CLA News / Shaping the Future of Dispute Resolution in Nigeria: The Arbitration and Mediation Act of 2023 by Aisha Mohammed Suleiman
In a remarkable move towards progressive legal reform, on May 26, 2023, Nigeria fortified its arbitration framework by signing into law the Arbitration and Mediation Act 2023 (“AMA” or “Act”), superseding the previous 35-year-old Arbitration and Conciliation Act 1988.
The AMA brought much-needed reforms into the enforcement of arbitration agreements. Section 5 aligns Nigeria’s enforcement of arbitration agreements with its obligations under the New York Convention. This provision mandates that courts stay proceedings commenced in contravention of the arbitration agreement unless found void, inoperative, or incapable of being performed. This pivotal change replaces the preceding Act’s approach, where the decision to stay in proceedings was at the court’s discretion, necessitating the applicant to prove its readiness to proceed with arbitration.
The Act, under Section 16, significantly introduced emergency arbitrator proceedings. This section enables parties to request their appointed arbitral institution or court (if no designation is made) for an emergency arbitrator when seeking immediate relief before the arbitral tribunal’s constitution. This swift process ensures the appointment of an emergency arbitrator within two business days of the receipt of the application.
Interim measures also receive due attention in the new Act. Section 29 recognizes them as enforceable and binding, allowing their application to court irrespective of the country issuing the interim measure. However, there are exceptions such as non-compliance by the applicant with a condition for the grant of the measure, incompatibility of the measure with the court’s powers, and grounds to refuse the enforcement of an arbitral award.
Another notable innovation in the Act is the provision for consolidation, concurrent hearings, and joinders under Sections 39 and 40. The Act acknowledges parties’ agreements to consolidate arbitral proceedings or conduct simultaneous hearings, disallowing an arbitral tribunal to consolidate proceedings or conduct concurrent hearings without the party’s consent. It also paves the way for the joinder of additional parties, given that the underlying arbitration agreement ostensibly binds them.
A standout feature is the introduction of an Award Review Tribunal (“ART”) in Section 56. This opt-in mechanism allows parties to seek the annulment of an arbitral award before the second arbitral tribunal. ART is required to deliver its decision within 60 days of the constitution. In an event where ART annuls an award, the court reserves the right to reinstate it if it finds ART’s decision unsupportable. However, if the ART upholds the validity of an award, the court can only annul it based on non-arbitrability and public policy.
The Act also addresses third-party funding in arbitration in sections 61 and 62. By abolishing the prohibitive torts of maintenance and champerty, parties can engage in third-party funding arrangements. Once a funding agreement is in place, the Act necessitates disclosure of the funder’s name and address to the counterparties, arbitral tribunal, and the arbitral institution, if applicable.
Part II of the Act comprehensively governs domestic and international mediation and the consequent settlement agreements. Sections 76 to 79 of the Act ensure the confidentiality of mediation proceedings, prevent the admissibility of statements made during mediation in subsequent proceedings, and restrict the mediator from acting as arbitrator unless agreed upon by the parties. The Act also endorses the enforcement of settlement agreements and extends the Singapore Convention to include international settlement agreements under certain conditions.
Conclusively, AMA is a transformative milestone in Nigeria’s legal landscape, effectively modernizing the nation’s arbitration framework. Key amendments include introducing emergency arbitrator proceedings, enforcing interim measures, providing consolidation and concurrent hearings, and establishing an Award Review Tribunal. It also supports third-party funding arrangements and fosters an environment for domestic and international mediation. Overall, the Act embodies Nigeria’s strides towards becoming a competitive global arbitration and mediation hub, enhancing its appeal to international investors and traders.
Author: Aisha Mohammed Suleiman
Designation: Legal Research Assistant
Organisation/Law Firm: Straus Institute for Dispute Resolution, Pepperdine University
Country: United States of America