Unit 6-7

Question 1

What are the sources of powers of Arbitrator

Answer 1

Arbitrators’ powers can be conferred expressly or by implication. They are conferred expressly by the arbitration agreement, and by implication in line with the law or the rules governing the arbitral proceedings. The powers conferred are those necessary for the performance of the duties of arbitrators, which include receiving evidence, directing the course of the arbitral proceedings and making decisions. Arbitrators may also exercise inherent powers that are deemed to be implied powers arising out of the arbitration agreement or may be conferred by the law of the seat of the arbitration. These inherent powers are held to extend to do things necessary for the proper and efficient conduct of the arbitration. However, these powers must be exercised with caution in order to avoid falling outside the scope of the arbitral reference with the potential of rendering any decision arrived at liable to being set aside by a court of law.

Question 2

What was determined in Arbico (Nigeria) Ltd v N.M.T Ltd

Answer 2

The Supreme Court, in Arbico (Nia,) Lid. W N. M. 7. Lid, held that acling outside express and implied terms of the arbitration agreement is among the list of misconduct, which may render an award invalid. The arbitration agreement, laws and rules of arbitration may confer on an arbitrator any combination of the following powers:
a.
Power to rule on its jurisdiction - Section 12ACA Seahon 14 Ci AMA
b.
Power to conduct the proceedings - Section 20 ACA 31 4+ AMA
C.
Power to act in a case of a party’s default - Section 21 ACA
d.
Power to order production of documents
e.
Power to appoint experts - Section 22ACA

Power to inspect the subject matter of dispute
g.
Power to order disclosure of documents
h.
Power to decide procedural and evidential matters
j.
Power to make provisional orders
Power to render an award
k.
Power to order adjournments
1. Power to order for interim preservation of properties - Section 13 of the Act and
Article 26 of the Arbitration Rules.
m.
Power to correct an award A 9 #MA
n.
Power to decide whether there should be oral/or written evidence or submissions
Section 20 ACA
0. Power to order attendance of witnesses - Section 23 ACA

p.
Power to direct that a witness be examined on oath or affirmation
9. Power to make awards on different issues at different times and on different aspects

г.
Power to grant an injunction
S.
Power of amicable composition

Question 3

Power to adjourn proceedings

Answer 3

Arbitrators have the inherent powers to adjourn proceedings from time to time, but this power is subject of limitation of time, either by the arbitration agreement or by statute. In City Eng. Ltd. V F.H.A. (1997) 9 NWLR (Part 520) p.224, the arbitrator was a non-lawyer, but competent in the subject matter of construction over which he was arbitrating. The arbitrator was oblivious of the provision of section 63 of the Limitation Law of Lagos State 1973 which provides that arbitral proceedings must be concluded within three months from the date from which a party moves the other party to refer to arbitration for it to be valid.
The only exception being that an arbitrator may extend time by a specific order of extension of time within which to arbitrate and publish his award. The arbitrator in this case simply continued to adjourn from time to time until the award was published five years from the date of the commencement of the proceedings. Subsequently, the award was declared invalid for being statute barred, on the ground of non-compliance with the provisions of section 63 of the Limitation Law of Lagos State and this was upheld by the Supreme Court.

Question 4

Advantages of Arbitration

Answer 4

1. Arbitration can be quicker than litigation
2. Arbitration can be less expensive than litigation
3. Some arbitration process permits some disputes to be solely on documents without hearings.
4. Parties can represent themselves in arbitral proceedings
5. A party to a contract may not wish to be exposed to the decision of a single individual who must have his weakness should a dispute arise out of the contract
6. Arbitration is less formal than litigation
7. The decision of an arbitral tribunal is final and binding

Question 5

How is the number Arbitrators determined

Answer 5

By section 6 of the Act, parties to an arbitration agreement may determine the number of arbitrators to be appointed by them under the agreement, but where no such determination is made, the number of arbitrators shall be deemed to be three.

