JOIA2009021

Journal of International Arbitration 26(3): 373–404, 2009.
© 2009 Kluwer Law International. Printed in The Netherlands.
Charting New Waters with Familiar Landmarks

The Changing Face of Arbitration Law and Practice in Nigeria
Charting New Waters with Familiar Landmarks
Adewale A. Olawoyin*
Journal of International Arbitration
Michael
Moser
Dominique
Nigeria is a federation and the rising profile of arbitration law and practice has brought to the fore questions
Journal of InternationalHascher
Arbitration
2009 Volume 26 Issue 3
regarding the validity of a substantive federal law on arbitration.The constitutional schematic of legislative
competence between the National Assembly and the State Houses of Assembly has generated judicial discourse
in other areas of the law which offer an insight into the proper interpretation of the relevant constitutional
provisions.This article is a critique of the various arguments in favour of a substantive federal law on arbitration.
It is argued, contrary to what appears to be conventional wisdom, that arbitration is a residual matter within
the legislative competence of the State Houses of Assembly. The article also reviews the laudable provisions of
the current Draft Federal Arbitration and Conciliation Bill proposed by the National Committee on the
Reform and Harmonization of Arbitration and Alternative Dispute Resolution (ADR) Laws in Nigeria
against the background of the deficiencies in the current statutory regime under the Arbitration and Conciliation
Act 1990 and the principles evolved by the courts.
I. Introduction
In the quest to attain international respectability in the new world economic order,
developing countries have in recent times been saddled with the enormous responsibility
of balancing the freedom of transnational trade and commerce with the desirable need to
exercise some measure of control and regulation of the operational dynamics of such
activities. The driving force underpinning this phenomenon is the desire to redress the
perceived disparity in their economic development.
These countries have placed themselves in the shop window for foreign direct
investment in the fervent hope that an economic tide would sweep through their entire
landscape. A critical aspect in giving foreign investors the comfort to trigger the required
seismic activity under the oceans of economic opportunities is the insulation of commer-
cial disputes from the perceived partiality or in extreme cases, outright inexperience or
alleged incompetence of domestic courts.1
Recent developments in African states, in general, and Nigeria, in particular, have
led to the irresistible conclusion that Alternative Dispute Resolution (ADR) has a valua-
ble contributory role in the aspirations of such states for socio-economic development.
The initial resistance and misgivings regarding the attributes of ADR are now tales of his-
tory. A necessary corollary to the foregoing is the existence and implementation of a
* LL.B (Hons.) Ife; LL.M (London); Ph.D. (Bristol), Senior Lecturer, Department of Commercial & Industrial
Law, Faculty of Law, University of Lagos, Akoka, Nigeria.
1
See also Adewale A. Olawoyin, Safeguarding Arbitral Integrity in Nigeria: Potential Conflict in Legislative Policies and
the Enforceability of Foreign Jurisdiction Clauses in Bills of Lading, 17 Am. Rev. Int’l Arb. 239 (2006).
374 journal of international arbitration
strong and vibrant alternative dispute resolution regime premised on acceptable interna-
tional standards. Arbitration lies at the very heart of such ADR mechanisms.2
The market for ADR mechanisms as a viable alternative to litigation in court is a
significant phenomenon in the recognition and enforcement of legal rights and obliga-
tions of persons. The current rising profile of ADR in developing economies is a reflec-
tion of the renewed invigoration and upward spiral of the economic fortunes of those
countries.
The Arbitration and Conciliation Act 1988 (ACA)3 was passed as a federal statute to
provide a unified framework for a fair and efficient settlement of commercial disputes by
arbitration and conciliation. It also made the Convention on the Recognition and
Enforcement of Arbitral Awards (“New York Convention”) applicable to any award made
in Nigeria or in any contracting state arising out of international commercial arbitration.
The Act was applauded as a giant stride by Nigeria in creating the enabling environment
for the enhancement of arbitration as a notable and influential appendage to sustainable
economic development.4
Though largely informal, ADR in all its facets was traditionally part of the native law
and custom of many indigenous communities in Nigeria. Arbitration or mediation was
used to resolve conflicts because of the emphasis on moral persuasion and the ability to
maintain harmony in human relationship.5 It is now close to two decades since the ACA
was enacted and it is apt to conduct a legal audit of the operational dynamics and appli-
cation of the statute, primarily against the backdrop of the raison d’etre of the ACA and
the future challenges of a growing global economy. This discourse will show that the
entire legal framework of the arbitration regime in Nigeria is due for an overhaul, partic-
ularly in certain critical areas, in order to withstand the challenges of dispute resolution
in the current millennium.
2
Alternative dispute resolution (ADR) refers to a range of processes designed to aid parties in resolving their
disputes outside formal judicial proceedings. These processes include but are not limited to early neutral evaluation,
mediation, and arbitration. See Lagos Multi-Door Courthouse, ADR Centre, Practice Directions, at 2. It is perhaps
apt to state from the outset that in this article, arbitration is regarded as a component of ADR mechanisms. There has
been and continues to be in some quarters a whimpering debate as to whether arbitration ought to be distinguished
from other ADR methods on the grounds, for example, that arbitration has left the arena of suspicion or that arbi-
tration has acquired a certain maturity and sophistication that a new line of distinction has to be drawn. See Amazu
A. Asouzu, Conciliation Under the 1988 Arbitration and Conciliation Act of Nigeria, 5 Afr. J. Int’l & Comp. L. 825, 826–
29 (1993), for a review of the different views on the distinction between arbitration and other ADR methods. The
distinguishing attributes of arbitration referred to supra coupled with the international recognition and acceptance of
the concept does not detract from the fact that arbitration is and remains a viable alternative dispute mechanism
to litigation in constitutionally recognized courts. It is therefore submitted that the debate or the distinction is
of no jurisprudential or indeed practical value in terms of the pivotal role of arbitration in the resolution of disputes
generally.
3
Arbitration and Conciliation Act, (1990) Cap. 19 (Nigeria), now in Arbitration and Conciliation Act, (2004)
Cap. 18A (Nigeria) [hereinafter “ACA”].
4
See Amazu A. Asouzu, The Legal Framework for Commercial Arbitration and Conciliation in Nigeria, 9 ICSID Rev.
214 (1994).
5
See Ephraim Akpata, The Nigerian Arbitration Law in Focus 1 (1997). See also Oguntade, J.C.A. (as he
then was) in Chief James Nzan Okpuruwu & Ors. v. Chief Kieran Jason Nzie Okpokam & Anor., [1988] 4
N.W.L.R. (pt. 90) 554, 586 (Nigeria): (“In pre-colonial times and before the advent of the regular courts, our people
certainly had a simple and inexpensive way of adjudicating over disputes between them. They referred them to elders
or a body set up for that purpose. This practice has over the years become so strongly embedded in the system that
they survive today as customs”).
charting new waters with familiar landmarks 375
The approach of this article is twofold. First, it seeks to identify the positive effects
of the arbitral legal framework in Nigeria in the context of the manifold initiatives that
have evolved on the heels of the enabling environment created by the ACA. Secondly, it
also seeks to highlight the key areas of deficiency arising either as result of a structural
weakness in the Act itself or attitudinal issues that are peculiar to the context of litigation
in Nigeria which have apparently found a place also in the context of arbitration. Fore-
most of these issues is the penchant for recontesting even the most ephemeral and irrel-
evant issues of the dispute between the parties by exercising the right of appeal to a
higher court. Since litigation gives a litigant, at the very minimum, three bites of the pro-
verbial cherry, disputants have great difficulty in accepting the finality of arbitral awards.6
The ACA has recently gone through a review under the aegis of the National Com-
mittee on the Reform and Harmonization of Arbitration and ADR Laws in Nigeria.The
Committee was set up with the mandate to review Nigeria’s laws on arbitration and
other ADR mechanisms with a view to proposing necessary reforms and to bring the
laws in line with modern trends, and to perform such other acts as are necessary for the
realization of the objective of giving Nigeria a modern law and procedure on alternative
dispute resolution.7 The Committee recommended a new federal Bill on arbitration as
well as a proposing a uniform arbitration law for the constituent states and in its report
noted that:
Eighteen years after the ACA was passed, it is clear that the legislation has not achieved the objec-
tives that inspired its enactment. In a number of significant respects the standards for the recogni-
tion and enforcement of international arbitration agreements and arbitral awards fall short of the
standards prescribed by the United Nations Commission On International Trade Law (UNCI-
TRAL) Model Law. Inelegantly drafted provisions have created confusion and generated conflict-
ing or retrogressive judicial decisions. Outmoded concepts and definitions have prevented the
arbitral process from keeping pace with contemporary trends in international trade and commerce.
Above all, experience shows that the ACA has failed to achieve one of the underlying philoso-
phies of the UNCITRAL Model Law and of most national arbitration legislations, viz. to mini-
mize judicial intervention in the arbitral process. In Nigeria, arbitration is often perceived as the
first step to litigation, and the arbitral process often becomes entangled in the extremely protracted
and cumbersome process of Nigerian litigation.8
Despite these rightly held views (in some respects) of the Committee, the ACA
should be applauded for laying the foundation for the development of arbitral practice
generally in Nigeria. Manifold initiatives have evolved because of the awareness and the
enabling environment created for ADR by the ACA. The interest in arbitration is evident
in the vast numbers of persons seeking to join international arbitral associations, such as
the Chartered Institute of Arbitrators (Nigerian Branch) and indeed the accreditation of
6
The Constitution of the Federal Republic of Nigeria (1999) recognizes and preserves the right of appeal of
a litigant from the High Courts to the Court of Appeal, through to the Supreme Court, which is the apex court in
Nigeria. See Constitution, Cap. C23, ss. 233, 240 (2004) (Nigeria).
7
See Report of the National Committee on the Reform and Harmonisation of Arbitration and ADR Laws in Nigeria 2
(2007) [hereinafter “National Committee Report”].
8
Id. at 4.
the branch by the global body as a well-grounded body for training and education in dis-
pute resolution.9
Further, a number of other initiatives have either sprung up from or thrived on the
platform of the ACA. In Lagos State of Nigeria, which remains the major hub of com-
mercial activities in Nigeria, there have been significant strides in entrenching ADR even
within the litigation process. For example, under the High Court of Lagos Civil Proce-
dure Rules 2004,10 Order 25 Rule 1 provides for pre-trial conferencing and scheduling
of matters before the court and one of the purposes of issuing a pre-trial conference
notice is “promoting amicable settlement of the case or adoption of alternative dispute
resolution.”11
In order to provide litigants with a timely and cost-effective alternative to the con-
ventional means of resolving disputes, a facility known as the Lagos Multi-Door Court-
house (LMDC) was established at the High Court of Lagos State. It is a court-connected
ADR centre founded through the joint collaboration of the Lagos State Judiciary, the
Ministry of Justice, and the Negotiation and Conflict Management Group (NCMG),
which has statutory imprimatur with the enactment of the Lagos Multi-Door Court-
house Law 2007.12
Section 2 of the Law provides that the objectives of the LMDC are to enhance
access to justice by providing alternative mechanisms to supplement litigation in the res-
olution of disputes; minimize the citizen’s frustration and delays in justice delivery by
providing a standard legal framework for the fair and efficient settlement of disputes
through ADR; serve as a focal point for the promotion of ADR in Lagos State; and pro-
mote the growth and effective functioning of the justice system through ADR methods.13
At the federal level, there is also a concerted effort to develop institutional arbitra-
tion as part of a scheme under the auspices of the Asian African Legal Consultative Com-
mittee (AALCC) and the UNCITRAL. The concept of having a regional centre for
commercial arbitration in Nigeria with the assistance of the Federal Government of
Nigeria was initiated by the AALCC in 1978. While the Federal Government had
approved the establishment of the Regional Centre for International Commercial Arbi-
tration in 1988, it was not until 1999 that the statutory framework was put in place with
the enactment of the Regional Centre for International Commercial Arbitration Act.14
The objectives of the Centre are, inter alia, to provide a unified legal framework for the
9
See Adebayo Adaralegbe, Challenges in Enforcement of Arbitral Awards in Capital-Importing States: The Nigerian
Experience, 23 J. Int’l Arb. 401, 426 (2006), where he notes that a discernable body of truly professional arbitration
practitioners is gradually emerging in Nigeria. From a modest membership of less than 100 in the early 1990s, the
Nigerian branch of the Chartered Institute of Arbitrators now has some 400 members, all possessing formal, special-
ized training closely coordinated by the U.K. parent body.
10
See High Court of Lagos State (Civil Procedure) Law 2004.
11
See Order 25 Rule (2)(c) of the Rules.
12
No. 21 of 2007. The Law came into force on May 18, 2007. See 40 O.G. No. 56, August 3, 2007 (Nigeria).
13
See also s. 3, which states that the functions and powers of the LMDC are, inter alia, applying mediation, arbi-
tration, neutral evaluation, and any other ADR mechanisms in the resolution of such disputes as may from time to
time be referred to the LMDC from the High Court of Justice, Lagos State, courts of other jurisdictions outside
Lagos State, federal courts, private persons, corporations, public institutions, and dispute resolution organizations.
14
Cap. R5, Laws of the Federation of Nigeria 2004.
fair and efficient settlement, through arbitration and conciliation, of commercial disputes
within the region and promote the growth and effective functioning of national arbitra-
tion institutions within the region.15 All these initiatives are largely traceable to the exist-
ence of the ACA.
As we have noted earlier, the ACA has gone through a thorough review by the
National Committee on the Reform and Harmonization of Arbitration and ADR Laws.
Certain fundamental innovations have been recommended in the proposed federal Bill
and uniform state laws. This article also reviews some aspects of the proposed Bill against
the background of the federal system of government in Nigeria, coherence with existing
laws (substantive or adjectival), and general arbitral practice in Nigeria. In particular it re-
appraises the competing arguments on the constitutional complexities of a substantive
federal law governing arbitration and whether the current proposals by the National
Committee finally resolve the difficult and fundamental legal issues in this context.
II. Constitutionality of a Substantive Federal Law on Arbitration

