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AN ARBITRATION AGREEMENT IS A SEPARATE CONTRACT

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The Courts have always upheld the autonomy and independence of the arbitration clause in the contract. The arbitration agreement may be drawn up separately or may form part of the transaction between the parties. Where the arbitration clause is part of the contract, it is nevertheless regarded in law as a separate contract. In HEYMAN v. DARWIN LTD (1942) A.C 356 at pp. 373-4, the Court in the United Kingdom in considering the legal status of such a clause in a contract, observed: ” … an arbitration clause in a contract is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other, but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement of both parties that, if any dispute arises with regard to the obligations which the one party has undertaken to the other such dispute shall be settled by a Tribunal of their own Constitution.”

— H.M. Ogunwumiju, JSC. UBA v Triedent Consulting Ltd. (SC.CV/405/2013, July 07, 2023)

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PARTY CAN APPLY TO COURT TO SET ASIDE AN ARBITRATION AWARD

The provisions simply provide any of the parties to an arbitration award a discretionary right to request, pray for or seek from a Court of law, an order refusing or declining to accord judicial recognition or enforcement of the arbitral award between them. By dint of the provisions, a party to an arbitral agreement is vested with and possesses the unfettered right to approach a Court of law to request that the arbitration award between the parties, should not be recognized and enforced by the Court. The provisions merely provide a right of access to a Court of law for the sole purpose of requesting for or seeking an order that would refuse to recognize and/or enforce an arbitral award the parties thereto, to any one of them.

– Garba, JCA. Dunlop v. Gaslink (2018)

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CONSIDERATIONS OF PUBLIC POLICY IN ARBITRAL PROCEEDINGS

As to public policy, in Cuflet Chartering v. Carousel Shipping Co Ltd [2001] 1 Lloyd’s Re 707 Moore-Bick J (as he then was) said: “Considerations of public policy can never be exhaustively defined, but they should be approached with extreme caution … It has to be shown that there is some illegality or that the enforcement of the award would be clearly injurious to the public good or, possibly, that enforcement would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the powers of the state are exercised.”

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AWARD IS BINDING ON PARTIES

What the learned trial Judge recognized and ordered to be enforced was an arbitral award not a judgment. Appellant should have pursued in England by way of an appeal against the arbitral award but failed to do so. The award is binding on the parties and since the arbitral award is not fraudulently procured and it’s not against public policy, the court is bound to give effect to such award.

— Mshelia, JCA. Tulip v Noleggioe (2010) – CA/L/744/07

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HIGH COURT DOES NOT SIT ON APPELLATE FUNCTION OVER ARBITRAL PANEL

In the case of Baker Marine Nigeria Limited v. Chevron Nigeria Limited (2000) 3 NWLR (Pt. 681) 939 @ 410, it was held that an application to set aside an arbitral award: “The lower Court was not sitting as an appellate Court over the award of the arbitrators. The lower Court was not therefore empowered to determine whether or not the findings of the arbitrators and their conclusions were wrong in law. What the lower Court had to do was to look at the award and determine whether on the state of law as understood by them and stated on the face of the award, the arbitrators complied with the law as they themselves rightly or wrongly perceived it. The approach here is subjective. The Court places itself in the position of the arbitrators, not above them, and then determines on that hypothesis whether the arbitrators followed the law as they understood and expressed it.”

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GENERAL PRINCIPLES APPLICABLE IN REGULAR COURTS ARE NOT APPLICABLE IN ARBITRATION PROCEEDINGS

In this context, the general principles of law laid down and applicable to and in proceedings of the regular Courts in the process of judicial adjudication of causes or matters before them do not ordinarily apply to such quasi judicial arbitral proceedings which the parties by their free and voluntary choice, opted to resort to in the settlement of their disputes rather than the judicial/adjudication of the regular Courts.

– Garba, JCA. Dunlop v. Gaslink (2018)

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ARBITRAL PROCEEDINGS LACK THE SOPHISTICATION OF REGULAR COURTS

In Celtel Nigeria BV v. Econet Wireless Limited (2014) LPELR-22430(CA) @ 60 explained, succinctly, the nature of arbitral proceedings before an Arbitration Tribunal as follows: “An Arbitral Tribunal is by nature an informal adjudicatory body lacking the sophistication and technical know-how of Judges of regular Courts. Arbitral Tribunals are also not bogged down in the procedural trappings of regular Courts. Arbitral proceedings are therefore treated with a broad, liberal/open mind leaning on the side of dynamism, commercial sense, latitude and common sense.”

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