Former President of the Nigerian Bar Association NBA, Dr. Olisa Agbakoba SAN, has made a strong case for the development of a National Policy on Arbitration in the country, saying that current policy and culture of arbitration in the country is still at the level of infancy.

While speaking recently in Lagos, Agbakoba noted that there is urgent need to develop and strengthen the policy and culture of arbitration in Nigeria, given that the judicial system has proven extremely inadequate at processing cases or enforcing decisions.

According to him, courts are slow and generally considered inefficient due to reasons associated with poor funding, poor physical facilities, manpower shortage, congestion due to low speed in dispensing justice and challenges associated with inadequate training and capacity building, among several others.

It was however gathered that in the face of these myriads of challenges, the average duration for the resolution of cases in Nigerian courts is between 10 – 20 years spanning the entire tiers of the judicial system, a development that is evidently unmanageable in any economy, including Nigeria’s.

“The enforcement of commercial contracts or settlement of disputes continues to be a primary concern for entrepreneurs and investors. Economic reforms and investment growth are hardly achieved and barely successful in face of dispute resolution constraints. The reason is that litigation has become such a major bottleneck to business that it is no longer seen as an effective mechanism for timely resolution of commercial disputes. Reliable alternative methods of resolving commercial disputes became imperative hence the introduction and wide acceptance of Alternative Dispute Resolution ADR processes or mechanisms.

“Arbitration has become the established method of determining international commercial disputes. All over the world, states have modernized their laws of arbitration to take account of this fact. In a recent survey conducted by White and Case, in collaboration with Queen Mary University, School of International Arbitration on the Improvements and Innovations in International Arbitration, 90 per cent of the respondents to that survey confirmed that international arbitration is their preferred dispute resolution mechanism”, he said.

While going down memory lane, he noted that under the tenure of the former Attorney General of the Federation, Prince Bola Ajibola, Nigeria’s policy on arbitration was at its height, during which the Regional Center of Arbitration was setup. He insists that the government needs to promote its arbitration policy by fully backing a center of arbitration, adding that the Lagos Court of Arbitration LCA undoubtedly, has potential to become a powerhouse in international arbitration in West Africa.

Investigations also show that Lagos Court of Arbitration’s strong institutional rules and the recent development in arbitration legislation in Nigeria demonstrates that it can gain the trust and acceptance of the region, which should be a good springboard from which to build an international arbitration centre and a regional arbitration hub in the country.

Experts also believe that the development of this hub has become necessary given that though Nigeria generates a significant volume of commercial transactions (both domestic and international with about 80 per cent of them originating or terminating in Lagos, unfortunately, dispute arising from these transactions are ultimately arbitrated in foreign countries.

This situation has been attributed to the inadequacy and efficacy of Nigeria’s legal and institutional framework for arbitration, as the ‘flight’ of ‘domestic’ (purely Nigerian) arbitration cases to arbitral venues outside the country is not helpful to Nigeria’s Economic Empowerment and Development Strategy programme NEEDS. It also means loss of revenue for majority of lawyers and other ADR practitioners, which prompted various efforts and proposals being made at the national level and some states too.

One of such efforts was the Repeal and Re-enactment Bill of the Arbitration and Conciliation Act 1988 currently before the National Assembly, which attempts addressing this issue. It is also believed that what is required is a commitment and affirmative steps for actualisation of the proposals.

In line with these efforts, the Olisa Agbakoba Legal Mediation and Arbitration Centre also submitted a proposal to the House Committee in charge of the repeal and the re-enactment of the Arbitration and Conciliation Act seeking to introduce into the bill an opt-in provision for fixing the seat of arbitration in Nigeria. We propose that where parties have failed to determine Seat and place of the arbitration, the arbitration tribunal should revert to Nigeria as the forum or seat for the Arbitration.

This is designed to promote the growth of the industry and also encourage investment, drive economic development and improve arbitration practice and culture among arbitrators and relevant professionals.

Agabkoba argued that Nigeria must take control of her bargaining power, arguing that in the scramble for resources, investors will be forced to accept local or regional arbitral systems and/or African seats, or risk losing deals. He cited a survey conducted by Simmons & Simmons in 2015, in which 72 per cent of respondents said that they would consider using local or regional arbitral systems, while 58 per cent said they would use an African seat.

According to him, in order to develop arbitration in this region and prop Nigeria as a regional hub in West Africa, it is incumbent on the country to take active steps to increase awareness. Nigeria must also build up the capacity of her arbitration centres, market them aggressively and must make legislative reforms an agenda priority, as well as publicising them widely.