Prior to May 2023, the applicable arbitral legislation in Nigeria was the Arbitration and Conciliation Act2 (ACA). The ACA was in force for more than three (3) decades and was enacted prior to the adoption of the UNCITRAL Model Law on International Commercial Arbitration, 2006, the UNCITRAL Model Law on International Commercial Mediation, 2018, etc. Thus, the ACA neither provided for nor reflected global best practices in arbitration in the 21st century.
The Arbitration and Mediation Act, 2023 (AMA) was signed into Law by the former President of the Federal Republic of Nigeria3 on 26th May 2023. The objective of the AMA as expressed in the explanatory memorandum is the same as the ACA except for the replacement of 'Conciliation' with 'Mediation'. The Act is divided into three (3) Parts with a total of ninety-two (92) Sections and three (3) schedules, as follows:
- Part I pertains to Arbitration – it applies to both international and domestic arbitral proceedings in Nigeria,
- Part II provides for Mediation – the practice of commercial mediation in domestic and international dispute settlement in Nigeria, and
- Part III covers Miscellaneous Provisions
Some novel and interesting provisions were introduced into the AMA and below are some of the notable developments in the AMA: -
- Resolution of the dichotomy in Sections 4 and 5 of the
ACA: The contradiction between Sections 4 and 5 of the ACA
on the grant of an order for stay of proceedings pending
arbitration being a mandatory or discretionary function of the
court has been laid to rest. Pursuant to Section 5 of the ACA, the
court could refuse an application for a stay of proceedings where
an Applicant fails to provide sufficient reason why the
matter should not be referred to arbitration in accordance with the
arbitration agreement. However, Section 5 of the AMA imposes a
mandatory obligation on the court to refer parties to arbitration
and stay proceedings unless the arbitration agreement is void,
inoperative or incapable of being performed.
- Emergency Arbitrators:4 Emergency
arbitration is permissible where a party seeks urgent relief. The
AMA provides parties with the option of a speedy and efficient
procedure to obtain urgent interim reliefs on urgent issues prior
to the constitution of an arbitral tribunal. The Act envisages that
an application for the appointment of an emergency arbitrator would
be filed either alongside or after the filing of a request for a
dispute to be referred to arbitration but before the constitution
of the arbitral tribunal. Such an application could be made either
to the arbitral institution designated by parties or the Court
where no arbitral institution is designated by parties. An arbitral
institution or Court before whom an application for the appointment
of an emergency arbitrator is filed is expected to appoint an
emergency arbitrator within two (2) business days of receipt of the
application.5 A challenge of the appointment of an
emergency arbitrator must be decided within three (3) business days
and an emergency arbitrator is required to render a decision within
14 days from the date of receipt of the file. The decision of the
emergency arbitrator is binding on the parties, and if a party
fails to comply, the other party can enforce the decision by
applying to the courts.6
The Emergency Relief Procedure is to be conducted in accordance with Article 27 of the 1st schedule to the AMA. Also, an application under Section 16 for the appointment of an emergency arbitrator does not prevent a party from seeking urgent interim measures from a court and an application to court for an urgent interim measure is not considered tantamount to either an infringement or a waiver of the arbitration agreement.7
- Consolidated and Concurrent
Hearings:8While the ACA had no
provision for the consolidation of arbitral proceedings, arbitral
proceedings under the AMA can be consolidated with ongoing arbitral
proceedings, including proceedings that involve different parties.
Also, the AMA permits concurrent hearings to be held. However, the
option to explore consolidated and concurrent hearings is at the
discretion of parties and arbitral tribunals are prohibited from
ordering consolidated and concurrent hearings. A consolidated and
concurrent hearing would save parties cost, time and resources as
well as reduce a duplication of arbitral proceedings, thereby
saving precious judicial time if parties decide to approach the
court either for interim orders or to challenge an award.
- Joinder of Parties:9 The AMA vests
the Arbitral Tribunal with the discretionary power to allow
additional parties to be joined to an arbitral proceeding, so long
as there is prima facie evidence that the additional party
is bound by the arbitration agreement giving rise to the
arbitration. This presupposes the establishment of a reasonable
belief that the additional parties to be joined will be bound by
the arbitration agreement.
