Introduction: Have you executed a Contract that has an Arbitration Clause with London or Kigali as the place of Arbitration? Yet the same Contract is subject to Nigerian Law and the Nigerian Courts? Now you're wondering which clause has priority over the other? This Article would try to provide some clarification as follows:
- Nigerian Courts Respect Agreements: The Nigerian Courts have over the years strongly taken the position that parties must be bound by the Terms of their Agreement voluntarily entered into. Where such Agreement contains an Arbitration clause, the Nigerian Courts strictly enforce the Agreement to go to Arbitration where either of the parties insists on exercising that right. Where a Party to an Arbitration Agreement opts for and insists on the right to Arbitration before a trial Court, the Court will hold the Parties to the Agreement to their intention expressed clearly in the Arbitration Clause(s) which bind(s) them.
- Stay not Incapable: It is however important to clarify that the consistent position of the Nigerian Courts is that the existence of an Arbitration Clause in an Agreement does not render the Nigerian Court incompetent or incapable to act. What it does is to suspend the jurisdiction of the Court until the completion of Arbitration proceedings. Thus, the Nigerian Court would in such circumstances stay its proceedings and refer the parties to Arbitration in compliance with Section 5 of the Arbitration and Conciliation Act of Nigeria1.
- Last Bus Stop: It is only when either party is dissatisfied with the arbitral award, that the Nigerian Courts would assume jurisdiction over the matter. It is important to note that this is applicable, irrespective of the location and jurisdiction of the Arbitration so long as the Contract states that Contract is subject to Nigerian Laws and the jurisdiction of Nigerian Courts.
Footnote
1 Per the Supreme Court's decision in Mainstreet Bank Capital Limited v. Nig. RE (2018) 14 NWLR (Pt.1640) 423 SC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.