Arbitration is a process in which a dispute is submitted by agreement of the parties to a transaction, to one or more arbitrators who make a binding decision on the dispute in order to avoid costly and lengthy litigation. Nigeria’s extant law on the subject, the Arbitration and Conciliation Act 1988 in section 34 expressly bars the court from interfering in matters governed by the Act except in instances permitted under the Act. Under the previous legal regime, there was no such provision curtailing the extent of the courts’ involvement in Arbitral proceedings, hence the court had unbridled interventionary powers, which in essence defeated the purpose of Arbitration as an alternative to Litigation. This limitation received scathing criticism in some quarters, particularly as regards its constitutionality. This article examines the constitutionality or otherwise of section 34, the rationale behind its enactment and in conclusion, instances where the court can intervene in Arbitration proceedings.
The judicial powers under the Nigerian constitution are vested in the courts and extend to all matters between persons, or between government or authority and to any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person. Nevertheless, the right of individuals to resolve disputes without recourse to these courts is not impinged. When parties enter into an agreement to refer any dispute that arises from their dealings to arbitration, the jurisdiction of the court, which is hitherto exercisable, is put in abeyance until any of the circumstances mentioned in the Arbitration and Conciliation Act arises.
Section 34 of the Arbitration and Conciliation Act provides that a court shall not intervene in any matter governed by the Act, except where so provided in the Act. The word “SHALL” as used here has been interpreted to mean a command or mandatory obligation to do or not to do a particular act. The Court of Appeal in Statoil (Nig) Ltd v NNPC in ringing enthusiastic terms endorsed this view, holding:
- “The provision of section 34 of the Arbitration and Conciliation Act, Cap A18 of the Laws of the Federation of Nigeria, 2004 (The Arbitration Act), the wordings is mandatory in that the word “SHALL” is one that does not accommodate a flexible interpretation of the directives being given therein….In this instance case, the issuance of ex parte interim injunction does not fall under the exceptions to section 34 of the Arbitration Act. It is very clear from the intendment of the legislature that the court cannot intervene in arbitral proceeding outside those specifically provided.”
It is pertinent to note that the exclusion of the Court’s jurisdiction from intervening in Arbitral proceedings is limited to matters governed by the Act. Where the arbitration is outside the purview of the Act, such as an International Arbitration, the court may intervene and grant injunctive orders. The recent Court of Appeal decision in Shell Petroleum Development Company v Crestar Integrated Natural Resources illustrates this point. Here, the Respondent commenced an action at the Federal High Court seeking to enforce the terms of a Sales and Purchase Agreement (SPA). Upon entering appearance, the Appellant sought an order staying further proceedings in the suit, pending reference of the dispute to Arbitration in London as contained in the Arbitration clause in the SPA. In a considered ruling, the trial court dismissed the application. The appellant, dissatisfied filed this present appeal and then initiated arbitration proceedings in London against the respondent, pursuant to the arbitration clause in the SPA. The respondent then filed an application seeking an order of injunction to restrain the Appellant from taking further steps in the London Arbitration. In opposing the application, the appellant filed a Preliminary objection, arguing that by virtue of section 34 of the Arbitration and Conciliation Act, the court was barred from granting anti-arbitration injunctions. The Court of Appealed held that to the extent that the Arbitration is an International Arbitration (London), the provisions of section 34 is inapplicable and consequently the injunction was granted.
CONSTITUTIONALITY OF SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT
The supreme and overriding authority of the Constitution has been alluded to by the apex court in a plethora of cases and it is understood that all other laws derive their validity from it. Where a law is found to be inconsistent with the constitution, such law is to the extent of the inconsistency, void. With specific regard to the Arbitration and Conciliation Act, the raging debate centered on the constitutionality of section 34. Mustapha Akanbi and David Ike hold the view that section 34 of the Arbitration and Conciliation Act is almost certainly unconstitutional. The latter’s position is predicated on the premise that the High Court of the FCT and State High Court under sections 257 and 272 respectively have jurisdiction (subject to the jurisdiction of the Federal High Court under section 251 and the National Industrial Court under section 254C) to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, interest, obligation or claim is in issue and accordingly, any proceedings here means any and every kind of civil proceedings, which includes matters parties have agreed to refer to arbitration.