- Grant of Interim Measures and Preliminary Orders by
Arbitral Tribunals:10 The AMA imbues the
arbitral tribunal with the powers to grant interim measures, such
as directing parties to maintain or restore status quo pending the
determination of the dispute, to preserve the subject matter of the
arbitration or evidence that may be relevant and material to the
resolution of the dispute, provide means of preserving assets that
subsequent award may be paid from, including the grant of
preliminary orders etc., unless otherwise agreed by parties. The
AMA provides a clear framework for the enforcement of the interim
measures ordered by the tribunal and permits an application for
interim measures and preliminary orders to be made without notice
to the other party. Also, the tribunal can modify, suspend, or
terminate an interim measure or preliminary order it has granted
upon application by the other party or in exceptional
circumstances. Furthermore, the arbitral tribunal could require an
applicant for an interim measure to provide security in relation to
the measures sought and could also find an applicant for an interim
measure or preliminary order liable for costs and damages caused to
the other party.11 The tribunal's decision on
interim measures is binding upon the parties.
- Grant of Interim Measures by
Courts:12 It is indisputable that the award of
interim reliefs could be regarded as part of the inherent powers of
the Court, however, such powers are usually derived from statutes.
While the ACA empowers the courts to issue orders necessary to
preserve the subject matter of the dispute, such as the grant of
orders for stay of proceedings, subpoena duces tecum or
ad testificandum, etc., Section 19 of the
AMA expands the powers of courts to issue interim measures in
relation to arbitration proceedings conducted in Nigeria or in
another country.
- The Abolition of the Torts of Maintenance and Champerty
and Third-Party Funding:13 Prior to the
enactment of the AMA, the torts of maintenance and champerty
prohibits third-party funding of litigation in Nigeria and this
extended to arbitral proceedings. However, Section 61 of the AMA
abolishes the torts of maintenance and champerty in relation to
third-party funding of arbitrations in Nigeria and arbitration
related proceedings in courts in Nigeria. Section 62 of the AMA
requires a recipient of third-party funding to give written notice
of the existence of the funding arrangement and the name and
address of the third-party funder to the other parties, the
arbitral tribunal, and the arbitral institution either on or
before, at the commencement of the arbitration or immediately after
the commencement of the arbitration. This no doubt is a welcome
development as more people would be encouraged to explore
arbitration since alternative funding arrangements could be made
for attendant arbitration costs.
- The Award Review Tribunal:14
Parties may agree to a review of the final arbitral award by an
Award Review Tribunal (ART), however, a review by an ART would only
be possible if parties expressly provide in their arbitration
agreement that awards can be reviewed by an ART. The ART is
required to be comprised of the same number(s) of arbitrator(s) as
the arbitral tribunal that delivered the award, and the ART is
required to render its decision in the form of an award within
sixty (60) days from the date on which it is
constituted.15 If an ART sets aside an award, fully or
partially, a party may apply to the court to reinstate the award
and the court would reinstate the award either fully or partially
where it finds that the ART's decision is unsupportable. Also,
an application to set aside an award affirmed either in whole or in
part by the ART must be made on any of the nine (9) grounds set out
under the Act to set aside an award.16
- Statute of Limitation Period:17
Prior to the enactment of the AMA, enforcement of arbitral awards
and the computation of time during the pendency of arbitral
proceedings were caught by statutes of limitation. Despite the
decision of the courts in several judicial authorities that time
ceases to run during the pendency of judicial
proceedings,18 this did not extend to arbitral
proceedings.19 Section 34 explicitly provides that in
computing the limitation period for enforcement of an arbitral
award, the time between the commencement of the arbitration
proceedings and the award shall be excluded. Section 71 has a
similar provision in relation to mediation.
- Reduction in Default Number of
Arbitrators:20 The AMA unlike the
ACA21 provides that the arbitral tribunal shall consist
of one arbitrator where there is no agreement as to the number of
arbitrators. This will reduce arbitration cost significantly unlike
in the old regime.
- Arbitrator's Immunity:22 The
AMA confers arbitrators, appointing authorities, arbitral
institutions as well as their employees with immunity against acts
or omissions that might arise in the discharge of their duties;
unless it can be established that they acted in bad faith. This
immunity as granted under the AMA does not exempt an arbitrator
from any liabilities that might arise from his withdrawal. This
shields arbitrators, appointing authorities, arbitral institutions
from the fear of liabilities, thus promoting independence and
impartial decision-making.
