Jude Igbanoi
26 May 2008
Lagos — The practice of arbitration in Nigeria has continued to grow in leaps and bounds, especially in the last few years. But the near absence of internationally recognised arbitration centres in the country has been a major challenge to practitioners.
The Lagos State Government has however taken the initiative of reviewing its arbitration laws in its determination to make Lagos a major international arbitration centre. The report was recently submitted to Governor Babatunde Fashola, SAN and approved by the State Executive Council. The State Executive Council in turn recently forwarded to the State House of Assembly, two draft bills: Lagos State Arbitration Law and Lagos Court of Arbitration Law. JUDE IGBANOI had a chat with Mr. Yemi Candide-Johnson SAN, Chairman of the Committee that reviewed the laws and he spoke about the challenges of his committee and the future of arbitration practice in Nigeria
You are Chairman of the Lagos State Arbitration Law Review Committee which just concluded and submitted its report to the Governor. What was the thrust of your committee's work?
Arbitration is of course a matter which is very much in the public perception now, with other initiatives. The idea is to develop within Nigeria that aspect of dispute resolution. It's a matter which the Lagos State Government has taken a critical look at and a keen interest in.
Of course, the point to realise is that in Lagos, legal issues are matters that are close to the heart of the Governor who happens to be a Senior Advocate of Nigeria. So many of these legal issues and initiatives that you are seeing have his hand-imprint and support. In the case of arbitration, he has enunciated the vision that Lagos should be an arbitration hub for the West African sub-region by the year 2010. It's a big challenge for Lagos, but one that obviously if the government enunciates its vision and applies recourses can be achieved.
In November 2007, the Governor directed the Attorney-General of Lagos State to set up an arbitration reform committee. I was privileged to be appointed to chair that committee. In fact, the panel of experts, the 11 people who formed that committee, are people who in their individual rights had a clear, strong contribution and desire to see that Lagos State had an arbitration law. That committee reviewed the Arbitration Law existing in Lagos State from the establishment of the territory of Lagos in the 19th Century. We reviewed the existing Arbitration and Conciliation Decree, 1988, which was in fact a creation of the military regime, which appears to operate across much of Nigeria. You may recall that it's a regime that is based on the United Nations UNCITRAL model law. That was the time that Prince Bola Ajibola was Attorney-General under Babangida.
In 2006, the Attorney-General under (former President olusegun) Obasanjo, Chief Bayo Ojo, SAN a leading international arbitrator set up a committee at the federal level to review the law on arbitration in Nigeria. That committee was headed by Dr. Olakunle Orojo, also a distinguished international arbitrator. That committee submitted its report to the Attorney-General, which proposed substantial amendment to the law in Nigeria. It also proposed that the states adopt what it termed 'Model State Arbitration Laws.' All these are materials which we considered.
In embracing these initiatives, Lagos State Government considered that it ought to determine for itself the operability and effectiveness of what had been done in the past, which of them to adopt and which it would enhance for its own use. This is because of its unique contribution to the commerce of Nigeria.
Our committee submitted its report in February, 2008. We proposed a new draft Arbitration Law for Lagos State. We also proposed the establishment of the Lagos Court of Arbitration. The law itself, we drew from the UNCITRAL model law, we drew from international arbitration laws like the 1996 English Arbitration Law and we looked also at the Singapore Arbitration Act 2001. Singapore is an emerging arbitration jurisdiction which is attracting increasing amounts of arbitration work to its jurisdiction against the competing and well established ones like New York and London, which have over the years dominated the business. The Court of Arbitration itself is modeled on the London Court of International Arbitration.
The model which we have adopted is one which will require Lagos State to establish legal structures. Primarily it is intended to be a private sector run and organised endeavour. These are part of the review which we made in the proposed Lagos law which should secure its integrity.
Since the Federal Government already set up its own Arbitration Law Review Committee, was your Committee meant to complement it and if not, what areas of differences are there in the recommendations?
