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FOREIGN COUNSEL IN NIGERIAN ARBITRATIONS: HOW FAR CAN THEY GO?1Arbitration and Dispute Resolution14th November, 2016.Introduction:The scope of foreign counsel’s involvement in Nigerian seated arbitrations has been a subject of interestto the arbitral community in recent times. Apart from scholarly discussions2 on this issue, an eminentarbitral tribunal and the Nigerian Court of Appeal had ruled in separate cases that a person who is notqualified as a legal practitioner in Nigeria may not represent parties in arbitration proceedings in Nigeria.What are the issues?As a starting point, the legal profession in Nigeria is a regulated one and the Legal Practitioners Act3(LPA) provides for the circumstances in which a person can practice law in Nigeria. Section 24 of the LPAdefines a ‘legal practitioner’ as a person who is entitled to practice as a barrister and solicitor in Nigeria,either generally or for the purpose of any particular office or proceedings. Furthermore, Section 2(1)(a)and (b) of the LPA provides that a person is only entitled to practice as a barrister and solicitor if his/hername is on the roll of the Supreme Court of Nigeria, or he/she is authorized to practice as a barrister bya warrant of the Chief Justice of Nigeria for the purposes of a particular proceeding.The above provisions of the LPA were upheld by the Supreme Court of Nigeria in the celebrated case ofOkafor v. Nweke,4 where the Court pronounced that:1Kolawole Mayomi, Associate Partner Dispute Resolution Department at SPA Ajibade & Co., Lagos Office.See for example, TEMPLARS LP, ‘Domestic Arbitration in Nigeria: Can Foreign Counsel still run the Race?’ DisputeResolution Newsletter (September 2012). OUNSEL-STILL-RUN-THE-RACE.pdf; Mofesomo Tayo-Oyetibo,Dispute Resolution in Nigeria: Representation of Parties to Arbitration Proceedings in Nigeria by Foreign Counsel,available at http://issuu.com/mofesomotayo-oyetibo/docs/dispute resolution in nigeria repre accessed on 6thOctober, 2016.3Chapter L11, Laws of the Federation of Nigeria, 2004.4[2007] 10 NWLR (Part 1043) 521, 531.21

“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.”Does the LPA preclude foreign counsel from representing clients in arbitrations seated in Nigeria?Undoubtedly, arbitration is a form of legal practice/proceedings in Nigeria. In Ezenwa v. BestwayElectronic Ltd,5 the Court of Appeal stated that legal proceedings “includes all proceedings authorized orsanctioned by law and brought or instituted in a court or legal tribunal for the acquiring of a right or theenforcement of a remedy.” Meanwhile, the learned authors, Candide-Johnson & Shashore,6 describedarbitration as a procedure where parties agree that disputes between them must be decided in a legallybinding way by one or more impartial persons in a judicial manner on the basis of evidence before them.The primary arbitration statute in Nigeria is the Arbitration and Conciliation Act7 (ACA). It covers bothdomestic as well as international arbitrations seated in Nigeria. The ACA is divided into 3 parts: Part Ideals with domestic arbitrations, Part II deals with conciliation, and Part III with international arbitration.Section 15 (in Part I) provides that all arbitral proceedings shall be conducted in accordance with theprocedure contained in the Arbitration Rules set out in the First Schedule to the ACA. Article 4 of theArbitration Rules deals with representation before arbitral tribunals, and provides that “the parties maybe represented or assisted by legal practitioners of their choice”. By way of background information, wenote that the Arbitration Rules is an adaptation of the 1976 UNCITRAL Arbitration Rules, and that Article4 of the said UNCITRAL Rules similarly provides that “the parties may be represented or assisted bypersons of their choice.” Thus, the only difference between Article 4 of the Nigerian Arbitration Rulesand Article 4 of the 1976 UNCITRAL Rules is the change from the word “persons” to “legal practitioner”.This change of words has however proved to be critical, considering the statutory definition attached to“legal practitioner” under Nigerian law. For instance, Section 18 of the Interpretation Act8 provides thatthe word “legal practitioner” when used in any enactment, has the meaning assigned to it by the LPA.We have already seen that under the LPA, ‟legal practitioner” refers to only persons who are enrolled topractice law in Nigeria. Thus, a literal application of article 4 of the Arbitration Rules means that aperson who is not qualified to practice law in Nigeria will not be permitted to represent any party indomestic arbitration proceedings unless the Chief Justice of Nigeria, upon application by the partyconcerned, grants a warrant to such person to represent the party in that particular