A Guide To Enforcing Foreign Arbitral Awards In Nigerian Courts

1.0 INTRODUCTION

As international trade and investment expand, disputes arising from cross-border commercial transactions are increasingly being resolved through arbitration rather than litigation. Arbitration offers parties a private, neutral, and often faster forum to resolve disputes. However, the value of arbitration lies not only in obtaining an award but in ensuring that the award can be enforced in the jurisdiction where the debtor’s assets are located.

Nigeria, a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), has developed a robust legal framework for the recognition and enforcement of foreign arbitral awards. This framework is significantly enhanced by the Arbitration and Mediation Act, 2023, which repealed the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria 2004.

This article provides a comprehensive overview of the meaning of arbitration and arbitral awards, Nigeria’s legal framework, procedural steps, defenses to enforcement and limitation issues.

2.0 WHAT IS ARBITRATION?

Arbitration is a form of alternative dispute resolution (ADR) in which the parties to a dispute agree to submit their claims to a neutral third party (the arbitrator or arbitral tribunal) for a binding decision, rather than resorting to court litigation. Arbitration is usually governed by an agreement between the parties, known as an arbitration agreement, which stipulates the rules, seat, language, and procedure of the arbitration.

2.1 WHAT IS AN ARBITRAL AWARD?

An arbitral award is the final and binding decision issued by an arbitral tribunal at the conclusion of the arbitration proceedings. The award resolves the substantive issues in dispute and may include orders for payment of money, specific performance, interest, and costs. Once issued, the award is enforceable under applicable national and international laws, similar to a court judgment.

3.0 LEGAL FRAMEWORK FOR ENFORCING FOREIGN ARBITRAL AWARDS IN NIGERIA

The enforcement of foreign arbitral awards in Nigeria is governed by both international treaties and domestic legislation.

3.1 INTERNATIONAL FRAMEWORK

Nigeria is a contracting state to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), having acceded to it in 1970. The Convention mandates the recognition and enforcement of arbitral awards made in other contracting states, subject to specific exceptions.[1]

3.2 DOMESTIC LEGISLATION

The Arbitration and Mediation Act, 2023 (the “Act”) incorporates the provisions of the New York Convention into Nigerian law. The Act provides that the Convention applies to any award made in a country other than Nigeria, provided that:

• The country is a party to the New York Convention; and
• The differences arise out of a legal relationship, whether contractual or not, considered commercial under Nigerian law.[2]

This incorporation ensures that foreign arbitral awards are recognized and enforceable in Nigeria, subject to the conditions stipulated in the Convention and the Act.

4.0 WHAT QUALIFIES AS A FOREIGN ARBITRAL AWARD IN NIGERIA?

A foreign arbitral award refers to an award made outside Nigeria pursuant to a valid arbitration agreement. For such an award to be enforceable in Nigeria, the following criteria must be met:[3]

• The award must be final and binding on the parties.
• It must be made in a country that is a party to the New York Convention.
• The subject matter of the dispute must be commercial under Nigerian law.
• The arbitration agreement must be valid under the law to which the parties have subjected it.

5.0 HOW TO ENFORCE A FOREIGN ARBITRAL AWARD IN NIGERIA: STEP-BY-STEP GUIDE

The enforcement process involves initiating legal proceedings in a Nigerian court. The following steps outline the procedure:

5.1 FILING THE APPLICATION

An application for the recognition and enforcement of a foreign arbitral award is made on application in writing,[4] before the Federal High Court or a State High Court with appropriate jurisdiction. It may be made ex-parte or on notice.[5] The application must be accompanied by:

• The duly authenticated original award or a duly certified copy thereof;
• The original arbitration agreement or a duly certified copy thereof; and
• A certified English translation of the award and agreement, if they are not in English.[6]
• An affidavit verifying the authenticity of the documents and compliance with the conditions for enforcement.[7]
• A written address outlining the legal arguments in support of the application.

5.2 COURT PROCEEDINGS

Upon filing, the court reviews the application to ensure compliance with the statutory requirements. If satisfied, the court may recognize and enforce the award as a judgment of the court. The respondent has the opportunity to oppose the application by raising any of the grounds for refusal stipulated in the Act.