Nigeria is a federation comprising the Federal Government, thirty-six states and the
Federal Capital Territory.16 Apart from the periods of military interregnum, during which
a peculiar variant of unitary system of governance was practised because of the command
structure of the military, Nigeria had always been a federation even before it became an
independent country under the Nigeria (Constitution) Order in Council 1960, No.
1652.17 It was during the period of military governance that the ACA was enacted as a
Decree of the Federal Military Government in 1988. It applied as a federal enactment
throughout the territory of the Federal Republic of Nigeria, and superseded all state
arbitration legislations because of the “unitary” legislative arrangement under the military
regime, according to which the Federal Military Government was competent to legislate
on any subject for the entire federation, including the states.18
The ACA is the prime legislation dealing with commercial arbitration. It is an Act,
which creates a body of federal substantive law on the validity, interpretation, and
enforceability of arbitration agreements in domestic and international commercial agree-
ments. Before the ACA came into force, a plurality of laws on arbitration existed in
Nigeria.19 These laws were apparently a vestige of the erstwhile constitutional framework
under which the then regions of Nigeria had their respective arbitration laws which
derived provenance from the Arbitration Ordinance 1914.20 The various states that
15
See also the functions and powers of the Centre under s. 4 of the Act.
16
See Constitution, s. 2 (1999) (Nigeria).
17
Per Uwaifo, JSC in Attorney General, Ondo State v. Attorney General, Federation, [2002] 9 N.W.L.R. (pt.
772) 222, 377 (Nigeria).
18
National Committee Report, supra note 7, at 2.
19
See supra note 9 at 401, 404 n. 23 for a list of some of the states which have arbitration laws on their statute
books.
20
See Arbitration Law, Cap. 7, Laws of Northern Nigeria 1963; Arbitration Law, Cap. 8, Laws of Western
Nigeria 1959; Arbitration Law, Cap. 10, Laws of Eastern Nigeria 1963.
emerged from the regions enacted arbitration laws for each of the states21 and none of
those arbitration laws was repealed by the ACA.
The structural allocation of legislative competence in Nigeria’s federal system of
governance requires the National Assembly to make laws for the entire Federation while
the component states have state Houses of Assembly that make laws for each state.22 The
schematics of legislative competence are such that there are two main recognized lists of
subject matters on which the legislative bodies have competence to make laws. The
Exclusive Legislative List contains the subject areas upon which the federal legislature
(i.e., the National Assembly) has exclusive legislative power to make laws for the peace,
order, and good governance of the Federation.23 The Concurrent Legislative List contains
those subject areas in which the state legislature (i.e., the House of Assembly of the States)
has power to make laws for the peace, order, and good governance within the state, albeit
not exclusively.24 In the sphere of Nigerian constitutional law, it is generally recognized
and accepted that subject areas which do not fall within the province of the Exclusive or
Concurrent Legislative Lists are residual matters within the exclusive legislative compe-
tence of the Houses of Assembly of the states.25
The foregoing constitutional allocation of legislative powers has a significant bearing
on the legality and validity of statutes where there is a transgression by either of the rec-
ognized bodies into the realm of the legislative authority of the other. Arbitration or
indeed ADR is not specifically provided for in the exclusive or concurrent legislative lists
of the Second Schedule to the 1999 Constitution. Given the foregoing, a fundamental
constitutional query to be answered is whether Nigeria can continue to have a substan-
tive federal law on arbitration. It must be pointed out, though, that this is not an issue
that has come up for judicial consideration before a court in Nigeria, and understandably
so. The ACA was enacted during a military junta which by decree had legislative compe-
tence to pass laws on any matter whatsoever.26 Furthermore, given the laudable objectives
of the ACA in enhancing arbitration practice in Nigeria, the possibility of mounting a
challenge on the very essence of the law itself was rather remote. This state of affairs con-
tinued even after the military handed over power to an elected civilian administration in
1999.
However, the ACA is currently going through a process of reformation and this
fundamental issue ought to be addressed dispassionately.While the ACA is an existing law
21
See the Arbitration Law, Cap. 8, Laws of Ondo State of Nigeria 1978; Arbitration Law, Cap. 8, Laws of Ogun
State of Nigeria 1978; Arbitration Law, Cap. 8, Laws of Oyo State of Nigeria 1978. It is instructive that Lagos State
simply reproduced the Arbitration and Conciliation Act in Cap. A10, Laws of Lagos State of Nigeria 2004.
22
See generally, Constitution, s. 4 (1999) (Nigeria). The legislative powers of the Federal Capital Territory are
vested in the National Assembly. See Constitution, s. 299(a) (1999) (Nigeria).
23
See Constitution, Sch. 2, Park I (1999) (Nigeria).
24
See Constitution, Sch. 2, Park II (1999) (Nigeria).
25
See Constitution, s. 4(7) (1999) (Nigeria). See also Attorney General, Ondo State v. Attorney General, Fed-
eration, [2002] 9 N.W.L.R (pt. 772) 222 (Nigeria); Attorney General, Lagos State v. Attorney General, Federation,
[2003] 12 N.W.L.R. (pt. 833) 1 (Nigeria).
26
See Constitution (Suspension and Modification) Decree No. 107 of 1993, ss. 2, 16.
under section 315 of the 1999 Constitution, and for the time being valid,27 it is not alto-
gether clear that there is a constitutionally recognized legal basis for its continued exist-
ence as a substantive federal law, or whether it should now only be a deemed law for the
Federal Capital Territory.28 Furthermore, the notion that the ACA is an existing substan-
tive federal law on arbitration should not be construed as removing or restricting the
power of a court of law or tribunal established by law to declare invalid any provision of
an existing law or, a fortiori, the entire law itself, on the ground of inconsistency with any
provision of the Constitution.29 Despite the earlier assertion that the validity or otherwise
of the ACA as a substantive federal law on arbitration has not come up before any court,
there have been a number of views expressed on the issue by some commentators.
Idornigie, for example, argues that the legislative competence of the National
Assembly to enact a federal law on arbitration is traceable to the subject matter of “Exter-
nal Affairs” in item 26 of the Exclusive Legislative List.30 The international element that
exists under the ACA is an extension of external affairs and the National Assembly would
have legislative competence in respect of arbitration by virtue of incidental/supplemental
powers vested in it. This argument, with respect, fails to appreciate the true purport and
contextual meaning of external affairs as used in the Constitution. Clearly, external rela-
tions are a subset of the jural relations of a country in the realm of public international
law and diplomacy.
The foregoing position is also consistent with the provisions of section 19 of the
1999 Constitution, which states that the foreign policy objectives shall be, inter alia,
respect for international law and treaty obligations as well as seeking settlement of inter-
national disputes by negotiation, mediation, conciliation, arbitration, and adjudication.
Arbitration in this context must necessarily relate only to inter-state disputes, which
could potentially lead to war. International commercial arbitration is irrelevant in the
context of public international law. Rather, the appropriate contextual setting of interna-
tional commercial arbitration is in the area of private international law covering jural rela-
tionships of a private nature but of international character.
Another argument championed by Asouzu appears to be the position endorsed by
the National Committee on Reform of Arbitration and ADR Laws as justification for the
continued existence of a substantive federal law on arbitration. This argument is premised
on item 62 of the Exclusive Legislative List, which is simplistically characterized as “trade
27
See Attorney General of Lagos State v. Attorney General of the Federation & 35 Ors., [2003] 12 N.W.L.R.
(pt. 833) 1 (Nigeria). See also Attorney-General, Benue State & Anor. v. M.O. Ogwu, [1983] 4 N.C.L.R. 213
(Nigeria), where the full Court of Appeal emphasized that to qualify as an act of the National Assembly, an existing
law must be in respect to any matter on which the National Assembly is empowered by the Constitution to make
laws.
28
See Constitution, s. 299(a) (1999) (Nigeria). See also Chief Gani Fawehinmi & Ors. v. General Ibrahim
Babangida (RTD) & Ors., [2003] F.W.L.R. (pt. 146) 835 (Nigeria); [2003] 12 W.R.N. 1.
29
See s. 315(3)(d). See also Attorney-General, Benue State v. M.O. Ogwu, supra note 27, on the point that an
existing law, though inconsistent with the Constitution, remains valid until declared invalid by a court. It is voidable
not void. But see Attorney-General of Abia State & Ors. v. Attorney-General of the Federation, [2002] 6 N.W.L.R.
(pt. 763) 264 (Nigeria).
30
See P.O. Idornigie, The Doctrine of “Covering the Field” and Arbitration Laws in Nigeria, 66 Arb. J. 193, 196 (No.
3, 2000) [hereinafter the “Idornigie argument”].
and commerce,” and item 68, which refers to “any matter incidental or supplemental to
any matter mentioned elsewhere in this list.”31 He is of the view that arbitration is a nor-
mal incident of trade and commerce and therefore within the exclusive legislative com-
petence of the National Assembly.32 The National Committee, in their view, concluded
that the Federal Government has competence to legislate on arbitration and conciliation
but only in respect of trade and commerce, which is international, and inter-state.33
Since the Asouzu argument is the driving force behind the current proposal for a
federal statute on arbitration, it is essential to embark on a critical analysis of the view in
order to deconstruct it. The starting point is with the construction given to item 62. It is
true that on a liberal construction of item 62, “trade and commerce” could or may
include contractual relations between individuals and/or companies in an international or
domestic context. It is, however, rather odd that it is only item 62 that is mentioned as
forming the basis of the power to enact a federal Arbitration Act. Surely, arbitration
should be germane to item 3 dealing with aviation, including airports, safety of aircraft
and carriage of passengers and goods by air.The same argument applies to item 7 on bor-
rowing of money within or outside Nigeria for purposes of the Federation or of any
state; item 11 on construction, alteration, and maintenance of roads; item 34 on labour
and industrial disputes; and item 36 on maritime shipping and navigation.
There is hardly any doubt that dispute resolution including arbitration complements
trade and commerce activities. However, it is not a process that is a necessity to the ful-
filment of those activities.34 Something is “incidental” when it is related to or accompa-
nies something important. On the other hand, something becomes “supplemental” when
it is added to a thing to complete a deficiency in it.35 Dispute resolution by arbitration,
important as it is, cannot be read as incidental or supplemental to trade and commerce in
the context in which the phrase is used in the Constitution. Trade and commerce is an
activity that does not necessarily require arbitration for its effective operation or success.
This point is also further underscored by the provisions of the Part III of the Second
Schedule, which significantly weakens the force of the Asouzu argument, where clause 2
thereof provides that “In this Schedule, references to incidental and supplementary mat-
ters include, without prejudice to their generality, references to … (b) the jurisdiction,
powers, practice and procedure of courts of law.”
31
Item 62 provides as follows: “Trade and Commerce, and in particular—(a) trade and commerce between
Nigeria and other countries including import of commodities into and export of commodities from Nigeria, and
trade and commerce between the States; (b) establishment of a purchasing authority with power to acquire for export
or sale in world markets such agricultural produce as may be designated by the National Assembly; (c) inspection of
produce to be exported from Nigeria and the enforcement of grades and standards of quality in respect of produce
so inspected; (d) establishment of a body to prescribe and enforce standards of goods and commodities offered for
sale; (e) control of process of goods and commodities designated by the National Assembly as essential commodities;
and (f ) registration of business names.”
Given the language of the provision with the use of the phrase “and in particular,” the instances cited supra
are not exhaustive of the instances of trade and commerce.
32
See Amazu A. Asouzu, Arbitration and Judicial Powers, 3 M.I.L.B.Q. 19, 35 (2000) [hereinafter the “Asouzu
argument”].
33
See National Committee Report, supra note 7, at 13.
34
Adaralegbe, supra note 9 at 405 n. 36.
35
See Blacks Law Dictionary with Pronunciations (6th ed. 1990).
Dispute resolution as an incident of trade and commerce, which underpins the

