Arbitration Guest Columnist Trade and Commerce

THE LAW IN NIGERIA AND THE REALITIES OF MODERN COMMERCIAL ARBITRATION – BASIT KOLAPO, SAKA

While we are working on making our Arbitral institutions much more viable and conducive for international commercial arbitration, it is important that we review our laws to accommodate more positive and business-smart ideas. The Legal Practitioners Act (“LPA”), as amended in 2014 is one of such laws.

INTRODUCTION
As the world continues to integrate, business and economic dealings have become more compact and seamless. This is not to say countries and states have to loosen grip on their sovereignty. Rather, individual countries must be ready to accommodate commercial entities of other nationalities, if the world is really going to be one big, prosperous village. Meanwhile, international trade naturally comes with disputes and as such, laws and lawyers need to be very flexible to accommodate this reality.

Arbitration as a method of resolving commercial disputes is on the rise, and Nigeria is a very important part of this. In 2018, it was reported that the International Court of Arbitration will launch an African Commission “to coordinate its growth and activity in Africa, as part of the arbitral institution’s drive to expand its use worldwide”(i). Members of this Commission include Funke Adekoya, Babatunde Ajibade, and Dorothy Udeme Ufot, to mention but a few. There are more members from Nigeria than from any other country within this Commission. This indicates how influential our Arbitrators are on the Continent and in the World.

THE ISSUE
While we are working on making our Arbitral institutions much more viable and conducive for international commercial arbitration, it is important that we review our laws to accommodate more positive and business-smart ideas. The Legal Practitioners Act (“LPA”), as amended in 2014 is one of such laws.

In defining who a legal practitioner is in Nigeria, the LPA gave a rather restrictive definition. Thus, Section 2(1) of the LPA provides that:

Subject to the provisions of this Act, a person shall be entitled to practice as a barrister and solicitor if, and only if, his name is on the roll.”

Section 24 of LPA, further defines “legal practitioner” as:

“a person entitled in accordance with the provisions of this Act to practise as a barrister or as a barrister and solicitor, either generally or for the purposes of any particular office or proceedings”

In context, “on the roll” would mean the roll (of the Supreme Court) in Nigeria. The Supreme Court in Okafor v. Nweke, (ii) per Onnoghen, JSC, said of the meaning of legal practitioner at page 531 as follows:

From the above provision, it is clear that the person who is entitled to practice as a legal practitioner must have had his name on the roll…For a person to be qualified to practice as a legal practitioner he must have his name in the roll otherwise he cannot engage in any form of legal practice in Nigeria.”

In essence, once your name is not on the roll in Nigeria, you cannot practice as a legal practitioner in Nigeria. What then happens to the principle of voluntariness in choosing who represents a person in an arbitral tribunal? What will be the fate of expatriates who decide to choose other expatriates as their arbitrators in commercial and investments disputes? Bearing in mind that Article 4 of the Arbitration Rules of the Arbitration and Conciliation Act (“ACA”) (iii) already provides that:

The parties may be represented or assisted by legal practitioners of their choice…”

This provision is not at par with the provisions of the LPA. The ability to choose is what makes arbitration special. Parties should be able to choose their respective counsel voluntarily. They should be able to choose the laws that would govern their transactions and attendant disputes. They should be able to choose the seat of arbitration and the extent to which local courts can intervene in their agreements.

THE ESCAPE PLAN
A collective reading of relevant laws may however allay the fears of foreign investors. Section 57(2) of the ACA provides for circumstances in which arbitration, though conducted in Nigeria, will be considered to be international. Paragraph (d) is one of them:

“(2) An arbitration is international if – (d) the parties, despite the nature of the contract, expressly agree that any dispute arising from the commercial transaction shall be treated as an international arbitration.”

In determining whether a party to an arbitration conducted under the ACA can retain a foreign counsel to represent him in an arbitration in Nigeria or otherwise, this section is crucial. Where parties agree to conduct arbitration under the ACA as one that is international, the ACA in section 53 does not make the Rules mandatorily. It provides thus:
Notwithstanding the provisions of this Act, the parties to an international commercial agreement may agree in writing that disputes in relation to the agreement shall be referred to arbitration in accordance with the Arbitration Rules set out in the First Schedule to this Act, or the UNCITRAL Arbitration Rules or any other international arbitration rule acceptable to the parties.

This provision clearly allows parties to incorporate the UNCITRAL Arbitration Rules or any other Rules into their agreement as the rules applicable to the arbitration. The 2010 UNCITRAL Arbitration Rules provides in Article 5 that:

Each party may be represented or assisted by persons chosen by it…”

Thus, this allows the parties to exercise liberality in the choice of counsel and terms of agreement. Without doubt, this further reiterates the beauty of arbitration and why it is the most adopted for the resolution of conflicts that arise from commercial and investment disputes. Further strengthening this position are the words of Honourable Justice Nnaemeka-Agu, J.S.C in Agu v. Ikewibe (iv):

The legal basis of all arbitrations is voluntary agreement. If there is a distinct agreement to appoint an umpire to determine the difference between the parties and other conditions are present, there is arbitration…”

CONCLUSION

Consequently, where parties to an arbitration in Nigeria seek to be represented by foreign counsel not caught within the definition of ‘legal practitioner’ under the Legal Practitioners Act, the only way to achieve such is to agree to designate their arbitration as international. Fortunately, under the ACA, this designation can be done by simple agreement. The parties would also need to agree to the incorporation and applicability of the arbitration rules to the arbitration agreement. Importantly, such rules would have to go further than simply stating that a party can be represented by a ‘legal practitioner’.

Furthermore, the importance of clarity and predictability in legal principles with respect to commerce and industry cannot be swept under the carpet. Admittedly, it may be argued that Section 2(2) of the LPA serves as an escape route since it empowers the Chief Justice of Nigeria to grant a person warrant (upon application) to practice as a barrister for the sake of a particular proceeding. By that provision of the LPA, a lawyer trained in a jurisdiction with similar laws like Nigeria’s, can apply to the CJN for a warrant to allow him represent a client at an arbitral tribunal. Meanwhile, the grant of such application is exclusively at the discretion of the CJN, which of course has its effects. Thus, it is important to amend the law to exempt arbitrators from this rigidity.

The ‘importation’ of lawyers for the purpose of arbitration has numerous benefits, not just to the economy but also to the standards of our arbitral institutions, laws and environment. While it is understandable that the LPA seeks to protect the respect and relevance of Nigerian-trained lawyers, it equally shuts the doors to greater economic prosperity as well as the exchange of resources and ideas, which cannot be measured.

ENDNOTES

i. https://www.africanlawbusiness.com/news/8483-icc-commission-targets-african-arbitration-growth accessed on 14/05/19

ii. [2007] 10 NWLR (PT 1043) 521

iii. Where the seat of an arbitration is in Nigeria, the Arbitration and Conciliation Act will be the lex arbitri. Arbitration and Conciliation Act (“ACA”) is the primary legislation in Nigeria.

iv. (1991) 3 NWLR (PT 180.) 385 AT 417-418

Basit Kolapo, Saka.

Guest Columnist


Kolapo is a legal practitioner at the prestigious Ayanlaja, Adesanya & CO, Situate in ILupeju, Lagos.
He has keen interest in Business and Corporate Law, Commercial arbitration and Fintech.
He also writes and advises business start ups and SMEs.

Contact
k_basyt@yahoo.com,

@_Kolamposi on twitter

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