International Arbitration 2023 Comparisons

International arbitration as a method of resolving disputes in Nigeria has, indisputably, gained greater relevance in Nigeria. This is due to the following factors.

Arbitral Institutions

Several internationally recognised arbitral institutions, such as the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA), have a presence in Nigeria.  These institutions provide administrative support and expertise to conduct international arbitration proceedings, thereby further promoting international arbitration in Nigeria. Also, due to the disadvantages of arbitration and the enforcement of arbitral awards in Nigeria, local entities choose to resort to international arbitration, particularly when the other party is a foreign entity.

Legal Reforms

Appreciable efforts have been made in Nigeria to modernise the country’s arbitration laws to align them with international best practices. The Arbitration and Mediation Act 2023 (AMA) is tailored towards improving arbitration practices in Nigeria and encouraging the uptake of arbitration in the country. For instance, the Act permits the granting of interim reliefs for arbitration where the seat of arbitration is in a foreign jurisdiction. The new Act also provides for third-party funding in arbitration proceedings.

Foreign Investment

Nigeria attracts substantial foreign investment in various sectors, such as oil and gas, telecommunications and infrastructure. Many international business transactions involving Nigerian parties include arbitration clauses, which stipulate that any disputes arising from the agreement will be resolved through arbitration.

Despite the foregoing, litigation is still more commonly used as a means of resolving disputes in Nigeria, particularly in matters involving criminal law, family law, land disputes, and other non-commercial issues. This is borne out by the tendency of litigious parties to attempt to “re-litigate” matters even after the conclusion of arbitration, and other attempts to utilise the court system to stifle the flow of the litigation process.

In Nigeria, many industries experienced significant international arbitration activity between 2021 and 2022. These included industries such as energy (including oil and gas), construction, infrastructure and telecommunications. The complex contractual relationships, cross-border transactions and investment disputes that are typical of these industries make them more prone to arbitration as a method of resolving disputes.

The COVID-19 pandemic did not have a negative impact on international arbitration in Nigeria, as international arbitration proceedings were often conducted virtually, even prior to the pandemic. In fact, given the relative preparedness of international arbitral institutions for virtual hearings, the use of arbitration was more attractive during the pandemic than the use of traditional courts, which were less prepared.

The disruption of global trade, travel restrictions and economic slowdowns caused by the pandemic led to an increase in breach of contract and debt default disputes in impacted industries such as the airline and travel, and hospitality sectors. This resulted in high demand for international arbitration among disputing parties.

Apparently, virtually all sectors/industries in Nigeria now use international arbitration. This is evinced in the arbitration clause(s) inserted in the respective contracts.

There are myriad arbitral institutions used for international arbitration in Nigeria. These include, but are not limited to, the Lagos Court of Arbitration (LCA), the Regional Centre for International Commercial Arbitration, and the Lagos Multi-door Courthouse. International arbitral institutions, such as the International Chamber of Commerce and the Chartered Institute of Arbitrators, UK, also have branches in Nigeria. Accordingly, international matters are more often arbitrated by such institutions.

One of the more popular arbitral institutions in Nigeria is the LCA, which is an independent institution based in Lagos, Nigeria. It was established in 2009 and provides arbitration services and facilities for the resolution of commercial disputes. The LCA operates in accordance with international best practices and its rules and procedures are designed to ensure a free and impartial process. It has gained recognition both within Nigeria and internationally as a reputable institution for resolving commercial disputes through arbitration.

There are no special courts designated to hear disputes related to domestic and/or international arbitrations in Nigeria.

The national legislation governing international arbitration in Nigeria is the Arbitration and Mediation Act 2023 (AMA). However, prior to the AMA, the national legislation governing international arbitration in Nigeria was the Arbitration and Conciliation Act 1998 (ACA) (Cap A18 Laws of the Federation of Nigeria 2004), now repealed.

The repealed ACA was largely based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law, with minimal differences. This Act was finally repealed and replaced by the AMA, following the change of president in Nigeria in early 2023. The AMA which governs both domestic and international arbitration, is based on the revised UNCITRAL Model Law adopted in 2006 and is the result of years of reform effort. It significantly improves the legislative framework for domestic and international arbitration in Nigeria, strengthening the country’s position as a leading arbitration destination in Africa.

There has been significant change to national arbitration law in the past year in Nigeria.

The newly enacted AMA represents a giant stride towards the development of arbitration in Nigeria, and in cementing Nigeria’s place as a leading arbitration seat on the continent. Prior to this development, the law governing arbitration in Nigeria was the now-repealed Arbitration and Conciliation Act.

