Abstract
Arbitration, as an alternative dispute resolution mechanism, has gained prominence as a means to address conflicts and disputes in Nigeria's diverse and multi-ethnic society. This thesis explores the current state of arbitration in Nigeria, identifies the challenges it faces, and examines its prospects for growth and development. The study reveals that arbitration is progressively emerging as a viable and preferred alternative to the traditional court system for resolving disputes in Nigeria. This trend is evident through the increasing number of domestic and international arbitration cases, indicating a growing trust in arbitration as a credible means to settle disputes. However, challenges persist in the arbitration landscape of Nigeria. Foremost among these challenges is the enforcement of arbitral awards, which often lacks the necessary efficiency and predictability, deterring parties from choosing arbitration as their preferred method of dispute resolution. Additionally, there exists limited public awareness and understanding of arbitration, hindering its widespread adoption. Despite these challenges, the prospects for arbitration in Nigeria are promising. Economic development, increased foreign investments, and Nigeria's strategic geographic location all contribute to a positive outlook. The country has the potential to emerge as a significant player in the international arbitration landscape, attracting more international cases and arbitrators. To harness this potential and address the identified challenges, several recommendations are proposed. These include comprehensive legal and institutional reforms to streamline arbitration processes and enhance the enforcement mechanism for arbitral awards. Additionally, public awareness campaigns and educational programs are recommended to improve understanding and utilization of arbitration. Collaboration and networking efforts with international arbitration bodies, as well as the promotion of case studies and research, are vital for nurturing the growth of arbitration in Nigeria. In conclusion, while challenges persist, arbitration stands as a promising tool for resolving conflicts and managing disputes in Nigeria. Collaborative efforts between stakeholders, including the government, legal practitioners, institutions, and the public, are essential to create an arbitration environment that is efficient, effective, and conducive to economic development and social harmony. This thesis provides valuable insights and recommendations for advancing arbitration in Nigeria, ultimately contributing to the country's socio-economic progress and legal landscape.
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CHAPTER ONE
GEN ERAL INTRODUCTION
Background of the Study
Conflict and disputes are inherent in human interactions and societal structures. In Nigeria, a diverse and multi-ethnic nation with a complex socio-political landscape, conflicts and disputes are commonplace. These disputes can range from commercial disagreements to community conflicts and even political crises. Addressing these disputes effectively is essential for maintaining social stability and economic growth.
One would expect that a party having chosen arbitration as a faster means of disputes resolution will be free entirely from the intervention of court, invariably eliminating delay, but that is usually not the case. In fact, a party who agrees to refer dispute to arbitration chooses a private system of justice and this, in itself, raises issues of public policy. The 1999 Constitution of the federal Republic of Nigeria sets up the court system and vests in them the right to determine controversies between persons in Nigeria. Access to court is therefore a fundamental right of every Nigerian citizen[1]. The key word “entitled” in Section 36 implies that such right can be waived. Parties can therefore waive their constitutional rights to courts and choose arbitration. In other words, a party to an agreement with an arbitration clause has the option to either submit to arbitration or have the dispute decided by court. It is also observed that under our Arbitration and Conciliation Act, there are sections providing for courts intervention in arbitration.
Though, arbitration may depend upon the agreement of the parties, it is also a system built on law and which relies upon law to make it effective both nationally and internationally. It is therefore a true statement that courts can exist without arbitration, but arbitration cannot exist without the courts.
Arbitration is described as a commercial arbitration whether or not administered by a permanent arbitral institution. The section also goes ahead to define the word “court” as the High Court of a state, the High Court of the Federal Capital territory, Abuja or the Federal High court. It is a proceeding in which a dispute is resolved by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has decreed, will be final and binding.
