On May 26, 2023, the Arbitration and Mediation Act, 2023, was signed into Law. The Arbitration and Mediation Act (”AMA”/ ”Act”) of 2023 aims to provide a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and mediation.

The Act contains several notable and innovative provisions and addresses some of the criticisms that trailed the repealed Arbitration and Conciliation Act, CAP A18, LFN 2004 (which was enacted in 1988).

Some of the key developments in the Act are:

I. Enforcement of Arbitration Agreements

Section 5 (1) of the AMA, 2023 empowers the Court to stay proceedings where a party to an arbitration agreement commences an action in court concerning any matter within the purview of the arbitration agreement unless it finds that the agreement is void, inoperative, or incapable of being performed.

This is an improvement on the provisions of the Arbitration and Conciliation Act wherein a court could refuse to stay proceedings despite a valid arbitration agreement if it found “sufficient reason why the matter should not be referred to arbitration under the arbitration agreement” or if the applicant had not shown that it was “ready and willing to do all things necessary to the proper conduct of the arbitration”.

II. Introduction of Emergency Arbitration for Urgent Reliefs

The 2023 Arbitration and Mediation Act has more comprehensive provisions than the previous arbitration Law on interim measures. The Act not only empowers Arbitral Tribunals to issue interim measures but also provides that such interim measures are binding and can be enforced upon an application to the Court.

If a party requires emergency or interim reliefs before the constitution of an arbitral tribunal, the Act allows such party to make an application for the appointment of an emergency arbitrator. This application is to be made either to the Court or to any arbitral institutions designated by the parties. The Act also allows meetings with the emergency arbitrator to be conducted either in person or by video conference, telephone, or similar means of communication.

III. Narrow Recourse Against Arbitral Award

Under the Arbitration and Conciliation Act of 1988, an arbitral award could be set aside where an arbitrator had “misconducted himself”. Misconduct could be interpreted in different ways, be it a failure to award interest or an error of law on the face of the award. The AMA, 2023 does not include misconduct of the arbitrator as a ground for setting aside an arbitral award.

The AMA limits the grounds for setting aside an arbitral award as the validity of the arbitration agreement, the jurisdiction of the tribunal, and the observance of due process and fair hearing. The Act also provides that the court has to be satisfied that a failure to set aside the arbitral award on these grounds will cause substantial injustice to the party applying for the award to be set aside.

IV. Introduction of Third-Party Funding

The AMA, 2023, provides that the common law torts of champerty and maintenance do not apply to third-party funding arrangements in connection with arbitration seated in Nigeria or arbitration-related proceedings before a Nigerian court. The Arbitration and Mediation Act requires the party benefiting from such an arrangement to disclose the name and address of the third-party funder to the other party, the arbitral tribunal, and the arbitral institution, where applicable.

V. Default number of Arbitrators where there is no express agreement.

The AMA provides that parties to an Arbitration Agreement may agree on the number of arbitrators to constitute an arbitral tribunal. However, where the parties have not made any such provision in the agreement, the arbitral tribunal will consist of a sole arbitrator, down from three arbitrators under the repealed Arbitration and Conciliation Act.

VI. The Award Review Tribunal (ART)

Under the AMA, 2023, an arbitration agreement may provide for an arbitral award to be reviewed by an Award Review Tribunal, in place of the court. The parties can agree on the constitution and procedure to be followed by the ART, otherwise, the ART shall conduct its proceedings in any manner it considers appropriate and shall be constituted by the same number of arbitrators as the initial arbitration tribunal. An application to the ART to set aside an arbitral award must be on the same grounds as if such an application was made to the court.

Where the ART sets aside an arbitral award, such award may be reinstated by the court if it finds that the decision of the ART is “unsupportable”, having regard to the ground on which the award was set aside. If the ART affirms the award, then, further recourse may be made to court only on the ground that the dispute is non-arbitrable or that the award is contrary to public policy.

CONCLUSION

The 2023 Arbitration and Mediation Act represents a step in the right direction for the alternative dispute resolution regime in Nigeria. The Act introduces innovative provisions that address key gaps and shortcomings of its predecessor, offering enhanced clarity, flexibility, and procedural frameworks for both arbitration and mediation processes. The innovative provisions in the Act will undoubtedly strengthen Nigeria’s position as a leading arbitration hub in Africa.