Question 6

What is the procedure for appointing arbitration

Answer 6

By virtue of section 7 ofind Act, parties to an arbitral agreement are in, when the
determine the procedure to be followed in the appointment of the arbitrator(s). When they fail to do so, in the case of three arbitrators, each party shall appoint one and then the two arbitrators so appointed shall appoint the third arbitrator (who under the common law is referred to as the “Umpire”). Where a party fails to appoint an arbitrator within 30 days of receiptor a re lies umpirso, or botra ppointed arbitrators failto agree on the third arbitrator within 30 days of their appointments, the court on the application of any party to the agreement shall make the appointment (Section 7 ACA).
However, in the case of international commercial arbitrations, an “appointing authority” named and agreed upon by the parties is saddled with the appointment of the arbitrators)
(See Section 44 of the Act).
As stated above, by section 7(4) of the Act, a decision of a court to appoint an arbitrator shall not be subject to appeal. However, in Ogunwale vs. Syrian Arab Republic [2002] 9
NWLR (Part 771) 127, 146, paras A-C., the Court of Appeal has held that before section 7(4) of the Act can extinguish a party’s right of appeal against the decision of a court appointing an arbitrator there must be:
(a)
Abinding, valid, compellable arbitration clause;
(b)
Adispute capable of being referred to arbitration; and
(c)
A party must have refused or defaulted to make an appointment.
These above conditions must co-exist, otherwise section 7(4) of the Act will not apply. It is also noteworthy that that the method of initiating proceedings for appointment of an arbitrator must be commenced by a motion on notice.

Question 7

Challenge of Appointment of Arbitration

Answer 7

Any person who knows of any circumstances likely to give rise to any justifiable doubts as to his impartiality or independence when approached in connection with an appointment as an arbitrator, the person is obliged to disclose such circumstances promptly (Section 8(1)) the duty to disclose spans through the entire arbitral process.

Question 8

What of challenge procedure

Answer 8

Under the Act, parties are empowered to determine the procedure to be followed in challenging the appointment of an arbitrator. But where no procedure is determined by the parties, a party who intends to challenge an arbitrator’s appointment shall, within 15 days of becoming aware of the constitution of the arbitral tribunal or becoming aware of any circumstance referred to in section 8 of the Act, send to the arbitral tribunal a written statement of the reasons for the challenge. (Section 8(1) ACA). &(%) AMA And the arbitral tribunal is empowered to decide on the challenge, unless the arbitrator who has been challenged withdraws from office or the other party agrees to the challenge.

Question 9

Termination of Mandate and Appointment

Answer 9

The mandate of an arbitrator shall terminate under the Act, if he withdraws from office or if the parties agree to terminate his appointment by reason of his inability to perform his functions or if for any reason he fails to act without undue delay (Section 9(3) ACA).
And where the mandate of an arbitrator terminates for any reason whatsoever, a substitute arbitrator shall be appointed in accordance with the same rules and procedure that applied to the appointment of the arbitrator who is being replaced (Section 11 ACA).

Question 10

Arbitrators’ Fees

Answer 10

In ad hoc arbitrations, the fees are fixed by the arbitrators themselves. The practice is that at the outset, after their appointment, the arbitrators request that parties make a deposit and may request for additional deposits during the course of the arbitration. At the end of the arbitral process, but before the publication of the award, the arbitrators usually request for the balance if any, of their arbitral fees. The deposits requested for usually include the professional fees of the arbitrator in addition to deposit to cover travels, meetings, secretarial services, expert witness and other necessary expenses. Where the fees are either expressly stated in the arbitral agreement or the instrument appointing the arbitrator and where there has been no agreement between the parties and the arbitrator, the custom is that the arbitrator may charge reasonable fees, but this must be guided by good faith. (Section 49; Articles 38 and 39 of Schedule I of ACA)

Question 11

What is an arbitral Award

Answer 11

An award, according to Russellon Arbitration, is a final determination of a particular issue ofclaim in the arbitration. Itis a determination, in the merits by the tribunal of a commercial dispute by a sole arbitrator or an arbitral tribunal in an arbitral proceeding and is similar to a judgement in a court of law. It is still referred to as an Award even if a claimant loses or the award is non-monetary in nature.

