OVERVIEW OF ARBITRATION IN NIGERIA
A neutral third party, known as the Arbitrator, or a group of impartial parties, known as the Arbitral Tribunal, developed arbitration as a private conflict resolution system for the resolution of disputes.
The parties’ consent to arbitrate is one of the essential elements of the arbitration procedure. Any arbitration that is legal must be based on a written agreement to arbitrate. It serves as the foundational source of the tribunal’s authority and capacity to arbitrate the conflict between the parties. Given the arbitration’s contractual basis, each party must agree to it in order for it to proceed. Arbitration cannot take place without a signed arbitration agreement.
Conflicts inevitably arise in both corporate and interpersonal relationships, and litigation is the most well-known technique of resolving them. In the Nigerian legal system, parties who resort to litigation settle disputes by filing a lawsuit against the offending party on behalf of the aggrieved party. We also have arbitration as a conflict resolution option; it is preferable since it is less expensive, quicker, and maintains the parties’ relationship even after the matter has been resolved.
Arbitration has the primary benefit of avoiding drawn-out and expensive court battles. Although individuals are permitted to have legal representation, the arbitration process in Nigeria is less expensive and makes it simple for them to represent themselves.
The category of alternative dispute resolution that includes arbitration comprises:
Mediation Reconciliation and Negotiation
The Nigerian legislation that governs arbitration is The Arbitration and Conciliation Act 1988, which is applicable across the federation with the exception of Lagos State, which has its own law, The Lagos State Arbitration Law, 2009. (LSAL).
It should be noted. not all disputes can be settled by arbitration.
ARBITRAL MATTERS INCLUDE
Breach of contractual agreement Matrimonial causes ancillary matters e.g. division of property. Torts Compensation for compulsory acquisition of land/ land disputes.
NON-ARBITRAL MATTERS INCLUDE
Criminal matters in general except plea bargain Election petitions being a matter of public policy Matrimonial causes such as the dissolution of marriage, nullity of a void marriage etc
PROCEDURE FOR ORIGINATING AN ARBITRATION PROCESS
In the event that a contract has an arbitration clause or an independent arbitration agreement, such clause or agreement acts as a bar to litigation and prohibits the parties from filing a lawsuit until the arbitration has been resolved. Therefore, the court may, upon the request of the other party, halt the proceedings in that case and refer the parties to arbitration if a party to such a disagreement files a lawsuit in court in violation of the arbitration agreement between the parties.
STATUTORY ARBITRATION CLAUSE
Some organisations’ founding statutes require that disputes between the organisation and another party be arbitrated first. This clause restricts the ability of any party to file a lawsuit in court before the arbitration has begun and been resolved. For instance, the Model Arbitration Clause for Contracts published by the United Nations Commission on International Trade Laws (UNCITRAL) states that:
“Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules.
The following prerequisites must be met for an arbitration to be valid:
IT MUST BE IN WRITING
The written arbitration agreement is required by both the ACA and the LSAL. A written arbitration agreement is required as it serves as evidence of the parties’ intent to submit the dispute to arbitration. A written record of the arbitration agreement can be found in a document that the parties have signed, or in an exchange of letters or other forms of communication.
AGREEMENT TO ARBITRATE
One of the key aspects of arbitration is that it demonstrates the parties’ agreement to have their issue arbitrated. Therefore, there cannot be a valid arbitration if there is no consensual agreement between the parties.
THE SCOPE OF THE ARBITRATION
The jurisdictional reach of the arbitral tribunal must be specified in the arbitration agreement. That is the issue that needs to be settled in the dispute.
NUMBER OF ARBITRATORS TO APPOINT
This will typically depend on how complicated the dispute is and how much the claims are worth. Contrary to complex and high-value arbitrations, which would benefit more from having a panel of three arbitrators, simple and small arbitrations should be handled by a single arbitrator.
CHOICE OF ARBITRATOR
The method for selecting the arbitrators may be stipulated by the parties. The parties, the court, or a body can all designate the arbitrator. The parties should use caution when defining the credentials of the arbitrator or tribunal. It is not advisable for parties to include the name of the arbitrator in the arbitration agreement, with the exception of submission agreements that are for already-existing disputes, as they cannot be sure if the arbitrator will be available when disputes arise.
THE LOCATION OF THE ARBITRATION
The arbitration’s seat is a crucial decision since it defines which national law will apply to the arbitration and which courts will have the authority to support the proceedings.
CONFIDENTIALITY
Although arbitration is fundamentally a private and confidential process, many national laws, such as the ACA, do not guarantee the confidentiality of the procedures and the decision. Therefore, it is advised that parties include provisions governing it in their arbitration agreement.
HEARING
Unless the parties agree otherwise, hearings during arbitral proceedings are less formal and private. The claimant files a statement of claim with points within the allotted time. The tribunal will continue the arbitration even if the defendant doesn’t submit his points or statement of defence, unless the party in default can provide a solid reason for the delay. However, the tribunal should not consider this defendant default to be an acknowledgment of the claimant’s allegations.
LANGUAGE
The arbitration’s language and the applicable arbitration legislation that would govern the proceedings
ARBITRAL AWARD
The arbitral tribunal reached this conclusion. It decisively establishes the parties’ rights. The award must be in writing and must include the following information: the names of the parties; the reasons for the award, unless the parties previously agreed that the arbitrator should not provide any justifications; the date the award was made; and the location of the award’s making. The document must then be signed by the arbitrator or the majority of arbitrators.
It is important to note that parties owe it to themselves to make sure that they carefully change their arbitration agreement to fit their needs while making sure that all necessary conditions are met for a legal arbitration agreement. When all of this is accomplished, they can be sure to take advantage of the arbitration process’ advantages of efficiency and speed.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080