Distrust In Judicial System Makes Arbitration Preferred In Foreign Jurisdictions

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An online conversation on the feasibility and challenges
associated with a National Arbitration Policy for the country saw
various stakeholders within the industry proffer bespoke ideas and
suggestions towards the development of a comprehensive framework
for the Nigerian arbitration sector, as part of the lessons learnt
from the P&ID case.

The webinar which was held and organized by a prominent
Lagos-based law firm, Olisa Agbakoba Legal (OAL), had as its aim
possibility of a National Arbitration Policy for the country.

Recall that the Attorney General of the Federation and Minister
of Justice, Mr. Abubakar Malami SAN, had set up a committee led by
Mr. Olisa Agbakoba SAN, and charged the committee with the
responsibility of proffering a comprehensive framework/policy which
would ensure that all contractual and commercial transactions
starting and ending in Nigeria will have their seat and venue of
arbitration in the country, thereby furthering the growth and
development of the arbitration sector of legal practice.

The highlights of the conversation were premised
on; Whether the proposed National Arbitration Policy should be
made mandatory or merely persuasive and the possibility of a
National Arbitration Policy touching on all spheres of contractual
and commercial transactions, especially given the various forms of
such transactions that exist.

In discussing the highpoints of the webinar, Mr. Tunde
Fagbohunlu, SAN, considered that the policy should not just seek to
cure some challenges with the present scenario, but should seek to
ensure that the entire municipal arbitration framework is made par
to international standards.

He considered that there exist four aspects of
commercial transactions, viz;

— Private-Domestic: Here the parties are purely Nigerians
and neither of the parties is governmental agencies.

— Public-Domestic: Here, the transaction is between the
government and a Nigerian own company.

— Private-International: Here, the transaction is between a
Nigerian company and a foreign company.

— Public-International: Here, the transactions is between
the government and an international company or group.

According to him, the national arbitration policy should only
focus on the last two forms of transactions. For him, government
should not be unnecessarily intrusive into private arrangements of
citizens, and given that arbitration is a private arrangement, the
government may be seen as limiting parties choices.

He also considered two extremes of the National Arbitration
Policy being; a situation where all arbitration dispute have their
seat of arbitration here in Nigeria and only Nigerians will be
allowed to handle the arbitration proceeding. The second extreme
being, the existence of no national law, only policy frameworks,
that encourages individuals to arbitrate but do not force the
parties to arbitrate.

Furthering his case, he considered that the reason most
Arbitrations are done in a foreign jurisdiction is due to the level
of distrust in national judicial system, ranging from the
challenges associated with the enforcement of an arbitration award,
especially where such the award is given against the government,
and the length of time, it takes to go through to the echelon of
the Nation’s Judicial system.

For Dr. Olisa Agbakoba, SAN, the entire process of producing a
national arbitration policy, should be aimed at how to get
Nigerians more involved in the use of arbitration proceedings.

He said that some other jurisdiction have incorporated a
National Arbitration Policy that makes it mandatory for municipal
arbitration, thereby growing their jurisprudence on arbitration,
and hastening the pace at which commercial disputes are
determined.

Other contributors shared ideas on how to develop a policy that
would be acceptable to all, ranging from the consideration of the
provision of an internal arbitration appeal tribunal, which would
review the proceedings and arbitration award issued by the (first)
tribunal, that way limiting the intrusion of the court to only
issues of public policy.

Furthermore, the participants considered the need for proper
contract negotiations by competent individuals, a fast-tracking of
enforcement proceedings amongst other things.

The event which was first proposed as a debate between Dr. Olisa
Agbakoba SAN and Mr. Tunde Fagbohunlu SAN; was later changed to a
discussion section due to Mr. Agbakoba’s appointment as the
Chairman of the National Arbitration Policy Committee.