
Litigation, Arbitration and Other ADR
FREQUENTLY ASKED QUESTIONS ON ARBITRATION
Arbitration is a party driven settlement process. It is a dispute resolution mechanism based on the party’s autonomy. Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision regarding the dispute.
An Arbitration agreement may be in the form of Arbitration clause in a contract or in the form of a separate agreement. An Arbitration agreement has to be in writing.
The requirement as to Arbitration agreement being in writing is fulfilled and the document must be signed by the parties.
All type of commercial legal dispute can be settled in arbitration, including those arising under commercial contracts. When entering into a contract, the parties can include an arbitration agreement clause providing that some or all of the disputes that arise between the parties will be resolved in arbitration. Criminal matters are non-arbitrable
In Nigeria, Section 13 of the Arbitration and Conciliation Act, A10, LFN, 2004 permits interim measures and any party to an arbitration agreement can seek relief by way of an interim application from the court.
Arbitrators are independent third-party individuals (appointed by parties to the arbitration or the mode of appointment prescribed by the arbitration agreement) who hear the evidence, apply the law, and decide the outcomes of arbitration disputes.
A sole arbitrator is an individual appointed to resolve a dispute between two or more parties through the process of arbitration.
Unless otherwise agreed by the parties, the Arbitration proceedings commence on the date on which a request for the dispute to be referred to Arbitration is received by the respondent.
Generally speaking, an award is final and conclusive, and cannot be appealed, if decided under a binding arbitration clause or agreement. In any case, in certain locales, for example, Nigeria and UK, arbitration regulations in all actuality do set out boundaries for when an arbitration award can be appealed. Be that as it may, these models are typically extremely restricting.
A court of competent jurisdiction can enforce arbitral awards if the party required to pay refuses to honour the award.
The Arbitration and Conciliation Act (Cap A18, LFN 2004) and state-enacted arbitration laws, eg. Arbitration Law of Lagos State 2009.
The Arbitration and Conciliation Act automatically applies in domestic arbitration where parties have not stated expressly the governing law.
The substantive law to apply in a dispute is determined by the parties’ agreement, otherwise, Nigerian law will apply in cases of domestic arbitration. However, in international arbitration, the conflict of law rules applied by the tribunal will determine the law to be applied.
1. The Economic Community of West African States Energy Protocol
2. The Convention on Settlement of Investment Disputes; and
The UNCITRAL Model Law;
Bilateral Investment treaties with countries like: France, Germany, Romania, Sweden, Switzerland, the United Kingdom, South Korea, Finland, Spain, Serbia, and Taiwan.
Investment Promotion and Protection Agreements (IPPAs) with France, the Netherlands, the United Kingdom, Morocco, Singapore.
Asian-African Legal Consultative Organisation on April 26 1999, guaranteeing the continued operation of the Regional Centre for International Commercial Arbitration.
Must be in writing or evidenced in writing.
Parties must have mutually agreed or consented to the agreement.
Parties must have legal capacity to enter into the agreement.
Agreement must be in respect of a commercial relationship
Disputes incapable of being referred to arbitration
Generally, disputes arising out of tax matters are incapable of being referred to arbitration (Esso Petroleum and Production Nigeria Limited & SNEPCO v. NNPC, Appeal CA/A/507/2012)
Criminal matters are not arbitrable
Illegal and void contracts (United World Ltd Inc. v. MTS (1998) 10 NWLR (Pt. 568) 106)
To commence an arbitration proceeding, the claimant is to serve a Notice of arbitration on the respondent. Hence the arbitral proceeding is said to have commenced on the date on which notice of arbitration was received by the respondent, unless otherwise agreed by parties.
Are there restrictions on the appointment of an arbitrator?
Generally there are no restrictions on who can be appointed as an arbitrator, however, an arbitrator is expected to be independent and impartial.
If the parties have agreed that if there is any dispute the same shall be resolved by arbitration, kindly check the contract for an arbitration clause therein. If there is no such clause you may have to initiate legal action in court at appropriate jurisdiction. You may still request the opponent to enter into a separate arbitration agreement.
An arbitration agreement shall exist totally independently of the contract. Any modification, extension or rescission of the contract, or invalidity or unenforceability of the contract shall not result in the invalidity of the arbitration agreement. – The consideration of whether the arbitration agreement is valid will be conducted by the arbitral tribunal and the competent court.
This will depend on several factors such as the institution; tribunal fees; seat of arbitration/ lawyer’s fees and expenses.