Innovations such as the statutory emergency arbitrator and the recognition and enforcement of interim measures are particularly interesting for arbitration practitioners, academics, and users alike. Other provisions, such as the Award Review Tribunal, have drawn some initial criticism but, given the unpredictable attitude of the courts towards arbitration, it is hoped that it will bring some benefits. It is worth mentioning, albeit in passing, other changes such as the introduction of provisions on arbitrator and arbitral institution immunity (Section 13); joinder and consolidation (Sections 39 and 40); the treatment of arbitration proceedings as court proceedings for the purpose of computing limitation periods (Section 34); and suspension of the computation of time during mediation proceedings (Section 71).

There have also been changes such as set-aside provisions, which dispense with such grounds as “misconduct”, and properly align the New Act with the New York Convention (Section 55) and align the application of the New Act to international arbitrations (between Nigeria and other countries), inter-state arbitrations and commercial arbitrations within Nigeria (Section 1(5)). This provision arguably settles the controversy around the legislative competence of individual states to enact their arbitration laws in view of federal law, as the New Act (a federal legislation) leaves room for state legislation to govern arbitrations within its own territory.

All the above innovations make for a robust new legal framework for arbitration in Nigeria and can only bring hope and positivity to the market in the coming years.

In Nigeria, the legal requirements for the enforcement of arbitration agreements are as follows.

Valid Agreement

An arbitration agreement must be in writing and must be contained in a document such as a contract, exchange of letters, or other means of communication that provides a record of the agreement. It should indicate the parties’ intention to resolve their disputes through arbitration.

Capacity

The parties entering into an arbitration agreement must have the legal capacity to do so. This generally means they must be of sound mind and have the legal authority to bind themselves, or the entity they represent, to arbitration.

Separability

Nigerian law recognises the principle of separability, which means that an arbitration agreement is considered separate from the underlying contract. Therefore, the invalidity or termination of the main contract does not automatically render the arbitration agreement invalid or terminated.

Written Notice

If a party wishes to rely on an arbitration agreement, they must give written notice to the other party requesting that the dispute be referred to arbitration.

Compliance With Formalities

The arbitration agreement must comply with any specific formalities required by the applicable law or agreed upon by the parties.

Public Policy Considerations

The Nigerian courts have the power to refuse enforcement of an arbitration agreement or an arbitral award if it contravenes public policy or violates the principles of natural justice.

Judicial Support

Nigerian courts are generally supportive of arbitration and the enforcement of arbitration agreements. The courts will typically refer parties to arbitration if a valid agreement exists, unless there are compelling reasons to deny enforcement.

In Nigeria, non-arbitrable matters are those that cannot be resolved through arbitration and must be resolved by the regular court system.

Criminal Matters

Disputes involving criminal offences are generally not arbitrable. Criminal cases are dealt with by the criminal justice system and are subject to prosecution by the state.

Matters Involving Public Interest

Issues that affect the public interest or public policy, such as constitutional matters, election petitions, and administrative actions of government agencies, are typically non-arbitrable. These cases involve matters of significant public concern and are handled by the regular court system (Section 130 Electoral Act 2022).

Matrimonial Causes

Disputes related to divorce, child custody, adoption, and other family law matters are generally not arbitrable. These cases involve personal and family relationships and are typically handled by family courts, as required under Section 114 of the Matrimonial Causes Act.

Insolvency and Bankruptcy

Matters related to insolvency, liquidation, and bankruptcy proceedings are typically non-arbitrable. These cases involve complex financial considerations and are dealt with by the Federal High Court, by virtue of Section 251 of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

The arbitrability of a dispute is always determined by the following:

• whether the dispute, given its nature, can be adjudicated and settled by arbitration;
• whether the dispute is discussed by the arbitration agreement or falls under the “excepted matters” eliminated from the scope of arbitration; and
• if the parties voluntarily agreed to have their dispute arbitrated.

In Nigeria, the court would look to the arbitration agreement in the determination of the governing law. The AMA makes copious provisions under Section 15 on the applicable law governing an arbitration proceeding. By virtue of the referenced section, the parties to an arbitration agreement are at liberty to determine the applicable law governing their arbitration proceedings. However, where the parties do not specify the applicable law, the arbitral tribunal is empowered to determine the appropriate law, based on the circumstances of the case. 

Furthermore, the Nigerian courts are imbued with the power to enforce arbitration agreements voluntarily entered into by the parties under the AMA. Accordingly, where a party to an arbitration agreement, for instance, fails/refuses to co-operate in the appointment of an arbitrator, the other party may, in consonance with Section 7(3) of the AMA, apply to the High Court to make such appointment on behalf of the defaulting party. Also, by virtue of Section 5 of the AMA, where a party to an arbitration agreement proceeds to court, contrary to the agreement, the court is empowered to stay the proceedings and refer the parties to arbitration.

