By Bimak Team
Team Head: Michael K. Bielonwu, Esq., MCIArb.
Team lead: Ekele Chinda
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.
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.
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.
Arbitration and Mediation Act 2023
This article is for information purposes, Specialist advice should be sought about your specific circumstances