On the other side of the argument is Joseph Mbadugha who argued in favour of the constitutionality of section 34. According to the writer, Arbitration is not a subject matter but rather a procedure or mechanism of dispute resolution. It could be used in resolving any dispute arising from or in relation to any of the subject matters listed in section 251 of the 1999 constitution (as amended) provided that the subject matter is arbitrable and parties chose arbitration as a method of resolving the dispute; arbitration or an arbitrator does not exercise state power nor is it a state institution. Parties who elect to resolve any dispute arising from their relationship in any matter by arbitration have, in so far as the matter is arbitrable, consciously waived their constitutional right of court’s intervention except to the extent provided by the law governing the mechanism they have selected and also by their choice of arbitration suspended, albeit temporarily, courts’ jurisdiction in respect thereto. To conclude that the court will intervene beyond the scope provided by the governing law will amount to rewriting the parties agreement and a negation of the principle of pacta sunt servanda.
It appears in the light of the Court of Appeal’s decision in Statoil v NNPC, the view of Mbadugha is the preferred opinion on this issue. Arbitration is not an exercise of judicial powers and the jurisdiction of the courts mentioned by Ibe is activated only when parties submit their dispute to it. The concept of party autonomy suggests that parties have substantial autonomy to decide how their arbitration is conducted, without courts’ interference except for the purpose of supervision and enforcement of Arbitral awards.
RATIONALE BEHIND SECTION 34 OF THE ARBITRATION AND CONCILIATION ACT
The Arbitration and Conciliation Act 1988 is modeled after the United Nations Commission on International Trade Law Rules (UNCITRAL) 1985. It repealed the Arbitration (Ordinance) Act 1914 which had become inadequate and anachronistic in view of developments in the law, particularly in International Commercial Arbitration. Section 34 of the Arbitration Act is a replica of Article 5 of the UNCITRAL Model Law. The explanatory note to the Model Law reads:
Article 5 thus guarantees that all instances of possible court intervention are found in the piece of legislation enacting the mode law….protecting the arbitral process from unpredictable or disruptive court interference is essential to parties who choose arbitration.
The major advantage of Arbitration over Litigation is the expediency of the Arbitration process and the UNCITRAL Secretariat recognizes the right of parties to exclude the court from exercising jurisdiction over their dispute. The Court of Appeal in Statoil v NNPC per Akinbami J.C.A commenting on section 34 of the Arbitration and Conciliation held thus:
That section 34 of the Arbitration (and Conciliation Act) is to be interpreted strictly as prohibiting the intervention of the courts in arbitration proceedings is supported by judicial decisions both in Nigeria and in other jurisdictions. . . The intendment of the legislature in enacting section 34 of the Arbitration and Conciliation Act is to give the said law the power that the courts would not have direct control over arbitration proceedings. By making arbitration not to be subject to the undue interference by the regular courts, the purpose of Alternative Dispute Resolution would be accomplished… Premised on the postulation that the essence of Arbitration is to have an alternative dispute resolution mechanism not unduly under the whims and caprices of the regular courts, the provisions of section 34 of the Arbitration and Conciliation Act aptly protects the mechanism of Arbitration.
EXTENT OF COURT INTERVENTION
As mentioned earlier, Arbitration is not an extension of the judicial powers vested in the court and accordingly, Arbitral tribunals do not have the coercive powers to enforce their decisions or awards. They seek the co-operation of the courts and one writer described the court’s involvement in Arbitration as ‘a fact of life as prevalent as the weather’. Another writer likened the relationship between the courts and Arbitration as a relay race where initially, the baton is in the grasp of the court as it is the sole organization that can take steps to prevent the arbitration agreement from being ineffectual. Then arbitrators take over the baton, and retain it until an award is made. At this stage, the baton is then handed back to the court to lend its coercive powers to the enforcement of the award. Under the Arbitration and Conciliation Act, there are six instances where the court can intervene in Arbitration, to wit; Revocation of Arbitration agreement, Stay of proceedings, Appointment of Arbitrator and Substitute Arbitrator, Compelling the attendance of witnesses, setting aside an arbitral award and recognition and enforcement of arbitral award.
