The freedom and ability of parties to determine the procedure to be followed in the resolution of their dispute is one of the attractions of arbitration. One of the hallmarks of arbitration is limited judicial intervention. However, the law envisages instances where parties may have recourse to the court where there are no agreed procedures or where one of the parties fails to comply with the appointment procedure. The Arbitration and Conciliation Act 2004 provides for a fall-back mechanism empowering the Court to act upon the application of one of the parties to appoint an arbitrator. The recent decision of the Appellate Court in AG Ogun State vs Bond Investments Ltd deals with several issues. Two fundamental issues pertaining to the appointment of an arbitrator by a court under the Arbitration and Conciliation Act however stand out. The case revisited the question of the rule finality of the Court as provided under Section 7 (4) of the Act. It also raises the novel issue as to whether the appointment of a Co-Arbitrator from the list nominated by an adversary party violates the Arbitration and Conciliation Act or the principle of perceived bias of an arbitrator. Each of these issues has a wider implication in respect of the procedural fairness in the court appointment and of the arbitral proceedings and the right of appeal as constitutionally guaranteed by the Constitution of Nigeria in order to promote effectiveness in arbitration while protecting the right of parties to access to the court.
1. Introduction
Arbitration is a consensual private dispute resolution method that is premised on party autonomy. It is commonplace in arbitration therefore
for parties to create procedures that are suitable to their specific needs and situations, the freedom of choice of law, seat, and arbitrators, being common examples. Unlike national courts that are permanent state institutions with given legal status, an arbitral tribunal is constituted on a case-by-case basis.1 Therefore, until the parties have agreed and have indeed constituted the arbitral tribunal, there is no competent arbitral tribunal to decide disputes as agreed by parties.2 The Arbitration and Conciliation Act (ACA)3 in line with the UNCITRAL Model Law International Commercial Arbitration (UNCITRAL Model Law) provides that courts should only intervene where there is a provision in the ACA that permits courts to so intervene.4 The ACA in Section 7 reflects the UNCITRAL Model Law precept of party autonomy by providing that parties are free to determine the number of arbitrators5 and the procedure for the appointment of arbitrators. Section 7(1) of the ACA provides: ‘Subject to Subsections (3) and (4) of this section, the parties may specify in the arbitration agreement the procedure to be followed in appointing an arbitrator.’ Where parties fail or cannot agree on the procedure for the appointment of an arbitrator, the ACA like most arbitration legislation6 provides for a default procedure. The courts are authorised to be involved in the appointment of arbitrators only as a default mechanism where the
parties’ have not agreed on a procedure or where the agreed mechanism has failed to function.7
The recent Court of Appeal decision in A.G Ogun State & Ors v Bond Investment & Holdings Ltd. (“Bond Investment & Holdings Ltd.” or “Bond Investment Case”)8 dealt with a number of issues. Two issues, however, stand out pertaining to arbitration. The case raises the legality of a court appointing a co-Arbitrator for the defaulting party from the list submitted by the applying party to the dispute. The other issue deals with the constitutionality of Section 7(4) of the ACA. This second issue has had several judicial authorities9 and commentaries.10
This case comment analyses these two issues as they give rise to some practical implications on the due process of arbitration as well as constitutionality as it bars the right to appeal granted under Sections 241 (1) & (2) and 242 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) (Nigerian Constitution).