Asouzu argument, is envisaged in Part III of the Second Schedule to the Constitution,
which recognizes the practice and procedure of courts of law. It does not specify arbitra-
tion. Indeed, the provisions of the Constitution referred to supra in fact place issues relat-
ing to dispute resolution by legal proceedings within the exclusive competence of the
National Assembly by virtue of a combined reading of item 68 and clause 2(b) of Part III
of the Second Schedule.
The Asouzu argument in justifying the substantive federal law on arbitration is
premised on certain assumptions, which may not stand the test of close judicial scrutiny.
It is in fact a similar argument which was rejected by the Supreme Court in Chief Gani
Fawehinmi & Ors v. General Ibrahim Babangida (RTD) & Ors,36 where the Tribunal of
Inquiry Act 1966 promulgated by the then Federal Military Government for the entire
Federation under the enabling powers conferred on it at the relevant time was accepted
as an existing law pursuant to section 315 of the 1999 Constitution and deemed to be an
Act enacted by the National Assembly for the Federal Capital Territory only. One of the
issues in that case also was whether the incidental and supplementary powers under the
Schedule to the 1999 Constitution were wide enough to enable the National Assembly
to enact a legislation for the whole Federation in terms of the Act. The Supreme Court
was not persuaded by the arguments, which was premised on the fact that the enactment
of a Tribunal of Enquiry Act was incidental or supplementary to the expressly stated sub-
ject matters in the Exclusive Legislative List.
In recent times, since the return to democracy in Nigeria, there has been a rapid
increase in cases requiring interpretation of several provisions of the 1999 Constitution.
In the aftermath of such cases there now appears to be an emerging trend in the courts
suggestive of adopting a liberal construction such as will promote the general legislative
purpose underlying the Constitution, which is to put the National Assembly in such a
position that it can legislate for the general interest of the whole country.37 There are also
cautions to the effect that it is not open to the Federal Government through the National
Assembly to take steps, or enact legislation, deliberately or by necessary consequence,
that would undermine the legislative powers of the states, if it cannot be ascertained
from the Constitution that the action was inevitably in the interest of the nation and was
constitutional.38
A third argument is by Adaralegbe and at first glance appears to be a compelling one.
We shall, however, argue that some aspects of his argument and conclusions are based on
a doubtful premise. The general thrust of the Adaralegbe argument is that the basis of the
National Assembly’s competence to enact the ACA as a federal law lies in the combined
effect of sections 4(4)(b) and 12(2) of the 1999 Constitution. He is of the view that:
36
Supra note 28.
37
See Attorney General, Ondo State v. Attorney General, Federation, supra note 25, at 340.
38
Id. at 394, per Uwaifo, J.S.C.
In addition to its powers under the exclusive and concurrent lists, section 4(4)(b) of the Constitu-
tion grants the National Assembly the power to make laws on other matters where the provisions
of the Constitution specifically empower it. Section 12(2) of the Constitution gives the National
Assembly power “to make laws for the Federation or any part thereof with respect to matters not
included in the Exclusive Legislative List for the purpose of implementing a treaty.” From the
introductory part of that law, the objective of the ACA is, in part, to give effect to and implement
the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (“New York Convention”), a treaty to which Nigeria is a signatory. (emphasis added)
At this stage, his argument is very compelling for a federal Act implementing the
New York Convention on the enforcement of foreign arbitral awards, without necessarily
being so as regards an all-encompassing substantive federal law on arbitration.
The ACA presently covers domestic arbitration and the National Committee rec-
ommended that two sets of statutes are now required on a combined reading of items 62
and 68 of Part I of the Second Schedule to the 1999 Constitution: first, a Federal Arbi-
tration and Conciliation Act which will apply to international trade and commerce and
trade between states; and secondly, a Uniform Arbitration and Conciliation Law for the
states to be adopted as desired for domestic arbitration. With respect, it is difficult, in
the light of our analysis supra, and on any reading of item 62—liberal or strict—to see the
basis for such demarcation of legislative competence or the distinction between interna-
tional and domestic arbitration. The view expressed by the National Committee simply
reads into the Constitution what is not there.
Adaralegbe, however, is of the view that the National Assembly has the legislative
competence to enact laws in respect of domestic arbitration. While he concedes that sec-
tion 12(2) of the Constitution would only constitute a legal basis for enacting laws in
respect of international commercial arbitration, being the form of arbitration that New
York Convention awards would arise from, he argues that the combined effect of item
6739 and the supplementary powers in item 68 of the Exclusive Legislative List gives the
National Assembly the power to enact laws on domestic arbitration. He then concludes:
Clearly, a narrow interpretation of item 68 (one that leaves out domestic arbitration) would cause
many arbitral clauses which have adopted the ACA for domestic arbitration, including those in
significant petroleum development contracts, to become hopelessly ineffective. It is submitted that
item 68 should be interpreted broadly enough to cover domestic arbitration. That being the case,
the various arbitration laws are no longer valid.40
As we have shown supra, the so-called dichotomy in legislative competence to enact
laws in respect of international and domestic arbitration has no constitutional basis in
Nigeria as is being suggested in the argument. Accordingly, we also fail to see why item
68 should be interpreted broadly enough to cover domestic arbitration. It seems that too
much emphasis has been placed on the international/domestic arbitration dichotomy
such that the relevant focus of having a robust substantive law, which covers international
39
Item 67 provides for: “Any other matter in respect to which the National Assembly has power to make laws
in accordance with the provisions of this Constitution.”
40
Adaralegbe, supra note 9, at 408.
and domestic arbitration, has been lost in a maze of arguments regarding legislative
competence.
The Adaralegbe argument, as regards the applicability of section 12(2) as justification
for a substantive federal law on arbitration other than a federal law implementing the
New York Convention, is also (with respect) premised on a fundamental flaw. The first
difficulty with the argument is the supposition that the New York Convention prescribes
the enactment of substantive laws of arbitration for Contracting States. The Convention
does not prescribe such a requirement. It is our view that the scope of the Convention is
limited to the establishment of a regime for the enforcement of foreign arbitral awards
and the guiding principles that would inform the recognition and enforcement of such
awards. The enactment of a substantive law on arbitration does not derive its provenance
from the New York Convention but from the recognition by individual countries of the
desirability of giving arbitration statutory imprimatur. This explains why substantive laws
on arbitration generally have been in existence before the New York Convention.41
The second difficulty with the Adaralegbe argument, which applies with equal force
to another common argument that the ACA was enacted in furtherance of Nigeria’s
treaty obligations, lies in the unorthodox fashion in implementing the New York Con-
vention in Nigeria. The domestication of international Conventions in the corpus of
Nigerian law is commonplace. The process, which was largely derived from a common
practice in England and other Commonwealth countries, consists of having a short stat-
ute which recites the raison d’etre of the Convention, the fact and date of ratification of
the Convention, and the fact that it is necessary and expedient to make legislative provi-
sion for the enforcement of the Convention in Nigeria. Following the typical recitals
above, there is a general provision to the effect that from the commencement of the Act,
the provisions of the Convention which are set out in the Schedule have the force of law
and shall be given full recognition and effect and be applied by all authorities and persons
exercising legislative, executive, and judicial powers in Nigeria.42 The implementation of
the New York Convention, which is without doubt within the legislative competence of
the National Assembly, cannot and should not be used as justification and validation of a
substantive federal law on arbitration. The scope of the New York Convention is clearly
limited to enforcement of foreign arbitral awards.
The third difficulty with the argument is that it does not take into consideration the
effect of section 12(3) of the Constitution, which provides that a Bill for an Act of the
41
See, e.g., Arbitration Ordinance 1914.
42
See, e.g., United Nations Convention on Carriage of Goods by Sea (Ratification and Enforcement) Act, No.
19 (2006) implementing the Hamburg Rules in Nigeria; African Charter on Human and People’s Rights (Ratifica-
tion and Enforcement) Act, (1983) Cap. A9, Laws of the Federation of Nigeria 2004, implementing the African
Charter on Human Rights; Carriage of Goods by Sea Act, (1936) Cap. C2, Laws of the Federation of Nigeria 2004,
implementing the Hague Rules; International Convention on Civil Liability for Oil Pollution Damage (Ratification
and Enforcement) Act, (2006) implementing the International Convention on Civil Liablity for Oil Pollution Dam-
age 1969 (as amended); International Convention on the Establishment of an International Fund for Compensation
for Oil Pollution Damage 1971 as Amended (Ratification and Enforcement) Act, No. 8 (2006), implementing the
International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Dam-
age 1971; International Convention for the Prevention of Pollution from Ships, 1973 and 1978 Protocol (Ratifica-
tion and Enforcement) Act, No. 15 (2007).
National Assembly passed pursuant to the provisions of subsection (2) shall not be pre-
sented to the President for assent, and shall not be enacted unless ratified by a majority of
all the Houses of Assembly in the Federation. It is arguable that for the provisions of the
ACA which relate to the domestication and implementation of the New York Conven-
tion to have continued validity under the Adaralegbe argument, there must be compli-
ance with section 12(3) of the Constitution as well.
This same argument applies to the proposed Bill, which contains provisions relating
to the New York Convention. The Adaralegbe argument, while rightly addressing the
issue that the National Assembly has legislative competence to enact a law implementing
a treaty to which Nigeria is a party, does not convincingly resolve the question whether
the National Assembly has legislative competence to enact an all-encompassing substan-
tive federal law on arbitration.
It is our view that the National Assembly does not have the legislative competence
to enact a substantive federal law on arbitration. Even on a most expansive and liberal
interpretation of the items of the Exclusive Legislative List as proclaimed by the Asouzu
argument and endorsed by the National Committee, it is difficult to sustain the tenability
of the argument, as we have sought to show supra. The Adaralegbe argument is most
plausible only to the extent that the legislative competence of the National Assembly to
enact laws implementing the treaty obligations of Nigeria is indubitable pursuant to the
provisions of the Constitution. The New York Convention can be codified in the ortho-
dox manner without creating the potential legal quagmire that could result if the validity
of a substantive federal law on arbitration is successfully challenged.
The concept of arbitration in all its facets (international or domestic) is a residual
matter within the legislative competence of the states under section 4(7) of the 1999
Constitution.43 The desire for a federal Arbitration Act dealing with international com-
mercial arbitration seems driven more by sentiments rather than sound legal principle.
The proposal by the National Committee for uniform laws on arbitration for the states is
a desideratum. However, such laws should encompass not only domestic arbitration but
also international commercial arbitration. There is no superior argument against the right
of a state to legislate in respect of the jural relations between a resident of that state and a
foreign resident. There is similarly no legal prohibition against state High Courts, for
example, implementing a federal Act domesticating the New York Convention in
Nigeria. It is submitted that the proposed federal Bill should be the uniform state laws on
arbitration. Such a regime would put arbitration law and practice on a sound inviolable
legal premise that is required for the future development of ADR in the Nigerian legal
environment. It could not have been the intention of the framers of the Constitution that
a liberal interpretation be adopted to take away the legislative competence of the states
43
We are not unmindful of some of the views expressed in the decision of the Court of Appeal in Compagnie
De Geophysique v. Etuk, [2004] F.W.L.R. (pt. 235) 86 (Nigeria), which do not accord with our position above. We
are in agreement with the analysis of Adaralegbe, supra note 9, at 409 where he noted that the Justices of the Court
of Appeal were not in agreement as to whether the relevant state arbitration laws were in operation. He then con-
cluded that there is therefore no judicial pronouncement on this important issue by Nigerian courts.
under the Constitution. There is clearly no compelling evidence that a substantive federal
Act on arbitration rather than uniform state laws on arbitration would serve the interest
of the Constitution and best carry out its objectives.
III. New Initiatives in the Proposed Federal Arbitration Bill

