Paul Idornigie SAN C.Arb

…Legal Resource Center

The Legal Regime of International Commercial Arbitration

THE LEGAL REGIME OF INTERNATIONAL COMMERCIAL ARBITRATION

1.1 A DEFINITION OF THE BACKGROUND
As a colony, Nigeria was not a subject of international law but an object. Even in business terms, what were regarded as Nigerian companies were, in fact, integral parts of foreign corporate persons especially those of Britain, Holland and France. This was a deliberate policy of the British, Dutch and French Governments.

The British Government found that customary laws regulated local legal relationships and therefore imposed the English legal system on Nigerians and such laws are referred to as the “Received English  Laws”. These “Received English Laws” operated concurrently with local customary laws with primacy given to the former in most cases. This situation remained unchanged until the Companies Ordinance of 19121 and the Arbitration Ordinance of 19142 came into force. The foreign corporate persons operated through transnational corporations. As they saw Nigeria as an “outpost”, her interest was not paramount in their transactions.

The need for a legal framework on international commercial arbitration in Nigeria evolved from the provisions of these legislations. However, with political independence, Nigeria became a subject of international law, its doors were thrown open to other nationals to participate in the economic development of the country and local laws  were passed.
Nigerian also got involved in negotiating international contracts.

It is worthwhile  mentioning that at that time international commerce involved mainly the import of consumer goods and export of raw materials. In negotiating such contracts, Nigerians were usually disadvantaged as they lacked the expertise to ensure that the terms were favourable.

This is so because international commerce has acquired a regime of technical rules and procedures. It involves persons usually domiciled in different legal jurisdictions and thus subject to different legal systems. Today, the situation has not changed much. This has given rise to the issue of how to resolve commercial disputes that could arise from such
relationships.
Commercial disputes can be resolved through various processes. Indeed the conventional courts see this as their prerogative. However, over the years, there has been widespread dissatisfaction with the delays and costs associated with these conventional courts. Consequently a movement for an alternative dispute resolution (ADR) mechanism
was initiated.3 Others advocated a “multi-door” court house instead of the “mono-door” approach.4 Hence mediation, conciliation, med-arb, mini-trial and full arbitration were resorted to by the commercial world. Essentially in a multi-door courthouse, it is the courts that initiate the non- adjudicatory process whereas under the ADR, the process is initiated by the parties themselves. Concomitant with these was the need for a legal regime to regulate these non-adjudicatory processes. The processes are seen as a continuum: at one end is the adversarial system and at the other non-adversarial. Whilst not discrediting the other non-adjudicatory processes, the focus of this work, stricto sensu is on international commercial arbitration. However in determining the process to adopt there should be a relationship before a dispute/ problem and a process.

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