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The Arbitration and Conciliation Act

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Nigeria is witnessing probably her biggest growth commercially. Nigeria is the most populous nation in Africa, its population exceeding over 150 million people. The economy of this huge country is twice the economy of many African countries. In the West Africa region, Nigeria’s economy is about the size of all the member states put together. Nigeria has become Africa’s largest and most commercialized business hub. The size of the economy coupled with various commercial, business and investment activities both domestically and internationally in various sectors of the economy which includes International commercial Trade shows the level and size of economic activities in Nigeria. These busy sectors of the Nigerian Economy are constantly involved in International Trade and Commercial transactions. These transactions results in negotiations, drafting and interpretation of international contracts and commercial agreements between bodies that form international entities. These various sectors are involved in international trade and commercial transactions which results in negotiation and drafting of international contracts and commercial agreements. These sectors in the economy by nature are mostly contractual and inevitably conflicts arise between contractual parties. The diversity of the parties to international commercial relation is reflected in their conflicting goals and point of views, making disputes almost inevitable” [1] Many of the sectors in the economy faces obstacle while conducting their business. Some of these obstacle are unforeseen for example changes in government policies might alter a conduct of business or a contractual term between business conductors, inflation might inflate lack of performance by the parties etc. willing or unwillingly parties breach of the terms of commercial agreements which eventually leads to disputes between the parties. Parties look for ways to solve their dispute. Majority of these businesses prefer to resolve their disputes through alternative dispute resolution mechanisms, and arbitration is often the dispute resolution mechanism of choice for these parties.

5.2. Legal framework

The Arbitration and concillation act is the legal mechanism for modern commercial arbitration and alternative dispute resolution in Nigeria. The ACA is the primary legislation governing the enforcement of arbitration agreements in Nigeria. The act, known as the ACA, governs both domestic and international arbitration proceedings with separate provisions for each. The First Schedule to the ACA contains arbitral rules that govern the procedure of arbitration proceedings. Whereas these rules are binding and must be applied in domestic arbitrations, they only apply by default to international arbitrations, where parties to an arbitration agreement have not expressly agreed a different set of rules such as the ICC, LCIA or UNCITRAL.[2] Nigeria being a federation, each of its 36 component states has the liberty to enact its own arbitral law to deal with contractual disputes. In Nigeria, both state and federal laws regulate arbitration. However, the federal Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria 2004 applies throughout Nigeria to both domestic and international arbitration, and its provisions prevail over any state laws to the extent of any inconsistency. The ACA consists mainly of the provisions of the UNCITRAL Model Law.

5.2.1.Arbitration under ACA

Part 1 of the ACA deals with arbitration which comprises of section 1 to 36. The section deals with arbitration in general, including Arbitration Agreement, Composition and Jurisdiction of Arbitral Tribunals, Challenge to the Appointment of Arbitrator(s), Conduct of Arbitral Proceedings, Recourse against Awards and Recognition and Enforcement of Awards. The applicable Arbitration Rules is flexible under ACA. Parties are at liberty to agree in writing on the applicable rules. Under the ACA parties to an international commercial contract, in solving their dispute, in a case it arises, shall write an application to the courts for arbitration. Arbitration shall be refferd to in accordance with the ACA rules, or any other international arbitration rules accepted by the parties. The basic legal requirement of an arbitration agreement under this law is that an arbitration agreement must be in writing or must be contained in a written document signed by the parties (section1 of ACA). Idigbe and yamah noted Section 1 presupposes that arbitration must be consensual and indicates that an arbitration agreement may be either an express clause in a contract whereby parties agree to refer future disputes to arbitration or in a separate document (Submission Agreement) whereby parties agree to submit their existing dispute to arbitration. An arbitration agreement may also be inferred from written correspondence or pleadings exchanged between parties.[3] The following additional legal requirements for a valid arbitration agreement can be seen in the provisions of the ACA: The arbitration agreement must be in respect of a dispute capable of settlement by arbitration under the laws of Nigeria. Section 48(b)(i) and 52(b)(i) of the ACA. The parties to the arbitration agreement must have legal capacity under the law applicable to them. Section 48(a)(i) and Section 52(2)(a)(i) of the ACA.[4] The arbitration agreement must be valid under the law to which the parties have subjected it or under the laws of Nigeria. In other words, the agreement must be operative, capable of being performed and enforceable against the parties. Section 48(a)(ii) and 52(a)(ii) of the ACA.[5] 5.3. Enforcement and Recognition of New York convention/Foreign Awards in Nigeria The New York convention was adopted by the united nation conference in 1958 and entered into force in 1959. The convention expect countries parties to the convention, to recognize arbitration between private entities and aslo public entities, and enforce arbitral awards. The convention also requires countries to enforce and recognize awards made in foregn contracting states. The new york convention is regarded as the main instrument for international arbitration. Without international standards to govern enforcement, parties neither had a guarantee that the domestic courts would enforce their awards nor that the courts would treat foreign and domestic awards equally. Buruma elaborates “For instance, the Netherlands is part of the European Union, on the basis of which a Dutch judgment can be enforced in 27 European countries. Enforcing a Dutch judgment in any other country will be much more difficult, time consuming and costly. An arbitration award, rendered in the Netherlands, however, can be enforced in over 140 countries, under the provisions of international treaties such as the New York Convention of 1958 to which the Netherlands is a party.[6] Nigeria is a contracting state to the New York Convention, having acceded in 1970. The New York Convention was incorporated and domesticated into Nigerian Laws by virtue of Section 54(1) of the ACA. It constitutes the Second Schedule of the Act and has been applicable in Nigeria since 14th March, 1988. Section 54 of the ACA. Section 54 imposes a qualification that, that state that, in order to sought any recognition and enforcement, the award rendered must been made in the territoty of a country that is party to the New York Convention and have resolved a difference arising from a contractual relationship. It is also relevant to state that even though the Convention was not adopted before 1988 and the country enacted no law relating to international commercial arbitration, a foreign arbitral award in an international commercial arbitration made outside the country could be enforced in Nigeria by the combined effect of sections 2(1) and 4(2) of the Foreign Judgment (Reciprocal Enforcement) Act, Laws of the Federation of Nigeria 1960, provide amongst other things, it was registered in the High Court in this country[7] Where an award was not made in a New York Convention state, a viable option is to seek the enforcement of the award of the award as a foreign judgment under the Foreign Judgment (Reciprocal Enforcement) Act. The development and of a harmonized regime for
[1] AMAZU, A. ASOUZU, international commercial arbitration and African states, Cambridge university press, Cambridge, 2001, p.1. [2] Arbitration and conciliation act, laws of the federation of Nigeria. [3] ANTHONY, IDIGBE, - OMONE FOY, YAMAH, international arbitration: Nigeria, ICLG, 2010, p.1. [4] Arbitration and conciliation act, laws of the federation of Nigeria. [5] Arbitration and conciliation act, laws of the federation of Nigeria. [6] HOUTHOFF, BURUMA, “international commercial arbitration: an introduction”, in house counsel practical guide, 2010, p.14. [7] EPHRAIM, AKPATA, the Nigerian arbitration law in focus, west African book publisher, 1997, p.32.
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