Unit 2 Flashcards
How does black’s law dictionary define arbitration
As a method of dispute resolution involving one or more neutral parties who agreed to by the disputing parties and whose decision is binding.
The Arbitration and Conciliation Act Laws of the Federation of Nigeria 2004 section 57 define arbitration
A commercial arbitration whether or not administered by a permanent arbitral institutions
This definition uses the sate worol administered ny within the definition and thus is unhelpful to anyone who previously had seeks terstanding of the concept of arbitration.
NNPC V Lutin Ltd defines arbitration as
Similarly, the Supreme Court in NNPC v. Lutin Lid. defined ‘arbitration’ as …a private method of dispute resolution in which the parties select the individual or individuals who will finally decide the matters in issue following a process agreed upon by the parties, with no or a minimum of court intervention’. These two definitions are representative of the judicial definitions of the concept and focus on the relationship between actors in the arbitral process, distinguishing arbitration from court processes and reinforcing the binding effect of the outcome of the process.
What is it to agree to submit to Arbitration
The agreement of parties to submit to arbitration is inferred from the arbitration agreement itself which is usually contained in a clause in the main agreement or in a separate arbitration agreement. Section 2 (1)of the AMA states that the agreement shall be in writing contained in a document signed by the parties; or in an exchange of letters, telex, telegrams or other means of communication which provide a record of the arbitration agreement; or in an exchange of points of claim and of defence in which the existence of an arbitration agreement is alleged by one party and not denied by the other.
Section 3 states that such arbitration agreement is irrevocable except by agreement of the parties or by leave of the court or a judge.
The effect of an Arbitration agreement
Arbitration agreements like all other contracts operate on the principle of pacta sunt servanda, meaning ‘agreements must be kept. This implies that parties are bound by their agreements and the courts will enforce such agreements. Therefore, arbitral agreements enjoy the recognition of the law and will be enforced by the courts. The House of Lords, per Justice Campbell, validated this position in Scott v Avery (1856) in which it held that: ‘… where it is expressly, directly and unequivocally agreed upon between the parties that there shall be no right of action whatever till the arbitrators have decided, it is a bar to the action that there has been no such arbitration.
essence, arbitration agreements are legally binding contracts. Just like any other agreement, courts will uphold the terms of these contracts (pacta sunt servanda means “agreements must be kept”). This means if you agree to settle a dispute through arbitration instead of court, the court will enforce that agreement.
This principle goes back to a case decided in 1856 (Scott v Avery). The court ruled that if both parties clearly agree upfront to use arbitration and wait for the arbitrator’s decision before taking legal action, then neither party can sue in court until that arbitration process is complete. This reinforces the idea that arbitration agreements are valid and enforceable contracts.
What did the court say in Celtel Nigerian B Econet Wireless
An arbitration clause in a written contract is quite distinct from the other clauses.
Whereas the other clauses in a written contract set out obligations which the parties undertake towards each other, the arbitration clause merely embodies the agreement of both parties that if any dispute should occur with regard to the obligations which the other party has undertaken to the other, such dispute should be settled by a tribunal of their own constitution and choice. The appropriate remedy therefore for a breach of a submission is not damages but its enforcement. Hence the Arbitration Act (Cap. 13). So that where a party refuses within a given time after due notice to have an arbitrator appointed, the court has full power and jurisdiction to appoint an arbitrator on an application properly made by the party who has served such notice
Section 5 of AMA states
Notwithstanding the provisions of any otherlaw,a court beforewhich anaction is brought in a matter, which is the subject of an arbitration agreement shall, if any of theparties request, not later than when submitting theirfirst statement on the substanceof the dispute, refer the parties to arbitration unless it finds that the agreement is void, inoperative or incapable of being performed.
(2) Where an action referred to in subsection (1) has been brought before a court, arbitral proceedings may be commenced or continued, and an award may be made by the arbitral tribunal while the matter is pending before the court.
(3) Where a court makes an order for stay of proceedings under subsection (1),the court may, for the purpose of preserving the rights of parties, make an interim or supplementary order as may be necessary.
What are the basic principles of arbitration
- Voluntary submissions
- Arbitration Disputes
- Conduct of Arbitration in a Judicial Manner
- Binding Nature of agreements to Arbitrate
Define the basic principles of Voluntary Submission
a.
Voluntary Submission
Voluntary submission is the basis to arbitration and it is universal to the concept of arbitration under all legal systems; it is irreievant whether the arbitration is under statute, common law or according to customs and usages. The pivotal concept herein is the voluntariness and the word voluntary as defined by the Black’s Law Dictionary is that which is “Done by design or intention, intentional, proposed, intended or not accidental, intentionally and without coercion.”
