Legislation Review - The New Nigerian Arbitration and Mediation Act, 2023
Introduction
The evolving and increased use of arbitration as a means of dispute resolution has necessitated the review of the legal framework governing arbitration practice at the national and institutional levels. Nigeria is not left out of this change in legal framework. The country is not just a signatory of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), it has since 1988 enacted an Arbitration and Conciliation Act that was intended to provide an integrated legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation. However, recent developments in the business sector and even arbitration practices and norms in general, have made our Nigerian arbitration legislation untenable and out of touch. Thereby justifying the need for a review of our arbitral law.
On 26th May 2023, the President of Nigeria gave his presidential assent to the National Assembly’s recently passed Arbitration and Mediation Bill, 2023. Thus, completing the enactment of a new arbitration law for Nigeria - The Arbitration and Mediation Act (‘AMA’) 2023. The AMA repeals the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria, 2004 and it seeks to provide a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and mediation and make applicable, the convention on the recognition and enforcement of foreign arbitral awards (New York Convention) to any award made in Nigeria or in any contracting state arising out of international commercial arbitration.
This Legislation Review seeks to identify and highlight the salient and innovative provisions of the AMA and where relevant, compare a specific AMA provision with its equivalent or similar in the former and now repealed ACA. Part 1 deals with Arbitration, while Part 2 deals with Mediation.
PART 1 - ARBITRATION
SECTIONS
Section 1 -
Objectives and Application
This section states the objectives and applications of the AMA. This includes promoting the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. (sub-section 1).
The AMA is applicable to international commercial arbitration, inter-state commercial arbitration with the Federal Republic of Nigeria and commercial arbitration within the Federal Republic of Nigeria (sub-section 1(5)).
It shall also apply where the seat is the Federal Republic of Nigeria (‘FRN’). Irrespective of location of the seat or its non-designation, the powers of the Court therein, shall apply under the circumstances mentioned in Section 1(7)(a) to (g) of the AMA i.e., power to stay court proceedings, power of court to grant interim measures of protection, recognition, and enforcement of interim measures, etc.
Section 2 -
Form of arbitration agreement
states that the arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate complete agreement. The arbitration agreement shall be in writing.
There is also the inclusion of a subsection (4) that the arbitration agreement satisfies the writing requirement if it is by an electronic communication as defined in S. 91.
Every arbitration agreement shall be in writing. (Section 1 of the ACA)
Section 4 (1) -
Change of status of party
Excludes the exception of enforcement by or against the deceased’s personal representative as previously provided for under the ACA
An arbitration agreement shall not be invalid by reason of death of any party thereto but shall, in such an event, be enforceable by or against the personal representative of the deceased. (Section 3 of the ACA)
Section 5 (3) -
Power to stay court proceedings on the same substantive claim
Where a court makes an order for a stay of proceedings under subsection 1, the court may, for the purpose of preserving the rights of parties, make an interim or supplementary order as may be necessary.
Section 6 -
Number of arbitrators
Where there is no agreement as to the number of arbitrators, the arbitral tribunal shall consist of a sole arbitrator.
Where the parties are unable to agree on a sole arbitrator, the non-defaulting party can approach the court or any arbitral institution in Nigeria to make the appointment.
Section 8 (1) -
Grounds for challenge
states that a party may only challenge an arbitrator it appointed, or in whose appointment it has participated for reasons of which it becomes aware after the appointment has been made.
Section 9 (2) -
Challenge process
the intention of a party to challenge an arbitrator must be carried out within 14 days
The ACA required it to be done within 15 days.
section 12 -
Withdrawal, death, and cessation of office of an arbitrator
recognises that the parties to an arbitration may agree on the consequences of the withdrawal of an arbitrator from appointment.
Section 13 -
Immunity of an arbitrator, appointing authority, and arbitral institutions
An arbitrator, appointing authority or an arbitral institution enjoys immunity from liability except where their action or omission is shown to have been in bad faith. An arbitrator is, however, not exempted from liability incurred as a result of his or her withdrawal as arbitration under Section 12 of the Act (s.13 (3) of the AMA).
Section 14 (6) (7) -
Competence of arbitral tribunal to rule on its Jurisdiction
states that where a tribunal rules as a preliminary question that it has jurisdiction, a party may request, within 30 days after having received notice of the ruling, the court to decide the matter.