proceedings.Indeed, this was a problem that confronted an eminent arbitral tribunal led by a retired English law lordin a Nigerian seated multi-million dollar arbitration between a major oil producing company and theNigerian State oil company. The oil company/claimant was represented by a London magic circle lawfirm, supported by a Nigerian law firm. At the oral hearing, the Respondent’s counsel pointed out thatthe proceedings were a domestic arbitration which was governed by the Arbitration Rules and, relyingon Article 4, objected to the foreign counsel’s conduct of the claimant case as he was not a “legalpractitioner” within the lex arbitri under Nigerian arbitration law. Although the tribunal was displeased5[1999] 8 NWLR (Part 613) 61, 78 para F.Commercial Arbitration Law and International Practice in Nigeria, LexisNexis, 2012, 27.7Chapter A18, Laws of the Federation of Nigeria, 2004.8Chapter I23, Laws of the Federation of Nigeria, 2004.62

by the Respondent’s ambush tactic, it had no choice, in the face of the mandatory terms of Section 15 ofthe ACA and the unequivocal nature of Article 4, but to hold that foreign counsel cannot represent theparties in a domestic arbitration governed by the Rules. On that basis, the tribunal declared that theclaimant’s foreign counsel was not qualified to appear in that arbitration proceeding.In another arbitration proceeding between Shell E & P Ltd and the Nigerian State oil company, theclaimant’s notice of arbitration and statement of claim was jointly signed in the name of an English lawfirm and a Nigerian law firm. The respondent objected to the jurisdiction of the tribunal, arguing that,under the LPA, only a legal practitioner i.e. a person who is enrolled to practice as a barrister andsolicitor in Nigeria, and not a law firm, is competent to sign these processes. Accordingly, it was argued,that the initiating processes were bad, and the arbitral tribunal had no jurisdiction to adjudicate. Thetribunal dismissed this objection, proceeded to hear the matter on its merits and eventually issued anaward. However, before the award was handed down, the Nigerian federal tax authority (FIRS) filed anaction in court to contend that the claims before the arbitral tribunal are tax disputes, and are nonarbitrable under Nigerian law. The court upheld this contention, and nullified the arbitrationproceedings. Shell appealed,9 and one of the major issues that was canvassed at the Court of Appeal waswhether the initiating processes in the arbitration was valid, having been signed by law firms that werenot licenced to practice law as legal practitioners in Nigeria.In its judgment, whilst the Court of Appeal accepted Shell’s arguments that article 3(3) of the ArbitrationRules which contains a checklist for a valid notice of arbitration does not require signature by a legalpractitioner who practices in Nigeria, the court gave primacy to article 4, to the effect that once theclaimant chose to be represented by a legal practitioner, such a legal practitioner must be a person whomeets the requirement of the LPA in Nigeria. Since the foreign law firm, and even the local Nigerian lawfirm, could not show that it was a “legal practitioner” enrolled to practice law in Nigeria, the initiatingprocesses were invalid, and the entire arbitral proceedings that were conducted on that basis was anullity.The Shell case may be contrasted with the earlier decision of Stabilini Visinoni Ltd v. Mallinson &Partners Ltd,10 where a different panel of the Court of Appeal (Lagos Division) ruled that sincearbitration is not limited to the legal community; it being open to lawyers and non-lawyers, there cannotbe a requirement that the notice of arbitration initiating the proceedings must be signed by a legalpractitioner. However, a closer look at the facts of the Stabilini case shows significant differencesbetween the two cases, and suggests that Stabilini is a doubtful precedence on this issue. First, thestatement of claim (which supersedes a notice of arbitration) in Stabilini was properly signed by a legalpractitioner. Second, more importantly, the court’s attention (in Stabilini) was not drawn to themandatory application of article 4 to domestic arbitrations. Thus, the court’s statement of the law wasbased on the general principle that the legal technicalities which are associated with the courts will notapply to arbitral proceedings. Conversely, in Shell, the application and effect of article 4 was an issuethat was fully canvassed before the court. Third, the Respondent in Stabilini did not raise any objectionthat the notice of arbitration was not signed by a legal arbitrator before the arbitral tribunal, and only9Shell Nig. E. & P. Ltd & 3 Others v. Federal Inland Revenue Service (Unrep. Appeal CA/A/208/2012).[2014] 12 NWLR (Part 1420) 134.103