Despite the concerns expressed above regarding the constitutional validity of a fed-
eral law on arbitration, the proposed federal Bill contains manifold innovations which
have been influenced largely by the UNCITRAL Model Law on International Com-
mercial Arbitration of 1985 (“UNCITRAL Model Law”) and the English Arbitration
Act 1996 (EAA).44 The approach of the Committee was to adopt without modification
provisions of the ACA considered suitable and adequate, and in some cases modify the
provisions of some existing sections or introduce entirely new provisions. The focus of
this section is largely on the areas of modification and introduction.
A. General principles
Section 1 of the proposed Bill commences with a statement of the general principles
and scope of application of the provisions in the Bill relating to arbitration.This is the first
influence of the EAA. It provides that the provisions of Part I are founded on the follow-
ing principles and shall be construed accordingly:
(a) the object of arbitration is to obtain the fair resolution of disputes of an impartial
tribunal without unnecessary delay or expense;
(b) the parties should be free to agree on how their disputes are resolved, subject
only to such safeguards as are necessary in the public interest;
(c) an arbitration agreement between parties for the settlement of their dispute shall
be binding upon and enforceable against each of the parties to the exclusion of
any other method unless the parties otherwise provide or the agreement is null
and void;
(d) the parties shall do all things necessary for the proper and expeditious conduct
of arbitral proceedings.
Paragraphs (a) and (b) above are the same as section 1(a) and (b) of the EAA. Para-
graphs (c) and (d) appear to be innovations introduced without reference to any similar
extant legislation in any other country. The intention behind paragraph (c) is clearly to
further entrench arbitration agreements to the exclusion of other methods, including lit-
igation. However, the paragraph rather than achieving the underlying objective could
turn out to be a source of challenge to the proposed law itself and to arbitration agree-
ments governed by the proposed law. It is trite conceptually that an arbitration agreement
44
1996 c. 23, s. 1 (EAA).
does not oust the jurisdiction of a court. This principle is one developed by the courts
following the initial resistance to alternative dispute resolution.
However, section 4(8) of the 1999 Constitution provides that “save as otherwise pro-
vided by this Constitution, the exercise of legislative powers by the National Assembly or
by the House of Assembly shall be subject to the jurisdiction of courts of law and of judi-
cial tribunals established by law, and accordingly, the National Assembly or the House of
Assembly shall not enact any law, that ousts or purports to oust the jurisdiction of a court of law
or of a judicial tribunal established by law” (emphasis added). Purport means to convey, imply
or profess outwardly; to have the appearance of being something.45 Paragraph (c) gives
the outward impression of ousting the jurisdiction of the courts without necessarily oust-
ing the jurisdiction of courts contrary to section 4(8) of the 1999 Constitution.
It is suggested that paragraph (c) of section 1 of the Bill serves no additional useful
purpose in further entrenching the enforceability of arbitration agreements under the Act
and should be removed. The unbridled enforcement of such agreements which it seeks
to achieve is more of an attitudinal issue which the courts have to adopt and be guided
by in the light of their perception of contemporary international developments in the
area of alternative dispute resolution, the equities of the case which would require that
the court compel arbitration, and the broad underlying policy of the arbitration legisla-
tion in encouraging ADR as a viable alternative to litigation.
B. Form of arbitration agreement

Under the ACA, an arbitration agreement would only be valid if it was contained in
a document signed by the parties to the agreement or was contained in an exchange of
letters, telex, telegrams, or other means of communication which provide a record of the
agreement.46 The formal requirement was based on Article 7 of the UNCITRAL Model
Law. However, it is now recognized that the requirement is not consistent with a signif-
icant number of well-accepted business practices and contemporary forms of business
communications. Indeed, it has been said that in so far as Article 7 of the UNCITRAL
Model Law seeks to reflect the needs of international commerce, it is now anachronistic.47
The Committee recognized the fact that there are a number of significant commer-
cial arrangements, which would not conform with the narrow purview of the present
formal requirements of an arbitration agreement.48 The Committee therefore rightly
recommended the adoption of the writing requirement in the revised Article 7(2) in the
draft UNCITRAL Model Law in place of the present section 1. The key element in the
new definition is the recognition that “writing” includes, without limitation, a data
45
See Black’s Law Dictionary, supra note 35, at 1236.
46
See ACA, s. 1.
47
See National Committee Report, supra note 7, at 17 (citing Toby Landau, The Requirement of a Written
Form for an Arbitration Agreement: When “Written” Means “Oral,” in International Commercial Arbitration: Important
Contemporary Questions, ICCA Congress Series No. 11, 20, 52 (A.J. van den Berg ed., 2002) ).
48
See National Committee Report, supra note 7, at 18–19. The business arrangements include computer software
licensing agreements, bills of lading, salvage agreements, negotiable instruments, companies Articles of Association.
message that provides a record of the arbitration agreement or is otherwise accessible so

as to be used for subsequent reference. A “data message” means information generated,
sent, received, or stored by electronic, optical, or similar means, including but not limited
to electronic data interchange (EDI), electronic mail, telegram, telex, or telecopy.
The Committee in making the recommendation also considered the concerns about
the possible tensions between the proposed section with its liberal requirements for for-
mal validity, on the one hand, and the narrower and restrictive requirements of formal
validity contained in Article II(2) of the New York Convention, on the other hand. This
was done particularly against the backdrop of the Convention thwarting business expec-
tations based on liberal national standards.49 The Committee was persuaded by the effort
of UNCITRAL Working Group II (International Arbitration and Conciliation) to mod-
ernize Article II(2) of the Convention and achieve greater uniformity in its application.
C. Enforcement of arbitration agreements

The ACA made provisions for the enforcement of arbitration agreements in a man-
ner that created a legal quagmire in Nigerian jurisprudence on this point. It was a classic
case of inelegant legislative drafting. There are two main methods of enforcing arbitration
agreements: staying court proceedings and compelling arbitration. These two methods
have different conceptual underpinnings.The power to stay proceedings is the most com-
mon and least controversial way of enforcing arbitration agreements. A court’s decision to
stay litigation has no comparable direct coercive effect.50 While it may facilitate arbitra-
tion, a stay of an action does not necessarily require that outcome.51
The power to compel arbitration is functionally a power to command specific per-
formance by ordering the parties to arbitration in accordance with the terms of their
agreement. This is typically premised on an in personam injunctive order against the
defaulting party. The coercive order issued as a prohibitory injunction, or what is com-
monly known as an antisuit injunction, is to ensure that a party abides by the negative
covenant or stipulation not to engage in litigation in the event of a dispute arising under
the contract. Antisuit injunctions have recently risen in prominence and are fast becom-
ing the principal non-statutory remedy to vindicate breaches of arbitration agreements.52
The antisuit injunction approach is uncommon in Nigeria, perhaps having regard to the
fact that the least intrusive way of enforcing arbitration agreements was given a statutory
basis in sections 4 and 5 of the ACA.
The possibility of a stay of proceedings pending arbitration is a formidable weapon
in the arsenal of any party to an arbitration agreement. Supporting arbitration as the pre-
ferred option to litigation, however, raises a recurrent issue whether or not courts should
49
Id. at 21.
50
See Daniel S. Tan, Enforcing International Arbitration Agreements in Federal Courts: Rethinking the Court’s Remedial
Powers, 47 Va. J. Int’l L. 545 (2007).
51
Id.
52
Id.
slavishly grant a stay pending arbitration as a matter of course or still exercise a degree of
residual discretion in the grant of a stay pending arbitration, which in essence must
depend on the circumstances of each case.53 Nigerian arbitration law under the ACA
grappled with these convergent views. Section 4 of the ACA provides, inter alia, that a
court before which an action that is the subject of an arbitration agreement is brought
shall, if any party so requests, order a stay of proceedings and refer the parties to arbitra-
tion. Section 5 also, curiously, deals with the power of the courts to stay proceedings
brought in derogation of an arbitration agreement. It provides, in subsection (1), that if
any party to an arbitration agreement commences any action in any court with respect to
any matter which is the subject of an arbitration agreement, any party to the arbitration
agreement may apply to the court to stay the proceedings.
A court to which such an application has been made may, if it is satisfied that there
is no sufficient reason why the matter should not be referred to arbitration in accordance
with the arbitration agreement, make an order staying the proceedings.54 There is the
generally held view that despite the conspicuous conflict between the two sections, sec-
tion 4 was intended to apply to international commercial arbitration, while section 5 was
intended to apply to domestic arbitration.55 This appears consistent with the fact that sec-
tion 4, which was new to Nigerian jurisprudence at the time, was a restatement of Article
II(3) of the New York Convention.56
Thus, when deciding individual cases in which legal proceedings were brought in
violation of arbitration agreements, the courts have applied sections 4 and 5 either con-
temporaneously or interchangeably, notwithstanding the different standards (i.e., obliga-
tion vs. discretion) that are inherent in the respective wording of each section.57 However,
a historical appraisal of these provisions shows that sections 4 and 5 apply to separate and
distinct situations, in that the “mandatory” stay in section 4 applies to “international”
arbitration (which would invariably include “foreign” arbitration), while the “discretion-
ary” stay in section 5 applies to “domestic” arbitration.58
Having regard to the schism wrought by the lawmakers in the enforcement of arbi-
tration agreements and the fact that the courts in Nigeria applied a discretionary standard
in the context of international arbitration agreements, the National Committee recom-
mended that the mandatory standard should apply to both domestic and international
arbitration agreements.59 Clause 5 of the Bill, inter alia, now reads:
53
Olawoyin, supra note 1, at 252.
54
ACA, s. 5(2).
55
Olawoyin, supra note 1, at 252.
56
Art. II(3) provides that “the courts of a contracting State, when seized of an action in a matter in respect
of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the
parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable
of being performed.”
57
National Committee Report, supra note 7, at 23, para. 41.
58
Id.
59
Id. The National Committee was persuaded by the fact that a significant number of countries with modern
arbitration legislation applied the mandatory standard across the board. See id. at 26 n. 28.
(1) A court before which an action is brought in a matter which is the subject of an arbitration
agreement shall, if a party so requests not later than when submitting his first statement on the sub-
stance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and
void, inoperative or incapable of being performed.
The proposed section should bring to an end the conflicting approaches of the
courts regarding the bases of exercising discretion to grant a stay. It would appear that no
question of discretion arises under the proposed section. The proposed section, however,
requires some further comments in respect of its content. Under the present section 5 of
the ACA, an application for stay must be made after appearance but before delivering any
pleadings or taking any other steps in the matter.60 The new proposal refers to a situation
not later than when a party submits a first statement on the substance of the dispute. In
practical terms, since the party applying to court for a stay of proceedings would be a
defendant in the substantive suit, it follows that the “first statement” referred to in the
clause would be a statement of defense or some form of counter-affidavit if the action is
instituted by way of Originating Summons rather than by Writ of Summons.
This would surely sound the death knell of the principle on submitting to the juris-
diction of the court in the context of enforcement of arbitration agreements, since the
new regime acknowledges the right of a party to raise the question, at least contempora-
neously with the filing of processes in the substantive suit.61
Clause 5(3) is a radical innovation that has been introduced in the Bill. It provides thus:
Notwithstanding subsection (1) of this section, any person carrying on business in Nigeria who is
a consignee under, or holder of, any bill of lading, waybill or like document for the carriage of
goods to a destination in Nigeria, whether for final discharge or for further carriage, may bring an
action relating to the carriage of the said goods or any such bill of lading, waybill or document in
a competent court in Nigeria and any arbitration clause which purports to limit or preclude this
right shall be null and void.
Clause 5(4) further provides that subsection (3) shall not apply where the arbitration
agreement provides for arbitration in Nigeria under the provisions of the Act or the rules
of a Nigerian arbitration institution.
These provisions draw largely from section 3 of the South African Carriage of
Goods by Sea Act62 which provides as follows:
(1) Notwithstanding any purported ouster of jurisdiction, exclusion jurisdiction clause or agree-
ment to refer any damage to arbitration, notwithstanding the provisions of the Arbitration Act,
1965 (Act 42 of 1965), and of s. 7(1)(b) of the Admiralty Jurisdiction Regulation Act, 1983 (Act
105 of 1983), any person carrying on business in the Republic and the consignee under, or holder
of, any bill of lading, waybill or like document for the carriage of goods to a destination in the
republic, whether for final discharge or for discharge for further carriage, may bring an action
relating to the carriage of the said goods or any such bill of lading, waybill or document in a com-
petent court in a republic.
60
See Kano State Urban Dev. Bd. v. Fanz Construction Co. Ltd., [1990] 4 N.W.L.R. (pt. 142) 1 (Nigeria);
Obembe v. Wemabod Estate Ltd., [1977] I A.N.L.R. 130 (Nigeria); (1977) II N.S.C.C. 262.
61
Id.
62
Act No. 1 (1986), available at <www.uctshiplaw.com/cogsa.htm>.
The provisions of subsection 1 of this section shall not apply to arbitration proceed-
ings to be held in the republic which are the subject of the Arbitration Act 1965.
The proposed section recognizes three important issues: first, the critical position
that the maritime industry holds in the economic development of a country, which
requires particular attention; secondly, the fact that in most of the standard form contracts
in the maritime industry, there are at best only notional agreements and not actual agree-
ments on dispute resolution which in the final analysis is inequitable to the interests of
the weaker party to the contracts (who would be Nigerian citizens or residents); tied to
such argument is also the need to develop Nigeria as a formidable and respected centre
for the resolution of maritime disputes. Thirdly, it is a clear and unambiguous provision,
unlike section 20 of the Admiralty Jurisdiction Act 199163 that leaves no room for a con-
trary interpretation other than that foreign arbitration clauses are generally subject to a
statutory ban whilst domestic arbitration clauses are given full effect.64
It is not, however, clear whether this section applies to arbitration clauses contained
in charterparties. A charterparty, with the exception of a charteparty by demise, is con-
ceptually a contract of carriage of goods by sea but not a negotiable document of title like
a bill of lading which can be transferred by endorsement and delivery. The section uses
the phrase “or like document for the carriage of goods to a destination in Nigeria” which
arguably should include charterparties in respect of carriage of goods to Nigeria. Fur-
thermore, it is perhaps arguable that in this context a charterer is a holder of a contract of
carriage of goods by sea.65 The importance of this comment lies in the fact that the parties
to a charterparty are typically of equal bargaining strength, unlike in bills of lading.
Accordingly, the venue for dispute resolution and the choice of dispute resolution
mechanism would in all probability have been negotiated rather than offered on a take-
it-or-leave-it basis. In such a situation, the justification for statutory intervention would
be non-existent. This issue needs to be revisited for the purposes of clarity. If it is the
intention that the section should have applicability to charterparties as well, it is desirable
that it states so expressly.
D. Number and appointment of arbitrators

