INTRA-AFRICAN ARBITRAL AWARDS; ENFORCEMENT OF OHADA AWARDS IN NIGERIA PT 2
Unfortunately, however, the public policy consideration continues to pose an obstacle to ease of enforcement of foreign awards.
1. Non arbitrable subject matter
The ACA does not set out the disputes that are considered non-arbitrable. However, Section 57 of the ACA defines arbitration to mean commercial arbitration, and “commercial” entails all relationships of a commercial nature. Further, the full title of the ACA states that it is an Act to provide a unified legal framework for the fair settlement of commercial disputes by arbitration and conciliation. Disputes arising from non-commercial transactions may not be referred to arbitration under the ACA. Awards procured on matters bordering on criminal acts, proceedings for the judicial review of administrative action, matters relating to taxes and taxation and matrimonial causes, for example, are unabitrable. See United World Ltd Inc v MTS
2. Procedural delays
The pace of the Nigerian judicial system has unconsciously constituted itself as a challenge/obstacle to the expedited and successful enforcement of arbitral awards, be they domestic or foreign. Parties may employ delay tactics in the enforcement proceedings, usually with no effort on the part of the relevant court to discourage or disallow such antics. Every application to enforce an arbitral award, with or without a parallel application to set aside the award, is potentially open to appeal from the court of first instance through the Court of Appeal all the way to the Supreme Court, many times in relation to interlocutory matters. In addition, such applications are susceptible to delays caused by the slow pace of the courts themselves.
A case in point is the NNPC case referred to above. Several delays occasioned by a myriad of applications such as applications for amendments, preliminary objections, application for reassignment, amongst many others caused the matter to suffer immeasurably. The English, in its attempt to grant some panacea to the award creditor granted leave for a partial enforcement of the award.
It suffices to state that the judgment of the English court in the IPCO v NNPC case was widely commended as a pragmatic approach to follow in view of the clearly ‘dismaying’ delay in determining NNPC’s application to set aside the arbitral award.
3. Statutory limitations
Most constraints to enforcements are encountered where the award is against a state entity. State entities in Nigeria are typically creations of statute. In some instances, the enabling statutes make provisions that limit the exposure of these entities to enforcement proceedings arising from adverse judgments or arbitral awards. For instance, Section 14 of the Nigerian National Petroleum Corporation Act precludes execution or attachment against any asset or property of the NNPC except ‘from the general reserve fund’. In a situation where there is an award for which assets of the corporation are to be attached, only such amounts that fall within what is contained in the general reserves fund can be attached. It is needless to imagine what would happen when the award sum is way above what is contained in the general reserves fund even where a Nigerian court has granted such award creditor leave to enforce the award.
Another limitation may arise from Section 84 of the Sheriffs and Civil Processes Act (SCPA) and Order V Rule 5 of the Judgment Enforcement Rules which applies throughout Nigeria, provides that no order for payment may be made attaching monies in the custody or control of a public officer without obtaining the consent of the appropriate officer, who is the Attorney General of the Federation or the Attorney General of the respective component states of Nigeria. The Judgment Enforcement Rules made under the SCPA in turn extend this restriction to cover property in the custody of a public official. The question then arises as to what recourse an award creditor has where such consent is denied or delayed. In such an instance, the award creditor may be left with no option than to apply for a writ of mandamus to compel the Attorney General’s hand, an option which, quite honestly, may amount to further time spent.
Enforcement of OHADA Awards in Nigeria
OHADA awards in this context can be looked at from 2 angles; OHADA awards emanating from an OHADA state who is a signatory to the NY Convention and those from an OHADA member state, not a signatory to the NY Convention. The first (OHADA awards emanating from a member state who is a signatory to the NY Convention) is straight forward by virtue of S.54 (ACA) as the reciprocity requirement allows for recognition and enforcement for Convention awards under the Act. The basis for enforcement awards under this category is reciprocity. The other category are Non-New York Convention awards. A party seeking to enforce a foreign non-convention arbitral award, will proceed by virtue of S.51 of the ACA.
In addition, the provisions of S.2 of the Foreign Judgments (Reciprocal Enforcement) Act, CAP F35, Laws of the Federation of Nigeria, 2004 for the recognition and Order 52, Rule 17 of the Federal High Court (Civil Procedure Rules), 2019 for enforcement mechanism can effectively facilitate a smooth enforcement of OHADA region awards, be they from a New York Convention signatory state or non-signatory state.
In conclusion, enforcement of foreign arbitral awards in Nigeria is governed by the New York Convention, 1958, the ACA, the Foreign Judgments (Reciprocal Enforcement) Act, CAP F35, Laws of the Federation of Nigeria, 2004 and Order 52, Rule 17 of the Federal High Court (Civil Procedure Rules), 2019 and therefore being a signatory to the OHADA treaty isn’t a necessary requirement for OHADA awards. To this extent, therefore, the UAA is redundant and plays no role. It is evident from the foregoing, that the arbitration legislation of Nigeria and indeed most African jurisdictions are more favourable towards enforcement than not. The continent is still struggling with keeping up with the demands of arbitration as an independent alternative to litigation but on the whole, arbitration has garnered remarkable acceptability evinced by the increasing number of progressive decisions in favour of recognition and enforced by the judiciary. Are we there yet, no but we certainly are not where we used to be.
It is recommended, however, that institutions such as the African Union, take a more proactive role in facilitating respect for arbitral awards on the continent. Advocating for a single unified arbitration legislation would go a long way towards harmonising and unifying the arbitration laws on the continent which will in turn facilitate intra-continental trade and investments even whilst making the continent an arbitration friendly one. It is heart-warming to know that the Treaty establishing the African Continental Free Trade Area (AfCFTA) which came into force May 30, 2019 makes an attempt (by virtue of Article 27 of the Protocol on Rules and Procedures on The Settlement of Disputes) to institutionalise arbitration as the preferred dispute settlement mechanism and by so doing, promote respect for the enforcement of arbitral awards. It is hoped that at such a time when all 55 countries (54 recognised by the United Nations) on the continent become signatories to the Treaty, enforcement of awards across the continent will become seamless.