Analysis of Arbitration Related Court decisions in Nigeria

We are pleased to present the results from the Broderick Bozimo & Company (BBaC) analysis of arbitration-related court decisions in Nigeria.  The study focuses on the attitude of Nigerian courts towards arbitration.  We reviewed the outcome of court decisions concerning the enforcement of arbitral awards, the challenge of arbitral awards, the challenge of arbitration agreements, and the challenges to arbitrator appointments.  

Overview

In total, we reviewed 165 cases decided at the High Court, Court of Appeal, and the Supreme Court of Nigeria. We accessed these decisions through law reports in Nigeria including, the Nigerian Weekly Law Reports, the Federation Weekly Law Reports, the Supreme Court Reports, and Law Pavillion Electronic Law Reports.  On occasion, we also had recourse to certified (but unreported) court judgments.  To that end, the analysis is limited to the decisions to which we had access.

Arbitration has become an accepted dispute resolution mechanism in Nigeria. Consequently, commercial and State parties are open to including arbitration clauses in their contracts and resort to arbitration when disputes arise. However, anecdotally, there is a perception that Nigerian courts are “arbitration unfriendly.” Indeed, practitioners commonly express frustration at the rate at which parties challenge or resist the enforcement of arbitral awards, file applications to restrain arbitral proceedings, and challenge arbitrator appointments.  As a result, rightly or wrongly, some decisions arising from these applications portray Nigerian courts as interfering with rather than assisting the arbitral process.  

The BBaC research yields interesting insights.

Enforcement of arbitration agreements through stay of proceedings

Most proceedings under this category concerned domestic arbitration (59 out of 64  challenge applications – amounting to 92%).  The court stayed proceedings in 18 of the domestic 59 cases (31%) and refused to stay proceedings in 41 cases (69%). Of the five international cases, the Courts stayed proceedings in 3 cases (60%) and refused to stay proceedings in 2 cases (40%).

Challenge and enforcement of arbitration awards

Data from the analysis shows that 74% of challenges to domestic awards are unsuccessful.  There were no successful challenges in the international arbitration cases we analysed.  The full report shows the common grounds through which parties challenge arbitral awards.

Turning to enforcement cases, Nigerian courts enforced domestic arbitral awards 79% of the time and refused enforcement in 21% of cases.  For international awards, the enforcement rate rises to 88%.

Arbitrator challenges

91%  of the cases in this category concerned domestic arbitration, and 9% concerned international arbitration.  In domestic arbitration, Nigerian courts refuse arbitrator challenges 50% of the time.  There were no successful arbitrator challenges in international arbitration.

Average length of proceedings

In challenge proceedings, it takes one year and eight months to complete proceedings.  Of the 40 cases we analysed, the High Court concluded:

• Eighteen cases within a year.
• Fourteen cases above one year but within two years.
• Four cases above two years but within three years.
• Four cases above three years.

It takes the Court of Appeal an average of two years and nine months to determine appeals from the High Court concerning challenge proceedings.  Of the 42 cases we analysed, the Court of Appeal concluded:

• Six cases within a year.
• Eight cases above one year but within two years.
• Eight cases above two years but within three years.
• Nineteen cases above three years.

It takes the Supreme Court an average of four years and eight months to determine appeals from the Court of Appeal concerning challenge proceedings.  Of the 16 cases we analysed, the Supreme Court concluded:

• One case within two years.
• Four cases above two years but within three years.
• Eleven cases above three years.

In enforcement cases, it takes the High Court an average of two years to complete the proceedings.  Of the 33 cases we analysed, the High Court concluded:

• Fourteen cases within a year.
• Twelve cases above one year but within two years.
• Two cases above two years but within three years.
• Four cases above three years.

It takes the Court of Appeal an average of one year and one month to determine appeals from the High Court concerning enforcement proceedings.  Of the 33 cases we analysed, the Court of Appeal concluded:

• Five cases within a year.
• Three cases above one year but within two years.
• Ten cases above two years but within three years.
• Fifteen cases above three years.

It takes the Supreme Court an average of three years and nine months to determine appeals from the Court of Appeal concerning enforcement proceedings.  Of the 12 cases we analysed, the Supreme Court concluded:

• One case within a year.
• Four cases above one year but within two years.
• Seven cases above three years.

The full report can be accessed here.