ARBITRATION INSTITUTIONS IN NIGERIA

The ongoing strike action by the Judiciary Staff Union of Nigeria (JUSUN) which commenced on 6 April 2021 is in its second week running and by the statement issued by their Deputy General Secretary on 16 April 2021, there appears to be no end in sight. The obvious effect of the strike is that all the national courts from the Supreme Court down to the High Courts are closed to the public, again. This comes barely a year after the courts resumed from Covid-19 and #EndSars protest induced shut down. Out of the sets of persons (litigation lawyers, court staff etc) adversely affected by these shut downs, the litigants are the most hit. The reason is obvious: not much has been done on most suits pending in the Courts in the last 12 months.

Meanwhile, on the other side of the dispute resolution spectrum is Arbitration and other Alternative Dispute Resolution (ADR) mechanisms which are totally immune from the incessant shutdowns and avoidable delays. Generally, arbitration may be institutional or ad hoc. It is institutional when parties opt for their arbitration to be administered under the auspices of an arbitration organisation. It is ad-hoc when parties do not choose any arbitration institution to administer the arbitration. From experience, institutional arbitration is more organised and less problematic than ad-hoc arbitration.

It is in light of this backdrop that this short article on the arbitration institutions in Nigeria becomes apt to shed light on these institutions as worthy alternative to regular courts. The arbitration institutions are as follows:

1.     The Regional Centre for International Commercial Arbitration – Lagos (RCICAL)

RCICAL was established in Lagos, Nigeria in 1989 under the auspices of the Asian African Legal Consultative Organisation (AALCO). Ten years later, on 26 April 1999, the Federal Government of Nigeria executed a Head Quarters Agreement with AALCO to secure the continued operations of RCICAL in Nigeria. Subsequently, the Agreement was given legislative blessing by the enactment of the Regional Centre for International Commercial Arbitration Act No. 39 of 1999[1].

RCICAL is one of the four Regional Centres under the AALCO’s Scheme. The first Centre was established in Kuala-Lumpur in 1978 to serve the Asian Countries, second was Cairo Centre in 1979 to serve North African and Middle Eastern Countries whilst Lagos Centre was established in 1989 to serve African Countries South of the Sahara. The most recent, is the Tehran Centre established in 1997[2].

The Rules for arbitration under the auspices of RCICAL which took effect from 3rd October, 2019 were adopted from the United Nations Commission for International Trade Law (UNCITRAL) Arbitration Rules of 1976 (as revised in 2013)[3]. However, domestic arbitrations which are administered by RCICAL are statutorily governed by the Arbitration and Conciliation Act[4] (ACA)[5]. In any event, a party who desires RCICAL to administer its dispute should adopt the following model clause in its contract:

“Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Rules for Arbitration of the Regional Centre for International Commercial Arbitration, Lagos”[6].

The RCICAL in consonance with its primary function provides facilities for arbitration and other Alternative Dispute Resolution (ADR) methods. Some of these facilities include suitable accommodation for sittings of the arbitral tribunal, recording and interpretation facilities, secretarial assistance and custody of records as well as transcribing of recorded proceedings[7]. The RCICAL is located in Victoria Island, Lagos.

2.     The Lagos Court of Arbitration (LCA)

The Lagos Court of Arbitration (LCA) is an independent, private-sector driven, International Centre for the resolution of Commercial disputes via Arbitration and other forms of alternative dispute resolution (ADR)[8]. It was established under the Lagos Court of Arbitration Law, No. 17, 2009 and launched officially on the 9th of November 2012. The proceedings under LCA is conducted under the 2018 LCA Arbitration Rules[9].

The LCA is headquartered at the International Centre for Arbitration & ADR (ICAA) located in Lekki Lagos Nigeria with over fifteen (15) meeting/hearing rooms ready for hire. 

To be able to conduct arbitration under the LCA parties must agree that their dispute will be settled under the LCA Rules or Lagos State Arbitration Law, 2009. Parties can do this by simply incorporating the LCA’s arbitration clause into their contract thus:

“All disputes arising out of or in connection with this agreement shall be finally settled under the Lagos Court of Arbitration (“LCA”) rules, by one or more arbitrators appointed in accordance with the said rules.”