REVOCATION OF ARBITRAL AGREEMENT
Section 2 of the Act provides that unless a contrary intention is expressed therein, an arbitration agreement shall be irrevocable except by agreement of the parties or by leave of court. Any party who has valid grounds to challenge an arbitration agreement may apply to court for leave to revoke the agreement. The Act does not mention the circumstances where a party may seek leave to revoke the agreement, but one author suggests that the general principles of law governing repudiation of contracts before performance will be applicable.
STAY OF PROCEEDINGS
Sections 4 and 5 of the Act provide that a court before which an action, subject of an arbitration agreement is brought shall upon application of any party, stay proceedings and refer the parties to arbitration. While the court cannot compel the parties to arbitrate their dispute, this section merely empowers the court to give effect to their agreement. The party applying for a stay of proceedings must bring such application before ‘taking any step’ in the proceedings. What amounts to taking any step is not defined under the Act but Lord Denning described it as “an action which impliedly affirms the correctness of the proceedings and defendant’s willingness to be bound by the court’s decision.
APPOINTMENT OF ARBITRATOR AND SUBSTITUTE ARBITRATOR
Sections 7 and 11 of the Act provides for the Appointment of an arbitrator and substitute arbitrator respectively. The parties may, subject to subsections (3) and (4) specify the procedure to be followed in appointing an arbitrator. Where no such procedure is specified, the Act lays down the procedure for the intervention of the court where either or both of the parties fail to appoint or agree to appoint an arbitrator. Section 11 further provides for the appointment of a substitute arbitrator where the appointment of an arbitrator terminates. It should be noted that an appointment made by the court here cannot be appealed.
COMPELLING THE ATTENDANCE OF WITNESSES
The court is empowered by Section 23 of the Act to secure and compel the attendance of any witness before any arbitral tribunal in Nigeria. The general rules of competence and compellability of witnesses under Evidence Law apply here. The court may order a writ of sub poena ad testificandum or sub poena duces tecum. Where the proposed witness is a prisoner, the Act allows the court to issue a writ of habeas corpus ad testificandum to appear before the Arbitral tribunal. Section 20(3) makes applicable, any written law relating to the service or execution outside a state of any such subpoena or habeas corpus issued or made in civil proceedings by the High Court to a subpoena or order issued under this section
SETTING ASIDE ARBITRAL AWARD
Sections 29 and 30 of the Arbitration and Conciliation Act imbue the Court with the power to set aside an arbitral award in domestic Arbitration. Any party who is aggrieved by an arbitral award may within 3 months from the date of the award or in a case falling within section 28 of the Act, from the date the request for additional award is disposed of by the arbitral tribunal, apply to the court to set aside the award. Failure to apply within the specified statutory time extinguishes this right. The Court of Appeal in Aribco (Nig) Ltd v Nigeria Machine Tools enumerated the grounds on which an arbitral award may be set aside viz;where the award contains decisions on matters which are beyond the scope of the submission to arbitration, where the arbitral proceedings or award has been improperly procured, where the arbitrator has misconducted himself and where there is an error of law on the face of the award. In the realm of international commercial arbitration, the relevant provision is in section 48 which contains a long list of grounds where the court may set aside an award.
RECOGNITION AND ENFORCEMENT OF ARBITRAL AWARD
The importance of the court to Arbitration, especially in the recognition and enforcement of Arbitral awards was succinctly captured by Professor Ajogwu, with the learned professor observing that the recognition and enforcement of arbitral awards is crucial to the Nigerian and International legal system, providing the final legal mechanism for the resolution of disputes governed by an arbitration clause. Section 31(1) of the Act provides that an arbitral award shall be recognized as binding and shall upon application, be enforced by the court. Section31 (3) further provides that an arbitral award may be enforced in the same manner as a judgment of that court or order to the same effect. Section 51 of the Act provides for the procedure for enforcement of awards from international arbitration.
Arbitration, as an alternative method of dispute resolute has proven to be faster, cheaper and more efficient than Litigation, especially in resolving commercial disputes. Nonetheless, Arbitral tribunals, without the coercive powers of the court are toothless bulldogs and arbitration cannot survive, much less prosper without the support of the court. It is unarguable that the court plays an indispensable role in the Arbitral process, and greater synergy between both institutions will guarantee speedy resolution of disputes and access to justice, both of which will in turn boost investors confidence and help stabilize the nation’s burgeoning economy.