Where the arbitral tribunal rules on its jurisdiction as a preliminary question, it may continue with the proceedings and make an award notwithstanding that a party has recourse to a court in respect of such ruling.
The time limit to challenge the arbitral tribunal’s ruling on its own jurisdiction is new and innovative. These provisions are not in the kompetenz kompetenz principles contained in (Section 12 of the ACA).
Section 15 -
Rules applicable to substance of dispute
directs that the arbitral tribunal shall decide the disputes in accordance with the rule(s) of law that is chosen by the parties as applicable to the substance of the dispute.
The designated law or legal system does not include its conflict of law rules unless otherwise expressed (s.15(2)).
In the absence of choice of law or legal system of a jurisdiction, the arbitral tribunal shall apply the conflict of law rules it considers applicable (s.15(3)).
Section 16 -
Appointment of an emergency arbitrator
Allows for the appointment of an emergency arbitrator where a party requires urgent relief following the request for a dispute to be referred to arbitration but before the constitution of the arbitral tribunal.
s.16(3) states the content of the application to include amongst others (a)a statement of the emergency relief sought; (b) name and description of each party; (c) a description of the circumstances that give rise to the application and of the underlying dispute referred to arbitration; (d) the reason the applicant is entitled to the relief etc.
s. 16(9) the emergency relief proceedings shall be in accordance with the provisions of Article 27 of the First Schedule of the AMA.
Section 17 -
Challenge of an emergency arbitrator
The challenge of the appointment of the emergency arbitrator shall be made within three (3) days.
Section 18 -
Seat of the emergency relief proceedings
The seat of arbitration agreed upon by the parties shall be the seat of emergency relief proceedings. Where no seat is agreed upon, the institution or the court shall fix the seat.
Any meeting with the emergency arbitrator may be conducted through a meeting in person at a location which the emergency arbitrator considers appropriate or by video conference, telephone, or similar means of communication. (s.18(3) of the AMA).
Sections 19 to 29 -
Powers of the court and arbitral tribunal to grant interim measures of protection.
The power of the court and arbitral tribunal to order interim measure of protection was broadly provided for across these sections. The AMA has more detailed and elaborate provisions on interim measures than the ACA.
The power of arbitral tribunal to order interim measure. Section 13 of the ACA.
Section 30 -
Equal treatment of parties
provides that parties are treated equally and that each party is given reasonable opportunity to present its case; and accorded a fair resolution of the dispute without unnecessary delay or expense.
In any arbitral proceedings, the arbitral tribunal shall ensure that the parties are accorded equal treatment and that each party is given full opportunity of presenting his case. Section 14 of the ACA
Section 31 (1) -
Arbitral proceedings and determination of rules of procedure
Parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings
The arbitral proceedings shall be in accordance with the procedure contained in the Arbitration Rules set out in the first schedule to the Act. Section 15 (1) of the ACA
Section 32 -
The seat and place of the arbitration
The seat of the arbitral proceedings can now be determined by an arbitral or other institution or person authorised by the parties with powers in that regard.
The seat of arbitration can now be outside of the country subject to relevant circumstances.(jurisdiction with most significant contacts).
Subsection (4) defines seat of arbitration as the juridical seat of arbitration for purposes of determination of the law that will govern the arbitration proceedings (the curial law).
Unless otherwise agreed by the parties, the place of the arbitral proceedings shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties. Section 16 of the ACA
Section 33
Commencement of arbitral proceedings
Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute shall commence on the date on which a written containing a request for the dispute to be referred to arbitration is received by the respondent.
Section 33 of AMA is impari materia with Section 17 of the ACA.
Section 34
Application of Statutes of Limitation to Arbitral Proceedings.
Expressly states that statute of limitation shall apply to arbitral proceedings as they apply to judicial proceedings.
s. 34(4) of the AMA states that in computing the time for the commencement of proceedings to enforce an arbitral award the period between the commencement of the arbitration and the date of the award shall be excluded.
The application of statute of limitation to arbitral proceedings was a question of case law authorities as evinced by the decision of the Supreme Court in City Engineering Nigeria Limited v. Federal Housing Authority (SC 204/1992) [1997] 1. Contrast with the 2018 Supreme Court decision in Sifax Nigeria Limited v. Migfo Nigeria Limited.
