Appraisal of Judicial Intervention in Domestic Commercial Arbitration in Nigeria

APPRAISAL OF JUDICIAL INTERVENTION IN DOMESTIC COMMERCIAL ARBITRATION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1. Background of the Study

Arbitration is a reference of a dispute between not less than two parties for determination after hearing both parties in a judicial manner by a person or persons other than a court of competent jurisdiction. Parties have the right to define the tenure of their agreement. The courts are enjoined to enforce such terms and give effect to whatsoever rights the parties conferred on one another and the obligations they choose to impose on one another. Though the courts are available to them, parties may opt for arbitration out of their own volition to suit their peculiar business interests. In doing so, parties circumscribe their right to seek redress in a court of law if a dispute arises which comes under the terms of their arbitration agreement. Therefore, compliance with the arbitration contract becomes a sine qua non, a condition precedent for a party to seek redress in the court.

In choosing arbitration instead of litigation, the intendment of the parties is to resolve their disputes privately and on their own terms. They choose arbitration to circumvent the usual delays, publicity, rancour and technicalities that pervade the formal court system. Rather, the parties seek to maintain and protect their privacy, business secrets and goodwill, and be in a position to mend fences in the interest of their mutual interests. Again arbitration affords the parties the opportunity to shun strife and ill-will which usually accompany formal litigation processes.

However, many a party to arbitration agreement, when a dispute arises which falls within the contemplation of the arbitration agreement, renege and go foul of the agreement. Where parties have chosen some persons they trust their skills, impartiality and fairness to determine issues arising between them, one wonders why either party is to be allowed to take steps in flagrant disregard of their extant agreement to arbitrate, except of course in deserving circumstances.

1.2. Statement of the Problem

Parties opt for arbitration to avoid litigation in resolving disputes between them. They prefer arbitration to avoid the time wastage and technicalities associated with litigation. However, some parties unwilling to honour arbitration agreements resort to the courts when disputes arise which fall within the contemplation of their agreement. Some parties submit to arbitration but resort to the courts later on the conviction that the arbitrators are biased against them or because of their indisposition to accept unfavourable awards.

Incessant judicial intervention impacts negatively arbitration. Parties conduct the arbitral processes half-heartedly, knowing they can fall back on the courts later. Arbitration which ought to be expeditious, eventually drags on for many years. Control measures in the Arbitration and Conciliation Act are inadequate to curb judicial intervention in the arbitral process. Although section 34 of the Act provides that the courts shall not intervene except as provided by the Act, the Act provides numerous circumstances where the courts can intervene. Parties find several excuses under these provisions to go to court. This inadequacy leads to continual resort to courts by parties, virtually at every stage of the arbitration process. While court intervention per se may not be the problem, it is notorious that the courts are neither pragmatic nor efficient.

1.3. Research Questions

The central focus of this study revolves around the following research questions:

1) Why do parties opt for arbitration as an alternative dispute resolution mechanism?

2) Which factors promote parties’ resort to the courts?

3) What are the effects of incessant judicial intervention in arbitration?

4) Is the Arbitration and Conciliation Act adequate in controlling judicial intervention in the arbitral process?

1.4. Objectives of the Study

The objectives of the study are as follows:

1) To critically examine parties’ preference of arbitration as an alternative dispute resolution mechanism.

2) To identify factors which promote parties’ resort to the courts.

3) To examine the effects of incessant judicial intervention in arbitration.

4) To determine the adequacy or otherwise of the Arbitration and Conciliation Act in controlling judicial intervention in arbitration.

1.5. Methodology

The research design adopted in this dissertation was interview. The population was all the arbitration law lecturers of universities in old Anambra State of Nigeria, made up of Anambra State, Enugu State and Ebonyi State. Arbitration law lecturers were chosen for this study because the subject-matter of this dissertation comes within their area of specialization and they teach arbitration practitioners who directly impact on the success or otherwise of arbitration. The samples were arbitration law lecturers from three universities, one from each of the States, of which fifty percent (50%) of the lecturers were interviewed. For the purposes of this study, the arbitration law lecturers were categorized into two groups: (i) lecturers from the rank of senior lecturer and above and (ii) lecturers below the rank of senior lecturer.

Equal numbers of lecturers were interviewed from each of these two groups. The lecturers interviewed from each group were picked at random. They were interviewed mainly on the following issues: (i) arbitration as an alternative dispute resolution mechanism, (ii) factors promoting resort to the courts by parties to arbitration agreements, (iii) effects of incessant judicial intervention in arbitration, (iv) adequacy of the Arbitration and Conciliation Act in controlling judicial intervention in the arbitral process and (v) ways of making arbitration more efficient in Nigeria.

This study relied on primary source materials, namely, interviews, observations and comments of legal practitioners teaching arbitration law, statutes and subsidiary legislations. The following secondary source materials were utilized: case law, textbooks, dictionaries, journals, articles and conference papers. The dissertation described arbitration as an alternative to litigation and discussed the state of the law of arbitration in Nigeria as it bears on the subject matter of this study. The dissertation also evaluated judicial intervention in the arbitral process, examined ways of eliminating the bottlenecks and suggested avenues to enhance the effectiveness of arbitration.

1.6. Scope of the Study

In its diversity, arbitration traverses a wide spectrum of our jurisprudence. Equally, there are various shades and forms of arbitration. In this circumstance, it is necessary to delimit the scope of this study. This work focuses on domestic commercial arbitration in Nigeria, particularly judicial intervention in the arbitral process.

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