3.     Chartered Institute of Arbitrators (CIArb) UK (Nigeria Branch)

CIArb (UK) Nigeria Branch is one of the 41 branches of The Chartered Institute of Arbitrators founded in the United Kingdom in 1915. Arbitral proceedings under CIArb Nigeria Branch is conducted under the guidance of the CIArb Arbitration Rules of December, 2015[10]. CIArb Nigeria Branch was granted Branch status by the mother body in 1999 having fulfilled the requirements. 

One of the highlights of facilities provided by the CIArb Nigeria Branch is The Micro, Small and Medium Enterprises (MSME) Arbitration Scheme (the ‘Scheme’) which was launched in 2017. Arbitration under the Scheme is guided by the MSME Arbitration Scheme Rules[11]. According to the Rules, the Scheme is applicable for resolution of commercial disputes with monetary value from N250,000.00K (Two Hundred and Fifty Thousand Naira) up to N5,000,000.00K (Five Million Naira)[12]. The Scheme is intended to provide simple, cost effective and timely resolution of disputes by the final, legally binding decision of an arbitrator within stipulated strict timelines with reduced costs.

To take advantage of this facility, parties are encouraged to adopt the below ‘Recommended Arbitration Clause’:

‘Any dispute, controversy, or claim arising out of or in connection with this contract, or the breach, termination or validity thereof, shall be settled by final and binding arbitration, in accordance with MSME Arbitration Scheme Rules, by a single arbitrator appointed by the Chairman of the Nigeria Branch of the CHARTERED INSTITUTE OF ARBITRATORS’[13].

4.     Lagos Chamber of Commerce International Arbitration Centre (LACIAC)

The LACIAC is an independent full service alternative dispute resolution centre, affiliated with the Lagos Chamber of Commerce and Industry[14]. It is not an arbitral tribunal which resolves disputes, but it administers the resolution of disputes by arbitral tribunals, mediators, and other dispute resolution practitioners[15]. The proceedings under LACIAC are conducted pursuant to the LACIAC Rules of Arbitration 2016. Interestingly, LACIAC Rules 2016 contains bespoke rules for Fast Track Arbitration[16], Emergency Arbitration[17] and Guidance for Online Dispute Resolution. Finally, the Rules also contain ‘Model Arbitration Clauses’. The ‘Short Form Model Arbitration Clause’[18] is as follows:

“Any dispute, controversy or claim arising out of or in relation to this agreement, including any question regarding its breach, existence, validity or termination or the legal relationships established by this agreement, shall be finally resolved by arbitration under the LACIAC Arbitration Rules, which Rules are deemed to be incorporated by reference into this clause.”

LACIAC is one of the few arbitration institutions in Nigeria and indeed Africa that offers Online Dispute Resolution (ODR) facility. It is located in Victoria Island, Lagos Nigeria.

5.     Nigerian Institute of Chartered Arbitrators (NICArb)

The NICArb was founded in 1979 and duly incorporated in 1988 under the Companies Act as a legal entity Limited by Guarantee[19]. It provides Arbitration and ADR referral services to interested companies, public sector agencies and interested individuals within and outside the shores of Nigeria[20]. NCIArb is located in Lekki, Lagos, Nigeria.

The NICArb’s model clause with which a party may be entitled to its services is as follows:

‘Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof, shall be settled by arbitration in Nigeria in accordance with the UNCITRAL Arbitration Rules. The appointing authority shall be the President/Chairman of the Nigerian Institute of Chartered Arbitrators (NICArb). The number of arbitrators shall be [one or three]; The place of arbitration shall be Lagos, Nigeria; The language to be used in the arbitral proceedings shall be English’[21]

6.     Multi-Door Courthouse (MDC) Initiative

MDC Initiative is the project of the Negotiation and Conflict Management Group (NCMG) International aimed at establishing, replicating and developing court-connected Multi-Door Courthouses anchored on Alternative Dispute Resolution[22].