The first point that you have raised silently, is the power of Lagos State to make such a law. This is very important and critical because it's a matter that has been discussed in the federal reports. The federal reports had difficulty in determining how to resolve the apparent lack of legislative competence of the Federal Government on arbitration. The view that we reached on this matter after a great deal of study of the matter is that Lagos State does have the power to enact its own arbitration law. After all, arbitration law is no more than the regulation of contracts, dispute resolution and the procedure of the courts in respect of states; so, that is part of the legislative competence, which is an important foundation.
It should be understood that Lagos State is not trying to reinvent the wheel. We therefore embraced every possible development in arbitration within the territory of Nigeria, including that which is the initiative of the Federal Government. We were not looking to strike off on a tangent. Indeed, many of the proposals made by the federal review committee of which some of the members of the committee were members of our own committee as well, were those which primarily had the same intention - to reduce the capacity of courts to interfere in the process, to strengthen the attorneys of the parties in their choice of arbitration as dispute resolution, to simplify the language, to simplify the procedure and to make it easier and more attractive for parties to come to Lagos to have their disputes resolved by arbitration.
What level of support did you receive from the Lagos State Legislature since they will the ones to pass the law?
In fact, we received great support from the Lagos State Government for a start. The executive set up this committee. Two weeks ago, the Executive Council of Lagos State approved that the report be sent to the House of Assembly with the recommendations of the Government of Lagos State to be passed.
In the course of seeking the approval in the enactment by the Lagos State House of Assembly, I understand that a whole series of activities are planned to sensitise those concerned in this endeavour. The Lagos State legislators are interested in the future and development of Lagos. I have no doubt that this is such a proposal that they will have no difficulty in embracing. What about structures? Did your committee take into consideration the issue of infrastructure? Arbitration requires specialised facilities, like meeting rooms, electronic recording systems, libraries, trained personnel and power supply. Did you have these at the back of your mind? Does Lagos State have the structures currently?
You know, this is very important. It's easy for you to have an ambition, but when you set yourself a goal you have to draw up a plan to achieve it. You also have to identify whatever is required and how to pursue it. Since the initiative of the Lagos State Government was announced it has received publicity from across the world. I was reading materials published online by international arbitrators. They said that the proposal of Lagos State Government to improve access to arbitration in Nigeria has been received with skepticism by international practitioners. Some of them say Lagos is not secured and some say we don't have roads and that it's too hectic as there is no power and infrastructure. These are problems that we have to identify.
For me, what is most important to recognise is that Lagos State generates 60% of the local and international commercial transactions in the country. This is the heart of Nigeria's industrial heartland. This is the place where every single bank is represented. 60% of all disputes resolved in Nigeria are resolved in Lagos. In fact, we have the activity and we have the market.
The second thing to understand is that arbitration is a business. When international arbitration centers say, 'We are skeptical about arbitration in Lagos', they are trying to protect their own share of the business which we are entitled to participate in. It is good to understand that there is nothing esoteric or secret about this. We have a business we are generating and how are we going to participate in the work that will lead to that? Making ourselves capable of doing so is the challenge. It's clear from the models of other centers which we studied, like Singapore which has set a high target and is achieving great strides. But consistency in arbitral proceedings, impartiality, integrity, access to the complementary businesses like banking, telecommunications and other such businesses are the requirements for a standard arbitration centre and Lagos is set to achieve those.
Clearly, the government has indicated its commitment to provide infrastructure. It has promised to provide a secured location where rooms can be provided and arbitration materials will be available. We understand it is interested in encouraging multinational agencies to provide a centre in conjunction with private sector organisations like banks and telecommunications companies. Anybody who is interested in seeing Lagos progress as an international arbitration centre will be encouraged to join in this venture and to supply its own share of the business, so that we can have facilities like arbitration rooms, recording systems and the likes.