In Nigeria, as in many other jurisdictions based on the UNCITRAL Model Law, the principle of separability is recognised and applied in relation to arbitration agreements. According to this principle, an arbitration clause is regarded as a separate and independent agreement from the main contract. Therefore, if the main contract is found to be invalid or unenforceable, the arbitration clause can still be upheld and enforced. This is given statutory backing by virtue of Section 14(2) of the AMA. In addition, Nigerian courts recognise the autonomy of arbitration clauses and their separability from the surrounding contract, allowing parties to pursue arbitration proceedings even if the underlying contract is deemed invalid. The Nigerian courts have consistently upheld the separability principle in arbitration cases. In Nigerian Agip Exploration Ltd v Nigerian National Petroleum Corporation (2001) 10 NWLR (Pt 722), the Nigerian Supreme Court held that an arbitration clause in a contract remains valid and enforceable even if the main contract is found to be void or unenforceable.

In Nigeria, there are no limits on the parties’ autonomy to select arbitrators. The autonomy of parties to select an arbitrator is recognised and respected under the country’s arbitration laws.

According to Section 6(1) of the AMA, parties are free to agree on the procedure for appointing an arbitrator or the institution responsible for making the appointment. If the parties have not agreed on a specific method, the AMA provides default provisions for the appointment of arbitrators.

The AMA also provides that if a party fails to appoint an arbitrator within 30 days of receiving a request to do so, or if the appointed arbitrators fail to agree on the presiding arbitrator within 30 days of their appointment, the appointment can be made by the court.

It is worth noting that the autonomy of parties to select an arbitrator may be subject to certain limitations imposed by mandatory provisions of Nigerian law or the arbitration agreement itself. For example, the parties may agree on qualifications or criteria that an arbitrator must meet, or may choose to appoint arbitrators from a specific institution’s panel of arbitrators.

In summary, the autonomy of parties to select an arbitrator in Nigeria is generally respected, subject to any agreed-upon procedures or default provisions under the AMA.

Under the AMA, if the parties’ chosen method for selecting arbitrators fails or if the parties cannot agree on a method, there are default procedures for appointing arbitrators, as follows.

• Where the parties are unable to agree on the appointment of a sole arbitrator within 30 days from the receipt of a request to do so, either party may request the court or an arbitral institution to appoint an arbitrator (Section 7(3) (b) of the AMA).
• Where three arbitrators are required, each party must appoint one arbitrator, and the two arbitrators appointed must jointly appoint the third arbitrator. However, where a party fails to appoint an arbitrator within 30 days of receipt of a request from the other party to do so, or where the two arbitrators appointed by the parties fail to agree on the third arbitrator within 30 days of their appointment, consequent upon a request by either of the parties, an appointment will be made by the appointing authority designated by the parties, or by an arbitral institution in Nigeria, or by the court (Section 7(3) (a) of the AMA).
• In the case of multi-party arbitrations, where any of the parties or arbitrators nominated fail to co-operate in the constitution of the arbitral tribunal, the appointment will be made, upon request by a party, by the appointing authority designated by the parties or, failing such designation, by an arbitral institution in Nigeria or by the court (Section 7(3) (c) of the AMA).

The above notwithstanding, parties are encouraged to include specific provisions for the appointment of arbitrators in their arbitration agreements, to avoid any disputes or delays in the process.

In Nigeria, a court can intervene in the selection of arbitrators under certain circumstances. This includes assisting in appointing arbitrators where there is a failure to appoint, deciding on challenges to arbitrators’ appointment or impartiality, facilitating the replacement of arbitrators, and revoking an arbitrator’s mandate in case of misconduct or justifiable doubts. However, the court’s power to intervene is limited to situations where there is a clear failure or challenge, and the principle of party autonomy is generally respected. The courts aim to support effective and fair arbitration while minimising their intervention.

In Nigeria, the challenge or removal of an arbitrator is governed by the provisions of the AMA. The AMA provides a framework for arbitration proceedings and sets out the grounds and procedures for challenging or removing an arbitrator.

• A party may agree on the procedure for challenging an arbitrator.
• A party can challenge the appointment of an arbitrator if there are justifiable doubts about the impartiality or independence of the arbitrator, or if the arbitrator does not possess the qualifications agreed upon by the parties (Section 8(3) of the AMA).
• The challenge must be made within 14 days of becoming aware of the constitution of the arbitral tribunal, or within 14 days of becoming aware of the grounds for the challenge (Section 9(2) of the AMA).
• If the challenge is unsuccessful, the challenging party may request the court to decide on the challenge (Section 9(1) of the AMA).