Question 12

What is the object of an award

Answer 12

The object of an award is to inform the parties of the arbitrators’ decision and the reasons for the decision. It is, of course, competent for parties to prescribe such a time in the arbitration agreement within which an award should be delivered. This period may be extended by consent of the parties or where not possible suo moto by the tribunal invoking the provisions of section 15(2). Parties may by agreement terminate the mandate of the tribunal where there is unexplained delay in the proceedings. (section 10 of the Act).

Question 13

Nature of an Arbitral Award monetary compensation

Answer 13

Many awards will decide that one party will need to pay the other party based on the contract or dispute controlling the award.

Question 14

Nature of an Arbitral Award Injunctive Remedies

Answer 14

b.
Injunctive Remedies: When a court orders that a party must take an action or stop an action, it is called an injunction. An arbitrator may offer a similar award in a dispute where one party needs such relief.

Question 15

Nature of Arbitral Award incentives

Answer 15

C.
Incentives: An arbitrator may add incentives for certain behaviours to encourage the parties to comply with the award

Question 16

Nature of Arbitral award creative Relief

Answer 16

d. Creative Relief: Often, the dispute between the parties will have many underling emotions and interests that are driving the parties. While the arbitrator will not have as much freedom as a mediator to help the parties come to a creative agreement, an arbitrator may have one party issue an apology or provide a positive employment reference.

Question 17

What are the components of an arbitral award

Answer 17

A.
Date and location of issuance of the award;
B.
Names and addresses of the claimant and of the respondent;
C.
Full names and addresses of the arbitrator/s;
D.
Summary of the statement of claim and matters in dispute;
E.
Reasons for issuance of the award, unless the parties agree it is unnecessary to specify reasons for the award;
F.
Result of the dispute resolution;
G. Time-limit for enforcement of the award;
H.
Allocation of arbitration fees and other relevant fees;
1. Signatures of the arbitrator/s

Question 18

Types of awards

Answer 18

Interim
Partial
Default
Additional award
Interlocutory award
Final
Consent award
Agreed award

Question 19

Interim award

Answer 19

a. Interim Award: this is granted by the arbitral tribunal during the course of the arbitral proceedings, pending the grant of a final award. It is usually made so that the parties will not perform an act that will render the arbitral proceedings nugatory. Interim award may be made where the arbitrator in the course of the proceedings determines matters which are susceptible to determination during the course of proceedings and which once determined may save a considerable time and money for all involved such as issues of jurisdiction or the applicable law. The power of arbitral tribunal to issue interim awards may be derived from the arbitration agreement or from the applicable law.

Question 20

What is partial award

Answer 20

b.
Partial Award: this is an award that does not cover all the issues raised in the arbitration. The partial award is made when the arbitrators believe that they are able to address a limited number of the issues raised in the arbitration, or in some cases, where they inadvertently omit to make an award with respect to some matter raised in the arbitration. Where there is a partial award, the parties can either refer the remaining issues to arbitration or litigation, depending on the circumstances of the award. Partial award is sometimes used interchangeably with interim award. It is used mostly to dispose some monetary or other ancillary issues; an example is payment on account.

Question 21

What is default award

Answer 21

c. Default Award: A default award is obtained where a party had proceeded exparte either because the respondent refused to participate or either party withdraws mid-way. This type of award is granted in the absence of a defaulting party who has refused to attend the arbitral proceedings. Therefore, where a party to the proceedings fails to attend or participate in the arbitral proceedings, a default award is made in the absence of such a party.

