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LITIGATION PREPONDERATES OVER ARBITRATION IN THIS INSTANCES

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No doubt, there are some instances where even though parties have submitted to arbitration, suitability of litigation preponderates over arbitration. These are instances among others: 1. Where the issue for resolution is essentially a legal one. 2. Where the issue turns largely on the credibility of the evidence. 3. Where immediate enforcement of a right is required. 4. Where one of the parties is intransigent. 5. Where there are multiparty disputes arising from a transaction e.t.c. Thus an arbitration agreement cannot and does not completely oust the jurisdiction of the Court. U

BA v Triedent Consulting Ltd. (SC.CV/405/2013, July 07, 2023)

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ARBITRATION AND LITIGATION ARE NOT MUTUALLY EXCLUSIVE

By the provisions of the Arbitration and Conciliation Act, parties to a contract can include an arbitration clause which allows for disputes to be settled by arbitration instead of litigation. At the end of the arbitration process, the agreement reached (i.e the award) will be enforced by the Courts after registration in Court. Where parties opt to arbitrate over disputes, it does not automatically oust the jurisdiction bestowed on the Court by the 1999 CRFN. Section 2(2) of the Arbitration Act states follows: “Unless a contrary intention is expressed therein, an arbitration agreement shall be irrevocable except by agreement of parties or by leave of the Court or judge.” (emphasis mine) Although it is preferable in many cases to go to arbitration rather than go to Court, it should be noted that arbitration and litigation are not mutually exclusive. Indeed the Court often complements and supplements the functions and powers of the arbitrator. For example, by stay of Court proceedings in appropriate cases; by the issue of subpoena; by making appointments where the parties cannot agree or where a party defaults; for the enforcement of awards and for setting aside awards where necessary. In these cases, the Court intervenes to ensure the proper functioning of arbitration.

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

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FROM THE FACTS AND CIRCUMSTANCES OF THIS CASE IT SHOWS THAT ARBITRATION MAY BE MORE OPEN TO FRAUD

582. Regardless of my decision, I hope the facts and circumstances of this case may provoke debate and reflection among the arbitration community, and also among state users of arbitration, and among other courts with responsibility to supervise or oversee arbitration. The facts and circumstances of this case, which are remarkable but very real, provide an opportunity to consider whether the arbitration process, which is of outstanding importance and value in the world, needs further attention where the value involved is so large and where a state is involved. 583. The risk is that arbitration as a process becomes less reliable, less able to find difficult but important new legal ground, and more vulnerable to fraud. The present case shows that having (as here) a tribunal of the greatest experience and expertise is not enough. Without reflection, then a case such as the present could happen again, and not reach the court.

— R. Knowles CBE. FRN v. Process & Industrial Developments Limited [2023] EWHC 2638 (Comm)

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WRONG FACT FINDING CANNOT SET ASIDE AN ARBITRAL AWARD

In arbitration proceedings, the general principle is that facts finding by an Arbitrator is not a ground for setting aside an award on the ground that it is wrong nor on the ground that there is no evidence on which the facts could be found because that would be mere error of law.

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

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ARBITRAL AWARDS HAVE SAME FORCE AS A JUDGEMENT OF A COURT

Onwu v. Nka (1996) 7 NWLR (Pt.458) 1 at 17 paragraph E, where the Supreme Court, per Iguh JSC. had this to say: “The law is well settled that where disputes or matters in difference between two or more parties are by consent of the disputants submitted to a domestic forum inclusive of arbitrators or a body of persons who may be invested with judicial authority to hear and determine such disputes and matters for investigation in accordance with customary law and general usages, and a decision is duly given, it is as conclusive and unimpeachable (unless and until set aside on any of the recognized grounds) as the decision of any constituted court of the land, such a decision is consequently binding on the parties and the courts in appropriate cases will enforce it.”

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AN ARBITRATION AGREEMENT IS A SEPARATE CONTRACT

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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WHAT IS AN ARBITRATION AGREEMENT?

Arbitration is a procedure for the settlement of disputes, under which the parties agree to be bound by the decision of an arbitrator whose decision is, in general, final and legally binding on both parties. The process derives its force principally from the agreement of the parties and, in addition, from the State as a supervisor and enforcer of the legal process. So where two or more persons agree that a dispute or potential dispute between them shall be decided in a legally binding way by one or more impartial persons of their choice, in a judicial manner, the agreement is called an arbitration agreement. Common law, lex non scripta and statute are the two sources of arbitration law in Nigeria. The statutory source did not codify arbitration law to the exclusion of common law. See B. J. EXPORT & CHEMICAL CO. LTD v. KADUNA PETRO-CHEMICAL CO. LTD. (2003) FWLR Pt. 165 Pg. 445 at 469 C.A.

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

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