Introduction

The Arbitration and Conciliation Act (the “ACA”) was in force in Nigeria for more than 30 years. This age long legislation could no longer meet modern arbitration needs and objectives. To demonstrate Nigeria’s commitment towards creating an arbitration friendly environment reflecting international and global best practices, the Arbitration and Mediation Act, 2023 was signed into law on 26 May 2023.

The Arbitration and Mediation Act, 2023 (the “AMA”) applies to both international and domestic arbitration proceedings in Nigeria. Some of the provisions of the AMA are highlighted below.

• Electronic arbitration agreement

Arbitration agreement in writing now includes electronic communication where such communication can be referred to subsequently.¹ Electronic communication has been defined as exchange of data messages being information generated, sent, or received by electronic or similar means.² Emails, telegrams, or telex can now constitute arbitration agreement in writing.

• Enforcement of arbitration agreement

Prior to the AMA, enforcement of arbitration agreement was subject to the courts’ discretion. The court’s discretion to enforce arbitration agreements by staying proceedings and referring parties to arbitration was demonstrated in the use of the word “may”. By the provisions of the ACA,³ a party to an arbitration agreement could apply to the courts to stay proceedings and refer parties to arbitration,⁴ however, the court could refuse to stay proceedings if the court finds that there is sufficient reason why the matter should not be referred to arbitration. The ACA did not define or restrict what could constitute “sufficient reason” and so this was subject entirely to the interpretation of the court.

The AMA has imposed a mandatory obligation on the court to the effect that where there is an arbitration agreement between parties and unless the agreement is “void, inoperative or incapable of being performed”, the court shall refer parties to arbitration .

• Number of arbitrators

Where there is no agreement as to the number of arbitrators,⁵ the AMA provides that the arbitral tribunal shall consist of one arbitrator . This is a deviation from the ACA which provided for three arbitrators. The AMA considers the costs for parties as the cost of arbitrator’s fees for three arbitrators will exceed that of a sole arbitrator.

• Immunity of arbitrators and arbitral institutions

The AMA provides to the effect that an arbitrator, appointing authority or arbitral institution would bear no liability for acts or omissions in the performance of their functions unless such act or omission was in bad faith.⁶ This immunity does not extend to where parties have agreed with the arbitrator as to liability arising from an arbitrator’s withdrawal from proceedings.⁷

• Interim reliefs and emergency arbitrations

A party can obtain interim reliefs pending the constitution of an arbitral tribunal. The application for an interim relief will be made to an emergency arbitrator appointed by a designated authority or the court.⁸ Such interim measures when obtained are enforceable as order of court irrespective of the country it was issued.⁹

• Consolidation of arbitration proceedings

Subject to the agreement and consent of parties, arbitral proceedings may be consolidated including arbitral proceedings involving a different party or parties.¹⁰ For instance, where a contract creates separate but corelated rights and obligations between parties or more than two parties, and such contract provides for arbitration agreement, while each party is entitled to enforce its separate rights by commencing arbitration proceedings, the AMA allows for a consolidation of such arbitration proceedings.

The AMA also allows an additional party to join arbitration proceedings in so far as that party is bound by the arbitration agreement.¹¹

• Award review tribunal

Parties may agree to refer the award to an award review tribunal.¹² If the award review tribunal sets aside the award, a party may apply to the court to reinstate the award and the court would do so where it finds that the award review tribunal’s decision is unsupportable.¹³ However, if the award review tribunal affirms the award, a party can only apply to the court to set aside the award on grounds that the subject matter is not arbitrable under Nigerian laws or the award is against public policy.¹⁴

• Third-party funding

Under common law, the doctrines of maintenance and champerty which contemplates financing litigations or arbitration by a third party in consideration for a share in proceeds of judgment or award, is precluded.

The AMA allows for third-party funding of arbitration and expressly states that the torts of maintenance and champerty does not apply to arbitrations seated in Nigeria or to arbitration related proceedings in courts within Nigeria.¹⁵

• Limitation periods to arbitration and mediation proceedings

Statutes of limitation are applicable to arbitral proceedings.¹⁶ In computing the limitation period for enforcement of an arbitral award, the time between the commencement of the arbitration proceedings and the award is not considered .¹⁷

• Mediation

Part 11 of the AMA contains detailed provisions on mediation applicable to both international and domestic mediations. The provisions do not apply to cases where a judge or an arbitrator attempts to facilitate settlement agreement in the course of arbitration or judicial proceedings, unless the parties agree.¹⁸ Before or during judicial or arbitral proceedings, a party may propose mediation to the other party .¹⁹ The AMA provides for confidentiality of mediation proceedings.²⁰

Conclusion

The Arbitration and Mediation Act, 2023 is a significant milestone in securing Nigeria at the forefront of dispute settlement in Africa. The AMA recognizes modern realities and promotes an era of arbitration compatible with international and global trends while achieving the objective of fair and efficient settlement of commercial disputes.

1. Section 2(7) of the AMA
2. Section 97 of the AMA
3. Section 5(1), Section (5)(2)(a) of ACA
4. Section 5(1) of AMA
5. Section 6(2) of the AMA
6. Section 13(1) of the AMA
7. Section 13(3) of the AMA
8. Section 16(1) of the AMA
9. Section 28(1) of the AMA
10. Section 39(1) of the AMA
11. Section 40 of the AMA
12. Section 56(1) of the AMA>
13. Section 56(8) of the AMA
14. Section 56(9) of the AMA
15. Section 61 of the AMA
16. Section 34 of the AMA
17. Section 34(4) of the AMA
18. Section 67(2) of the AMA
19. Section 70(3) of the AMA
20. Section 76 of the AMA