It is notable that the court’s role is limited to deciding challenges, or the removal of arbitrators in Nigeria. The court does not have the power to review the merits of the dispute, as the arbitration process is intended to be final and binding. If the court upholds a challenge or removes an arbitrator, the arbitration proceedings may continue with the remaining arbitrators (if any) or a substitute arbitrator may be appointed.

There are legal requirements as to the independence, impartiality and/or disclosure of potential conflicts of interest of an appointed arbitrator. Impartiality and independence are fundamental principles in arbitration, ensuring that the arbitrator remains neutral and unbiased throughout the proceedings. The AMA imposes a duty on arbitrators to be impartial and requires them to disclose any circumstances that may give rise to justifiable doubts about their impartiality or independence (Section 8(1) of the AMA).

When an arbitrator is approached to act in a dispute, or upon becoming aware of any circumstances that may affect their impartiality, they must disclose such circumstances to the parties involved. The disclosure should include any potential conflicts of interest, such as financial, personal, or professional relationships that may create a perception of bias. It is essential for the arbitrator to make these disclosures promptly and in writing.

Upon receiving the disclosure, the parties have the right to object to the appointment of the arbitrator if they believe there is a justifiable doubt about their impartiality or independence. If an objection is raised, the arbitrator must withdraw from the proceedings, unless the parties agree otherwise.

It is worth noting that in addition to the AMA, there may be specific rules or guidelines applicable to arbitrators’ impartiality and disclosure of conflicts of interest in different arbitral institutions or organisations operating in Nigeria.

• Criminal matters: disputes involving criminal offences are generally not arbitrable. Criminal cases are dealt with by the criminal justice system and are subject to prosecution by the state.
• Matters involving public interest: issues that affect the public interest or public policy, such as constitutional matters, election petitions, and administrative actions of government agencies, are typically non-arbitrable. These cases involve matters of significant public concern and are handled by the regular court system (eg, Section 130 of the Electoral Act).
• Matrimonial causes: disputes related to divorce, child custody, adoption, and other family law matters are generally not arbitrable. These cases involve personal and familial relationships and are typically handled by family courts (Section 114 of the Matrimonial Causes Act).
• Insolvency and bankruptcy: matters related to insolvency, liquidation, and bankruptcy proceedings are typically non-arbitrable. These cases involve complex financial considerations and are dealt with by specialised courts (Section 251 of the Constitution).

An arbitral tribunal may rule on a party’s challenge to the tribunal’s own jurisdiction. The principle of competence-competence is recognised in Nigeria, as arbitral tribunals are competent to rule on questions pertaining to their jurisdiction, the qualification of their member(s) and the existence or validity of arbitration agreements. Where the jurisdiction of the arbitral tribunal is in question, a party may also apply to the tribunal itself to determine its jurisdiction and competence to hear and determine the substantive dispute. This is disclosed in Section 14 of the AMA.

In Nigeria, the courts can address issues regarding the jurisdiction of an arbitral tribunal under the following circumstances.

Challenge to the Existence or Validity of the Arbitration Agreement

If a party challenges the existence or validity of an arbitration agreement, the court may determine the issue. This typically arises when one party claims that there is no valid arbitration agreement between the parties or that the agreement is null and void.

Dispute Over the Scope of the Arbitration Agreement

If the parties cannot agree whether a particular dispute falls within the scope of the arbitration agreement, the court may intervene to decide the issue. This occurs when a party argues that the dispute is beyond the scope of the arbitration clause and should be heard by the court instead.

Courts Can Review Negative Rulings on Jurisdiction by Arbitral Tribunals

The courts can review negative rulings on jurisdiction by arbitral tribunals upon request by either party within 30 days of such ruling on jurisdiction (Section 14 of the AMA).

It is important to note that the courts’ role in addressing jurisdictional issues is limited and supportive of arbitration. The AMA emphasises the principle of competence-competence, which means that the arbitral tribunal has the power to rule on its own jurisdiction. The courts generally respect the tribunal’s decision unless there are compelling reasons to set it aside.

Overall, while the courts in Nigeria can address issues regarding the jurisdiction of an arbitral tribunal in specific circumstances, the general policy is to uphold the autonomy and independence of the arbitration process.

In Nigeria, parties have the right to go to court to challenge the jurisdiction of an arbitral tribunal after the submission of the points of defence in the arbitration proceeding. According to the provisions, a plea that the arbitral tribunal lacks jurisdiction should be raised no later than the submission of the points of defence, regardless of whether the party has appointed, or participated in the appointment of, an arbitrator.

Similarly, the arbitral tribunal will determine the plea questioning its jurisdiction as soon as such plea is raised.

