By Sandra Nwadi, Esq.
▪Arbitration:
This is a way or form of solving problems outside of court proceedings or processes.
It is also know as one of the main and popular types of alternative dispute resolution (ADR). Arbitration as part of ADR is highly recognised by courts, laws, etc of both Nigeria and other countries of the world.
▪Award:
Once an arbitration dispute resolution process is done with, a decision is given and this decision is known as an award.
Awards are recognised and completely binding on all parties and totally enforceable by courts too.
▪Contract:
Contracts are known to be agreements between individuals or groups which can be written or oral and they are legally binding on all parties. The law would often seek to enforce the legal rights of the contractual parties unless there are loopholes or aspects which voids the contract if against law. There are also other categories or teems such as express, implied, bilateral and unilateral contracts of which the distinguishing factors can be seen in the name or its definitions.
▪Sealed Contract:
These are contracts often under seal, written and also, would require it to be signed, sealed and delivered. A seal is also affixed to it, but this varies in countries and jurisdictions. Sealed contracts are seen as more formal.
▪Unsealed Contract:
Unsealed contracts are sometimes, not formal and no seal is used. There is also need for credible evidence to prove these types of contracts especially when it is just oral.
▪Limitation period for arbitration awards:
Generally, there are no statute of limitations on awards.
However, an award when delivered is subject to the common law limitation act depending on the cause of action.
So, one need to check what the cause of action is and if there are laws baring it.
For instance, a case or a cause of action that is bound by 6yrs limitation will be bound by such under Arbitration and it will follow the common law principles.
Types of Limitations:
Lawyers see limitation period to be of two types and they are: contractual time limitation and statutory time limitation.
Contractual time limits are often put in agreements and including arbitration agreement if any, but then, it also, has to follow or fall under the statutory provisions of the state or country where the contract or case takes place.
Statutory limitations follow the limitations given by the essential statutes or laws of the place or country. There are so many statutes and they include:
Reciprocal Enforcement of Judgments Act, Chapter 175 Laws of the Federation of Nigeria 1958 (REJA), Lagos State Arbitration Law provides in section 35(5), The Limitation Law of Lagos State,The Foreign Judgments (Reciprocal Enforcement) Act 2 (FJREA)
▪Limitation period for a sealed contract:
In places like districts of Columbia, the law there has a 12 year statute of limitation if law suits or actions concerhing contracts under seal are brought.
In Georgia, it has 20 year limitation.
Contracts under seal are seen as formal and without consideration and some include:deed, covenant, sealed contract, special contract, common law specialty, etc.
This must be in writing too. Then signed, sealed and delivered. One party through presumption of consideration already expects to receive full obligations or promises written in the contract.
➡️▪Recently, the law generally provides for a limitation period of 6 years for awards given in arbitration over varying issues including sealed contracts.
It’s more often than not accepted by most lawyers, courts, statutes, etc. This can be seen in explanations or articles by SPA Ajigbade and co law firm. Though this view is aligned with section 8(1)(d) of the limitation law of Lagos State which gives 6 years for an application of enforcement of award to be activated or brought…often from the start of cause of action too.
Often times till date, a worrisome concern of the judicial interpretation by lawyers or clients or judicial officers come up on when time begins to run and if it is when the cause of action originated or when the award is given. It’s been said that some of the decisions of the Suoreme Court on limitationn of time are sometimes, not arbitration friendly compared to some of the Lagos Court of Appeal recent decisions. Thereby, a review and concrete laws are needed and often called for. Ajigbade also notes that one of the supreme court decisions inferring that time be postponed till award is given and that the case of Scott v Avery be replicated.
▪Case Instances :
▪In the Supreme Court case of City Engineering Nig. Ltd v. Federal Housing Authority, (1997) 9 NWLR (Part 520) 224, Justice Ogundare stated and questioned thus:
“The principal question that calls for determination in this appeal is: When does the statutory period of limitation start to run for the purpose of the enforcement of an arbitration award; is it at the date of the accrual of the original cause of action or is it at the date of the arbitral award?”
The statutory period of limitation of six years began to run from 12/12/87 and appellant’s application to enforce the award was statute-barred when it was brought in 1988. The appellant has itself to blame for the catastrophe that has befallen it. Notwithstanding that there was some delay in the arbitration proceedings arising from various applications made by both sides, the arbitrator gave his award in November 1985, a date still within the statutory period of limitation. For unexplained reasons, the appellant waited another three years before applying to enforce the award in its favour, by which time limitation period had set in.”
Unlike this Nigeria’s Supreme Court desicion, the English decisions or position often start counting from when the exact date of the award while putting into consideration issues that may include length of proceedings, other set backs, etc.
For Nigerian case like the above, it’s encouraged to avoid limitation issues by making sure their agreements made under arbitration are under seal or simply state that it would use the Arbitration and Conciliation Act. It does seem Justice Ogundare used arbitration generally and not the Act.
▪In foreign awards in Nigeria, the limitation is seen as 12 years especially if arbitration agreement is made under seal. It is said that since Nigeria’s Minister of Justice has not made any proclamations on it, the six year limitation would not apply; so it’s same or seen as it applies in England, Ireland and Scotland.
Ibifubara Berenibara of Aelex law firm notes in his articles that Lagos government is silent on the limitations in arbitration using the Arbitration and Conciliation Act but that if an arbitration is governed by a particular statute, then the period of limitation in the limitation law will not apply.
