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Arbitration in Africa: Babatunde Fagbohunlu, SAN, Nigeria, part 1 of 2

Our Arbitration in Africa series continues with Babatunde Fagbohunlu, SAN, Partner at Aluko & Oyebode in Nigeria.

In Part 1, Babatunde discusses his personal and professional background, including his current role. He also considers arbitral institutions and centres in Nigeria, as well as arbitral procedure. In Part 2, he examines the courts’ support for arbitration in Nigeria, recognition and enforcement of awards, and investment treaty arbitration. He also considers the challenges facing arbitration practitioners and arbitrators in Nigeria, and offers advice to those hoping to pursue an arbitration career in Nigeria.

Personal background

My initial interest in law was motivated by its prestigious position among the vocations that are based on the arts and social sciences. Once I started studying law, I quickly discovered that I had a passion for litigation. The many challenges with litigating in Nigerian courts have inspired a lot of commercial people to choose arbitration as their preferred dispute resolution mechanism. As a dispute resolution professional, I have found that arbitration provides a greater degree of work satisfaction compared to litigation.

Professional background and current role

I obtained a Bachelor’s degree in law (LLB Honours) from the University of Ife, Ile-Ife, Nigeria in 1987, and an LLM from the University of Lagos, Nigeria in 1991. I was admitted as a barrister and solicitor of the Supreme of Nigeria in 1988.

Over the years, I tailored my practice to specialist areas, such as commercial litigation and arbitration, on an extensive range of issues. These included oil and gas, maritime, intellectual property, telecommunications, taxation, finance and banking, contracts, receiverships and insolvency, commercial law transactions and general litigation, both at trial and appellate levels.

I have represented various clients including oil companies, telecommunication companies and banks, both in litigation and arbitration proceedings. I also render legal advice on a wide range of commercial transactions.

My typical day involves attending court or arbitral proceedings to represent clients. With respect to arbitral proceedings, I either sit in as an arbitrator or counsel. After attending proceedings for the day, I review court processes or tend to various projects on arbitration.

Arbitral institutions and centres in Nigeria

Key arbitral institutions in Nigeria

The key arbitral institutions in Nigeria are:

Chartered Institute of Arbitrators, Nigerian Branch (CIARBNG). This is the Nigerian Branch of the prestigious Chartered Institute of Arbitrators (CIArb). The branch was granted approval by the CIArbin 1999, having fulfilled the requirements to be granted branch status. Since then, it has grown in its membership to over 1137 members. Its membership cuts across all disciplines including practitioners in law, construction, shipping, engineering, insurance, banking, accounting, oil and gas, and so on.

The Nigerian branch has seasoned arbitration practitioners of international repute in its fold. It is the fastest-growing branch of the CIArb worldwide.

The CIARBNG has not administered any arbitration cases but has been heavily involved in the appointment of arbitrators, conciliators and mediators in Nigeria.

A Micro, Small and Medium Enterprise (MSME) arbitration scheme launched recently. It has been developed by the institute to advance and promote access to arbitration by micro, small and medium enterprises, for the resolution of commercial disputes. The scheme aims to provide simple cost effective and timely resolution of disputes by final, legally binding and enforceable decisions of sole arbitrators, in less than 90 days from the appointment of the arbitrators or as soon as practicable.

Lagos Court of Arbitration. The Lagos Court of Arbitration (LCA) is an independent, private-sector driven, international centre for the resolution of commercial disputes via arbitration and other forms of alternative dispute resolution (ADR). The LCA was established under the Lagos Court of Arbitration Law, No. 17, 2009 to provide institutionalised arbitration and ADR services. The expertise of the LCA spans multiple industries, including oil and gas, finance, maritime, construction, engineering, telecommunications, hospitality, tourism, insurance and so on.

The LCA has been involved in the appointment of arbitrators, conciliators and mediators in Nigeria. The institution also provides parties with facilities for the hearing of arbitrations.