How is a Arbitrable Disputes a basic principle of arbitration
Arbitrable Disputes
Not all disputes can be submitted to arbitration. The general guide to arbitrable disputes is that such disputes must be justifiable issues triable by a civil court. Furthermore, the disputes must be capable of being compromised by accord and satisfaction, that is, they must be matters on which a person can contract or enter into agreement on terms with another person.
Disputes arising from the following transactions are arbitrable: contract, personal property, deeds of separation, inheritance, land use, partnership, companies, co-operatives, interpretation of the law and documents, among others.
On the other hand, some disputes are not arbitrable on account of express provisions of the law, illegality and public policy. Among this group of disputes are: criminal offences (R vs. Blakemore (1850) 14 Q.B. 544.), illegal contracts (Re Bok & Co. and Paters Rushton & Co. (1919)1 K B. 491), contacts and divorce petitions Also to be noted is the fact that when a party admits liability of a party’s claim against him, such a claim is no longer arbitrable even when the liable party fails to fulfill his obligation to the claimant United World Ltd Inc. vs. M.T.S. Ltd. This is a marked difference from the dispute settlement provisions in the Co-operative Societies Laws of the States.
Conduct of Arbitration in a judicial manner is it a basic principle
Yes
An award is reached only after a judicious evaluation of the dispute between the parties.
This implies the determination of rights and liabilities of disputing parties after hearing and taking evidence of all parties and weighing all the adduced evidence on the imaginary scale of justice, and making consequential awards of rights and obligations.
Binding Nature of the agreement to Arbitrate
Binding Nature of agreements to Arbitrate
All arbitration agreements, both pre-dispute agreements and agreements reached after disputes have arisen, referred to as submissions, once subscribed to, bind the subscriber and can be enforced by a court of law where a subscriber defaults to refer a matter to arbitration at the instance of the other party. A party to an agreement to arbitrate can only be let off the hook by mutual consent of all subscribers or by an order of court on grounds such as fraud, coercion, illegality and public policy.
The English Arbitration Act of 1889
History of Arbitration Law in Nigeria: A Summary
Nigeria’s history with arbitration law can be broken down into three main phases:
Phase 1: Borrowing from England (1900-1988)
The first law (1900) was based on the English Arbitration Act of 1889.
This law was later incorporated into Nigerian legislation (1914) and regional laws (1959-1963).
Phase 2: The Arbitration and Conciliation Act (1988)
In 1988, a new, more modern law influenced by international standards was enacted.
This Act is still the main law governing arbitration in Nigeria.
Phase 3: Federal vs. State Authority
The Nigerian Constitution doesn’t explicitly mention arbitration until 1999.
Despite this, the federal government had the legal authority to enact arbitration laws throughout history.
States also have the right to create their own arbitration laws that don’t conflict with federal laws.
Key Points:
Nigeria adopted arbitration laws based on the English system.
The Arbitration and Conciliation Act of 1988 is the current main law.
Both federal and state governments have the authority to make arbitration laws
Talk about the Arbitration and Conciliation Act
While the scope of arbitrable matters under the Arbitration and Conciliation Act (ACA) is restricted to commercial disputes, there is no restriction at all on arbitrable disputes under the Arbitration Act and the several Arbitration Laws of the states. A community reading of the long title of the ACA which declares the purport of the Act as the provision of a *…..unified legal framework for the fair and efficient settlement of commercial disputes by arbitration….
“and the definition of the word “commercial” in Section 58 ACA are apposite.
It is beneficial to seek to understand the intention of the drafters of the ACA as to its relationship vis-à-vis other arbitration legislations. Section 35 (b) of the ACA provides that:
This Act shall not affect any other law by virtue of which certain disputes may be submitted to arbitration only in accordance with the provisions of that or other law.
It is clear that section 35 (b) of the ACA is a savings provision, which preserves other arbitration statutes such as the Arbitration Act, the Arbitration Laws of the various states as well as other arbitration laws. And this is so because of the divergence in the scope of the various arbitration laws. Other statutes that govern arbitration in Nigeria are discussed below.
Nigerian Co-operative Societies Act 2004
Nigerian Co-operative Societies Act, Cap. N98, LFN 2004
The Nigerian Co-operative Societies Act provides for arbitration of disputes involving cooperatives societies and their members. Section 49 of the Act makes provisions for settlement of disputes thus:
(1) If a dispute touching the business of a registered society arises -
(a) Among present or past members and persons claiming through present or past members and deceased members; or
(b)
Between a present, past or deceased member and the society, its committee or any officer, agent or servant of the society;
