INTRODUCTION:
Litigation which is commonly practiced in Nigeria is considered rigorous in nature but arbitration which has become a conventional vehicle as an alternative for the settlement of disputes and this is done by a neutral third party which is referred to as "The Arbitrator" or a panel of neutrals referred to as the "Arbitral Tribunal".
On the 26th day of May 2023 the then-president of the Federal Republic of Nigeria, Muhammadu Buhari signed into law the Arbitration and Mediation bill which marked the end of the legislative process and the beginning of a new arbitration regime in Nigeria.
The 2023 Arbitration and Mediation Act offers a revamped legal framework to entities seeking to arbitrate their commercial disputes in Nigeria. This new law encompasses several novel provisions that significantly alter the existing legislative arbitration framework and have the potential transform the arbitration landscape in Nigeria.
The objective of this article is to highlight the novel
provision in the recently enacted Arbitration and Mediation Act
1988 and became the unified legal
framework for the fair and efficient settlement of commercial
disputes by arbitration and mediation.
ANALYSIS OF KEY INNOVATIONS IN THE ARBITRATION
AND MEDIATION ACT 2023
The Arbitration and Mediation Act 2023 contains several novel
provisions some of which are discussed below.
1) JOINDER OF PARTIES:
The Arbitration and Conciliation Act 1988, did not contain
provisions in relation to the joinder of an additional party to
arbitration proceedings.
However, Section 40 of the Arbitration and Mediation Act 2023
allows the joinder of additional parties provided that the
additional party is prima facie,
bound by the underlying arbitration agreement giving rise to the
arbitration.
2) CONSOLIDATION OF ARBITRATION
PROCEEEDING:
Consolidation is a procedural mechanism allowing for two or more
claims to be united into a single proceeding concerning all or more
claims to be united
into a single proceeding concerning all or more claims to be united
into a single proceeding concerning all related parties and
disputes. Section 39 of
the act recognizes the agreement of parties to consolidate arbitral
proceedings or hold concurrent hearing. This provision can without
a doubt
save time and costs and reduce the risk of parallel proceedings and
inconsistent awards.
3) THIRD PARTY FUNDING:
The Arbitration and Mediation Act introduces third-party funding
arrangements that apply to arbitrations and arbitration-related
proceedings in Nigeria. Although section 62(1) of the Arbitration
and mediation Act, 2023 introduced the concept while section 91 of
the Act defines a third-party funder as any natural or legal person
who is not a party to the dispute but who enters into an agreement
either with a disputing party, an affiliate of that party or a law
firm representing that party, in other to finance part or all of
the cost of the proceedings, either individually or as part of a
selected range of cases. The provision on third party funding can
encourage individuals and companies who lack financial resources to
pursue or defend legal claim by transferring some or all the costs
to a third-party funder.
4) MEDIATION:
The repealed Arbitration and Conciliation Act does not have
any specific provision for mediation as an alternative
dispute-resolution mechanism in
Nigeria while the Arbitration and Mediation Act, 2023 codifies
mediation as a dispute resolution mechanism and this happens to be
the first time.
The term mediation is the process where parties seek the assistance
of a neutral third party or parties to help them in reaching a
mutually agreeable
resolution for their dispute.
5) ARBITRAL AWARD REVIEW TRIBUNAL:
The Arbitration and Mediation Act, 2023 introduced the creation of
an Award Review Tribunal through an arbitration agreement, which
allows for
a first level review of an arbitral award made in an arbitration
proceeding seated in Nigeria by the award review tribunal on any of
the grounds provided
for setting aside an award, that is under section 55 (3) of the
Act. The Act in section 56(6) mandates the award review tribunal to
render its decision
within 60 days of its constitution.
One very important fact to note under this provision is that an
Award Review Tribunal has the power exercisable by the High Court
in an instance where a
party seeks to set aside of an award under section 55(3) of the Act
(note: an award can only be set aside pursuant to section 55(3) and
(4), however, while
section 55(3) sets out the ground under which an award may be set
aside, section 55(4) provides for the time within which an
application must be made either to the High Court or to the Award
Review Tribunal.).
This simply means, where a party under an agreement which
provides for an Award Review Tribunal approaches a High Court for
review of the award,
instead of filing a Notice of Challenge under section 56 of the
Act, the High Court will lack the jurisdiction to hear the
application for review.
6) ELECTRONIC COMMUNICATION:
Section 91 of the Act defines "Electronic Communication"
as "Any communication that the parties make by means of data
messages that is any information generated, sent, received or
stored by electronic, magnetic, optical or similar means"
The Act recognizes a written arbitration agreement vis electronic communication provided that it satisfies the requirement for the information therein to be accessible and useable for subsequent reference.
CONCLUSION:
The new Arbitration and Mediation Act is a comprehensive framework
that strengthens the transparency, autonomy, speed and
enforceability of arbitral award.
The Act introduced novel provisions that recognize the growing
importance of mediation as a means of dispute resolution.
The closes key gaps and flaws in the Arbitration and Conciliation
Act 1988 and provides clarity, flexibility and
procedural frameworks for both arbitration and mediation process in
Nigeria.
REFERENCES:
Arbitration and Mediation Act 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.