5.3 INTERACTION WITH THE FOREIGN JUDGMENTS (RECIPROCAL ENFORCEMENT) ACT

Where an arbitral award is made in a foreign territory to which the Foreign Judgments (Reciprocal Enforcement) Act applies, and it was rendered in accordance with the law of that place, the award may be enforced in Nigeria as if it were a foreign judgment.[8]The provisions of the Act will apply mutatis mutandis.

6.0 GROUNDS FOR REFUSING ENFORCEMENT OF A FOREIGN ARBITRAL AWARD IN NIGERIA

While Nigerian courts generally favor the enforcement of foreign arbitral awards, the Act provides specific grounds upon which enforcement may be refused. These grounds, reflecting Article V of the New York Convention, are categorized as follows:

6.1 GROUNDS INVOKED BY THE RESPONDENT

The court may refuse enforcement if the respondent proves that:[9]

• A party to the arbitration agreement was under some incapacity, or the agreement is not valid under the applicable law.
• The party was not given proper notice of the appointment of the arbitrator or the arbitral proceedings or was otherwise unable to present their case.
• The award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration.
• The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the law of the country where the arbitration took place.
• The award has not yet become binding on the parties or has been set aside or suspended by a competent authority in the country where it was made.

6.2 GROUNDS CONSIDERED BY THE COURT SUO MOTU

The court may also refuse enforcement if it finds that:[10]

• The subject matter of the dispute is not capable of settlement by arbitration under Nigerian law.
• The recognition or enforcement of the award would be contrary to the public policy of Nigeria.

7.0 TIME LIMITS AND LIMITATION ISSUES IN ENFORCING FOREIGN ARBITRAL AWARDS IN NIGERIA

The Act does not specify a limitation period for enforcing foreign arbitral awards. However, by virtue of the Arbitration and Mediation Act, the Limitation Act applies to arbitral proceedings as it does to judicial proceedings.[11]

It is important to note that the period between the commencement of arbitration and the final award is excluded from the computation of the limitation period.[12] This provision ensures that parties are not penalized for delays inherent in the arbitration process.

8.0 CONCLUSION

Nigeria’s legal framework, underpinned by the Arbitration and Mediation Act, 2023, provides a robust mechanism for the recognition and enforcement of foreign arbitral awards. By aligning domestic legislation with international standards, Nigeria reinforces its commitment to fostering an arbitration-friendly environment conducive to international commerce. Parties seeking to enforce foreign arbitral awards in Nigeria can be assured of a legal process that upholds the sanctity of arbitration agreements and the finality of arbitral awards, subject to the limited exceptions provided by law.

Written by Adeola Austin Oyinlade and Felicia Ayeomoni for Adeola Oyinlade & Co

Email us: [email protected]

Telephone Number: +234 803 826 7683 / +234 802 686 0247

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Ranked as a top law firm in Nigeria, Adeola Oyinlade & Co is known for its expertise in resolving disputes through arbitration, a form of alternative dispute resolution. The firm often handle complex, high-stakes cases across various industries and jurisdictions. With a strong track record in arbitration, deep knowledge of international arbitration rules and institutions, and the ability to manage cross-border disputes effectively, our services have earned us the Nigeria Law Firm of the Year Award at the Lawyers Global 2024 Annual Legal Awards and the prestigious International Law Firm of the Year in Nigeria of Corporate INTL Global Awards for the years 2022, 2023, 2024 and 2025 (4 years in a row) among others.

[1] Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), 1958, Articles I–V.

[2] Section 60 of the Arbitration and Mediation Act, 2023.

[3] Ibid

[4] Section 57 (1) of the Arbitration and Mediation Act, 2023.

[5] Order 52 Rule 16 (1) of the Federal High Court Civil Procedure Rules, 2019.

[6] Section 57 (2) of the Arbitration and Mediation Act, 2023.

[7] Order 52 Rule 16 (2) of the Federal High Court Civil Procedure Rules, 2019.

[8]  Order 52 Rule 17 of the Federal High Court Civil Procedure Rules, 2019

[9] Section 58 (2) (a) of the Arbitration and Mediation Act, 2023.

[10] Section 58 (2) (b) of the Arbitration and Mediation Act, 2023.

[11] Section 34 (1) of the Arbitration and Mediation Act, 2023.

[12] Section 34 (4) of the Arbitration and Mediation Act, 2023