Certainly, the things that can ignite or fuel disputes, controversies, or disagreements between people or communities or groups or societies, even amongst nations are legion and diverse. For example: Disputes may arise from different human transactions including economic activities, family relationships, community and neighbourhood activities, and other social relationships, international activities, religious activities, and other civil activities.4 It could occur on account different subject matters, such as ideas or beliefs, values, material resources, roles and responsibilities5 or from personal disagreements, religious crises, political, ethnic, marital disputes, chieftaincy matters, land and community boundary disputes and even economic conflicts.6
In addition to the foregoing prodigious circumstances, it must be agreed that divergence of opinion among individuals, social groups, or societies; differences in societal values; as well as differences in individual’s level of education, tolerance, maturity, understanding, interests,
and the different ways by which different individuals, sects, or societies reason and/or react to issues concerning them or their loved ones account for much of the disputes or disagreements in our society, and indeed, the world today.
Experiences have shown that peace is a sine qua non for meaningful human existence and development. But peace can hardly thrive where there exist controversies, disagreements or unresolved disputes. In like manner, it is very unlikely for any meaningful development to issue forth, take place or manifest where there is no peace. For this reason, mankind had ultimately to device different means of resolving their differences whenever and wherever it occurs. This is to enable the disputing parties to resume their normal cordial relationships once again, and for peace to reign in society. This is more so since the continuance of such controversies or disputes whether it is due to carelessness, mistake, wilful wrongdoing or mere misunderstanding would always energize the conflict between the disputing parties and deepen their disagreements and grief against each other.7
Perhaps, it was against this backdrop that a learned English author, Richard Bruce of the Gray’s Inn, in his work, Success in Law, wrote: A man living on his own on a desert island can beh ave ex actly as he likes. As soon as a second arrives, however, the two o f them must come to some arrangem ent or agreement as to how they are going to get along together … Every society in every ag e has found it essential to work out a code o f rul es to which its members must con form, for oth erwise there would soon b e no society at all – only rival g angs o f thieves fighting endless vendettas against one another. 8 Similarly, the African M ediation and Community Service posited that:9
Disagreements and misunderstanding are key ch aracteristics o f human relationships whether the relationship is a domestic, national or international one. T he potential for disputes is even higher where the p arties are from di fferent cultural, economic and political backgrounds with di fferent leg al systems. Since disputes are such a critical part o f human relationships, many countries hav e mech anisms to resolve them in a manner, which maintains the coh esion, economic and political stability of the stat e.
7 See also, Beheshi, loc. cit.
8 Richard Bruce, Success in Law, (London: John Murray [Publishers] Limited, 1983) p.1.
9 African M ediation & Community Service, <http://www.metros.ca/amcs/international.htm>. T his website was last visited on 2nd November, 2014.
This is particularly so with regards to disputes related to commerce because commerce is the engine of growth. Ultimately, it is to aid in the resolution of disputes that arbitration, which is the subject matter of this research, was conceived and born. Although, litigation is the principal method of settling disputes today, arbitration was, and still remains one of the most credible Alternative Dispute Resolution (ADR) mechanisms that are known to mankind.
Types of Arbitration
Arbitration it is usually divided into two broad categories to wit, domestic arbitration, and international arbitration. Irrespective of type, arbitration may be conducted on an ad hoc or institutional basis.10 Of the foregoing two broad categories into which arbitration can be divided, the former, that is to say, domestic arbitrations is further sub-divided into three distinct categories, namely arbitration pursuant to statute law, common law arbitration, and customary law arbitration. Out of these three main types of domestic arbitration, it is with the last arbitration tradition in the foregoing order, that is, the customary law arbitration that this dissertation is principally concerned.
Universal Nature of Arbitration
In recognition of the universal nature of arbitration, Professor Jerzy Jakubowski, posited:
Arbitration is a univ ersal human institution. It is the product o f a universal human need and desire for th e equitable resolution of di fferences invariably arising from time to time between people by an impartial person having the con fiden ce and authority from the disputants themselves.11
Professor Jerzy Jakubowski’s stance is amply reinforced by the mere fact that instances of the use of or resort to arbitration for the settlement of disputes proliferate in ancient, historical,