Parties have the right to approach the court to challenge the jurisdiction of the arbitral tribunal, within 30 days of receiving the notice of the ruling (Section 14(6) of the AMA).

However, the arbitral tribunal has the discretion to consider a later plea if it deems that the delay is justified (Section 14(3) and (4) of the AMA).

Under the AMA, the courts are required to adopt a pro-arbitration approach and generally limit their intervention in arbitration proceedings. The Act gives effect to the principles of party autonomy and the finality of arbitral awards. Accordingly, courts are generally inclined to uphold and enforce arbitration agreements and respect the decisions of arbitral tribunals.

Regarding questions of admissibility and jurisdiction, the AMA provides that an arbitral tribunal has the power to rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. The tribunal’s decision on jurisdiction is referred to as the “preliminary award”.

If a party challenges the jurisdiction of an arbitral tribunal, or raises objections to the admissibility of certain evidence, the AMA allows either party to apply to the court for a decision on the matter. The court’s role is to review the preliminary award of the tribunal and determine the issue of jurisdiction or admissibility.

When reviewing questions of jurisdiction and admissibility, the court adopts a deferential approach and applies a limited standard of review. The court’s primary focus is to determine whether the tribunal’s decision was made within the scope of its authority and in accordance with the arbitration agreement and the AMA.

The court will not typically re-examine the merits of the case or the evidence presented. Instead, it will assess whether there was a valid arbitration agreement, whether the dispute falls within the scope of that agreement, and whether any objections to the admissibility of the evidence are well founded.

Nigerian courts tend to uphold the sanctity of arbitration agreements and show a willingness to enforce them. They often stay or dismiss court proceedings initiated in violation of an arbitration agreement, redirecting the parties to pursue their dispute through arbitration as per their agreement. This approach reflects the pro-arbitration stance of Nigerian courts and their commitment to respecting party autonomy and promoting alternative dispute resolution mechanisms (Section 5 of the AMA). 

Under Nigerian law, the general rule is that an arbitral tribunal does not have the power to assume jurisdiction over individuals or entities that are neither party to an arbitration agreement nor signatories to the contract containing the arbitration agreement. The jurisdiction of the tribunal is typically limited to the parties who have agreed to arbitration. This principle applies to both domestic and foreign third parties under Nigerian law (Section 40 of the AMA).

An arbitral tribunal in Nigeria is permitted to award preliminary or interim relief. Such relief is binding and enforceable. The types of relief that can be awarded by the arbitral tribunal include measures to preserve assets, protect evidence, maintain the status quo, and grant interim injunctive relief (Sections 20 to 22 of the AMA).

By virtue of Section 19 of the AMA, the courts can issue interim reliefs in relation to arbitration proceedings that are seated in the Federal Republic of Nigeria or in another country. These reliefs range from interim injunctions, measures for the conservation of goods forming the subject matter in the dispute, or the provision of security for costs. Where a party commences an action in court in defiance of the arbitration agreement, Nigerian courts may grant anti-suit injunctions to support the parties’ agreement to resolve their disputes by arbitration.

The AMA, under Section 16(1), permits the appointment of an emergency arbitrator upon application to the arbitral institution or the court by any party. It is notable that while the appointment of an emergency arbitrator is binding, it may be challenged on the same ground as a substantive arbitrator. This challenge is typically initiated by a party to the arbitration agreement, to the court or arbitral institution.

The arbitral tribunal has discretion to order security for costs under Section 52 of the AMA, but the AMA is reticent on this point in relation to the courts. Nonetheless, the courts may, in consonance with their power to grant interim measures under Section 19 of the AMA, make any such consequential order in this regard.

Arbitration in Nigeria is regulated by the following federal and state laws and rules:

• the Arbitration and Mediation Act 2023;
• the Lagos State Arbitration Law 2009;
• the Lagos Multi-door Courthouse Law 2007;
• the Foreign Judgment (Reciprocal Enforcement) Act;
• the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration;
• the New York Convention;
• the International Centre for the Settlement of Investment Dispute; and
• judicial decisions.

In Nigeria, there are procedural steps required by law for arbitration proceedings. These steps are governed by the AMA, which is the primary legislation regulating arbitration in the country.

The Key Steps Typically Followed in Arbitration Proceedings in Nigeria

Arbitration agreement

The parties must have a valid arbitration agreement that specifies their intention to resolve disputes through arbitration. The agreement may be in the form of a separate agreement or a clause within a contract.

Notice of arbitration

The party initiating the arbitration (referred to as the “claimant”) is required to submit a written notice of arbitration to the respondent. This notice should include the details of the parties, the nature of the dispute, and the relief sought.

Appointment of arbitrators

The parties may agree on the number of arbitrators, or if there is no agreement, the default number is usually three. Each party typically appoints one arbitrator, and the two party-appointed arbitrators then select a presiding arbitrator.

