle arbitration?

    There are many leading arbitration lawyers in Nigeria. Many of these lawyers have experience of arbitrations in the oil and gas sector, where arbitration is the preferred means for resolving disputes.  There is a false perception that it is only used in resolving oil and gas disputes, this, however, is not the case, as arbitration is constantly evolving and is increasingly common in other sectors.

    The recent creation of the Association of Young Arbitrators (AYA) Nigeria, also shows that Nigeria is investing in promoting arbitration among young, up-and-coming lawyers. AYA is an organisation established by young Nigerian lawyers to facilitate mentoring, knowledge sharing and training of the next generation of arbitration lawyers in Nigeria. The Lagos Court of Arbitration has also offered arbitration training to Nigerian lawyers for a number of years.

    How can the concept of arbitration be related to real estate?

    When people talk about Arbitration, they are often referring to mediation.  Unlike in court or an arbitration, in mediation there is no final and binding judgment.  Instead, the mediator’s role is to seek to facilitate the parties reaching agreement on a final settlement.  The mediator’s role is to help show the parties how they can reach a win-win solution by helping them evaluate the strength and weaknesses of their cases to reach a fair and mutually acceptable outcome.  A key advantage of mediation is that it is faster and cheaper than litigation or arbitration.

    To what extent is the outcome of arbitration legally binding on other parties in real estate issues?

    Arbitration results in an award which the parties agree is final and binding, subject to any rights of appeal provided for by law.  Courts will usually enforce arbitration awards provided that the arbitration was conducted fairly and in compliance with the parties’ agreement to arbitrate.

    What other means are available for real estate dispute resolution?

    If the parties do not wish to use mediation or arbitration to resolve real estate disputes then these would usually end up in court litigation.

    Court litigation can be expensive and it can take a long time get to a final judgment, particularly if the case goes all the way through the appeals process.

    Adoption of arbitration in real estate disputes is a great opportunity in Nigeria. It takes pressure off the courts, and Nigeria definitely has the infrastructure for it, with high-calibre lawyers experienced in arbitration, and arbitral institutions like the Lagos Court of Arbitration. Arbitration has a broader role in resolving not only real estate disputes, but shipping and other commercial disputes, and Nigeria is well placed to capitalise on this.

  • Arbitration restores investor confidence, says Osinbajo

    Arbitration restores investor confidence, says Osinbajo

    A good commercial arbitration system will restore investor confidence in the Nigerian economy, Vice President, Prof Yemi Osinbajo, has said.

    The Vice President, who spoke at the First International Chamber of Commerce (ICC) Africa Regional Arbitration Conference in Lagos, said arbitration promotes the virtue of utmost good faith and constitutes a significant determinant of a country’s ranking in the yearly World Bank’s Ease of Doing Business report.

    Represented by the Minister of Justice and Attorney-General of the Federation, Abubakar Malami, the Vice President said any forward looking society must provide ways for resolution of commercial disputes, saying as lawyers and policy makers, “we are all aware that a fiscal resolution mechanism is a key factor involved in investment decision.”

    He said every business environment is prone to disputes, but stressed that every prudent society must design and constantly draw the processes through which disputes could be resolved in an amicable manner. “In the world of today, commercial arbitration is now recognised as a preferred method of solving several commercial disputes,” he said, adding that arbitration is now seen as not only possessing the desired speed, but also aggregating competency.

    The President of the Paris-based ICC Court of Arbitration, Alexis Mourre, stressed the need for more engagements and interactions on arbitration, adding that commercial practitioners would recognise arbitration just like common law and civil laws, pointing out that ICC is one of the key institutions that adopted arbitration and that 70 per cent of world arbitration came from ICC.

    The Chairman, Planning Committee, Nigeria ICC, Mrs. Dorothy Udeme Ufot, said  Committee came up with the idea of the three-day event with Arbitration and Africa: Prospects and Challenges as theme because Africa is the next major destination for Foreign Direct Investments (FDIs) by the international community.

    Ufot urged the international community to support Africa’s efforts to promote economic growth and investments, saying the interest of investors across the continent are so numerous that oil mining companies were looking forward to developing natural resources.

    At the panel discussion, the discussants, including the President, Nigeria Bar Association,  Augustine Alegeh, a representative from Dangote Group, Mr. Abdulah, Gbenga Oyebode, Founder/President, Econet Wireless Group, Strive Masiyiwa and other Senior Advocates of Nigeria (SAN), agreed that arbitration has become an integral part of dispute resolution. They agreed that employing arbitration in resolving disputes achieves faster results than long-drawn court processes.

    The former Minister of Justice and Attorney-General of the Federation, Bayo Ojo and a host of other lawyers from across Africa attended the forum.