Experts call for more international commercial arbitration in Africa

Local and international experts in arbitration have said that Nigeria and other African countries must do all that is necessary to make the region Arbitration-Friendly, as against ‘appearing to be Arbitration-Friendly’.

Speaking at a Roundtable in Lagos recently, Professor Emanuel Gillard, Head of International Arbitration at Shearman & Sterling LLP and others stated that there was need to ensure efficient laws and adequate infrastructure for Arbitration Centres to boost the level international commercial arbitration on the continent.

He said, “There are lots of African parties involved in arbitration globally, yet a good number of these are conducted outside the region. I would like to see this position change.”

Gillard who spoke exclusively to BusinessDay after the event said, “I think that at the moment no country has emerged as an originating centre more than the northern part of Africa. A good example is the Cairo Regional Centre For International Commercial Arbitration, which has been able to handle a decent number of arbitrations.”

He further disclosed that the jury was still out as to what country has the most regional or even global arbitration cases in Sub-Sahara Africa.

“Because to be recognised for this, you will need good infrastructure. Efficient arbitration Centres require great infrastructure and as I said earlier during the sessions, Nigeria does have a wonderful arbitration centre here – this includes, great locations, venue and rooms for conducting arbitration in each of this room. There is however need to effectively market the centre to prospective users,” Gillard said.

“An arbitrator can sit here in this building and apply the laws of whatever countries the parties have chosen – such as English law, French law, Chinese law or any other arbitration laws.

He reiterated the need for legislations that are not only arbitration-friendly but attractive to foreign investors; and also enforceable. Gillard frowned at situations where parties who do business within a jurisdiction (i.e. Africa), ultimately chose other jurisdictions as seats of arbitration, stating that this should be discouraged with investment-friendly and arbitration-friendly laws and policies.

Gillard continued, “Judges also need to realise that arbitration is an important part of economic activity and frankly one of the most efficient ways to resolving disputes, commercial or otherwise. There is no competition between the court and the arbitrators – as the court maintains a supervisory role at the end of the entire process. The old picture that portrays competition between the court and arbitration is outdated, which is why courts in countries around the world now support arbitration.”

Speaking on the theme, ‘International Arbitration in Nigeria: Current Practice Under The New York Convention’, Funke Adekoya, SAN who was a speaker at the event disclosed that Article III of the New York Convention allows the country of enforcement to establish rules of procedure for recognition and enforcement of Convention awards.; noting that, Nigerian courts take procedural requirements seriously; as it is a common position of the courts that procedural rules aid the proceedings of the court and are meant to be obeyed.

“It is therefore important that a party requiring the recognition and enforcement of a foreign arbitral award to be aware of the national procedural rules that will apply to its award.”

Adewale Atake, Dispute Resolution Partner at Templars in his presentation, stated that Nigerian courts have not fared badly in the development of International Commercial Arbitration.

According to him, a calm review of the provisions of Sections 4(1) and 5 of the Arbitration and Conciliation Act (ACA) reveals that the problem is more of a legislative than a judicial one.

“If Nigeria must be regarded as pro-arbitration comparative to other more liberal jurisdictions like France, there is need to make some legislative reforms to the ACA. Particularly, Section 5 (2), which places the burden on the party seeking to enforce the arbitration agreement to demonstrate its willingness to arbitrate the dispute, before the court can refer the parties to arbitration, should be amended.

“In my view, the burden should be statutorily placed on the party who has rushed to court in breach of the arbitration agreement to demonstrate why he should not be held bound by the arbitration agreement he freely entered into.

Atake stated further that such an approach, would be more consistent with Article II (3) of the Convention which places an obligation on courts of contracting states to enforce arbitration agreements and refer parties to arbitration, save where the agreement is “null and void, inoperative or in capable of being performed.