Introduction

Arbitration, a time-tested mechanism for resolving disputes outside the traditional courtroom, continues to evolve to confront its inherent challenges whilst broadening its efficacy in navigating intricate commercial disagreements.  A recent development within the Nigerian arbitration landscape is the emergence of the Award Review Tribunal (ART) under the Arbitration and Mediation Act.  This innovative addition has elicited an array of queries and piqued the interest of stakeholders involved in international arbitration.  This article embarks on a detailed examination of the Award Review Tribunal, explaining its workings, raison d’être, and the potential concerns it raises for users of international arbitration.

Conceptualising the Award Review Tribunal

Embedded in Section 56 of the Arbitration and Mediation Act (AMA), the ART allows parties to opt for an arbitral award review by a distinct tribunal instead of resorting to the courts.  It is a forward-thinking approach aimed at providing an efficient recourse mechanism nestled within the arbitration framework rather than becoming ensnared in the complexities of the conventional court challenge process.  This concept has been designed to ensure that the inherent advantages of arbitration, such as speed, efficiency, and finality, aren’t undermined whilst concurrently offering a renewed opportunity for justice for parties who believe their dispute wasn’t appropriately addressed initially.

Constituting the Award Review Tribunal

When parties opt for the ART, the composition of the review tribunal becomes a paramount consideration.  An often-overlooked aspect of arbitration is the potential for delay rooted in the process of nominating and appointing arbitrators, which could significantly elongate the dispute resolution process.  Therefore, parties must contemplate this element when drafting the arbitration agreement.

For instance, the agreement could stipulate that, in the event of a dispute, the parties must promptly nominate specific arbitrators for the first instance and, should the need arise, for the review proceedings.  This provision allows for an efficient and pre-determined procedure for their appointment, preventing a time-consuming selection process at the later stages of the dispute resolution process.

Mitigating Potential Delays

A frequently expressed concern regarding the ART is its potential to extend the dispute resolution timeline.  Arbitration’s status as a more efficient alternative to courtroom litigation is one of its most valued attributes.  However, it is crucial to remember that the ART, even with its perceived potential for prolonging the proceedings, still offers a more time-efficient recourse compared to the lengthy durations typical of court proceedings in Nigeria, which often extend to several years.  By contrast, the Arbitration and Mediation Act places a 6-month time limit for the ART to decide on a challenge unless the parties agree otherwise.

In circumventing potential delays, a proactive strategy could incorporate specific timeframes for the ART proceedings and decision-making process into the arbitration agreement.  Parties could outline a definite timeline for rendering the tribunal’s decision.  This anticipatory approach can go a long way in curtailing avoidable delays.

Assessing the Cost Implications of the ART

Undeniably, adding an ART to the arbitration process brings additional costs.  Parties will need to absorb the expenses of an extra set of arbitrators, administrative charges, and, possibly, extended legal fees.  This potential cost escalation may make some parties hesitant to opt for the ART.  However, it is worth considering that these additional costs can be viewed as a preventative measure to offset the substantial costs and delays associated with subsequent court litigation.

To mitigate this, the arbitration agreement can include provisions detailing specific timeframes for the ART proceedings and the decision-making process.  For example, parties might stipulate that the ART must render its decision within 60 days from the date of its constitution, as suggested by Section 56(6).  By setting clear time expectations upfront, parties can manage the overall arbitration process more effectively and ensure a more time-efficient recourse compared to court proceedings.

Enforcing the Award amidst ART Proceedings

With the ART in play, there may be complexities in enforcing an award, especially when a “Notice of Challenge” has been issued.  However, Section 56(7) provides some assurance, clarifying that an application for enforcement can be made notwithstanding a challenge unless the court, considering the specific circumstances of the case, decides otherwise.  This could mean, for instance, that even if the ART is reviewing an award, the winning party may still initiate enforcement proceedings.  However, depending on the court’s decision, they may have to provide security for the award or agree to interim preservation orders.

Comparing ART with Traditional Court Proceedings

To truly understand the potential benefits of the ART, it is helpful to juxtapose it against traditional court appeal processes.  A recent study conducted by Broderick Bozimo and Company provides a telling comparison.  The firm’s analysis of arbitration-related decisions in Nigeria reveals that challenge proceedings average one year and eight months in the High Court, two years and nine months in the Court of Appeal, and a staggering four years and eight months in the Supreme Court.  These time frames highlight the potential benefits of the ART, particularly concerning reducing the timeline for dispute resolution.

 Despite the concerns about potential delays introduced by the ART, compared with traditional court proceedings, the ART provides an opportunity for a much faster resolution if parties take a proactive approach to managing timelines and setting clear procedural rules from the outset.

Making the Decision to Use the ART: A Checklist

Choosing to use the ART is consequential, necessitating thorough consideration of various factors.  Here are six key points to consider:

1. Review Mechanism Need: Consider if the nature of your potential disputes and their complexities necessitate a review mechanism. For example, a second look at the award could be valuable if you anticipate a high-stakes conflict involving complex financial transactions.

2. Time Implication Analysis: Assess whether you can accommodate potential timeline extensions due to the review process. You may agree on specific timeframes for the ART proceedings and decision-making process in your arbitration agreement, following the guidance of Section 56(6) of the AMA.

3. Cost Evaluation: Consider if you can absorb the additional costs of the ART. You might agree on measures to control costs, such as selecting a single arbitrator for the review tribunal or agreeing on a fixed fee as per the guidance of Section 56(5) of the AMA on the application of fees and expenses.

4. Enforcement Consideration: Consider if you are comfortable enforcing the award pending the ART decision and can handle potential challenges during this process. Section 56(7) of the AMA provides some guidance on this.

5. Comparison with Traditional Court Proceedings: Assess whether the ART’s timeline and cost implications favourably compare with potential court proceedings. If court proceedings are typically lengthy and costly, opting for ART might be advantageous.

6. Drafting of Arbitration Agreement: Be ready to incorporate detailed provisions regarding the ART into your arbitration agreement, following the guidance of Section 56(4) of the AMA on the tribunal’s constitution and other key processes.

Conclusion

The introduction of the ART into Nigerian arbitration presents an intriguing development.  It brings the potential to enhance the justice delivery process within the arbitration framework, offering a more efficient and context-specific recourse mechanism than court challenges.  However, its potential benefits must be carefully weighed against its potential drawbacks, including the risk of delays and additional costs.

The key to successfully navigating the ART mechanism lies in carefully drafting the arbitration agreement.  Parties should meticulously consider the selection process for the review tribunal and implement specific provisions to manage timelines and control costs.  With well-drafted agreements and a proactive approach, parties can harness the ART mechanism to their advantage, ensuring a robust, fair, and efficient dispute resolution process.  The ART undoubtedly marks a new era in Nigerian arbitration and provides fresh perspectives for achieving justice within the realm of arbitration.