Olatunde Cole and Salmat Afolabi are law students at Lagos State University.
 Maxwell f., Commercial Alternative Dispute Resolution, (London: The Law Book Co Ltd, 1989) 55
 Cap A18 Laws of the Federation of Nigeria 2004.
 The Arbitration (Ordinance) Act 1914, Cap 13 LFN 1958 which was in operation until the promulgation of the Arbitration and Conciliation Decree No.11 of 1988
 See for instance, Akanbi M.M (2014) “Contending without being contentious: Arbitration, Arbitrators and Arbitrability, (152nd Inaugural Lecture)www.unilorin.edu.ng/UIL/152.PDF accessed 13 July 2020; Ike, D., ‘Arbitration in Nigeria: A review of Law and Practice’ (2016) 7(3) The Gravitas Review of Business and Property Law 57,62.
 See generally Section 6, 1999 Constitution of the Federal Republic of Nigeria (as amended)
 See sections 2, 4, 5, 7, 11, 23, 29, 30, 31, 48 and 51 Arbitration and Conciliation Act 1988
 Ogidi v State (2005) 5 NWLR (PT.918) 286, Onochie v Odogwu (2006) 6 NWLR (Pt.975) 65
 (2013) 14 NWLR (Pt 1373) 1
 (2016) 9 NWLR (Pt.1517 )300
 AG Lagos v AG Federation (2004) 18 NWLR (Pt.904) 1, AG Federation v AG Abia (2002) 6 NWLR (Pt. 764)524, Inakoju v Adeleke (2007) LPELR-1510 (SC)
 Section 1(3) 1999 Constitution of the Federal Republic of Nigeria (as amended)
 Akanbi, (n 3)
 Ike, (n 3)
 Mbadugha J., ‘Section 34 of the Arbitration and Conciliation Act: Issues Arising’ (2017) 8(1) The Gravitas Review of Business and Property Law 88, 95
 Nika Fishing Co Ltd v Lavina Corp (2008) 16 NWLR (Pt.1114) 509
 (2013) 14 NWLR (Pt. 1373) 1
 See also Asouzu A., ‘Arbitration and Judicial Powers in Nigeria’ (2001) Journal of International Arbitration 18(6) 617
 (2013) 14 NWLR (Pt. 1373) 1
 Lord Mustill, ‘Comments and Conclusions in Conservatory Provisional Measures in International Arbitration’ (1993) 9th Joint Colloquium, ICC Publication, 118
 Section 2, Arbitration and Conciliation Act
 Sections 4 and 5 ACA
 Sections 7 and 11 ACA
 Section 23 ACA
 Sections 29, 30 and 48 ACA
 Sections 31 and 51 ACA
 Orojo J. and Ajomo M., 1999 Law and Practice of Arbitration and Arbitration and Conciiation in Nigeria. Lagos: Mbeyi & Associates (Nigeria) Ltd, 321
 Section 5(1) of the Act
 Eagle Star Insurance Co Ltd v Yuval Insurance Co Ltd (1978) 1 Lloyd’s Rep. 357
 Section 7(1) of the Act
 Section 7(4) of the Act
 Section 175 Evidence Act 2011
 An order compelling a witness to appear and testify before the court
 An order compelling a person to produce certain documents or things without testifying
 For instance, the High Court (Civil Procedure) Rules of Lagos 2019
 Section 29(1) ACA
 Araka v Ejeagwu (2000) 15 NWLR (Pt. 692) 684
 (2002) 15 NWLR (Pt. 789) 1 at 7
 Ajogwu F., 1999 Comercial Arbitration in Nigeria: Law and Practice, 2nd ed. Lagos: Centre for Commercial Law Development, 129
 Section 287 of the 1999 Constitution (as amended) provides that the decisions of the Courts shall be enforced in any part of the Federation by all authorities and persons.
 Redfern A and Hunter M., 1991 Law and Practice of International Commercial Arbitration, 2nd Ed, (London): Swet and Maxwell, 345