SUPREME COURT LAMBASTS LAWYERS WHO ASSIST LITIGANTS TO FRUSTRATE ARBITRATION AWARDS

Metroline (Nig.) Ltd. v. Dikko

[2021] 2 NWLR (Pt. 1761) 422 at 445, per Rhodes-Vivour, JSC

Notable Pronouncement

I intend to comment on the disturbing trend where all manner of appeals are filed against awards. It is time litigants fully understand, respect and appreciate the nature of arbitration agreements they freely enter into. It is the duty of counsel to explain the nature of these agreements and not encourage their clients to disregard them when they get unfavourable awards. Arbitration agreements out to be respected and the resultant awards complied with. We should always bear in mind the importance of respecting arbitration agreements, more so those that have international connotations. Building up and sustaining a globally respected dispute resolution system are major steps for the growth of our Nation into a preferred investment destination. The Nigerian Legal System, following international standards, has legislated on the nature of arbitration awards to be final and binding and only to be interfered with by the courts in the exceptional circumstances enunciated in the relevant arbitration statutes. Arbitration is widely acknowledged as an alternative to litigation which enables expeditious dispute resolution. Commendably, the legal framework provides for court interference in specified circumstances only. However, the unfortunate trend in which litigants, with the assistance of counsel who fail to appreciate their duties as officers of the court, all in a bid to win their clients’ case by all means, bring unsubstantiated and spurious challenges against otherwise good arbitration awards and the arbitration tribunal, ought to be frowned upon and discouraged. The courts should not allow itself to be used as a tool to set aside otherwise good awards or frustrate legitimate arbitration awards. 

Notes

The words of Hon. Justice Rhodes-Vivour, JSC (now retired) are as bright as day. In the short pronouncement, the learned Jurists highlighted the core ideas surrounding the concept of arbitration. His Lordship has words for everyone – litigants, lawyers, the courts, and general public. This seminal pronouncement deserves to be recited like an anthem, and internalised by all.

The relevance of arbitration can never be overemphasized. It has developed to become one of the most potent means of commercial dispute resolution globally.

Although it is a quasi-judicial system in that an arbitrator, like a judge, decides the dispute, it still retains certain distinctive features which makes it attractive. For instance, unlike litigation, arbitration is private and not conducted in the public; and confidentiality is guaranteed. Final decision/judgment in arbitration (called an award) is precisely final as there is no right of appeal.

These features are underscored by the fact that arbitration is party-driven. The use of arbitration and the issues relating to the process and procedure are largely borne out of agreement by the parties. For instance, there can be no arbitration except the parties agree in writing that arbitration will be the mode of resolving their dispute. This agreement is usually in the form of an arbitration clause contained in the contract. The clause is drafted in a way that captures other accompanying details touching on process, like the number of arbitrators, the appointing authority, governing law, place and seat of the arbitration, etc. Sound solicitors, especially solicitors who also double as arbitrators, are familiar with how to draft a perfect arbitration clause.

As pointed out by the Supreme Court above, arbitration saves time and has gained international recognition and acceptance as an effective means of resolving commercial disputes. 

Notwithstanding, in some part of the world like Nigeria, many litigants are still attempting to dethrone arbitration from its respected position in order to advance their unending craving for litigation. This is mostly by those who are unsuccessful at the arbitration. They move to challenge the award with the aim to set it aside. The move to set aside the award naturally flows from the understanding that an arbitral award is final and cannot be subject of an appeal. The law governing arbitration in Nigeria, the Arbitration and Conciliation Act, contains specific provisions on the conditions for which an arbitral award may be set aside. These include where an arbitrator misconducts himself or herself.

In order to allow arbitration to thrive in Nigeria, legal practitioners must hearken to the voice of the Supreme Court and abandon the “win-at-all-cost” mentality. Among all the reasons litigants and lawyers must comply with the Supreme Court’s advice, we should note the need to make Nigeria a preferred investment destination. A country with an uncertain and ineffective justice system and system of commercial dispute resolution have a lot to lose in terms of foreign investment. 

 

Featured image credit: Thisday

 



Stephen Azubuike
Author: Stephen Azubuike
Stephen is a lawyer with expertise in Commercial Dispute Resolution and Technology Law practice. He is a Partner at Infusion Lawyers. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts on behalf of financial institutions, other corporate bodies and multinationals. He has worked with a number of startup tech companies. He tweets @siazubuike.

1 Comment

  • Afrikan Eagle

    As if the troubles with the Nigerian legal system is only arbitration. It has sunk so deep beyond remedy. Nigeria itself is a lost project.

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