The difficulty sometimes in appointing arbitrators following the default and/or out-
right refusal of a party to an arbitration agreement or the appointing authority has the
potential of threatening arbitral integrity in Nigeria. The ACA made default provisions in
63
No. 59 (1991) [hereinafter “AJA”]. This provision declares agreement ousting the jurisdiction of courts null
and void and has been applied to foreign arbitration clauses in bills of lading by the courts in Nigeria. See M.V. Pan-
ormos Bay & Ors. v. Olam Nigeria PLC, [2004] 5 N.W.L.R. (pt. 865) 1 (Nigeria); Lignes Aeriennes Congolaises v.
Air Atlantic Nigeria Ltd., [2005] 11 C.L.R.N. 55 (Nigeria). But see Onward Enterprises Ltd. v. M.V. Matrix & Ors.,
unreported CA/L/510/04, June 27, 2008.
64
For a critical review of s. 20 of the AJA, see Adewale A. Olawoyin, Forum Selection Disputes Under Bills of Lading
in Nigeria: A Historical and Contemporary Perspective, 29 Tulane Mar. L.J. 255, 278–83 (2005).
65
It is conceded that the typology in the context of “holder” of a contract of carriage of goods by sea is a
person who has acquired possession of same by endorsement or delivery and would not be relevant in the context of
charterparties.
respect of situations where the parties fail to specify the number of arbitrators. Section 6
of the ACA followed Article 10(2) of the Model Law in specifying that the number shall
be deemed to be three. The National Committee, in recommending a change to the sin-
gle-arbitrator model, followed a similar suggestion by the Department Advisory Com-
mittee in England. This was primarily on two grounds: first, a default provision, which
prescribes a three-arbitrator panel, would produce unnecessary expense; and secondly, a
single-arbitrator model would overcome the problems which might arise if there are
more than two parties to the arbitration.66 Clause 6(2) of the Bill provides that “unless
otherwise agreed by the parties, an agreement that the number of arbitrators shall be two
or any other even number shall be deemed as requiring the appointment of an additional
arbitrator as chairman of the tribunal.” The proposed section, however, does not specify
the manner in which such an additional arbitrator should be appointed, particularly in
the case of an even number more than two.
Section 7 of the ACA deals with the appointment of arbitrators. It provides that:
(2) Where no procedure is specified under subsection (1) of this section:
(a) in the case of an arbitration with three arbitrators, each party shall appoint one arbitrator
and the two thus appointed shall appoint the third, so however, that:
(i) if a party fails to appoint the arbitrator within thirty days of receipt of a request to do
so by the other party; or
(ii) if two arbitrators fail to agree on the third arbitrator within thirty days of their appoint-
ments, the appointment shall be made by the Court on the application of any party to
the arbitration agreement;
(b) in the case of an arbitration with one arbitrator, where the parties fail to agree on the
arbitrator, the appointment shall be made by the Court on application of any party to the
arbitration agreement made within thirty days of the disagreement.
The proposed Bill, however, makes comprehensive provisions in respect of the

appointment of arbitrators and default provisions regulating the appointment of such
arbitrators where the parties have failed or neglected to comply with the terms of the
appointment requirement in the arbitration agreement. The proposed Bill recognizes the
power of the parties to specify the procedure to be followed in appointing an arbitrator.
Where the parties have not specified a procedure but have designated an appointing
authority, a number of set rules apply. If a sole arbitrator is to be appointed, either party
may propose to the other names of one or more persons.67 If within thirty days after the
request by a party, the parties have not reached an agreement, the sole arbitrator is to be
appointed by the appointing authority.68 If three arbitrators are to be appointed, each
party appoints one arbitrator of its choice and the two arbitrators choose the third arbi-
trator, who is to act as the presiding arbitrator of the arbitral tribunal.69 If, however, one
of the parties fails to appoint its arbitrator, the party who has already appointed its
66
67
See clause 7(2)(a).
68
See clause 7(2)(b).
69
See clause 7(2)(c).
arbitrator may request the appointing authority to appoint the second arbitrator.70 Again,
in the event that the two arbitrators are unable to agree on a choice of third arbitrator
within thirty days after the appointment of the second arbitrator, the third and presiding
arbitrator is to be appointed by the appointing authority.71
Clause 7(2)(f ) requires the party making the request to send a copy of the notice of
arbitration and a copy of the contract containing the arbitration agreement to the
appointing authority “and the appointing authority may require from either party such
information as may be necessary to fulfil its functions under the Act.”
This provision requires some comment in the light of unusual developments in
Nigeria regarding the role of appointing authorities.The issue takes on added complexity
where the appointing authority specified in the arbitration agreement (for some curious
reason that is common in Nigeria) is the Chief Judge of a state or the Chief Judge of the
Federal High Court. The central issue is whether the request made of an appointing
authority to appoint an arbitrator involves the performance of a purely administrative act
or calls for the performance of a judicial or quasi-judicial act. There have been instances
in Nigeria where the appointing authority has refused to appoint an arbitrator on the
ground that no dispute has arisen. If this approach continues to flourish, it could have the
immense potential of threatening the integrity and development of the arbitral process.
The basis of such posture is uncertain even though it is possibly attributable to the erst-
while position under the English Arbitration Act 1950 (which incidentally was never part
of Nigerian law, unlike the English Arbitration Act 1889).72
The appointment power of an English court in default of agreement was governed
by section 10(1) of the 1950 Act before its repeal. It provided, inter alia, that:
In any of the following cases—(a) where an arbitration agreement provides that the reference shall
be to a single arbitrator, and all the parties do not, after differences have arisen, concur on the appoint-
ment … Any party may serve the other parties … with a written notice to … concur in appoint-
ing an arbitrator … and if the appointment is not made within seven clear days after the service of
the notice, the High Court or a judge thereof may … appoint an arbitrator. (emphasis added)73
The power of appointment under the section does not come into existence until
“differences have arisen.”74 Thus, a claimant cannot proceed directly to a notice under
section 10 the moment his claim has arisen.75 He must first bring a difference into exist-
ence: either by an explicit denial of the claim on the part of the defendant, or at least an
evident failure to admit it.76 The wording of the section indicates that the right to initiate
the procedure under section 10 comes into existence as soon as a difference has arisen.77
It was accordingly tenable for a court, as a default appointing authority, to consider
70
See clause 7(2)(d).
71
See clause 7(2)(e).
72
14 Geo. 6 c. 27. It is not uncommon for English authorities and books to be used as reference materials without
a scrutiny of the relevance of those authorities.
73
Arbitration Act, (1914) Cap. 13, Laws of the Federation of Nigeria 1958 did not contain the phrase “after dif-
ferences have arisen” in s. 6 of that Act that deals with the power of courts to appoint arbitrators in certain circumstances.
74
See Michael J. Mustill & Stuart C. Boyd, Commercial Arbitration 178 (2d ed. 1989).
75
Id.
76
Id.
77
Id.
whether a dispute or difference had arisen in compliance with the precise wording of the
applicable statute.
Significantly, the requirement that differences must have arisen is not contained in
the similar provisions in section 7 of the ACA. Furthermore, the requirement in section
10 of the 1950 Act applied only to the default appointment of a sole arbitrator and not
to situations where two arbitrators are unable to agree on a third one. In the light of the
foregoing vital distinguishing characteristic, the function of the appointing authority in
Nigerian arbitration law is or should be no more than an administrative act or function
and should be seen in that light even on a most expansive interpretation of clause 6(2)(f )
of the Bill.78
The same underpinning principle should apply in a situation where an appointing
authority is not specified in the arbitration agreement and the parties have resorted to the
courts for an appointment under the default provisions of the applicable statute. Where
no procedure for the appointment of arbitrators is specified and no appointing authority
is designated by the parties, the default provisions in the Bill are slightly different. In the
case of an arbitration agreement stipulating the appointment of three arbitrators and one
party fails to appoint its arbitrator within thirty days of receipt of a notice to do so, the
other party having duly appointed his arbitrator may give notice in writing to the party
in default that it proposes to appoint its arbitrator to act as sole arbitrator.79 If the default-
ing party does not within seven clear days80 of that notice make the required appointment
and notify the other party, the other party may appoint his arbitrator as sole arbitrator,
whose award will be binding on both parties.81
In the event that the two parties appoint their arbitrators and the two arbitrators so
appointed are unable to agree on the third and presiding arbitrator within thirty days of
their appointment, the appointment is to be made by the court on the application of
either party.82 In the case of a sole arbitrator, where the parties fail to agree on the arbi-
trator, the appointment is to be made by the court on the application of any party to the
agreement within thirty days of such disagreement.83
The question then again arises whether the exercise of powers of appointment by
the court in this limited regard is a judicial one or purely ministerial. The only reported
authority on this point in Nigeria appears to suggest it is judicial. In Chief Felix K.
Ogunwale v. Syrian Arab Republic,84 the respondent commenced an action by Originating
Summons against the appellant in the High Court of Lagos State for the appointment of
78
The same argument should apply to the similar provisions in respect of international commercial arbitration
contained in ACA, s. 44.
79
See clause 7(3)(a)(i).
80
Seven clear days is not defined in the Bill. This could be a source of dispute. It is suggested that it should
mean seven days not counting the day on which the notice is served and the day of the application. See Mustill &
Boyd, supra note 74, at 179.
81
See clause 7(3)(a)(ii).
82
See clause 7(3)(a)(iii).
83
See clause 7(3)(b). The foregoing default provisions do not apply to international arbitration, which is gov-
erned by a separate regime under clause 56 of the Bill where the Director-General of the Lagos Regional Centre for
International Commercial Arbitration is deemed to be the appointing authority.
84
Chief Felix K. Ogunwale v. Syrian Arab Republic, [2002] 9 N.W.L.R. (pt. 771) 127 (Nigeria).
an arbitrator in respect of an alleged dispute under a tenancy agreement. The respondent