Points of claim and defence

The claimant is required to submit a written statement of claim, outlining the facts and relief sought. The respondent then submits a written statement of defence, responding to the claims made. The claimant may also file a reply, where necessary.

Oral hearing or documents-only proceedings

The arbitral tribunal may conduct an oral hearing or documents-only proceedings, depending on what the parties choose.

Interim measures

Either party may apply to the arbitral tribunal for interim measures to protect their rights or preserve the status quo pending the final award. The tribunal has the power to grant interim measures if it deems them necessary.

Award

After considering the arguments and evidence presented, the arbitral tribunal issues a final written award, setting out the decision on the merits of the dispute and any remedies granted. The award is binding on the parties.

Enforcement

Once the award is issued, either party may apply to a court in Nigeria for its enforcement. The courts play a supervisory role in the arbitration process and can assist with various matters, such as the appointment of arbitrators, interim measures, and enforcement of awards.

Variations

It is important to note that while these steps are generally followed, the specific procedural requirements may vary depending on the rules chosen by the parties or as specified in the arbitration agreement. Additionally, different arbitral institutions or bodies may have their own rules and procedures that can be adopted by the parties.

Powers

Some of the powers confirmed on arbitrators in Nigeria, include the following:

• Jurisdiction – an arbitrator has the power to determine their own jurisdiction, including issues related to the validity and scope of the arbitration agreement. The arbitrator can decide whether a dispute falls within the agreed terms of reference or arbitration clause.
• Case management – the arbitrator has the authority to manage the arbitration proceedings, including setting the timetable for submissions, conducting hearings, and issuing procedural orders. The arbitrator can also decide on the admissibility and relevance of evidence presented by the parties.
• Decision-making – an arbitrator has the power to make a binding decision, known as an arbitral award, on the issues submitted for arbitration. The arbitrator’s decision is final and enforceable, subject to limited grounds for setting aside or challenging the award under the AMA.
• Evidence – the arbitrator has the power to require the parties to produce documents, provide witness testimony, and present any other relevant evidence. The arbitrator may also appoint experts to assist in resolving technical or specialised issues.
• Interim measures – an arbitrator can grant interim measures to preserve the rights of the parties during the arbitration proceedings. These may include injunctions, orders for the preservation of assets, or the provision of security.
• Mediation and settlement – the AMA allows an arbitrator to encourage the parties to settle their dispute through mediation or negotiation. If the parties agree, the arbitrator can act as a mediator to facilitate settlement discussions.

It is important to note that the specific powers of an arbitrator may also be outlined in the arbitration agreement between the parties or in the rules of the arbitral institution, if applicable.

Duties

With regard to the duties of arbitrators, the national laws also provide for:

• Confidentiality – an arbitrator has a duty to maintain the confidentiality of the arbitration proceedings and any related documents or information disclosed during the process. This duty of confidentiality is generally imposed on the arbitrator(s) and the parties involved.
• Impartiality – an arbitrator is expected to discharge their duties without any form of prejudice. Such arbitrator must disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence.
• Disclosure of conflict of interest – an arbitrator must, as a matter of duty, disclose any conflicting interest related to the subject matter of the arbitration dispute. This duty is to be discharged before assuming the role of arbitrator. This duty is a continuing obligation and is expected to subsist through the arbitration proceedings. 
• Independence – an arbitrator must act independently, that is, an arbitrator must act without interference of any sort.

There are specific qualifications and requirements for legal representatives appearing in Nigeria. These requirements apply to both domestic matters and international arbitration. Legal representatives appearing in Nigeria are generally required to be qualified and registered as legal practitioners in Nigeria. However, for international arbitration, legal representatives may also have qualifications from jurisdictions other than Nigeria, provided they comply with the relevant rules and regulations governing legal practice in Nigeria. 

Generally, the approach to be adopted for the collection and submission of evidence at the pleading stage and the hearing in arbitration in Nigeria (including discovery, disclosure, privilege, expert witness, use of witness statements, and cross-examination) is to be as agreed by the parties at the preliminary meeting. If there is no agreement between the parties on the procedure, it will be determined by the arbitral tribunal, as it considers appropriate to the circumstances of the case.