The other requirement is to provide a panel of arbitrators drawn from the sub-region, from Lagos State and other areas that are competent and skilled. It is interesting to know that the Chartered Institute of Arbitrators report shows that the number of trained arbitrators in Lagos in particular and Nigeria generally is about 585! That is more than half the number of trained arbitrators in Africa! We have the human skills, we have the promise and assurance that the physical structures will be provided.
Integrity is a matter which comes from the development of the practice of arbitration. The only way we can prove this is to start determining arbitral decisions in this country and let people judge them. So that every time a Nigerian arbitrator writes an award, they must recognise that it's going to be read in countries across the world. Unless it is of outstanding international value this endeavour will fail.
Did your committee avert its mind to the issue of training? Arbitration requires specialised skills. Did your committee take this into consideration in its recommendations?
We recognised that training is crucial. What we are doing now is building on the work that many had done before. It's always good to recognise that it's better to stand on the shoulders of giants that were before you. Many of the people I have spoken of - Chief Bayo Ojo, SAN, Dr. Olakunle Orojo - are people who have practised international arbitration for many years. These are people who have participated in the sensitisation of the public to need to train arbitrators. The training of arbitrators in Lagos and Nigeria in general is the result of many people over the years, like Babatunde Ogundipe for instance who was also on our committee. He is the current Chairman of the Chartered Institute of Arbitrators (UK) Nigeria Branch. This is an organisation that, following the lead of the body which was established in London in 1915, has branches in over 50 countries and has for years conducted training for arbitrators. I understand the Nigerian branch is the leading branch. They conduct training at least three times a year at the various levels - membership, associateship and fellowship. Indeed, the Chartered Institute of Arbitrators (UK) Nigeria Branch is training arbitrators in Ghana at the moment. This is apart from the fact that we hold sessions in Kaduna, Port Harcourt and other places.
The training of arbitrators is an industry of its own. We have taken this on with great speed and enthusiasm. There is a pool of trained arbitrators that is being developed yearly. In the next few weeks there will be about 40 arbitrators trained in Lagos.
Did you consider at what point the work of your committee will impact on our litigation system? How will your recommendations impact on the conventional court system which most disputants are used to? Is it possible to arbitrate a partly litigated case for instance?
You know arbitration is a consensual method of dispute resolution. It is very interesting that one of the things we had to deal with is the facility of courts. This is not just Nigerian courts. Historically, the courts of England and America were hostile to arbitration. The governments set up a system of dispute resolution and the courts couldn't understand why it will be taken out of their hands.
First, you must demystify arbitration before you can make it attractive to people. As someone put in recently, if two people meet in a bar and decided that one person in that bar should resolve their problem, that is arbitration. If he is going to solve it by getting them together, that person is a mediator. If they agree that the decision is going to be binding, that person is a n arbitrator. So, a meeting over lunch is an arbitration and there is no interference with the powers of the court, so there is no reason for hostility. But arbitration as a system in itself, because it's made by the parties, they can choose exactly what they want and how they want it. At the end of the day arbitral tribunals have no courts, no police, nobody to enforce their decisions; so, they must come back to the courts. It is the power of the courts to enforce ultimately an arbitral decision. Arbitration requires the court and the court requires arbitration. Arbitration reduces the number of cases going to the courts.
The question of whether parties in a litigated matter can go for arbitration, of course they can. If both parties in the middle of litigation say, 'The court is not helping us. This case has been going on for 20 years, let's try arbitration', the court will respect that if they both sign a binding arbitration agreement. Under the present procedure, the courts encourage arbitration. Once they agree and they come back with the result, the court will enforce it.
Hitherto, we have had a situation in Nigeria where enforcement of arbitral awards has been somehow problematic. Did your committee think about that?