had invoked the arbitration clause under the agreement and appointed an arbitrator. In
response to the appellant’s failure to appoint his arbitrator, the respondent applied to
court under section 7(2) of the ACA to have an arbitrator appointed for the appellant.
The trial court granted the application, appointed an arbitrator for the appellant, and
ordered the parties to proceed to arbitration.
On appeal, one of the issues that arose for determination was whether there was a
dispute referable to arbitration. Chukwuma-Eneh, J.C.A. (as he then was), relying on the
case of United World Ltd. Inc. v. Mobile Telecommunications Services Ltd.,85 stated that the test
for determining whether a dispute or difference is referable to arbitration is that the dis-
pute or difference must necessarily arise from the clause contained in the agreement.86 It
is evident from the decision in this case that the court conflated a request to appoint an
arbitrator with a request to refer a matter to arbitration in the context of a stay of pro-
ceedings brought in derogation of an arbitration agreement. The determination of the
question whether there is a dispute referable to arbitration in the United World Ltd. Inc.
case was made in the context of a motion for stay of proceedings pursuant to section 5 of
the ACA and not section 7 of the ACA, which deals with a different situation entirely. It
is submitted that the juridical provenance and basis upon which the requirement of the
existence of a dispute has found its way into appointment of arbitrators in default of
agreement simply does not exist or, if it does, is of doubtful origin. The appointment of
an arbitrator by the court following the default of the parties should also be no more than
a purely ministerial act.
Clause 7(5) of the Bill raises a serious constitutional issue which the National Com-
mittee identified. It provides that “a decision of the court under subsections (2) and (3)
of this section shall not be subject to appeal.”87 A similar provision in the ACA88 had been
struck down as unconstitutional in Nigerian Agip Oil Co. Ltd. v. Chief Dr. M.William Kemmer,89
as being contrary to section 241 of the 1999 Constitution, which guarantees the right of
appeal against decisions of the courts.
However, in Chief Felix K. Ogunwale v. Syrian Arab Republic,90 the same Court of
Appeal did not declare the section unconstitutional but was content to state that the pro-
vision cannot override the clear right of appeal contained in section 241(1) of the 1999
Constitution.91 Indeed, there were insinuations in the leading judgment that where it is
shown (a) that there is a binding, valid, compellable arbitration, (b) a dispute capable of
85
United World Ltd. Inc. v. Mobile Telecommunications Services Ltd., [1998] 10 N.W.L.R. (pt. 568) 106
(Nigeria).
86
Supra note 84, at 152. Earlier his lordship had stated: “Besides, from my research it seems to me that where the
court is disposed to refer a matter to arbitration there must coexist albeit in the matter before the court a competent arbitra-
tion clause and a cognizable dispute otherwise the court would be bereft of jurisdiction to so refer.” (emphasis added).
87
It would appear that the relevant subsections are actually (3) and (4) because subsection (2) does not deal with
any of the powers of the court as regards appointments.
88
ACA, s. 7(4).
89
Chief Felix K. Ogunwale v. Syrian Arab Republic, [2001] 8 N.W.L.R. (pt. 716) 506 (Nigeria).
90
Supra note 84.
91
Id. at 147. Per Chukwuma-Eneh, J.C.A. (as he then was): “Without going flat out to declare the provisions
of sections 7(4) and 34 unconstitutional, it is enough to say here that they cannot override the clear right of appeal
conferred on the appellant by section 241(1) of the 1999 Constitution.”
being referred to arbitration, and (c) a party has refused or defaulted to make an appoint-
ment, the finality of the decision prescribed in section 7(4) may be applicable.92
It is difficult, on a true construction of the provisions of section 7(2) and (3), to see
where there is a requirement for the court to consider requirements (a) and (b) supra. The
consideration of these requirements does not appear to have any justifiable legal basis. It
is also difficult, with respect, to agree with the suggestion that there is the possibility,
however remote, of section 7(4) being applied to deprive a party of the right of appeal as
enshrined in the Constitution. The unequivocal decision in the Nigerian Agip Oil Co. Ltd.
case seems more consistent with the constitutional jurisprudence on the subject.
It is suggested that clause 7(5) should have been worded to the following or similar
effect: “For the avoidance of doubt, the appointment of an arbitrator by the court under
the preceding subsections is an administrative act or directive and is not subject to
appeal.” The Bill should then have a simple form for the process of seeking the appoint-
ment by the court in default of appointment attached as a Schedule to the Act that elim-
inates the requirement of commencing the process by Originating Motion with
supporting affidavits under the Arbitration Rules contained in Schedule 3 to the Bill. A
judge in chambers or the Chief Registrar of the court could then effectively deal with
such applications as the case may be.
Aside from being cost effective, such a provision would achieve two purposes. First,
it establishes unequivocally that the court is not exercising any judicial or quasi-judicial
powers in appointing an arbitrator in default. Secondly, the specific reference to an
administrative act or directive creates a stronger, if not total, riposte to any suggestion that
such appointment “directive” is a decision within section 318 of the 1999 Constitution.93
The right of appeal pursuant to section 241 of the Constitution may arguably become
irrelevant. In Okeke v. Uzochukwu,94 the Court of Appeal had in fact held that a directive
was not appealable.
The requirement that a dispute must be referable to arbitration in the context of
appointing an arbitrator would inevitably frustrate the arbitral process in the absence of
statutory intervention. A decision whether a dispute is referable must necessarily involve
considerations of substantive issues better suited for the arbitral panel or tribunal. The
existence of a dispute and the further obvious question of whether the dispute is within
the purview of the arbitration agreement tie into the existence of a cause of action.
These are issues that border on the jurisdictional competence of the arbitral tribunal.
Section 12(3)(a) of the ACA envisages this situation when it provides that in any arbitral
proceedings, a plea that the arbitral tribunal does not have jurisdiction may be raised not
later than the time of submission of points of defense and a party is not precluded from
raising such plea by reason that he has appointed or participated in the appointment of an
92
Id. at 145C-D, 146A-C.
93
The section provides that decision means “in relation to a court, any determination of that court and includes
judgment, decree, order, conviction, sentence or recommendation.” (emphasis added). But see, e.g., All Nigerian Peo-
ples Party v. Boni Haruna & 2187 Ors., [2003] 14 N.W.L.R. (pt. 841) 546 (Nigeria).
94
Okeke v. Uzochukwu, [2001] 3 N.W.L.R. (pt. 700) 338, 344 (Nigeria). It must, however, be noted that the
authority of this case is doubtful having regard to the provisions of the Constitution and the order made by the court
in the particular case.
arbitrator.95 The foregoing suggested methodical approach leaves little room for inten-
tional delay by any of the parties or an ill-informed approach by the appointing authority
or the courts in appointing arbitrators in default of agreement.
E. Removal of arbitrators by the court: misconduct and error

on the face of the award
Section 30(2) of the ACA provides that an arbitrator who has misconducted himself may
on application of any party be removed by the court. This provision undoubtedly covers
instances of what ordinarily would be understood as misconduct but also embraces situations
in which, although the arbitrator has not necessarily acted unfairly, he has allowed himself
to get into a position where unfairness might reasonably be suspected or foreseen.96
The arbitrator must not only show no bias, but must also appear to be in a position to
act judicially and without any bias.97 The fact that the court is given a wide power to remove
an arbitrator in cases of misconduct does not mean that the power will be freely exercised.98
The National Committee, in recommending a change of the provisions regarding
removal, “considered that resort to the old English concept of ‘misconduct’ as a ground
for removal of arbitrators has been abused under the present Arbitration Act.”99 Be that as
it may, it has been suggested by the National Committee that clause 11 of the Bill
95
See also clause 16(3)(a) of the Bill. The provisions of s. 30 of the EAA addresses this issue much better by pro-
viding that: “Unless otherwise agreed by the parties, the arbitral award may rule on its substantive jurisdiction, that
is, as to—(a) whether there is a valid arbitration agreement, (b) whether the tribunal is properly constituted, and (c)
what matters have been submitted to arbitration in accordance with the arbitration agreement.”
96
See Mustill & Boyd, supra note 75, at 530.
97
Id.
98
Id.
99
See National Committee Report, supra note 7, at 31. The allegation of misconduct allowed the courts to
review the award on grounds of “error of law on the face of the award.” This approach is clearly wrong. There was
the view that courts retained, prior to the Arbitration Act 1950, an inherent jurisdiction to set aside an award for error
on the face, enshrined in Arbitration Act, (1889), s. 1. It would be recalled that the 1889 Act was the extant Act in
Nigeria before the ACA. Certainly prior to 1889 and after, an error on the face of the award was a basis for the court’s
interference because on one analysis, it was an example of “substantive patent invalidity.” See Mustill & Boyd, supra
note 75, at 439, n. 16. However, the editors of Mustill & Boyd, id. at 447– 48 stated categorically that: “But there
were certain powers which, at least on a traditional view, were derived solely from the court’s inherent jurisdiction
over references regarded as dependent upon its own procedures, and which were not dependent on the statutory
jurisdiction to set aside for misconduct. These consisted of the powers to set aside for admitted mistake, error on the face of the
award, and excess of jurisdiction. The sweeping-away of these powers seems to have passed unnoticed.” (emphasis added). It is
clearly doubtful from the foregoing that the power of review on the basis of an error on the face of the record existed
after the passing of the 1950 Act in England. While the 1950 Act (which was a consolidating enactment) did provide
for the power of the court to remove arbitrators and set aside awards in cases of misconduct, there was no explicit
statutory power to set aside on the basis of error on the face of the award. There are, however, some authorities in
England, despite clear reservations about the propriety of the concept, which seem to accept that misconduct and
error on the face of the record are two different concepts, thus confirming the separate common law origins of the
error on the face of the record principle. See Giacomo Costa Fu Andrea v. British Italian Trading Co. Ltd., [1963] 1
Q.B. 201. The authorities in England are also clear that even where an arbitrator has made an error of fact or law or
there was inconsistency between two parts of the award, it did not amount to misconduct. See K/S A/S Bill Brakh
v. Hyundai Corp., [1988] 1 Lloyds Rep. 187 and Moran v. Lloyds, [1983] Q.B. 542. Error of law amounting to mis-
conduct as a ready avenue to appeal against the award appears to have been accepted by Nigerian courts without an
appreciation of the foregoing analysis. See Taylor Woodrow of Nigeria Ltd. v. Suddeutsche Etna-Werk Gmbh, [1993]
4 N.W.L.R. (pt. 286) 127 (Nigeria), where the Supreme Court noted that “misconduct” is not defined in the appli-
cable arbitration laws and resort must therefore be made to the common law. See also Kano State Urban Dev. Bd. v.
Fanz Construction Co. Ltd., [1990] 4 N.W.L.R. (pt. 147) 1 (Nigeria); Arbico (Nig.) Ltd. v. Nigeria Machine Tools
Ltd., [2002] 15 N.W.L.R. (pt. 789) 1 (Nigeria); Baker Marina Nigeria Ltd. v. Danos & Curole Marina Contractors
Inc., [2001] 7 N.W.L.R. (pt. 712) 337 (Nigeria).
jettisons “the amorphous and pliable concept of ‘misconduct’ as a basis for removing an
arbitrator” and introduces a regime along the lines of section 24 of the EAA where an
arbitrator may be removed on grounds of justifiable doubts as to impartiality, lack of req-
uisite qualifications required by the arbitration agreement, physical and mental incapacity,
or failure to use reasonable despatch in the conduct of proceedings.
It is doubtful whether the new regime regarding the circumstances entitling a party to
apply for the removal of an arbitrator would change the attitudes that led to the perceived
abuse recognized by the National Committee. First, the view of the National Committee
that “section 30 permits judicial review on grounds of ‘misconduct of arbitrator,’ which
allows judges to review arbitrators’ decision on grounds of ‘error of law on the face of the
award,’”100 fails to appreciate the trail of development of the error of law on the face of the
award principle identified supra.101 The principle, at common law, had a separate and distinct
evolutionary path from the misconduct concept, which is essentially statute based.102
Accordingly, in the absence of a clear statutory statement in respect of the non-applicability
of the common law principle of error of law on the face of the award,103 it would still
have continued applicability despite the change of language.104 Secondly, clause 11(1)(a)
is cast in wide terms and a justifiable doubt as to impartiality contained therein would
almost invariably be employed with the same level of “abuse” as the misconduct concept.105
F. Challenging the jurisdictional competence of the arbitral tribunal

