Enforcement of Arbitration Awards in Nigeria

Introduction

Arbitral award enforcement is without doubt a topical issue in both domestic and international arbitration practice. Arbitration — whether domestic or international — derives much of its attraction from the promise that awards will be recognised and enforced efficiently, without the need to relitigate the substantive merits.

That promise is enshrined in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), to which Nigeria acceded in 1970, and domesticated through what was the Arbitration and Conciliation Act (ACA), Cap A18, Laws of the Federation 2004, now significantly updated by the Arbitration and Mediation Act (AMA) 2023.

Yet the reality of enforcement — in Nigeria and globally — is more complex than the treaty framework suggests. This article examines the legal architecture for enforcing arbitral awards in Nigeria, the grounds on which enforcement may be refused, and the practical strategies available to award creditors.

The Legal Framework

Domestic Awards

A domestic arbitral award — one arising from arbitration seated in Nigeria — may be enforced in the same manner as a judgment of the court. Under the AMA 2023, a party seeking enforcement files the award with the appropriate court, which will make an order recognising and enforcing it unless the limited grounds for refusal apply.

The courts have jurisdiction over the enforcement of domestic awards, and Nigerian courts have generally been supportive of the arbitral process, respecting the parties' agreement to arbitrate and declining to second-guess arbitrators' factual findings.

Foreign Awards — The New York Convention

A foreign arbitral award — one made outside Nigeria — is enforceable under the New York Convention framework as domesticated by the AMA. The applicant files the original or certified copy of the award and the arbitration agreement (or certified copies thereof). The court will then recognise and enforce the award unless the respondent establishes one of the grounds for refusal.

The New York Convention creates a strong presumption in favour of enforcement. The grounds for refusal are exhaustive and narrowly construed.

Grounds for Refusing Enforcement

The New York Convention (and the AMA) identify two categories of refusal grounds:

Grounds the Respondent Must Establish

1. Incapacity or invalidity of the arbitration agreement. The parties were under some incapacity at the time of concluding the arbitration agreement, or the agreement is not valid under the law to which the parties subjected it.

2. Lack of notice or inability to present case. The respondent was not given proper notice of the appointment of the arbitrator or the arbitral proceedings, or was otherwise unable to present its case.

3. Award beyond submission or not decided. The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions beyond the scope of the submission. Where the decisions on matters submitted can be separated, the award may be enforced in part.

4. Improper composition of tribunal or procedure. The composition of the arbitral authority or the arbitral procedure was not in accordance with the parties' agreement, or (failing such agreement) not in accordance with the law of the country where the arbitration took place.

5. Award not yet binding or set aside. The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which (or under the law of which) it was made.

Grounds the Court May Raise Proprio Motu

6. Non-arbitrability. The subject matter of the difference is not capable of settlement by arbitration under Nigerian law.

7. Public policy. Recognition or enforcement of the award would be contrary to the public policy of Nigeria.

The public policy ground is the most frequently and controversially invoked basis for resisting enforcement. Nigerian courts have, in some cases, given it a broad reading — encompassing fraud in the arbitral proceedings, breach of natural justice, and fundamental procedural impropriety. The better approach, consistent with international best practice, is to construe "public policy" narrowly, limiting it to the most fundamental principles of Nigerian law and justice.

Practical Challenges in Enforcement

Assets and Immunity

Identifying and attaching the respondent's assets is a core practical challenge. Where the respondent is a private party, the normal tools of civil execution — attachment, garnishment, receivership — are available. Where the respondent is a state entity, the doctrine of sovereign immunity may shield certain categories of assets.

The AMA 2023 and the Supreme Court's evolving jurisprudence on state immunity provide some guidance, but the interplay between commercial activity and sovereign immunity remains a live issue in Nigerian enforcement practice.

Delay

Despite the relative efficiency of the New York Convention framework, enforcement proceedings in Nigerian courts can be delayed by interlocutory applications — particularly applications for stays pending annulment proceedings or applications challenging the court's jurisdiction. Award creditors must be prepared to contest these delays vigorously.

Annulment Proceedings

A respondent who has lost an arbitration may seek to annul (set aside) the award in the courts of the seat of arbitration. In Nigeria, annulment applications must be brought within three months of the award. The grounds for annulment are similar (though not identical) to the grounds for resisting enforcement. A pending annulment application in the courts of the seat may provide grounds for a stay of enforcement in another jurisdiction.

Award creditors who anticipate annulment applications should consider filing for enforcement in multiple jurisdictions simultaneously, reducing the risk that a successful annulment in one jurisdiction eliminates all enforcement options.

The AMA 2023: Key Improvements

The Arbitration and Mediation Act 2023 represents a significant modernisation of Nigeria's arbitration framework. Key improvements relevant to enforcement include:

• Adoption of the UNCITRAL Model Law (2006) as the basis of the domestic framework
• Strengthened anti-suit injunction provisions to protect arbitral proceedings
• Clearer framework for interim measures, including recognition of interim measures from foreign tribunals
• Improved timelines for court proceedings related to arbitration
• Explicit provisions for mediation and mediated settlement agreements

These reforms position Nigeria more favourably as an arbitration-friendly seat and enforcement jurisdiction.

Conclusion

Enforcing an arbitral award in Nigeria is more straightforward than enforcement through litigation to judgment, but it is not automatic. Award creditors must be strategically prepared: identifying assets pre-award, filing enforcement applications promptly, anticipating and countering annulment applications, and navigating the sometimes uncertain terrain of sovereign immunity.

The AMA 2023 provides a modern framework that, properly applied, should support efficient enforcement and reinforce Nigeria's attractiveness as an arbitration-friendly jurisdiction.

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Isaac D. Folorunso is the Principal Partner of Isaac Dennis Folorunso & Co. The firm advises on domestic and international arbitration, including enforcement proceedings.