It was a critical point of attention for the committee. We wanted to avoid as much as possible the intervention of the courts in the ordinary consensual proceedings of arbitration. One of the comments that was made in an international arbitration journal online is that international arbitrators have expressed concern about corruption in our Judiciary. My response is that great strides have been made to reduce the incidents of corruption in our litigation. But notwithstanding, when parties agree to settle a matter through arbitration they want to be sure that the panel is skilled and that they have their own individual integrity. It's a matter of great importance, the need to limit the access of the court to the process of arbitration. It is one of the issues that we recommended be strengthened in the proposed law.
Nigeria today has quite a number of arbitration bodies, one chartered institute here and another chartered institute there. More are likely going to spring up. How can cohesion be assured in such an environment where there is a proliferation of arbitral bodies? Also, the challenge of standardisation and quality of arbitrators that will be emerging from these institutes?
The major thrust of our report is not to deal with the condition of arbitral bodies and institutions in Nigeria. In fact, there is nothing wrong with having many arbitral institutions. One of the challenges is to provide guidelines and rules. The target is to set and increase the standard and quality of arbitration that will be conducted in this jurisdiction. Therefore if arbitration comes up in Lagos we must ensure that it meets international standards.
The proliferation of arbitral bodies is not the problem, but the standards of those in the respective organisations and the necessity for them to conduct themselves with integrity; this is the real issue. The Chartered Institute of Arbitration (UK) Nigeria branch is one that takes training and its integrity very seriously. The work of the Institute is recognised across the world. But if another Institute wants to mimic the Chartered Institute (UK) Nigeria, then it's not so much as to taking their name but they have to live up to standard as an international institution.
As arbitration continues to grow in Nigeria, we have of recent been witnessing the emergence of specialised areas in arbitration practice. For instance, we now haw Maritime Arbitration, Construction Arbitration and other areas. Is this a development that can take really take root in this jurisdiction?
One of the imperatives when you choose an arbitral panel is to choose a panel of people with special skills and knowledge in particular areas. You mentioned maritime arbitration; across the world there are specialist maritime arbitrators, there are specialist petroleum arbitrators and there are specialist construction arbitrators. Because the Nigerian jurisdiction is not as advanced as others we have not reached that level of specialisation. But certainly it is something to be encouraged. If somebody is a specialist in telecommunications for instance, it is certainly useful to have him arbitrate in telecommunications matters. I would encourage it. Indeed, the largos court will encourage it.
Would you subscribe to the view that arbitration be made a part of the requirements for the award of silk?
I am a member of the Privileges Committee and as matter of fact the current rules for the award of silk provides that among the cases you are required to have concluded at the High Court level include arbitral awards. So, the fact is that arbitral awards are considered for the award of silk.
There was the 50th anniversary of the New York Convention on Arbitration recently. The awareness was not much in Nigeria, but it was celebrated in other jurisdictions and it was a big event. What does this say about the level of awareness of arbitration in Nigeria?
The New York Convention was a momentous event in international arbitration. The New York Convention is a law which many countries have embraced and which Nigeria has accepted as part of its laws since 1988. It is a law which allows an arbitral award given in one country to be enforced in Nigeria by our courts. Yes, the anniversary was celebrated in many countries around the world. But in Nigeria it coincided with the 10th anniversary of the Chartered Institute of Arbitration (UK) Nigeria branch. Therefore in the celebration of our 10th anniversary, we celebrated the 50th anniversary of the New York Convention. Chief Richard Akinjide SAN gave a keynote address which related substantially to the New York Convention.
What challenges did you face in chairing that committee?
There were no problems substantially. But the major challenge in heading such a committee is bringing together the right group of people, each with their own independent judgments, various understanding and various motivations.
My role as chairman was relatively easy because as chairman, I recognised my role more as that of a facilitator than as a governor. Then you have to deal with the challenge of managing egos and managing busy schedules, bringing out the best in others.
Most importantly, one must recognise that if the committee fails, one has failed in his role as chairman. That basically was the key and I am happy to say we had no problems.
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