The general approach to the collection and submission of evidence during the hearing include:

• Discovery – generally, each party is to supply the other party with all documentary or other information (on paper or electronically stored) that may be relevant to the outcome of the case, even if the information may have, or even evidently does have, a negative effect on the position of the requested party.
• Disclosure – in considering a party’s request for disclosure, the arbitral tribunal must be mindful of the principles of equal and fair treatment of the parties, and of a fair hearing. The tribunal should conduct the proceedings in such a manner as it considers appropriate to ensure a fair hearing. Therefore, granting an application for discovery/disclosure should reduce the element of surprise.
• Privilege – the tribunal may limit the scope of discovery of documents it considers relevant to the proceedings which are not covered by any other privilege. Generally, the following documents are under privilege: documents or communications made between the legal practitioner and the client during the course of business, documents marked “without prejudice”, or documents made during negotiation.
• Use of witness statements during cross-examination – the usual procedure is that unless the attendance of a witness is dispensed with by the opposing party, witnesses who have given oral evidence or written depositions on oath must be present for cross-examination. During arbitration, witnesses may be asked to clarify or explain evidence already given as long as the principles of a fair hearing, independence and impartiality are maintained. 

The arbitration laws do not delineate any precise rules of evidence for arbitrations held in Nigeria. The Evidence Act is generally applicable to domestic court proceedings in Nigeria, along with other rules of evidence prescribed by the respective rules of court. However, Section 256 of the Evidence Act expressly excludes arbitration proceedings from its scope of applicability.

In view of the foregoing, in the absence of a contrary position in the arbitration agreement, the arbitral tribunal is at liberty to determine its rules of evidence under Section 31 of the AMA. However, institution-based arbitration may be subject to certain rules of evidence prescribed or adopted by such arbitral institution.

Under Section 43 of the AMA, the court, on request of a party, may order the production of a document or the attendance of a witness through the issuance of subpoenas.

Arbitration proceedings and their constituent parts are generally confidential in Nigeria, but there are exceptions, where the parties’ consent, legal obligations, and/or court proceedings may allow for the disclosure of information in subsequent proceedings.

The legal requirements for an arbitral award in Nigeria are that it must be in writing and signed by the arbitrators, and it must state the reason upon which the decision was based. It should also be dated and should state the seat of the arbitration. Although no specific time limit is imposed by law for delivering the award, arbitrators are expected to act diligently and promptly.

Under the AMA, arbitrators have broad discretion in determining the appropriate remedies to be awarded, subject to certain limitations. The Act does not specifically list the types of remedies that can be awarded by arbitrators, but it generally allows arbitrators to grant any remedy that a court would have the power to grant in relation to the dispute. This includes both monetary and non-monetary remedies.

However, there are certain limitations and restrictions on the powers of arbitrators in Nigeria. Some of the key limitations include:

• Public policy – arbitrators are not allowed to make awards that are contrary to public policy. Public policy includes fundamental principles of law, morality, and public order.
• Exemplary or punitive damages – arbitrators are generally not empowered to award exemplary or punitive damages. Such damages are considered exceptional and are typically within the domain of the court.
• Criminal sanctions – arbitrators cannot impose criminal sanctions on parties. Matters involving criminal offences are generally outside the scope of arbitration.
• Interest on punitive damages – arbitrators are not authorised to award interest on punitive damages, as interest is generally limited to compensatory damages.
• Third-party rights – arbitrators do not have the authority to adjudicate the rights of third parties who are not parties to the arbitration agreement, unless all parties to the arbitration consent to the involvement of such third parties.

It is important to note that the parties to an arbitration agreement can also stipulate any specific limitations or restrictions on the arbitrator’s power to award remedies through the arbitration agreement itself. The arbitration agreement may provide guidance on the applicable law, procedural rules, and the scope of remedies that the arbitrator can consider.

In Nigerian arbitration, parties may be entitled to recover interest and legal costs. Furthermore, the arbitral tribunal has discretion to apportion or share costs. The tribunal can also award interest on the amount awarded, based on factors such as the contract, applicable laws, and equities of the case. The specific basis for interest and costs will depend on the arbitration agreement, institutional rules, and the tribunal’s discretion.

In Nigeria, parties generally do not have the right to appeal an arbitral award on its merits, as it is final and binding on the parties. However, under Section 55 of the AMA, they can challenge an award by applying to set it aside or by resisting its enforcement or recognition in court within three months of the issuance of the award. The grounds for such challenge are as follows:

• 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 application was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings, or was otherwise not able to present its case;
• the award exceeds the scope of arbitration;
• the arbitral tribunal or procedure was not within the parties’ agreement or the provision of the AMA;
• the subject matter of the dispute is not arbitrable; or
• the award is against the public policy of Nigeria.

However, as opposed to challenging an award in court, the parties may agree that the award be reviewed by the Award Review Tribunal established under Section 56 of the AMA.

The AMA does not make provision for this, and neither does any law governing arbitration in Nigeria.

In Nigeria, the standard of judicial review of the merits of a case in arbitration is deferential. The courts show deference to the arbitral tribunal’s decision-making and do not engage in a de novo review. The courts focus on limited grounds for setting aside or refusing enforcement of an arbitral award as specified in the AMA.