The LCA hosts a monthly speaker series in which seasoned arbitrators are invited to discuss topical and controversial issues on arbitration.

A training school offers cutting-edge practical ADR training to professionals with a keen interest in arbitration and ADR. This involves beginner and master classes, which run once a year for one week.

Lagos Chamber of Commerce International Arbitration Centre. The Lagos Chamber of Commerce International Arbitration Centre (LACIAC), is an independent full service ADR centre, affiliated with the Lagos Chamber of Commerce and Industry. LACIAC focuses on the provision of tailored dispute management solutions, assisting businesses, not only in the resolution, but in the management of disputes.

The Commercial Disputes Legal Network (ComDis-LawNet), a corporate counsel dispute management network administered by the LACIAC, is presently drafting practice directions for superior courts in Nigeria, so as to ease dispute resolution in business and investment related transactions in Nigeria.

Maritime Arbitrators Association of Nigeria. The Maritime Arbitrators Association of Nigeria (MAAN) is an arbitral institution established with the aim of advancing and encouraging professional knowledge of maritime arbitration in Nigeria, and to ensure the development of Nigeria as a resource for arbitration in dispute resolution. MAAN was conceived by practitioners who have attained distinction and expertise in arbitration and maritime law in Nigeria. It was borne out of the essential need to offer Nigeria an alternative resource and venue following recent developments in the maritime industry, the growing cost of arbitration in foreign countries and the pressure on the litigation system to deliver timely solutions.

It is a membership organisation open to:

  • Industry practitioners.
  • Service providers.
  • Consumers of arbitration services.
  • All stakeholders at large.

It maintains a roll of MAAN arbitrators and a list of MAAN experts/assessors (individual experts who have shown an intention and preparedness to offer their services for effective dispute resolution). MAAN is therefore the only association of experts on Maritime Arbitration in Nigeria.

On average, about ten maritime disputes cases are heard every year.

Arbitral procedure

General information

The Principal legislation that governs arbitration in Nigeria is the Arbitration and Conciliation Act 1988 Laws of the Federation of Nigeria 2004 Cap A18 (ACA). The ACA is primarily modelled on the UNCITRAL Model Law on International Commercial Arbitration 1985. It came into force on 14 March 1988. Schedule I to the ACA provides rules which generally govern arbitral procedure in Nigeria.

Nigeria has not made any modifications to the ACA at the federal level, although a bill is currently before the National Assembly to replace the 1988 legislation with the UNCITRAL Model Law, incorporating the 2006 amendments.

Furthermore, some states in Nigeria have enacted arbitration laws to govern arbitration in their states. The principal state arbitration law is the Lagos State Arbitration Law 2009 (LSAL) which applies to all arbitrations that arise in Lagos State, except where parties have stipulated another law. This law is an enactment of the UNCITRAL Model Law, and incorporates the 2006 amendments.

The typical length of an average arbitration in Nigeria depends on the sort of dispute in question. If the dispute is fairly simple and less complicated, it may be resolved within one to two years. However, if the dispute is complicated and involves a large sum of money, it may be resolved within two to five years.

Tribunals power to make certain orders

Section 26 of Schedule I to the ACA grants the arbitral tribunal the power to make any interim measures it deems necessary in respect of the subject-matter of the dispute, including measures for the conservation of the goods forming the subject matter in dispute, such as ordering their deposit with a third person or the sale of perishable goods.

Improvements that could be made to the process

In practice, it has been observed that arbitration processes are generally being delayed. This is due to various applications filed by parties in court, which seek to delay or stall arbitration proceedings.

Also, there tends to be a significant amount of time spent when seeking to enforce or set aside an arbitration award.

An amendment to the ACA providing limits as to when a dissatisfied party may approach the court for intervention should be enacted to deal with this delay. It may also be necessary to develop specialist courts to resolve enforcement and set aside applications. These issues are currently being dealt with under the ACA bill, which is currently before the National Assembly.

Aluko & Oyebode Babatunde Fagbohunlu, SAN

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