As arbitration becomes more popular in Nigeria, the courts' ability to support arbitration becomes more important. Many take the Arbitration and Conciliation Act (the ACA) as the only law that applies to arbitration applications before the court. However, the Arbitration Law of the States (the AL) and the High Court Law of Lagos State (the HCL) also empower the Lagos High Court to support arbitration. Sometimes, these laws apply exclusively.
This article analyses the Lagos High Court's power under the AL, the ACA and the HCL as regards arbitration applications.
The common law courts now support arbitration. One of the major ways by which they support arbitration is by preserving assets through preservative orders, pending final determination by arbitration.
There are two major statutes on arbitration in Lagos:
- the ACA – a decree by the former military government but it is deemed as an act of the National Assembly, and it applies nationwide; and
- the AL – a law made by the Lagos State House of Assembly.
There is still controversy about which of these statutes apply to arbitration applications before the Lagos High Court.
One of the major differences between the ACA and the AL is the express power under section 21 of the AL, according to which the Lagos High Court can grant interim measures in support of arbitration. Conversely, section 34 of the ACA(1) restricts the courts (including the Lagos High Court) from "intervening" in arbitration. Thus, the provisions of the ACA and of the AL directly contradict each other as regards the court's power to intervene with arbitration applications. Therefore, the issue of which law is applicable is important.
It is generally accepted that "arbitration" is not listed on the exclusive and concurrent legislative lists in the Constitution, which allows two schools of thought to arise as regards the statutes that apply to arbitration applications before the court.
Despite the fact that "arbitration" is not mentioned in any of the Constitution's lists, the Constitution empowers the State Houses of Assembly to make laws on arbitration. The Lagos High Court has upheld this view in several cases.(2)
For injunctions in support of arbitration seated in Lagos, it can be argued that the AL is the lex arbitri (ie, the law of the place of arbitration). On that basis, the restriction in section 34 of the ACA does not apply to the Lagos High Court.
However, it has also been argued that the AL applies to only arbitration. This argument relies on section 2 the AL, which states that it applies to "all arbitration within the State" but subject to adoption of another law by the parties.
Unlike arbitration, the Lagos High Court upholds all laws within the state. So, a statute does not need to expressly declare that the court should apply it. Therefore, the AL applies to applications to the Lagos High Court as well as arbitrations within the state. It applies regardless of whether the parties adopt a different law. Thus, in the context of an application to the court for an injunction in support of arbitration within the state, the AL is the lex arbitri.
Notwithstanding the ACA's restriction on intervening in arbitration, the High of Lagos State has an unlimited power to grant injunctions in all cases. In this regard, section 13 of the HCL states as follows:
The High Court may grant a mandamus (as defined in subsection (5) or an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the court to be just or convenient so to do.
Similarly, section 16 of the HCL gives the court the power to grant injunctions where the court "thinks fit". As such, the Lagos High Court has an absolute and unlimited power to grant injunctions "in all cases". It may be granted where "it appears to the court to be just or convenient so to do". That includes in support of arbitration. Thus, the restriction in section 34 of the ACA does not remove the court's power under the HCL.
Despite section 34 of the ACA restricting the court's power to "intervene" in arbitration, the AL and the HCL give the Lagos High Court the power to support arbitration applications.
Arbitration applications for preservative orders, such as a Mareva injunction (freezing order) – pending arbitration, are available to parties even if they have adopted the ACA as the governing law for their arbitration.
Therefore, it can be held that the Lagos High Court has absolute power under both the AL and the HCL to support arbitration applications.
For further information on this topic please contact Muyiwa Ogungbenro or Similoluwa Adeyemi at Olajide Oyewole LLP by telephone (+234 1 279 3670) or email ([email protected] or [email protected]). The Olajide Oyewole LLP website can be accessed at www.dlapiperafrica.com.
(1) Statoil Nig Ltd v NNPC (2013) NWLR 14 (Part 1373).
(2) Samsung Heavy Industries Nig Ltd v Global Resources Management Ltd, Suit LD493CMW/2018 and Deltatek Offshore Ltd v Amni International Petroleum Development OML 52 Company Ltd, Suit LD/577CM/2021.