In Sundersons Limited & Milan Nigeria Limited v. Cruiser shipping PTE Limited & Universal Navigation PTE Limited1 the Court of Appeal in Nigeria interpreted the provisions of Sections 51 and 52 of the Arbitration and Conciliation Act CAP A18, LFN 2004 in favour of the recognition and enforcement of a foreign arbitral award made in London. The decision indicates the supportive role of Nigerian Courts to the arbitral system and that the court will enforce an international award in the absence of any legitimate ground for refusing the recognition and enforcement of the award.
By a charter party dated the 4th day of August 2006, the 2nd Respondent chartered the vessel "MV CRUISER" to the 1st Appellant. The 1st Respondent was the registered owner of the vessel. The vessel was to carry a cargo of about 23,000 metric tons of rice belonging to the 2nd Appellant from Kakinada, India to Lagos and Port Harcourt in Nigeria. A dispute arose between the parties. The charter party incorporated in the Bills of Lading provided for London arbitration. The dispute was referred to a three-man arbitral tribunal in the United Kingdom and a Final Award was delivered on the 15th day of October, 2009.
The Respondents (Applicants at the lower court) by an Originating Motion dated the 27th day of September 2010 sought an order of Court to recognize and grant leave to enforce the Final Arbitration Award in the same manner as a judgment of the court. Attached to the Respondents' application was a duly certified copy of the arbitration award and a fax copy of the arbitration agreement. The Appellants (Respondents at the lower court) challenged the recognition and enforcement of the award on the ground that the Respondents failed to put sufficient materials before the Court to warrant the granting of the application. Specifically, the application was opposed on the grounds that an original or duly certified copy of the arbitration agreement was not attached to the application for enforcement.
The Lower Court held that the arbitral award was recognizable and enforceable as a judgment of the court. The Court further held that it was not against public policy to recognize and enforce Arbitral Awards rendered in foreign venues agreed upon by the parties provided that it is just and proper to do so in the circumstances. The Court however decided that the award shall be enforced upon the filing of a duly authenticated original arbitration award.
The Appellants dissatisfied with the ruling, filed a Notice of Appeal on the ground that the Respondents had not satisfied all the conditions set out under Section 52(1) of the Arbitration and Conciliation Act (ACA) entitling them to the recognition and enforcement of the Award. It submitted that the learned trial Judge ought to have struck out, dismissed or granted the application and not to make it recognizable or enforceable upon the filing of an authenticated charter party.
The Court of Appeal affirmed the decision of the lower court and held that failure to attach an original copy of the arbitration agreement [contained in the charter party] to the application for enforcement did not render the application incompetent. To it, a conditional enforcement was proper in the circumstances in the absence of any injustice or violation of the principles of fairness and equity. The Court further held that the ground on which the Appellants sought for the refusal of recognition and enforcement of the arbitral award does not fall within the grounds provided in Section 52 of the Arbitration and Conciliation Act.
There are different regimes for the enforcement of international arbitration awards in Nigeria. Prior to the promulgation of the Arbitration and Conciliation Act, foreign arbitral awards were enforceable by registration under statutes dealing with the enforcement of judgments [judgments are defined as including arbitral awards]. The statutes include the Reciprocal Enforcement of Judgments Ordinance, 1922 (REJO) and the Foreign Judgments (Reciprocal Enforcement) Act of 1960 (FJREA).2 The Arbitration and Conciliation Act (ACA) provides alternative mechanisms for the recognition and enforcement of foreign awards without any requirement of registration.
Section 54 of the Arbitration and Conciliation Act domesticates Nigeria's treaty obligations under the New York Convention providing for enforcement of foreign arbitral awards on reciprocal basis. Section 54 states that without prejudice to sections 51 and 52 of the Act, the New York Convention shall apply to awards arising out of international commercial contracts. The provisions of sections 51 and 52 of the Act also provide for the enforcement of foreign arbitral awards though without making any express reference to the requirement of reciprocity. The provisions of sections 51 (on recognition and enforcement of awards and the procedure) and 52 (which states the grounds for refusing recognition and enforcement of an award) are substantially the same as Articles IV and V of the New York Convention. The complaint of the Appellants in this case was that the processes filed by the Applicants in its bid to enforce the award did not include the original copy of the arbitration agreement. Indeed Section 51(2)(b) of the ACA specifically provides amongst the documents to be laid before the court the original arbitration agreement or a duly certified copy thereof. Other documents to be laid before the court are the duly authenticated original award or a duly certified copy thereof and where the award or arbitration agreement is not made in the English language, a duly certified translation thereof into the English language.
In the present matter, the Respondents (Applicants at the lower court) seeking enforcement failed to comply with the provision by not attaching the original arbitration agreement or a duly certified copy to its application. However, the lower court noted that the Appellants neither denied the authenticity of the award nor the validity of the arbitration agreement contained in the charter party or participation in the proceedings. Neither was there any complaint made on any of the grounds stipulated in Section 52, (grounds recognized under the New York Convention for non-recognition of awards). However, to the Appellants, the court had no power to make the conditional order enforcing the award and should simply have either granted the application, or struck out or dismissed same for the Respondents' default.
In interpreting Section 51(2)(b) of the Arbitration and Conciliation Act, the Court of Appeal was of the view that failure to attach an original copy of the agreement to the application did not render the application incompetent. The court, rather than strike out the application, exercised its discretion to enforce the award subject to the production of a duly authenticated original award. The court recognized that failure to attach the original arbitration agreement or a duly certified copy of the arbitration agreement was not one of the eight grounds for refusing an application to enforce an award.
It appears that the court rightly resisted refusing the application to enforce an international award on the technical ground of a 'fax' and not an 'original arbitration agreement or a duly certified copy of the arbitration agreement' having been provided. The court considered that there was no legitimate complaint against the arbitration agreement, the arbitral proceedings and the resultant award. To the Appellate Court, the lower court striking out or dismissing the application would have been prejudicial to the Appellants and the court rightly protected the interest of the parties by making an order enabling the enforcement of the international arbitral award.
The court struck a balance between technical requirements of the procedure for enforcement of awards and the need to preserve the sanctity of arbitration agreements freely entered into in circumstances where the resultant awards comply with international enforcement standards. The court affirmed that it is not against public policy to recognize and enforce arbitral awards rendered in foreign venues agreed upon by the parties.
The Nigerian Supreme Court in Owners of the M.V. Lupex v NOCS Ltd3 had emphasized the need to preserve the sanctity of international arbitration agreements. It held that courts should not be seen to encourage the breach of a valid arbitration agreement particularly if it has international flavour.
- (2015) 17 NWLR (Pt. 1488) 357 C.A, (2014) LPELR-22561(CA).
- For further reading see Olawoyin AO 'Enforcement of Foreign Judgments in Nigeria: Statutory Dualism and Disharmony of Laws' Journal of Private International Law 10:1(2014), pp.–129-156
- (2003) 15 NWLR Pt 844 p 469