Question 22

What is additional award

Answer 22

Additional Award: this award would usually arise where there has been a partial award and one or both of the parties to the arbitration require(s) the arbitral tribunal to address the issues which have been left out of the partial award or where the parties believe that the award with regard to a particular issue does not cover all the aspects of that issue. It gives the parties the opportunity to ensure that the arbitration addresses all the issues relevant to their dispute.

Question 23

Interlocutory award

Answer 23

e.
Interlocutory Award: An interlocutory award refers to a decision of the arbitral tribunal on a procedural question. It’s really a procedural order and strictly not to be called an interlocutory award.

Question 24

Define the Final Award

Answer 24

Final Award: this is an award made at the end of the arbitral proceedings, after the participation of all parties in the proceedings and which addresses all the issues raised in the claim. An Award is final if it determines all the outstanding issues in the arbitration. In this case it is binding being a complete decision on the matter dealt with in the arbitration. The handling down of a final award normally renders the tribunal funtus officio. It ceases to have any further jurisdiction over the dispute; and the special relationship that exists between the arbitral tribunal and the parties during the currency of the arbitration ceases.

Question 25

What is a consent award

Answer 25

g.
Consent Award: It is a frequent occurrence that the parties in arbitration are able to arrive at a settlement. The settlement can, of course, be formalized as an amendment to their original contract or as a new contract. In that case, if one of the parties does not fulfill its obligations under the settlement, the other can commence a new arbitration (assuming that there is a suitable arbitration clause) or litigation. The settlement can be formalized as a consent award The tribunal has an obligation to assure itself that the requested consent award does not constitute a fraud or otherwise violate mandatory rules of law.

Question 26

What is an agreed award

Answer 26

h.
Agreed Award: this is an award agreed upon by the parties and endorsed by the arbitrator, at the request of the parties. Therefore, rather than the arbitrator making the award for the parties, they come to an agreement on their own.

Question 27

Termination of proceedings

Answer 27

The Arbitral proceedings are terminated by the final award or by an order of the arbitral. tribunal in accordance with the provision of the law. It may also be made when the claimant withdraws his claim or where all parties agree on the termination and where continuation is unnecessary. However, the respondent may object to the withdrawal and if the arbitrator finds merit in the objection, it shall uphold same - section 27(2).

Question 28

Ways to set aside an proceeding

Answer 28

By section 27 of the Act, arbitral proceedings terminate when the final award is published or an order of termination is issued by the arbitral tribunal.
It may also be made when the claimant withdraws his claim or where all parties agree on the termination and where continuation is unnecessary. However, the respondent may object to the withdrawal and if the arbitrator finds merit in the objection, it shall uphold same
- section 27(2).

Question 29

When can an award be challenged

Answer 29

7.5
Recourse against Award or Challenge of an Award
The Act provides that the award of an arbitral tribunal is final and binding on all the parties who undertake to carry out the same without delay - Article 32(2).
It is binding and not appealable. (Onwu vs. Nka- (1996) 7 SCNJ p. 240, at 255). However, an aggrieved party can apply to the court under sections 29 and 30 within three months of the Award for the setting aside of the Award.
The Award may be set aside where;
The tribunal has exceeded the scope of submission though if severance of extraneous issues is possible it can be done, hence it is expressly provided that the tribunal shall not decide, ex aequo et bono, or as amiable compositeur, unless the parties have expressly authorised it do so Section 22(3).
Under section 30, An Award may be set aside for misconduct. Such misconduct may result from absence of notices, use of affidavits where oral evidence was agreed upon, refusal to hear evidence on a material issue, refusal to hear the other party, discussing the proceeding with one party in the absence of the other party, gross mistake in an award, taking bribe, where the arbitrator acts on an evidence which is patently inadmissible etc or where an arbitrator has misconducted himself/herself in any other form or where the award was improperly procured (for example where the arbitrator has been deceived or material evidence has been fraudulently concealed:
See Taylor Woodrow (Nig) Ltd vs. SEGMH (1993) 4 NWLR (Part 256) p. 127).

