Most international contracts today include an arbitration clause. As a result of the obvious advantages of arbitration over litigation, some business partners willingly agree to submit to arbitration when a dispute arises from their contract. But the arbitral proceedings will be a mere academic exercise and the arbitral award, a worthless piece of paper if the award cannot be enforced within the country in which the award was made or across its borders to enable the winning party to realize proceeds of the award. It is therefore important to know the legal framework for enforcement of both domestic and foreign awards in Nigeria.
Legal framework for enforcement of foreign awards in Nigeria
As a member of the United Nations Organization, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 ("the Convention") is applicable in Nigeria. The Convention regulates recognition and enforcement of awards of foreign ad-hoc and institutional arbitral tribunals. For a foreign award to be recognized in Nigeria there must have been an agreement between the parties to arbitrate and such agreement must not be void, inoperative or incapable of being performed.
Though a foreign award is to be enforced in accordance with the rules of procedure in Nigeria, a Nigerian court would not apply onerous conditions or higher fees or charges on foreign awards than those imposed on domestic awards.
In applying for recognition and enforcement of a foreign award, the applicant shall attach an authenticated original award and a valid arbitration agreement between the parties or a certified copy of the documents. If the award is in a language other than English, the award will be translated to English language which is the official language of Nigerian courts.
Nevertheless, a Nigerian court may refuse to recognize or enforce a foreign award, if the arbitration agreement is not valid under the law of the country where the award was made or under Nigerian law; if the party against whom the award is to be enforced was not given notice of the arbitral proceedings; if the arbitral award is in relation to matters beyond the scope of the arbitration or submission agreement; if the composition of the arbitral tribunal was not in accordance with the agreement of the parties or the law of the country where the award was made; if the award has not become binding on the parties or has been set aside by a competent authority under the law of the country in which the award was made; if the matter in which the award relates is incapable of settlement by arbitration under the law of the country in which the award was made and if the award is against public policy.
Legal framework for enforcement of domestic awards in Nigeria
Section 31 (3) of the Arbitration and Conciliation Act ("the Act") provides that a domestic award may by leave of court be enforced as a judgment or order of the court. An application for recognition and enforcement of a domestic award is accompanied with a duly authenticated original award and arbitration agreement or a duly certified copy.
Section 29 (2) of the Act provides that a party may apply to court to set aside an award if the award contains decisions on matters beyond the scope of the submission or arbitration agreement. Nevertheless, if the matters submitted to arbitration can be separated from those not submitted; only that part of the award on matter not submitted may be set aside.
Recognition and enforcement of foreign awards vis-à-vis foreign judgment in Nigeria
Since the Supreme Court of Nigeria has in the case of Macaulay v R.Z.B of Austria (2003) 18 NWLR (Pt. 852) 282 held that the Minister of Justice has not made an order extending the applicability of Foreign Judgments (Reciprocal Enforcement) Act, 1990 to other countries, it is only judgments from superior courts in the United Kingdom and other commonwealth countries that are recognised and enforced in Nigeria under Part 2 of the 1990 Act and the Reciprocal Enforcement of Judgments Ordinance, 1958. Judgments from non-commonwealth countries may be enforced by commencing an action in Nigeria upon the judgments. Moreover, the appellate courts' onerous interpretation of the conditions for registration of judgments from commonwealth jurisdictions has complicated a process which ought to be simple and straightforward. This leads to only one conclusion; it is easier for a foreign award to be recognised and enforced in Nigeria than a foreign judgment.