▪In Sifax Nigeria Limited v Migfo, (2015) LPELR 24655(CA), the court of appeal did what is seen as freezing computation of time to determine it and so, the court excluded the time from when the arbitration started and the date of the award. The Supreme Court equally aligned itself with the decision of the court of appeal. May be, if this case was in existence before that of City Engineering, the court may have held that the appelant was within time. It does appear the decision in City’s case would not be used if the two instances are brought up and rather, Sifax decision used. Recent cases overrules old cases as time changes and new law made or reviewed.
▪Nigeria being a signatory to foreign agreements of nations:
Depending on the case or foreign companies, the award enforcement can be aligned with the New York Convention on Arbitration as signed. Ajumogobia and Okeke’s firm authors, Olasupo Shashore, Bello Salihu and Safiat Kekere-Ekun noted that on 17th March, 1970, Nigeria became a signatory to the NY convention.
At Regional level, Nigeria signed a treaty with Asian African Legal Consultative Organisation to continue with operating the Regional Centre For International Arbitration established in Lagos in 1989.
▪Limitation period for an unsealed contract:
They (Ajumogobia and Okeke’s contributory authors) also stated that an award not under seal has a limitation period of 6 years to bring an action to enforce the award. So, long as it is part of the arbitration agreement or pursuant to any other statute used or the Arbitration and Conciliation Act (ACA). The arbitration process and proceedings or agreements would need to be looked into to figure out what to do about enforcing the award and time limits.
Limitation period made under Arbitration and Conciliation Act (ACA):
These are generally seen as awards enforceable within a period of 12 years.
▪Limitation period for Abuja:
The Limitation Act of Abuja, section 7(4), Cap.522, Laws of the Federation of Nigeria provides that there will be a limitation period of six years for an action although when founded on tort and from the time the cause of action started.
Note:
According to Former Fida Chairperson of Anambra State and Arbitration facilitator, Chineze Obianyo, she notes that there arent statute of limitations on awards per say but that when an award is delivered, it is subjected to common law limitation act and this depends on cause of action which for instance, if a cause is bound by 6 year limitation, the same thing applies under arbitration too.
▪Legal advice and solutions:
To be on the safe side, I would advice that the award be enforced and if not done by the party meant to, then an action or suit be filed in court of competent jurisdiction being Abuja. There is need to play safe while testing the water especially in a case whereby award given is still within 6 years and since the facts and terms of arbitration or it’s proceedings are unknown, waiting for a 12 year period as accepted by other statutes or acts may be detrimental.
The courts also view an applicant or it’s lawyer as being focused and serious if things are done within time for awards to be enforced by parties, individuals or companies or government as the case may be.
When filing an action to enforce an award, note that the court will often require original award, arbitration agreement, name and last place of business of the person or parties, where the award is intended to be enforced, statement of fact that the award has not been complied with at all or that it was partly complied with as the case may be.
An important case here is the Imani & Sons Ltd v Bill Constructions Co. Ltd (1999) NWLR 12 Part 630, 253 at 263.
The Arbitration and Conciliation Act Cap, A18,LFN, 2004, section 51 also covers these and provides it as unified laws whereby a party suing to enforce provides the above and more depending on the case, jurisdiction, local or foreign awards, etc. If arbitration agreement was not made in English, a certified translated version in English should be provided.
➡️▪Another important example is the case of Abuja Urban Mass Transport CO. Ltd v Autocorp Impex PTE Ltd, a motion on notice filed in the Jabi High court dated, February 7,2020 and done according to Order 19 rule 13 of the Abuja FCT High Court Civil Procedure Rules, 2018 and also, section 31 (1) and (2) of the Arbitration and Conciliation Act asked or prayed the court for an order to “grant leave for the recognition and enforcement of the arbitral award dated 6th November, 2019.
Second order asked of the court in same motion on notice “for such order and further orders as the court deems fit to be made.” A 10 paragraph affidavit by Temilade Ojo, the applicant’s lawyer’s clerk was added in support of the application of the motion on notice and plea. Also, a written address was attached by the applicant’s cousel which he equally adopted as his oral submission.
The judge, Hon. Justice D Z Senchi, in his ruling in the above case made mention of reading the original award and found it to be sound and valid even though the respondent on the other side seemed dissatisfied with the award and asked that it be seen as against public policy. The judge said cogent reasons were not established and it did not fall under public policy as stipulated by courts or Acts and other laws. He therefore ruled in favour of the applicant and granted reognition and enforcement of the award as conducted by the sole Arbitrator, Dr Alex Iziyon, SAN on 6th November, 2019.
➡️▪The above is a standard procedure for pragmatic action to be taken in general all over Nigeria and especially Abuja on recognition and enforcement of awards.
It’s a helpful guide for further decisions to be made by the client’s lawyer and client too.
References:
Section 8(1)(d) of the limitation law of Lagos State.
City Engineering Nig. Ltd v. Federal Housing Authority, (1997) 9NWLR (Part 520) 224.
Sifax Nigeria Limited v Migfo, (2015) LPELR 24655(CA)
The Limitation Act of Abuja, section 7(4), Cap.522,Laws of the Federation of Nigeria .
Imani &sons Ltd v Bill Constructions Co. Ltd (1999) NWLR 12 Part 630, 253 at 263.
The Arbitration and Conciliation Act Cap, A18,LFN, 2004, section 5
Abuja Urban Mass Transport CO Ltd v Autocorp Impex PTE Ltd