- Mediation:23The AMA unlike the ACA
provides for mediation and recognizes it as a dispute resolution
mechanism in Nigeria. The Act adopted the UNCITRAL Model Law on
International Commercial Mediation, 201824. The AMA
outlines the kind of disputes that can be mediated under the Act,
how mediation is to be commenced, number of mediators to be
appointed, procedure at mediation, immunity and fees of mediators
and mediation provider, etc. Also, the AMA recognizes the Singapore
Convention on Mediation, 201825 as the applicable
convention for the enforcement of international settlement
agreements made outside Nigeria, provided that the State is a party
to the Singapore Convention.26
- Provision on Arbitration Proceedings Rules: The Third Schedule to the AMA provides Arbitration Proceedings Rules for applications to court. This will be applicable where there are no provisions in the High Court (Civil Procedure) Rules, in relation to the Arbitration Proceedings.
Conclusion: The provisions of the Act are commendable, as it has introduced a number of novel provisions guaranteed to establish a robust legal framework for the practice of arbitration and mediation in Nigeria. Also, the AMA took cognizance of modern trends and incorporated global best practices into its provisions, for example, the provisions on third-party funding, award review tribunal, the award of interim reliefs and emergency arbitrations. However, the Arbitration and Mediation Act, 2023 is not without some foreseeable challenges, for instance, some mischievous applicants might use such remedies as award of interim reliefs, award review tribunal, to harass other parties. Nonetheless, we hope that the AMA, 2023 will position Nigeria as an arbitration hub in Africa.
Footnotes
1. Associate in the Dispute Resolution Department at S.P.A. Ajibade & Co., Lagos, Nigeria.
2. Cap 18 Laws of the Federation of Nigeria, 2004.
3. President Muhammadu Buhari.
4. Section 16 of the AMA.
5. Section 16(4) of the AMA.
6. Section 17(1)(a) of the AMA, Articles 27(6) & (10) of the First Schedule to the AMA.
7. Section 16(9) & (10) of the AMA.
8. Section 39 of the AMA.
9. Section 40 of the AMA.
10. Sections 20 – 29 of the AMA.
11. Sections 25 and 27 of the AMA.
12. Sections 23 of the AMA.
13. Sections 61 and 62 of the AMA.
14. Section 56 of the AMA.
15. Section 56(4) & (6) of the AMA.
16. Section 55(3) of the AMA which states thus:
The court may set aside an arbitral award-
(a) If the party making the application furnishes proof that -
- a party to the arbitration agreement was under some legal incapacity,
- the arbitration agreement is not valid under the law to which the parties have subjected it, or failing such indication, under the laws of Nigeria,
- the party who makes the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise not able to present his case,
- the award deals with a dispute not contemplated by or does not fall within the terms of the
- submission to arbitration,
- the award contains decisions on matters which are beyond the scope of submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside,
- the composition of the arbitral tribunal, or the arbitral procedure, was not in accordance with the agreement of the parties, unless the agreement was in conflict with a provision of this Act from which the parties cannot derogate, or
- where there is no agreement between the parties under subparagraph (vi), that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with this Act; or
(b) the court finds that the -
- subject matter of the dispute is otherwise not capable of settlement by arbitration under the laws of Nigeria, or
- award is against public policy of Nigeria.
17. Section 34 and 71 of the AMA.
18. Sifax (Nig.) Ltd. v Migfo (Nig.) Ltd. (2018) 9 NWLR (Pt. 1623) 138 SC., where the Supreme Court unanimously decided that time freezes from the moment an action is commenced for the purpose of computation of time in relation to Statute of Limitation.
19. FHA v City Engineering (1977) 9 NWLR (Pt 520) 224, where the Supreme Court held that the period of limitation for the enforcement of an award runs from the date of the breach that gave rise to the arbitration.
20. Section 6(2) of AMA
21. Section 6(2) of the ACA states that the number of arbitrators shall be deemed to be three where there is no agreement as to the number of arbitrators.
22. Section 13 of the AMA.
23. Sections 67 – 87 of the AMA.
24. See, United Nations Commission on International Trade Law, Model Law on International Commercial
Mediation and International Settlement Agreements Resulting from Mediation, as adopted in 2018 (New York: United Nations, 2018) https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/22-01363_mediation_guide_e_ebook_rev.pdf accessed 21st July 2023, and
United Nations Commission on International Trade Law, United Nations Convention on International Settlement Agreements Resulting from Mediation, as adopted in 2018 (New York: United Nations, 2018) available at: https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/EN/Texts/UNCITRAL/Arbitration/mediation_convention_v1900316_eng.pdf accessed 21st July 2023.
26. Section 87 of the AMA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.