Enforcement Of Foreign Arbitral Awards In Nigeria

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ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN NIGERIA February 2009 Vol. 22: Issue # 2 Commercial arbitration has become a major attraction in international transactions owing to its speed and effectiveness in resolving commercial disputes. Having obtained the award however, the successful party would have to enforce the award against his adversary. The willingness of Nigerian courts to enforce foreign arbitration awards and the ease or difficulty of doing so and the likely timescale of the process of enforcement are issues of immense concern to any foreign person wishing to enforce an arbitral award in Nigeria. This is the focus of this short newsletter. Foreign arbitral awards can be enforced in Nigeria through five principal ways, namely: (a) By an Action upon the award In Toepher Inc. of New York v. Edokpolor (trading as John Edokpolor & Sons) [1965] All N.L.R. 307, the Nigerian Supreme Court held that a foreign arbitral award could be enforced in Nigeria by suing upon the award, even where there is no reciprocal

treatment in the country where the award was obtained. To succeed in the action, the plaintiff must prove the existence of the arbitration agreement, the proper conduct of the arbitration in accordance with the agreement, and the validity of the award. The defendant may, however, resist the enforcement of the award by challenging the award, the conduct of the arbitration or the jurisdiction of the arbitral tribunal. However, the defendant cannot rely on misconduct or impartiality on the part of the arbitral tribunal, for those points can only be taken on an application to set aside the award. In Nigeria, this procedure could take about a year or more to conclude. (b) By registration under the Foreign Judgment (Reciprocal Enforcement) Act 1990 Under the Foreign Judgment (Reciprocal Enforcement) Act 1990, a judgment or award obtained in a foreign country may be enforced in Nigeria within six years of the judgment or award. The judgment or award would have to be registered first in a Nigeria court with jurisdiction to hear the dispute. The judgment must be final and conclusive as between the parties and there must be payable thereunder a sum of money, not being a sum payable in respect of a fine or other penalty.

©Blackfriars LLP 2009. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.

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However, only countries, which accord reciprocal treatment to Nigeria, as designated by the Minister of Justice, would be recognized. Under Section 6 of the Act, the registered award or judgment may be set aside on the application of the defendant if the court is satisfied that: • the Act has not been complied with, or • the original court had no jurisdiction, or • the judgment was obtained by fraud, or • that the enforcement would be contrary to public policy, or • on grounds of res judicata, or • that the rights under the judgment are not vested in the person by whom the application for registration was made. Ordinarily this is a fast process but of limited application due to the requirement that the award must be for the payment of a sum of money and the judgment must have become enforceable as judgment of a court according to the law of the place where it is made. If the registration is challenged, the process may become prolonged up to a year or more. (c)

Under Section 51 of the Arbitration & Conciliation Act, 1990

Section 51 of the Arbitration and Conciliation Act, 1990 provides that: “(1)

(2)

An arbitral award shall, irrespective of the country in which it is made be recognized as binding and subject to this section and section 32 of this Act, shall, upon application in writing to the Court, be enforced by the Court. The party relying on an award or applying for its enforcement shall supply (a) the duly authenticated original award or a duly certified copy thereof; (b) the original arbitration agreement or a duly certified copy thereof (c) where the award or arbitration agreement is not made in the English language, a duly certified translation thereof into the English language.”

Section 52 provides a list of grounds for refusing recognition or enforcement which are similar to the ones mentioned in (b) above. These grounds could also be a hindrance to an otherwise very expeditious method of enforcement.

©Blackfriars LLP 2009. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.

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(d)

Enforcement under the New York Convention 1958

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Award 1958 applies in Nigeria by virtue of section 54 of the Arbitration and Conciliation Act 1990. Nigeria has made reciprocity reservation and so only awards made in contracting states that undertake to recognize and enforce awards made in other contracting states, including Nigeria, will be recognized and enforced in Nigeria. (e)

Enforcement under the International Centre for Settlement of Investment Disputes (ICSID)

Nigeria ratified the ICSID Convention on 23 August 1965. In pursuance of its commitment to domesticate the ICSID Convention, the convention was reenacted as a local legislation vide the International Centre for Settlement of Investment Dispute (Enforcement of Awards) Act, cap 19 Laws of the Federation of Nigeria 1990. The Act provides that an ICSID award shall be enforced in Nigeria as if it were an award contained in a final judgment of the Supreme Court if a copy of such an award, duly certified by the Secretary General of the Centre is filed in the Supreme Court by the party seeking its recognition and enforcement. This is

perhaps the fastest procedure in Nigeria for enforcing an arbitral award as there is little or no room for objections to the enforcement of the award.

For further information, please contact: Ms. Nkeiru Onyeaso Tel: +234 808 718 0833 Email: [email protected] Fax: +234 1 2694781 Dr. Pius Okoronkwo Tel: +647 831 7487 Email: [email protected] Fax: +234 1 2694781 Dr. Chidi Oguamanam Email: [email protected] Phone: +234 1 739 0397 (Lagos) Phone: +1 902 494 7125 (Halifax) Fax: + 234 12694781

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©Blackfriars LLP 2009. All rights reserved. This document is for general guidance only. Definitive advice should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative office in Toronto, Canada.