Due to the constantly increasing volume of litigation, arbitration is gaining widespread acceptance in the world, and Nigeria is no exception to this rule. Hence, commercial arbitration in Nigeria is increasingly being used in the oil and gas, telecommunications & construction industries.
So, let’s have a look at what it takes to initiate arbitration in the Republic of Nigeria & what regulatory requirements parties will have to comply with
Under the LSAL, local governments, and not the federal government, are responsible for regulating all arbitration-related matters. However, the LASL is less commonly used for arbitration in the Republic of Nigeria than the federal law. 2018 saw a new bill passed aimed at solving issues in the settlement of disputes through arbitration in Nigeria, including issues arising from court decisions.
Starting the arbitration process in Nigeria requires parties to keep in mind some basic requirements, such as:
- all parties must be equally treated by arbitrators;
- awards must be in writing & bear signatures of all arbitrators.
Arbitration in Nigeria can be initiated pursuant to arbitration rules contained in the 1st addendum to the ACA. Under the rules, parties can only be represented by lawyers that are sufficiently qualified to practice law in Nigeria.
If an arbitration agreement doesn’t explicitly specify the numerical composition of an arbitral tribunal, 3 arbitrators are used by default. If parties can’t reach an agreement on the number of arbitrators, Nigeria’s Arbitration Court appoints arbitrators at its own discretion.
Nigeria: Initiating Arbitration
If parties decide to initiate international arbitration in Nigeria, they’re free to choose whatever applicable laws they deem necessary for the governance of upcoming proceedings.
Normally, courts aren’t permitted to intervene in arbitration proceedings in Nigeria. However, there are some exceptional circumstances under which they can do so. They include:
- suspension of proceedings;
- appointment of arbitrators if appointed arbitrators can’t agree on a presiding arbitrator;
- appointment of a judge;
- taking interim measures;
- informing parties on consequences of the arbitrator's resignation if parties haven’t reached an agreement.
Breaching an Arbitration Agreement
If a party decides to initiate litigation in Nigeria in violation of an arbitration agreement, the other party may request that the court suspend litigation & suggest that the parties settle their differences by arbitration.
However, if that party takes steps to defend their claim in court, they won’t be able to request a stay of proceedings.
Pursuant to the ACA, arbitral tribunals have the power to order that any party take interim measures which arbitral tribunals deem necessary for the settlement of disputes by arbitration in Nigeria.
Decisions rendered by arbitral tribunals can’t be appealed under the ACA or LSAL. Parties may request that arbitral awards be reversed if they provide enough evidence that awards are beyond the scope of arbitration or that arbitrators committed wrongdoing during the arbitration process.
Those planning on initiating international arbitration in Nigeria should keep in mind that the enforcement of foreign arbitral awards in Nigeria is governed by the NYC. Pursuant to NYC, foreign decisions are enforceable in Nigeria if a country in which they were made is a party to NYC.
Resolving a business dispute through arbitration in Nigeria is a fairly inexpensive alternative to traditional litigation. If you want to stay up-to-date on the latest changes in Nigeria’s arbitration legislation or require legal advice on arbitration regulation in the Republic of Nigeria, contacting IQ Decision UK may be a wide choice. Our experienced legal advisors will be delighted to lend you a helping hand with any legal issues you may be facing in this regard.