Section 35 -
Language to be used in Arbitral proceedings.
The new law provides that where there is no agreement on the language that should be used in Arbitral proceedings the language to be used is English.
The parties may by agreement determine the language or languages to be used in the arbitral proceedings, but where they do not do so, the arbitral tribunal shall determine the language or languages to be used bearing in mind the relevant circumstances of the case. s. 18 of the ACA.
Section 38 -
Hearing and written Proceedings
Section 38 of the AMA is impari materia with S. 20 of the ACA except that section 20(6) of the ACA was not included in the new law.
However, a new Section 43 of the AMA provides for the power of a court to order the attendance of a witness before an arbitral tribunal.
Any party to an arbitral proceeding may issue out a writ of subpoena ad testificandum or subpoena duces tecum, but no persons shall be compelled under any such writ to produce any document which he could not be compelled to produce on the trial of an action. S. 20(6) of the ACA.
Section 39 -
Consolidation and Concurrent hearing
Parties can now agree that the proceedings be consolidated with other arbitral proceedings, inclusive of that involving a different party or parties with the agreement of that party or parties.
Section 40 -
Joinder of parties
The arbitral tribunal have the power to allow an additional party to be joined to the arbitration provided that prima facie, the additional party is bound by the arbitration agreement giving rise to the arbitration.
Section 41 -
Default of a Party
The new section 41 (a) amended the old section 21(a) by stating that unless otherwise agreed to by the parties, if, without showing sufficient cause
(a). the claimant fails to state his claim as required under section 36(1) of this Act, the arbitral tribunal shall terminate the proceedings provided that where a respondent has a counterclaim and has evinced an information to file same, the proceedings shall not be terminated.
Unless otherwise agreed by the parties, if, without showing sufficient cause
(a) The claimant fails to state his claim as required under section 19(1) of this Act, the arbitral tribunal shall terminate the proceeding.
See sec 21(a) of the Arbitration and conciliation Act.
Section 42 -
Power of Arbitral Tribunal to appoint expert
This is the same with its corresponding provision under Section 22 of the ACA. However, Section 42 of the AMA omits section 22 (3) and (4) of the ACA.
(3) The arbitral tribunal shall not decide ex aequo et bono or as amiable compositeur unless the parties have expressly authorised it to do so.
(4). The arbitral tribunal shall decide in accordance with the terms of the contract and shall take account of the usages of the trade application to the transaction. S 22(3) and (4) of the ACA.
Section 44 -
Decision Making by the Arbitral Tribunal
Unless otherwise agreed by the parties, in tribunal with more than one arbitrator, any decision shall be made by the majority of its members.
The presiding arbitrator may decide questions relating to the procedure to be followed at the arbitral proceedings, when authorised by the parties or the members of the tribunal.
Section 49 -
Correction and Interpretation of award and additional award
This is essentially the same provision as Section 28 of the ACA. However, under sub-section (5) of the AMA where the tribunal considers a request made for an additional award as to the claims presented in the proceedings but omitted in the initial award to be justified, it shall within 60 days of the receipt of the request, make the additional award.
Under the other ACA, it is 30 days that is required. S.28 (5) of the ACA.
Section 50 -
Cost of the arbitration
Additional definition for costs under the AMA includes –
- Administrative cost such as cost of the arbitral institution or the appointing authority, cost of venue, sitting and correspondence.
- The cost of obtaining Third-Party Funding; and
- Other cost as approved by the arbitral tribunal.
Compare with S.49(a) to (e) of the ACA. which has only five definitions of cost for purposes of the ACA.
Section 52 -
Security for costs
There is a new provision that empowers the tribunal upon the application of a party. To order others claiming any claiming or counterclaiming party to provide security for the legal or other costs of any other party by way of deposit or bank guarantee or in any other matter and upon the terms as the arbitral tribunal consider appropriate.
The ACA only has provisions for cost and Deposit for Costs. See S. 49 and S. 50 of the ACA.
Section 53 -
Joint and Several Liability of the Parties for Arbitrator
This section states that the parties are jointly and severally liable to pay the arbitral such reasonable fee and expenses.
Section 54 express gives the arbitral tribunal or institution the right to refuse to deliver an award to the parties except on full payment of the fee and expenses of the arbitrators or the arbitral institution.
