(References to the Act in this article are to the Nigerian Arbitration and Conciliation Act CAP. A18 LFN)
INTRODUCTION:
The main obligation of an arbitral tribunal is to prepare an award on every live issue which has been referred to it by the parties in dispute. This is necessary even in cases where issues are agreed or withdrawn, it may be the intention of the parties to have such issues dealt with by the arbitral tribunal in an agreed award. (See Section 25(1-2) of the Act.
Generally speaking, an arbitral tribunal’s authority continues until the disposal of all issues properly referred to it. Any award that is purported to be a final award but which does not deal with all such issues can be challenged within 3 months from the date of the award. The court may set aside an arbitral award where the Applicant can satisfy the court by way of proof that the award contains decisions on matters which are beyond the scope of the reference to arbitration. However if the decision on matters not submitted can be separated from the decision on matters submitted only that part of the decision on matter not submitted may be set aside.
It is also provided under the Act, that the courts before which an application to set aside an arbitral Award is brought may at the request of a party where appropriate suspend proceedings for certain determined period in order to afford the Arbitral Tribunal the opportunity to resume the arbitral proceedings or take such other actions to eliminate the grounds for setting aside of the award. The court can also set aside an arbitral award or remove an arbitrator for misconduct or where the award is improperly procured. (See sections 29 & 30 of the Act)
FORMAL REQUIREMENTS OF AWARDS
The parties may agree on the form of the award. However in the absence of an agreement, there are a number of formal requirements set out in section 26 of the Act which the award shall comply with:
- Be in writing and signed by all the Arbitrators
- Where the Arbitral tribunal comprises of more than on arbitrator, the signature of the majority of all the members of the Arbitral Tribunal shall suffice if the reason for the absence of any signature is stated.
- The award must contain reasons upon which it is based unless the parties agreed that the tribunal should not give reason or the award is an award on agreed terms.
- The award must be dated.
- The award must state the place i.e. the venue of the arbitration as agreed by the parties (S.16) where venue is presumed to be the place of the issue of the award.
- Copies of the award made and signed by the arbitrators shall be delivered to all the parties.
On a careful look at the provisions of the Act relating to setting aside of an arbitral award by court, it is clear that the Act does not state whether or not an award which fails to comply with these requirements of form is invalid or unenforceable. It is however suggested that the validity and enforce ability of an award depends largely on the nature of the failure for instance minor formal errors will not invalidate an award provided the defect is reasonably clear. However it is possible that an award that contains minor errors in form may be attacked.
THE SUBSTANTIVE REQUIREMENT
In addition to the formal requirement, an award must be clear, consistent and certain in order to remove any doubt in its meaning. Where an award is uncertain it will entail the court exercising its own interpretation, this the court is usually reluctant to do because the parties have agreed that the decision was to be that of an Arbitrator not the court.
To be substantively enforceable an award must: - The award must state clearly the result of a final adjudication. A statement of hope or expectation is not sufficient.
- The award must not be ambiguous or insufficiently precise.
- The award must be internally consistent.
- The award must not leave anything to be decided. However in situations where an arbitrator makes an award which can be rendered certain by calculation of agreed interest or for instance an arbitrator ordering investigation by reference to inquiries in a price of a specified stock in a specified market at a specified date, then the award is complete. Any award that leaves some issues to be decided by one of the parties or a third party is unenforceable. The only exception to this is the determination of costs which may in some instance be left to the court.
However, it must be stated that the need for substantive clarity does not mean that arbitral awards are rendered invalid by minor ambiguities or uncertainties the courts in most cases strives to make reasonable sense of an award. A failure to meet the substantive requirements can only be challenged when there has been “serious irregularity” which the court considers sufficient enough to cause substantial injustice.
REASONS
Generally an arbitral award should contain reasons unless it is an agreed award or the parties have agreed to dispense with reasons. Reasons in award usually advise the parties why the winning party won and most importantly why the losing party lost.
Reasons in arbitral award can be long or short, as it may entail detailed examination and weighing of each aspect of the evidence. Also the law can be reviewed and debated in great detail. It is possible in some instances to have an award of over 200 pages and equally possible in another case to have an award of just two pages.
REMEDIES WHICH THE ARBITRATOR MAY AWARD
Under the Act the parties are free to agree on the powers to be exercisable by the tribunal. An arbitrator may, unless the parties otherwise agree makes any of the following types of award:
a. An award for the payment of money.
b. An award for specific performance of the parties’ contract.
c. Declaration this where the arbitrator makes an award clarifying the legal rights and obligations as between the parties.
d. Rectification of a deed or other instruments.
e. Where appropriate, an injunction requiring one party to refrain from carrying out some activity in breach of contract.
COSTS AND INTEREST
Arbitration is not complete unless the arbitrator has dealt adequately with the issues as to costs. Section 490 of the Act invests the arbitral tribunal with the power to fix costs of arbitration in its award. The cost of arbitration includes; - The fees of the arbitral Tribunal to be stated separately as to each arbitrator and to be fixed by the tribunal itself.
- The travel and other expenses incurred by the arbitrators.
- The cost of expert advice and of other assistance required by the arbitral tribunal.
- The travel and other expenses of the witnesses as approved by the tribunal.
- The costs for legal representation and assistance of the successful party if such costs were claimed during the proceedings and considered as reasonable by the tribunal.
MISTAKES AND SLIPS
An arbitral award may contain some clerical errors or mistakes or in some instance obvious slip. Section 28 (1) of the Act provides that unless otherwise agreed by the parties a party may within 30 days of the receipt of an award and with notice to the other party, request the arbitral tribunal to correct any errors, clerical or typographical errors or any errors of similar nature in the award.
CONCLUSION
In conclusion, it is submitted that in this short essay the basic principles of drafting arbitral award have been reasonably considered and dealt with in the essay.
BY:
Baba Lawal Aliyu, DIL, LLB, BL, DipCArb (Oxon) FCIArb UK, is an International Commercial Arbitrator based in Kaduna – Nigeria; blaliyu@yahoo.com
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