raised this issue for the first time in its application to the court to set aside the award. Indeed, the Courtof Appeal observed that even if this complaint is justified, the Respondent had clearly waived its right tocomplain since it never objected to the defective notice of arbitration before the arbitral tribunal.So, is this the end of the road for foreign counsel in Nigerian seated arbitrations?Not quite. The Shell case only resolves this issue as it relates to domestic arbitrations. The position isquite different if an arbitral proceeding is an international arbitration seated in Nigeria. As earlier stated,Section 15 of the ACA which provides for the mandatory application of the Arbitration Rules is onlyconcerned with domestic arbitration proceedings. Indeed, Section 53 (in Part III) of the ACA providesthat “Notwithstanding the provisions of this Act, the parties to an international commercial agreementmay agree in writing that the dispute in relation to the agreement shall be referred to arbitration inaccordance with the Arbitration Rules set out in the First Schedule to this Act, or the UNCITRALArbitration Rules, or any other international arbitration rules acceptable to the parties.”In other words, the Arbitration Rules which ties party representation to a “legal practitioner” does notmandatorily apply to international arbitration proceedings in Nigeria. In this event, parties are free toagree to apply any set of Rules (e.g. UNCITRAL, ICC, LCIA), which are worded in a more liberal mannerthan Article 4, to their arbitration proceeding.What qualifies an arbitral reference as ‘international arbitration’ in Nigeria?Section 57(2) of the ACA provides a checklist of the circumstances in which a Nigerian seated arbitrationwill be considered to be an international arbitration, as paraphrased below:(a) where the parties have their places of business in different countries; or(b) one of the following places is situated outside the country in which the parties have their placeof business(i)the place of the arbitration if such place is determined in, or pursuant to the arbitrationagreement,(ii)any place where a substantial part of the contract is to be performed or the place withwhich the subject matter of the dispute is most closely connected; or(c) where the parties have agreed that their contract relates to more than one country; or(d) where the parties, despite the nature of the contract, expressly agree that any dispute arisingfrom the commercial transaction shall be treated as an international arbitration.The attraction, particularly, of section 57(2)(d) lies in the words: “despite the nature of the contract ”.This turn of phrase clearly shows that the parties’ ability to expressly designate their arbitration as“international” is not fettered nor circumscribed by the nature of their contract. Accordingly, no matterthe circumstances of the case and even if there is no international element to the parties or the dispute,the parties are at liberty to agree to treat the arbitration as an international one. Hence, if contractingparties are uncomfortable with the restriction on foreign counsel representation contained in Article 4of the Arbitration Rules, they may be able to eliminate same by including a declaration in their contractthat any arbitrations arising thereof are international, and are to be governed by another arbitrationrules of their choice, notwithstanding that the lex arbitri is Nigerian arbitration law. For parties whose4

contracts are already subsisting, similar results may also be achieved by execution of supplementaryarbitration clauses tailored towards the same effect.ConclusionThe take-away from this discussion are threefold:1. By virtue of article 4 of the Arbitration Rules, only a legal practitioner who is enrolled to practice lawin Nigeria can appear in domestic arbitration proceedings in Nigeria. Foreign counsel may however seekauthorization by a warrant of the Chief Justice of Nigeria for the purposes of that particular proceeding.2. A law firm, foreign or local, is not a legal practitioner and cannot therefore engage in law practice inNigeria, such as filing processes before an arbitral tribunal in Nigeria. It is however presently unclearwhether this stipulation cuts across both domestic and international arbitration proceedings.3. Where parties’ arbitration agreement expressly designates their arbitration as “international”, theywill be entitled to select a more liberal rules regime, and thus side-step the restrictions created by article4 of the Arbitration Rules which mandatorily apply to domestic arbitration proceedings in Nigeria.For further information on this article and area of law please contact Kolawole Mayomi, atS.P.A. Ajibade & Co. by telephone ( 234 1 472 9890), fax ( 234 1 4605092), mobile ( 2348107251110), or email ([email protected]).www.spaajibade.com5