Nigeria has signed and ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Nigeria ratified the Convention on 17 March 1970, and it came into force in Nigeria on 15 June 1970. The New York Convention is also incorporated into the AMA by reference in Section 60.

In Nigeria, the procedures for enforcing an arbitral award involve filing an application with the court, providing necessary supporting documents, and obtaining an enforcement order if the court is satisfied with the validity of the award (Section 57 of the AMA).

An award that has been set aside by the courts in the seat of arbitration will not be enforced in Nigeria by virtue of Section 58(2) (viii) of the AMA. When an award is subject to ongoing set-aside proceedings at the seat, the Nigerian courts typically suspend the enforcement proceedings pending the resolution of the set-aside proceedings (Section 58(3) of the AMA).

It is notable that sovereign immunity may be raised as a defence to enforcement of an award. However, the application of sovereign immunity is not absolute and can be subject to certain exceptions, such as waiver by the sovereign entity, either in the arbitration agreement or through a separate written agreement. Another exception is when the state or state entity has engaged in commercial activities. In such cases, the state may be held to have implicitly waived its immunity regarding those specific commercial activities. However, the specific circumstances and the nature of the activities will be important in determining whether the exception applies.

In Nigeria, the courts have a pro-enforcement approach towards the recognition and enforcement of arbitral awards. They generally respect the finality of arbitral decisions. However, enforcement may be refused on public policy grounds, including violations of domestic or international public policy. The threshold for refusing enforcement based on public policy is high, and the courts exercise caution to ensure the integrity of the legal system while upholding arbitral awards.

In Nigeria, the AMA does not specifically provide for class action arbitration or group arbitration. However, parties can agree to conduct arbitration in a collective manner if their arbitration agreement or chosen arbitration rules allow for it. The arbitrability of class action claims and the requirements for group arbitration may be subject to judicial interpretation and case law.

In Nigeria, legal representatives and arbitrators are governed by various ethical codes and professional standards. The primary sources of ethical guidelines and professional standards for lawyers include the Legal Practitioners Act, the Rules of Professional Conduct for Legal Practitioners, and the Nigerian Bar Association (NBA) Rules of Professional Conduct. The Arbitration Rules also include a number of standards required of arbitrators.

Ethical and Professional Standards for Lawyers

Legal Practitioners Act

This is the principal legislation governing legal practice in Nigeria. It sets out the qualifications and requirements for becoming a legal practitioner and provides the general framework for the regulation of the legal profession.

Rules of Professional Conduct for Legal Practitioners

These rules are made pursuant to the Legal Practitioners Act and provide detailed guidance on the professional conduct expected from lawyers in Nigeria. They cover various aspects, including the lawyer-client relationship, conflicts of interest, confidentiality, diligence, and professional competence.

Nigerian Bar Association (NBA) Rules of Professional Conduct

The NBA is the umbrella body for lawyers in Nigeria, and it has its own rules of professional conduct that supplement the statutory framework. These rules, enforced by the NBA Disciplinary Committee, provide additional guidelines on professional conduct and set out disciplinary procedures for lawyers.

Ethical and Professional Standards for Arbitrators

Arbitration Rules

These rules require that a person approached in connection with a possible appointment as an arbitrator must confirm their availability as well as disclose any circumstance that may affect the person’s impartiality or independence. Even after appointment, should circumstances affecting an arbitrator’s impartiality or independence subsequently arise, the arbitrator is also mandated to disclose same immediately.

Arbitration and Mediation Act 2023

Regarding arbitrators, the primary reference for professional standards is the AMA. While this Act does not provide specific ethical rules for arbitrators, it outlines the legal framework for arbitration proceedings in Nigeria.

Other guidelines and codes of conduct

Additionally, many professional bodies and organisations offer guidelines and codes of conduct that arbitrators may adhere to. For example, the Chartered Institute of Arbitrators Nigeria (CIArb Nigeria) has its own code of professional and ethical conduct for arbitrators.

The AMA legitimised third-party funding of arbitration and states that the torts of maintenance and champerty do not apply to arbitrations seated in Nigeria or to arbitration-related proceedings in courts within Nigeria. Section 62 of the AMA also provides that the benefiting party is required to disclose the name and address of the funder as soon as the funding arrangement is made.

In Nigeria, arbitration proceedings may only be consolidated subject to agreement by the parties by virtue of Section 39 of the AMA.

In Nigeria, a third party cannot be bound by an arbitration agreement or award, unless such party is, prima facie, privy to the arbitration agreement and has been joined to the proceedings, under Section 40 of the AMA.