Effective Procedure to Enforce Arbitral Awards in Nigeria: A Step-by-Step Guide to Success
INTRODUCTION
Globally, arbitration is recognised as a peaceful method of resolving disputes. In the Nigerian court system, arbitration has grown significantly in popularity as a method for resolving business and trade disputes over the years. The rationale for this is not implausible because arbitration by its very nature is quicker than litigation in delivering justice. Because of its neutrality, flexibility, and confidentiality, arbitration is appealing to parties to a dispute.
Successful parties in arbitration proceedings would be given a final, legally binding judgement known as an arbitral award, which could only be revoked by a court order on the reasons specified in the 1988 Arbitration and Conciliation Act. See the ACA Sections 29 and 30. The Federal High Courts and State High Courts have jurisdiction over requests to have arbitral verdicts enforced. Refer to ACA Sections 29, 30, and 57. Additionally, the Supreme Court has the authority to hear cases using Section 1 of the ICSID Convention, which Nigeria adopted in 1965, and enforcement actions related to it. The Arbitration and Conciliation Act of 1988 is the applicable law in Nigeria that governs the enforcement of an arbitration ruling.
An action to enforce an arbitral award accrues from the time the disagreement that gave rise to the arbitration began, not from the time the decision was made. According to the Limitation Law’s Section 7(1)(d), this is the case. When a substantive dispute has been resolved definitively through arbitration, the courts uphold the decision. Applicants must submit written submissions that are no more than 20 pages and pay the appropriate filing fee as determined by the court’s registrar. See Lagos State High Court Rules, Order 35, Rule 3. Where relevant, an originating motion, affidavit, and written submission must be submitted, along with copies of each, in line with Order 52 rule 15 of the Federal High Court Rules 2019.
Arbitral awards may be recognised and enforced in Nigeria under Sections 31, 51, and 52 of the ACA 1988. Following these procedures and requirements will enable a successful party to enforce arbitral judgements in Nigeria:
PRESENCE OF A VALID AWARD
Before a party can seek to have an arbitral award enforced, a dispute must have arisen, both parties must have submitted to the arbitral tribunal’s jurisdiction, and the successful party must have received a legally binding award. A written award must be signed by the arbitrators in order to be considered valid. When there are many arbitrators, the majority’s signature is sufficient. See ACA Section 26. This technique of enforcement is frequently used; it is founded on the idea that parties to an arbitration agreement agree to carry out a legitimate award, and that, in the event that this is not done, the victorious party may take legal action for breach of contract.
ENFORCEMENT UNDER SECTION 31 ACA
This section addresses the enforcement of domestic awards, stating that a court may order the enforcement of an arbitral award after receiving a written request from the arbitrator and subjecting it to Section 32’s limitations. According to this, a party must provide a properly authenticated award or a certified copy of the award when relying on it or asking for its enforcement. While Section 31(3) stipulates that an award may, with the court’s or a judge’s permission, be enforced in the same way as a judgement or order with the same purpose.
APPLICATIONS FOR ENFORCEMENT OF INTERNATIONAL AWARDS
International awards may be enforced in Nigeria under the Foreign Judgement Act and the Arbitration and Conciliation Act. Below is a summary of how the two Acts’ enforcement procedures work.
ENFORCEMENT UNDER SECTION 51 ACA
Foreign awards may be enforced under Section 51. It states that an arbitral award shall, regardless of the nation in which it is rendered, be regarded as enforceable and shall, subject to Section 32 of the ACA, be enforced by the court upon application in writing to the court. The party relying on an award or requesting its enforcement must provide the original, duly authenticated arbitration agreement or a duly certified copy of it, as well as a duly certified translation into English of any award or arbitration agreement that was not made in that language.
In Imani & Sons Ltd v. Bil Construction, the Court of Appeal determined that in addition to filing a motion on notice, the party seeking enforcement must also attach the arbitration agreement, the original award, the name and address of the party the award is to be enforced against, and a statement that the award has not been followed.
ENFORCEMENT UNDER FOREIGN STATUTES
Awards may also be enforced in accordance with the New York Convention of 1958, the Reciprocal Enforcement Judgement Act of 1922, and the Foreign Judgment Act of 1961. (Convention on the Recognition and Enforcement of Foreign Award). In contrast to a domestic award, which begins to run from the day the dispute began, an arbitral award’s period of enforcement commences to run from the date of the award. The New York Convention is domesticated by Section 54 of the ACA; this convention did not establish a deadline for enforcement and left it up to the court seeking enforcement.
Despite the foregoing, an aggrieved party may ask the court to reject an award in accordance with Section 52 ACA.
Conclusion
In conclusion, the procedure to enforce arbitral awards in Nigeria, though detailed, offers a robust legal framework designed to ensure that arbitration remains a reliable method of resolving disputes. The process involves several key steps, including the application for recognition and enforcement of the award, the filing of the application in a competent court, and potentially dealing with any objections raised by the party against whom enforcement is sought. It’s important to note that the legal system in Nigeria strongly supports the enforcement of arbitral awards, as stipulated by both domestic laws and international treaties such as the New York Convention.
While the process is generally efficient, parties seeking to enforce an arbitral award must be aware of potential challenges, including the possibility of the opposing party seeking to set aside the award or the complexities involved in enforcing it across different jurisdictions within Nigeria. However, with the proper legal guidance and understanding of the procedural requirements, these hurdles can be overcome.
The enforcement process is not only about following the procedural steps but also about leveraging the legal protections and remedies available under Nigerian law. This includes ensuring that the award is properly registered and obtaining the necessary court orders for enforcement, which may include seizure of assets or garnishment of funds.
Therefore, while challenges may arise, with the right legal strategy and adherence to the procedural rules, parties can effectively enforce arbitral awards. The clarity of Nigeria’s arbitration laws provides parties with confidence that disputes resolved through arbitration can ultimately be settled, providing closure and enabling business continuity.
In this regard, it is always recommended to consult legal professionals with expertise in arbitration enforcement to ensure a smooth and successful process. By being informed, prepared, and proactive, businesses and individuals can maximize the benefits of arbitration and secure a fair resolution to their disputes, ultimately contributing to a stronger, more reliable legal system in Nigeria.
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, pleascontact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080