Section 54
Lien on the Award
The tribunal or arbitration institution may refuse to deliver an award to the parties except on full payment of the fees and There is no such provision stated in the repealed ACA.
In the terms of expenses of the arbitrators or arbitral institution. (2) Where the fees and expenses of the arbitrators or the arbitral institution have not been agreed, and the arbitral tribunal or arbitral institution refuses on that ground to deliver an award, a party to the arbitral proceedings may, upon notice to the other parties, the tribunal and, where applicable, the arbitral institution, apply to the Court, which may order that (a) the arbitral tribunal or arbitral institution shall deliver the award where the applicant pays the fees and expenses demanded into Court, or pays such lesser amount as the Court may specify; (b)the amount of the fees and expenses properly payable shall be determined by the means and upon the terms as the Court may direct; and (c) out of the money paid into Court there shall be paid out the fees and expenses as may be found to be properly payable and the balance of the money (if any) shall be paid out to the applicant. (3) For this purpose, the amount of fees and expenses properly payable is the amount the applicant is liable to pay under section 53 of this Act or any agreement relating to the payment of the arbitrators. (4) No application to the Court may be made unless every available arbitral process for appeal or review of the amount of the fees or expenses demanded has been exhausted. (5) References in this section to arbitrators include an arbitrator who has ceased to act. Joint and several liability of the parties for arbitrator's fees an expenses Lien on the award (6) The leave of the Court is required for any appeal from a decision of the Court under this section. (7) Nothing in this section shall be construed as excluding an application under section 5 of this Act, where payment has been made to the arbitrators in order to obtain the award.
Section 55 -
Application for setting aside Arbitral Award
The new section sets out the application for setting aside arbitral award.
Section 55 -
(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with subsections (3) and (4).
(2) An application for setting aside an arbitral award shall not be made on the ground of an error on the face of the award, or any other ground except those expressly stated in subsection (3).
(3) The Court may set aside an arbitral award, where
(a) the party who makes the application furnishes proof that
(i) a party to the arbitration agreement was under some legal incapacity,
(ii) 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,
(ili) 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 its case,
(iv) the award deals with a dispute not contemplated by or does not fall within the terms of the submission to arbitration,
(v) the award contains decisions on matters which are beyond the scope of the submission to arbitration, provided that, fi 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,
(vi) 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
(vi)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
Application for setting aside an arbitral award.
(b) the Court finds that the-
(i)subject matter of the dispute is otherwise not capable of settlement by arbitration under the laws of Nigeria, or
(in)award is against public policy of Nigeria.
(4) An application for setting aside shall not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under section 49 of this Act, from the date on which that request had been disposed of by the arbitral tribunal.
(5) Where the Court is satisfied that one or more of the grounds set out in subsection (3) has been proved and that it has caused or will cause substantial injustice to the applicant, the court may
(a) remit the award to the tribunal, in whole or in part, for reconsideration; or (b) set the award aside in whole or in part.
(6) The Court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take any other action which in the opinion of the arbitral tribunal will eliminate the grounds for setting aside.
A party who is aggrieved by an arbitral award may within three months-
(a).from the date of the award; or
(b). in a case falling within section 28 of this Act, from the date of the request for additional award is disposed of by the arbitral tribunal,
by way of an application for setting aside, request the court to set aside the award in accordance with subsection (2) of this section.
(2). The court may set aside an arbitral award if the party making the application furnishes proof that the award contains decisions on matters which are beyond the scope of submission to arbitration so however 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 may be set aside.
(3). the court before which an application is brought under subsection (1) of this section may, at the request of a party where appropriate, suspend proceedings for such period as it may determine to afford the arbitral tribunal an opportunity to resume the arbitral proceedings or take such other action to eliminate the grounds for setting aside of the award. (S.29 of the ACA).
Section 57 -
Recognition and Enforcement of Award
The new section added subsection (c) to section 57(2) which states that-
Where the award or arbitration agreement is not made in the English language, a certified translation of it into the English Language.
(2).The party relying on an award or applying for its enforcement shall supply.
(a).the duly authenticated original award or duly certified copy thereof;
(b). the original arbitration agreement or a duly certified copy thereof.
See section 31(2) of the ACA.
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