The doctrine of competence-competence, which holds that an arbitral tribunal may
determine questions as to its own jurisdiction, is an important aspect of arbitration law.106
It has been observed that if arbitrators could not determine questions as to their own
jurisdiction, a recalcitrant respondent could easily frustrate the parties’ agreement to have
their disputes decided by arbitration, or at least create considerable delay by merely con-
testing the existence or validity of the arbitration agreement in court.107
100
101
Id.
102
See also 2 Halsbury’s Laws of England para. 623 (4th ed. 1992).
103
See, e.g., English Arbitration Act 1979, s. 1(1), which expressly abolished the courts’ jurisdiction to set aside
or remit an award on the grounds of error of law or fact on the face of the award. The principle no longer has appli-
cation despite the absence of a similar provision in the EAA.
104
There are manifold authorities where regrets have been expressed about the provenance of the principle. See
Hodgkinson v. Fernie, [1857] 3 C.B.N.S. 189: (“The law has for many years been settled, and remains so at this day,
that, where a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is constituted
the sole and final judge of all questions both of law and of fact … The only exceptions to the rule, are, cases where
the award is the result of corruption or fraud, and other, which though it is to be regretted, is now, I think, firmly established,
namely, where the question of law necessarily arises on the face of the award, upon some paper accompanying and
forming part of the award. Though the propriety of this latter may very well be doubted, I think it may be considered as estab-
lished.”) (emphasis added). See also Champsey Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co. Ltd., [1923] A.C.
592, per Lord Dunedin: (“Now the regret expressed by Williams J. in Hodgkinson v. Fernie has been repeated by more
than one learned judge, and it is certainly not to be desired that the exception should be in any way extended”).
105
Clause 11 provides that: “(1) A party to arbitral proceedings may (upon notice to other parties, to the arbi-
trator concerned and to any other arbitrator) apply to court to remove an arbitrator on any of the following
grounds—(a) that circumstances exist that give rise to justifiable doubts as to his impartiality.”
106
107
See Julian D. M. Lew, Loukas A. Mistelis & Stefan Kröll, Comparative International Commercial
Arbitration 332 (2003).
Section 12 of the ACA makes provisions regarding the competence of the arbitral
tribunal to determine challenges to its jurisdiction or any objections with respect to the
existence or validity of an arbitration agreement. Section 12, however, does not allow for
continuation of the arbitral process in the event of an appeal against such determination.
Section 12(4) simply provides that such a ruling shall be final and binding. The Model
Law, on the other hand, had recognized the possibility of an appeal but specified that the
arbitral tribunal may continue with the proceedings and make an award.108
Clause 16 of the Bill maintains the main provisions of section 12 with the additional
provision that the arbitral tribunal may rule on the issue as a preliminary question or in
an award on the merits, and such ruling would be final and binding.109 It also further pro-
vides that where the tribunal rules upon 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 National Committee were of the view that “since, for reasons stated above,
court review of arbitrators’ decisions on their jurisdiction cannot be excluded, it is expe-
dient to provide for the continuation of the arbitration proceedings while court review
proceedings are pending.”110 The justification for making this assertion by the National
Committee can be found in its earlier comment that “as a matter of legal principle, an
arbitrator’s decision on his jurisdiction is likely to be regarded as a partial award and therefore
susceptible to the usual process for reviewing arbitral awards (i.e., applications to set aside).”111
Even if the principle of partial awards is accepted in the particular context of deter-
mining a preliminary question on jurisdiction, it is doubtful whether the ACA recognizes
the possibility of setting aside a partial award. Section 29(1) of the ACA provides that a
party aggrieved by an arbitral award may within three months from the date of the award
apply to the court to set aside the award. Subsection (2) further provides that the court
may set aside the arbitral award if the party making the application furnishes proof that
the award contains decisions on matters which are beyond the scope of the 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.
A close reading of the provisions above, particularly subsection (2), seems to suggest
that reference to the arbitral award can only mean the final award. The arbitral award in
this context would only be final if the arbitral tribunal determines that it has no jurisdic-
tion to arbitrate on the matter. Where the tribunal finds and rules that it has jurisdiction,
as a matter of law, it is not a final award but a “partial” one much akin to an interlocutory
ruling in a court.112 This explains why the Model Law makes specific provisions in Article
108
See Model Law, art. 16(3).
109
See clause 16(4) of the Bill.
110
111
Id. at 33.
112
The provisions of subsection (3), which may have been used to substantiate the argument that partial awards
are liable to be set aside, actually relates to the power of the court to suspend its proceedings to afford the arbitral
tribunal an opportunity to resume the arbitral proceedings or take such other action to eliminate the grounds for set-
ting aside the award.
16(3) for an application to court on this specific matter.113 That portion of the Article was
not inserted in section 12 of the ACA and is absent from clause 16 of the Bill.
Accordingly, if such a ruling is a partial award, which cannot be set aside under the
ACA, it follows that the arbitral tribunal’s “interlocutory” ruling would be final and bind-
ing until the final award only. The correctness of the ruling could then be challenged by
applying to set aside the award on the ground that the award deals with a dispute not
contemplated by the arbitration agreement or no dispute at all.114 It also follows that the
provisions of section 12(4) of the ACA and clause 16(4) of the Bill which seem to suggest
that an arbitral tribunal’s ruling on jurisdiction is “an award on the merits” would be
inconsistent with the parties’ right to apply to set aside the final award on grounds which
include the jurisdictional ground.
G. Powers of the court or tribunal to order interim measures of protection