Question 30

Is misconduct a term in which a n an award be set aside

Answer 30

Misconduct:
Although the term “misconduct was not defined in the Act, it has been taken to denote irregularity and would also cover cases where there is a breach of natural justice.(Araks vs. Ejeagwu (2000) 15 NWLR (Part 692) p.684 at 415, Baker Marine (Nig) Lid vs. Chevron Nig Ltd (2000) 12 NWLR (Part 681) at 404-405).
The Supreme Court, in Arbico (Nig) Lid. vs. N.M. T. Ltd, at pp. 24-25 paras G-G, gave a list of what amounts to misconduct, as follows:
(a)
(b)
(c)
Where the arbitrator fails to comply with the terms, express or implied, of the arbitration agreement;
Where even if the arbitrator complied with the terms of the arbitration agreement but makes an award which, on grounds of public policy, ought not to be enforced.
Where the arbitrator has been bribed or corrupted.
(d)
Technical misconduct, such as where the arbitrator makes a mistake as to the scope of the authority conferred by the provisions of the agreement referring the dispute to him. This however does not mean that every irregularity of procedure amount to misconduct.
(e)
Where the arbitrator or umpire fails to decide all the matters, which were referred to him.
(1)
Where in his award, the arbitrator or umpire purports to decide matters which have not been included in the agreement or reference for example:
(g)
Where the award contains unauthorized directions to the parties; or
(h)
where the arbitrator has power to direct what shall be done but his directions affect the interest of third parties.
in lhenacho vs. Chigere (2004) 17 NWLR (Part 901) p. 130 at 149, the Court held that an award, pursuant to a customary arbitration, against a third party who was not a party thereto (the arbitration and oath-taking), could not be bound by same.);
(a)
Where the arbitrator decided as to the parties’ rights, not under the contract upon which the arbitration had proceeded but under another contract;
(b)
If the award is inconsistent or is ambiguous or there is some mistake of fact, which mistake must be clear beyond any reasonable doubt; or
(c)
Where the arbitrator has breached the rules of natural justice.
The above enumerated instances of misconduct are essentially aimed towards substantial justice.

Question 31

How to set aside proceedings

Answer 31

A party seeking to have an award set aside must establish at least one of the following seven options
A party to the arbitration agreement was under some incapacity;
The arbitration agreement is not valid under the law which the parties have indicated should be applied, or under Nigerian law;
The party was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was not given the opportunity to present his case;
The award deals with a dispute not contemplated by the parties when agreeing to submit to arbitration;
The award contains decisions on matters beyond the scope of submission to arbitration such that only the part of the award which contains such decisions should be set aside;
• The composition of the arbitral tribunal was not in accordance with the agreement if the parties unless such agreement is contrary to the provisions of the Act:
Where there was no prior agreement between the parties for composition of the arbitral tribunal, the composition was not carried out in accordance with the

Question 32

How can one recognize and enforce an award

Answer 32

7.7
Recognition and Enforcement of Award
An award just like a judgement both being products of adjudicatory processes, is binding.
Section 31 of the Act provides that an arbitral award shall be recognized as binding unless any of the parties request the court to refuse recognition or enforcement of the Award.
A party relying on an award or applying for its enforcement shall supply:
(a)
(b)
The duly authenticated original award or a duly certified copy thereof.
The original arbitration agreement or duly certified copy thereof (Egbokan vs
Ekwenibe & Sons Trading Co. Ltd. (2001) 2 NWLR (Part696) p. 32 at 41-42);
(C.)
Where the award or the agreement is not made in English language, a duly certified translation thereon into English (Section 51 (2) ACA).
It should be noted that there is no need to apply to court for the recognition of the award, this is because section 31 provide that the award shall be recognised as binding. The application to court is only necessary for enforcement. There are two methods of enforcement available viz. summary enforcement of award and Enforcement by action.