Through its efforts, the NCMG has established Multi-Door Courthouses in Lagos, Abuja, Kano, Enugu and other State High Courts in Nigeria. Recently, the NCMG has also extended its concept to the Appellate Courts, hence the birth of the Supreme Court Mediation Centre and Court of Appeal Mediation Centre[23].

One unique feature of the Multi-Door Courthouses that sets them apart from the other institutions is its ‘walk-in’ service. Under this feature, for instance, a party desirous of having its arbitration administered by LMDC can simply do so by providing proof of delivery of the Notice of Arbitration to the other party or by submitting the arbitration agreement to them[24]. In any event, this does not mean that the party should not have an arbitration clause inserted in its contract. The prominent Multi-Door Court Houses are as follows:

a.     The Lagos Multi-Door Courthouse (LMDC)

The LMDC is the first court-connected ADR Centre in Africa established in June, 2002 by the Negotiation and Conflict Management Group (NCMG) International[25]. The existence of the LMDC is backed up by the Lagos Multi-Door Courthouse Law of 2007.

b.    The Abuja Multi-Door Courthouse (AMDC)

The AMDC is a replication of LMDC by the judiciary of the Federal Capital Territory, Abuja, in October 2003. It is also the project of the NCMG.

c.      The Kano Multi-Door Courthouse (KMDC)[26]

d.    Enugu State Multi-Door Courthouse (ESMDC)[27]

In conclusion, disputes are almost inseparable from commercial relations. Resolving commercial disputes speedily is as key to the success of entities as making profit. Since the incessant shutdown of courts does not ensure speedy resolution of disputes, it behoves entities to become proactive by incorporating recommended arbitration clauses of any of the above arbitration institutions of their choice in their contract. By so doing, they have a say on how and when their disputes will be resolved if they arise.

[1] https://rcical.org/index.php/corporate-profile/ accessed 19 April 2021

[2] Ibid n. 1

[3] https://rcical.org/index.php/arbitration-rules/ accessed 19 April 2021

[4] Chapter A18 LFN 2010

[5] https://rcical.org/index.php/domestic-arbitrations/ accessed 19April 2021

[6] https://rcical.org/index.php/model-arbitration-clause/ accessed 19 April 2021

[7] https://rcical.org/index.php/provision-of-facilities-for-arbitration-and-other-adr-methods/ accessed 19 April 2021

[8] https://www.lca.org.ng/about/ accessed on 18 April 2021.

[9] https://www.lca.org.ng/arbitration/#what accessed on 18 April 2021.

[10] https://www.ciarb.org/media/1552/ciarb-arbitration-rules.pdf accessed 19 April 2021

[11] Available at https://ciarbnigeria.org/wp-content/uploads/2021/02/MSME-ARBITRATION-SCHEME-BROCHURE.pdf accessed on 19 April 2021

[12] Ibid n. 11

[13] Ibid n. 11 page 2

[14] https://www.laciac.org/ accessed 18 April 2021

[15] Article 2 (3), LACIAC Rules of Arbitration 2016

[16] Ibid. Annex III

[17] Ibid. Annex V

[18] Ibid. Annex VI

[19] https://nicarb.org/about.php accessed 19 April 2021

[20] https://nicarb.org/adr-service.php accessed 19 April 2021

[21] https://nicarb.org/model-clauses.php accessed 19 April 2021

[22] https://ncmginternational.org/projects/multi-door-courthouse-mdc-initiative/ accessed 19 April 2021

[23] https://ncmginternational.org/about-ncmg-international/ accessed 19 April 2021

[24] https://lagosmultidoor.org/lmdc-process/ accessed 19 April 2021

[25] Ibid n. 19

[26] The KMDC was established in January 2009 https://www.britishcouncil.org.ng/sites/default/files/multidoor_courthouse.pdf accessed 19 April 2021

[27] Established by the Enugu State Multi-Door Courthouse Law of 2019 available at https://enugustatemultidoorcourthouse.org/wp-content/uploads/2019/03/2018-MULTI-DOOR-COURT-LAW.pdf accessed 19 April 2021