THE ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN NIGERIA
Today, Arbitration has become one of the fastest growing areas of dispute resolution mechanisms. This is without doubt, due to the legal flavour of recognizing that its arbitral awards are binding on the arbitral parties. Section 31(1) of the Arbitration and Conciliation Act states thus;
“An arbitral award shall be recognised as binding and subject to this section 32 of this Act, shall, upon application in writing to the court, be enforced by the court.”
Also, the binding effect and enforceability will apply to an arbitral award granted outside Nigeria. It is pertinent to state that, for the Nigerian court to enforce such foreign award, such country in which the award was given, must have laws extending reciprocity in this regard.
According to “World Bank ease of doing business index 2020”[i], Nigeria ranked 131st and on enforcement of contract index it ranked 73rd on the list. Amongst many reasons for these, includes the number of days it takes (454 days) to enforce a contract through the court. It is for this reason; it becomes imperative to state that arbitral awards be enforced and respected in a seamless fashion.
The Nigerian Arbitration proceedings is regulated by Arbitration and Conciliation Act. As this legislation provides the legal framework for arbitration proceedings in Nigeria. Our primary area of focus in this discourse is to analyse the enforcement of Foreign Arbitral award in the Nigeria system.
This article seeks to discuss the various laws which gives power to the Nigerian court to recognize and enforce foreign arbitral awards.
Foreign Judgment (Reciprocal Enforcement) Act 2004[ii]
Section 2 of the Act defines judgement to include arbitral award. Such judgment or award would have to be registered[iii] in a Nigeria court with the jurisdiction to hear the dispute. The judgment must be final and conclusive between the parties. The court will enforce monetary award payable and not fine or penalty. The Act allows the enforcement and recognition of foreign judgement within six years of the judgement[iv]. The purport of the law is to accord recognition and enforcement to judgement of foreign court that accords reciprocal respect to judgements of the Nigerian court.
The Federal High Court Civil Procedure Rules 2009 provides for the enforcement of foreign arbitral award. Order 52 Rule 17 stipulates that “where an award is made in proceedings on an arbitration in a foreign territory to which the Foreign Judgment (Reciprocal Enforcement) Act extends, if the award was in pursuance of the law in force in the place where it was made; it shall become enforceable in the same manner as a Judgment given by a court in the place and the proceedings of the Foreign Judgments (reciprocal Enforcement) Act shall apply in relation to the award as it applies in relation to a Judgment given by that court.”
The Supreme Court in the case of Macaulay v R.Z.B of Austria (2003) 18 NWLR (Pt. 852) 282 has held that only judgments from superior courts in the United Kingdom and other commonwealth countries are recognized and enforced in Nigeria.
Going by the above, it is questionable if the same position held in the enforcement of a foreign judgment applies in the same way as a foreign award here in Nigeria? Anyway, it is doubtful if such restrictions apply to an award since in an Arbitration, there seem to be no hierarchy as that of courts.
Arbitration & Conciliation Act, (ACA) 2004[v]
Section 51 of the Arbitration and Conciliation Act provides that;
“An arbitral award shall, irrespective of the country in which it is made, be recognised as binding and subject to this section 32 of this Act, shall, upon application in writing to the court, be enforced by the court.”
The Act provides for the enforcement of an arbitral award thereby giving right to a party to apply to the court in such regards.
Section 51(2) of the Act, provides for that in which a party relying on an award or applying for its enforcement shall supply the court with:
- A duly authenticated original award or a duly certified copy;
- Copy of the original arbitration agreement or a duly certified copy;
- A duly certified translation in the English language if the award was not granted in English language.
Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).[vi]
By virtue of Nigeria ratifying the New York Convention on the Recognition and Enforcement of Foreign Arbitral Award in March 10, 1970, it then becomes a signatory thereby agreeing to implement the laws contained in the convention. This goes to state the reason and need for Section 54 of the Arbitration and Conciliation Act which states thus
“Without prejudice to sections 51 and 52 of this Act, where the recognition and enforcement of any award arising out of an international commercial arbitration are sought, the Convention on the Recognition and Enforcement of Foreign Awards (hereafter referred to as “the Convention”) set out in the Second Schedule to this Act shall apply to any award made in Nigeria or in any contracting state”.
For section 54 of the ACA to apply, such other contracting state country must have laws reciprocating the enforcement of awards made in Nigeria.
The International Centre for Settlement of Investment Disputes (ICSID)[vii]
Nigeria ratified the ICSID Convention since 23rd August 1965. Pursuant to this, the legislature enacted the International Centre for Settlement of Investment Disputes (Enforcement of Awards) Act CAP I 20, Laws of the Federation of Nigeria, 2004 (“the ICSID Act“). Section 1 (1) of the ICSID Act provides that if it is expedient to enforce in Nigeria an award made by the International Centre for Settlement of Investment Disputes, a copy of the award duly certified by the Secretary-General of the Centre, shall be filed at the Supreme Court of Nigeria by the party seeking its recognition for enforcement in Nigeria. The award shall for all purposes have effect as if it were an award contained in a final judgment of the Supreme Court, and the award shall be enforceable as such.
Conclusion
For Arbitration to strive in the Nigeria climate, the enabling laws are to be provided and implemented. The laws, have been provided and therefore, the need for speedy enforcement of arbitral awards will serve as a crux in creating and increasing commercial transactions and participation in the Nigeria business environment.
Therefore, the need for most parties inserting in their contract agreements is to save themselves the hassle of long-term litigation process. So, in a such situation where enforcement of an award becomes forestalled due to reasons such as failure to recognize an award duely obtained, it then causes parties to less believe in the system regulating the enforcements of a foreign award. And again, this will in turn lead to less participation of international business personnel or organizations.
AUTHOR: JULIET ISIMAKHOMHEN IKHAYERE
[i] https://www.doingbusiness.org/en/rankings
[ii] CAP F25, Laws of the Federation of Nigeria, 2004
[iii] Section 3 supra
[iv] Section 4 supra
[v] CAP 18, Laws of the Federation of Nigeria, 2004.
[vi] New York Convention which came into force on 7th June, 1959 in accordance with article XII
[vii] ICSID Convention which came into force on 14th October, 1966.