One of the points of interface between the arbitral process and courts lies in the
power of a court to grant interim protective orders in support of the arbitral process.
Despite the general trend in reducing the influence of courts in the arbitral process, the
supportive role of courts in granting interim relief is crucial to the overall effectiveness of
the process. The National Committee observed that commercial disputes often arise in
circumstances that give rise to the need for some form of interim protective order.115 For
example, an order may be required to protect the subject matter of the dispute from
deterioration or dissipation, or to prevent a party from frustrating the ultimate result by
pre-emptively transferring assets in the meantime. Such protective order may be required
before the arbitral tribunal has been appointed or may be required from the arbitral
tribunal pending its final decision.116 The most crucial aspect is the requirement of pro-
tective relief before the constitution of the arbitral tribunal.
Section 13 of the ACA and Article 26 of the Arbitration Rules set out in the First
Schedule to the Act contain provisions in respect of interim measures. These provisions
derived from the Model Law were not robust enough to adequately and efficiently cope
with the myriad of instances that would require the immediate intervention of the courts
pending commencement of arbitration. The National Committee, therefore, recom-
mended for adoption the present draft amendment to Article 17 of the UNCITRAL
Model Law prepared by the Working Group on International Commercial Arbitration
and Conciliation.
Clauses 18 through to 28 of the Bill make copious provisions dealing with express
power of the courts to grant interim measures;117 the express powers of the tribunal to
grant interim measures, including powers to make orders maintaining the status quo
or to provide a means of preserving assets out of which a subsequent award may be
113
See also the extensive provisions contained in EAA, ss. 30–32.
114
See also s. 48(a)(iv)–(vi) in respect of international commercial arbitration.
115
116
Id.
117
See clause 18.
satisfied;118 conditions for the grant of such measures by the tribunal;119 application for
preliminary orders in support of a request for an interim measure;120 specific regime
for preliminary orders;121 modification, suspension, and termination of interim measures
and preliminary orders;122 order by the arbitral tribunal for the provision of security;123
disclosure of material change in circumstances;124 costs and damages;125 recognition and
enforcement of interim measures and the grounds for the refusal of recognition and
enforcement.126
The powers of the courts in Nigeria to grant interim measures require some com-
ment in the context of admiralty claims. The provision is a welcome development but its
efficacy would depend largely on how it coheres with the adjectival laws and practice of
the courts in the exercise of admiralty jurisdiction. There are two critical questions in this
context. First, where a claim falls within the admiralty jurisdiction of the Federal High
Court, can a claimant arrest the vessel notwithstanding that the underlying contract con-
tains an arbitration clause? Secondly, if the claimant can arrest the vessel, can the vessel or
any subsequent guarantee or bond for its release be used as security for an award in the
arbitration?
Admiralty courts have some remedies and procedures not possessed by other
courts.127 Admiralty jurisdiction has three unique characteristics and distinctive features,
namely, an accepted jurisdictional foundation in rem against the res; a well recognized
procedure for security for maritime claims in the form of an arrest of the res; and prior-
ities in admiralty.128 The ability to proceed in rem and arrest a vessel as security for satis-
faction of a claim is a key feature of admiralty jurisdiction.With the innovatory provisions
in clause 5(3) of the Bill in respect of maritime contracts in admiralty, pressing problems
would arise when an attempt is made to utilize the security aspect of an action in rem in
support of the determination on the merits by some arbitral tribunal other than the local
admiralty court.
As we shall show, the whole structure of the Admiralty Jurisdiction Procedure Rules
(AJPR) 1993 made pursuant to the Admiralty Jurisdiction Act 1991 and the powers of
the Federal High Court pursuant to such Rules in respect of arrest of vessels centres
around the institution of an action in court. This has the potential of rendering the pro-
visions on interim measures in the context of maritime arbitration sterile. Order VII Rule
1(1) of the AJPR provides that a party to a proceeding commenced as an action in rem
118
See clause 19.
119
See clause 20. These conditions are that a party must satisfy the tribunal that harm not adequately reparable
by an award of damages is likely to result, and that there is a reasonable possibility of success on the merits of the claim
by the requesting party.
120
See clause 21.
121
See clause 22.
122
See clause 23.
123
See clause 24.
124
See clause 25.
125
See clause 26.
126
See clauses 27 and 28.
127
See Civil Admiralty Jurisdiction, Law Reform Commission Report No. 33, 61, para. 86 (1986).
128
See id. paras. 88 –90, at 62.
may by motion ex parte apply for an arrest warrant in respect of the ship or other property
against which proceeding was commenced. Clearly this provision presupposes that there
must be an action in existence in the Federal High Court. Further, Order VII Rule 4(2)
provides that an arrest warrant shall not be executed on a ship or other property unless
the writ in the proceeding concerned has been previously served, or is to be served con-
currently with the execution of the warrant, on the ship or property.129
Accordingly, it would be impossible for a party who has a maritime claim governed
by an arbitration clause to obtain the arrest of a vessel as security for such claim pending
the appointment of an arbitrator or even pending arbitration where arbitrators have been
appointed. To obtain the privilege of arrest, the wording of the relevant rule requires such
a party to first institute an action in rem in court before applying for the arrest. Instituting
an action in rem in court would necessarily entail a breach of the arbitration clause,
which the party seeking the benefit of the right of arrest is not inclined to do.The claim-
ant would also be in the peculiar situation of depending on the defendant to raise an issue
about the forum by applying for a stay, which may not necessarily be forthcoming.
The AJPR also makes provisions regarding the power of the court to make an order
directing that the vessel under arrest be used a security for foreign proceedings or arbitra-
tion.130 However, as with the jurisdictional power to arrest a vessel, the exercise of discre-
tion by the court is also hinged on an existing action in rem in which an application to
stay the action is made. Similarly, a claimant who is not in the first place inclined to insti-
tute an action in court but is in a sense forced to do so because of the procedural diffi-
culties perpetrated by the rules of court would only be able to derive the benefit of the
applicable powers of court in the event that the defendant is also inclined to arbitration,
which may not necessarily be the case.
Nigeria has recently enacted the Coastal and Inland Shipping (Cabotage) Act No.
2003131 and it is expected that this would engender an increase in maritime arbitration
activity. It is suggested that the AJPR should be streamlined with the current proposals in
129
See Owners/Charterers of M.V. Roman Glacier v. Benson Agbo, [2000] F.W.L.R. (pt. 23) 1283 (Nigeria).
130
See AJA, s. 10. See also Olawoyin, supra note 1, for a discussion of the internal illogic between AJA, ss. 10 and
20. The same argument would apply between AJA, s. 10 and clause 5(3) of the Bill. The practical implication of the
clause would render s. 10 sterile.
131
Cabotage or coastal trading as it is also popularly known, refers to the exclusive reservation by a state of the
commercial operations between ports in that country for their own national flag vessels. There are manifold defini-
tions of cabotage. Suffice it to say that s. 2 of the Cabotage Law effectively captures the numerous activities within
the coastal waters that are intended to fall within the purview of coastal trading. It provides, thus: “(a) the carriage of
goods by vessel, or by vessel and any other mode of transport, from one place in Nigeria or above Nigeria waters to
any other place in Nigeria or above Nigeria waters, either directly or via a place outside Nigeria includes the carriage
of goods in relation to the exploration, exploitation or transportation of the mineral or non-living natural resources
of Nigeria whether in or under Nigerian waters; (b) the carriage of passengers by vessel from any place in Nigeria
situated on a lake or river to the same place, or to any other place in Nigeria, either directly or via a place outside
Nigeria to the same place without any call at any port outside Nigeria or to any other place in Nigeria, other than
as an in-transit or emergency call, either directly or via a place outside Nigeria; (c) the carriage of passengers by vessel
from any place in Nigeria to any place above or under Nigerian waters to any place in Nigeria, or from any place
above Nigerian waters to the same place or to any other place above or under Nigerian waters where the carriage of
the passengers is in relation to the exploration, exploitation or transportation of the mineral or non-living natural
resources in or under Nigerian waters; and (d) the engaging, by vessel, in any other marine transportation activity of
a commercial nature in Nigerian waters, and the carriage of any goods or substances whether or not of commercial
value within the waters of Nigeria.”
the Bill by amending the relevant provisions on arrest to introduce a special procedure for
arrest pending arbitration without the apparently strict requirement of instituting an
action in rem in the relevant court. The right to arrest a vessel pending arbitration is
arguably presently non-existent in Nigeria.
The Third Schedule to the draft Bill contains the Arbitration Claims and Appeals
(Procedure) Rules 2006 made pursuant to the provisions of clause 59(2) of the Bill. The
purpose of the Rules is to prescribe the procedure to be adopted by a party seeking
interim protective assistance of the court pending arbitration. An application to the court
for the grant of interim measures of protection under clause 18(1) is regarded as an arbi-
tration claim under Rule 1(f ). Rule 2(1) and (3) state that an arbitration claim shall be
started by Originating Motion in the court which has jurisdiction in relation to the
underlying subject matter or underlying contractual relationship from which the claim
arises. The Originating Motion shall include a concise statement of the remedy claimed
and any question on which the claimant seeks the decision of the court.132
The draft proposals address most of the concerns relating to the operation of the
current regime under section 13 and Article 26 of the Arbitration Rules. The National
Committee was of the view that, first, the power of Nigerian courts to grant interim
measures in aid of arbitration is clearly provided for; secondly, the language of the provi-
sion explicitly states that such measures can be granted in aid of foreign arbitrations and
in situations where arbitration is yet to commence; thirdly, detailed provisions are made
as to the type of measures that an arbitral tribunal may order, and the procedures that
should be adopted by the tribunal.
The Arbitration Rules made pursuant to the Bill have seemingly dispensed with the
need to file a writ before the relevant court exercises its judicial powers.The question that
would arise in the specific context of admiralty claims that require the interim measure
of protection of arrest of a vessel is whether the conflict between the Arbitration Rules
and the AJPR would be resolved in favour of the Arbitration Rules. It is suggested that
the Federal High Court should subjugate the AJPR requirements of filing a Writ of Sum-
mons in respect of the maritime claim in favour of the requirement of filing an Originat-
ing Motion specifically focused on the precise interim remedy pending arbitration that is
sought without necessarily touching on the merits of the substantive claim, which is the
essence of the provisions in the present proposals.133 In any event, the Originating
Motion with supporting affidavit would contain enough information about the nature of
the maritime claim to be pursued at arbitration.
132
See Rule 3(1)(a)(i) and (ii).
133
The current proposals would also eliminate the difficulties experienced by the plaintiff and the ultimate deci-
sion of the Supreme Court in Messrs N.V. Scheep & Anor. v. M.V. Araz & Anor., [2005] 15 N.W.L.R. (pt. 691) 622
(Nigeria), where the plaintiff sought the arrest of the M.V. Araz as security for a claim of U.S.$300,000 as security for
damages, interest, and costs relating to a claim for demurrage and/or damages for detention of another vessel which
claim was then before arbitration in London. The action in itself was peculiar because of the difficulties identified
supra with the AJPR.That explains why a Writ of Summons had to be filed in respect of a claim for security for costs.
The Supreme Court therefore rightly held that security for damages, interests, and costs that may be awarded in a
proceeding cannot constitute a cause of action as security for costs belongs to the realm of adjectival law.
H. Remedies
The ACA made no provisions in relation to the remedies that an arbitral tribunal
may grant.134 While the parties to an arbitration agreement have the freedom to stipulate
the type of remedies that the tribunal may grant, experience shows that not all arbitration
clauses deal with this important subject.135 The Bill accordingly follows the lead of section
48 of the EAA by preserving the parties’ autonomous entitlement to specify the types of
available remedies. In the event that the parties do not make such prior assessment of
remedies, the tribunal may make declaratory orders, mandatory or restrictive injunctions,
order specific performance of a contract (other than a contract for the sale of land) and
rectification, setting aside or cancellation of a deed or other document.136
The provision is a positive development which places the remedial powers of the
arbitral tribunal on a statutory footing. However, it would appear that parties to a con-
tract containing an arbitration clause should pay particular attention to the subject matter
and area of the transaction in determining whether it is imperative to specify the remedial
powers of the arbitral tribunal. For example, in Nigeria, it is common to have sharehold-
ers’ agreements rather than Articles of Association of the company which govern the rela-
tionship of the shareholders inter se. These agreements, which are favoured by foreign
companies doing business in Nigeria, typically contain arbitration clauses.
In corporate law, the traditional common law remedies of injunction and specific
performance are readily available and would not create any difficulties with the new pro-
posals. However, there are company law specific remedies which may not necessarily be
available to the parties in arbitral proceedings. For example, the dispute between the par-
ties to the shareholders’ agreement might be one that justifies winding up the company
under the just and equitable ground contained in section 408(e) of the Companies and
Allied Matters Act 1990 (CAMA).137 Similarly, it is doubtful whether a party can bring a
petition for unfairly prejudicial conduct under sections 310–311 of CAMA before an
arbitral tribunal. Furthermore, while most of the remedies specified in section 312(a)–( j)
are in the nature of the traditional common law remedies, it is not uncommon for the
appropriate remedy to be an order winding up the company.138 It is suggested that the
legal advisors of the parties must develop ingenious ways of couching the remedial pow-
ers of the arbitral tribunal such that while it may be conceded that the arbitral tribunal
does not have the statutory power to order a winding up, it could order the successful
party to commence winding up proceedings in court. As a practical matter, the arbitral
award might not have conferred any significant benefit on the successful party, since the
court would probably reconsider the facts on the merits in order to determine whether
winding up is an appropriate remedy.
134
135
Id.
136
See clause 36.
137
Companies and Allied Matters Act, (1990) Cap. C20, s. 408(e) (Nigeria) [hereinafter “CAMA”]. See also
Ebrahimi v. Westbourne Galleries Ltd., [1973] A.C. 360 (H.L.).
138
See CAMA, s. 312(a).
IV. Conclusion
Arbitration practice is now firmly rooted in Nigeria. The proposals in the proposed
federal Bill on arbitration and conciliation would further broaden, entrench, and promote
arbitration law and practice in Nigeria. In terms of the statutory schematic of arbitration
law, we have shown that there appears to be a superior argument that a federal substantive
law on arbitration does not have a constitutional basis in Nigeria.The extent of the power
conferred on the National Assembly to enact a general law for arbitration applicable in
the federation is in serious doubt. On the contrary, by virtue of section 4(7) of the 1999
Constitution, a substantive law on arbitration is a residual matter within the legislative
competence of the component state Houses of Assembly of the Federation. Accordingly,
the proposed uniform state laws on arbitration must be encouraged in the interest of cer-
tainty, harmonization, and consistency of application.
We have also alluded to the fact that there is currently a rush to accreditation by
joining international arbitral institutions such as the Chartered Institute of Arbitrators.
This is a positive development but could also pose a threat to arbitral integrity if care is
not taken.With the current momentum with which arbitration is developing, it is imper-
ative for the stakeholders and users of arbitration to appreciate the urgent need for
appointing arbitrators who have specialist knowledge of law and practice connected to
the relevant dispute. Arbitral practice needs to rise to another pertinent level, which
would be driven by the market and the knowledge of the users of this form of dispute
resolution that arbitral training is only a start. Whilst arbitral training is a desideratum, it is,
however, specialist knowledge in the subject matter of the dispute that is the key to the
greater success of arbitral practice in Nigeria.
This significant component of arbitral practice is virtually non-existent in Nigeria
now. It is common for arbitration practitioners, who are mostly lawyers, to be known for
their professional qualifications as arbitrators rather than the depth of their knowledge of
a particular aspect of the law connected with the dispute. As a result, the same person
could be arbitrating a construction dispute, intellectual property dispute, and maritime
dispute. If this persists, the market for alternative dispute resolution mechanisms may
become disillusioned with the quality and expertise shown in arbitral awards.There is also
the need to encourage professionals other than lawyers to obtain the requisite arbitration
training. In this regard, the initiative by the Maritime Arbitrators Association of Nigeria
in encouraging ship masters, engineers, loss adjusters, and surveyors, whose wealth of
experience would be invaluable in cargo and collision claims, for example, to train as
maritime arbitrators is a positive development.

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Journal of International Arbitration 26(3): 373–404, 2009.

© 2009 Kluwer Law International. Printed in The Netherlands.

Charting New Waters with Familiar Landmarks

II. Constitutionality of a Substantive Federal Law on Arbitration

Dispute resolution as an incident of trade and commerce, which underpins the

III. New Initiatives in the Proposed Federal Arbitration Bill

B. Form of arbitration agreement

message that provides a record of the arbitration agreement or is otherwise accessible so

C. Enforcement of arbitration agreements

D. Number and appointment of arbitrators

The proposed Bill, however, makes comprehensive provisions in respect of the

an arbitrator in respect of an alleged dispute under a tenancy agreement. The respondent

E. Removal of arbitrators by the court: misconduct and error

F. Challenging the jurisdictional competence of the arbitral tribunal

G. Powers of the court or tribunal to order interim measures of protection

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