THE INTERFACE BETWEEN COURTS AND ARBITRATION IN THE CONTEXT OF THE OVERRIDING OBJECTIVES.

COMMENTS ON THE DRAFT FEDERAL ARBITRATION AND CONCILIATION BILL AND THE UNIFORM STATE ARBITRATION AND CONCILIATION BILL

PRESENTED BY MRS FUNKE ADEKOYA SAN

AT THE NATIONAL STAKEHOLDERS CONFERENCE ON THE REFORM OF ARBITRATION AND ADR LAWS HOLDING IN ABUJA ON 6^TH JUNE 2006.

As ably stated in the Discussion Paper, any arbitration law and rules of procedure which will be acceptable within the international community must balance the need of the consumer of the service for an efficient standalone system that minimises court intervention in the arbitration process, whilst ensuring that the judicial process remains available to support the arbitration process if required.

As a matter of practice, the main areas where the judicial system interfaces with arbitration processes are:

1. Commencement proceedings – e.g. stay of application proceedings, removal of arbitrators, jurisdiction;

Clause 5 – Stay of proceedings. The proposed legislation has removed from the court its discretionary powers to grant a stay of proceedings. Provided the application is brought in time, a stay of proceedings will be mandatory. Clause 5[2] makes it clear that the reference to court does not of itself act as a stay of proceedings. The effect is to remove an aspect of judicial intervention that had tended to slow down arbitration proceedings, which supports the minimalist judicial intervention role that foreign clients look for in choosing an arbitration venue.

Clause 11 – The Bill makes it clear that although a party may apply to both the arbitral panel and the court to remove an arbitrator, the reference to court is the latter option. In this case, where the challenge is made to the appointing authority which has appointed a sole arbitrator [clause 10(6)], the court will be in the position of acting in a somewhat appellate capacity in reviewing the decision of the appointing authority.

Clause 15 [4] also makes it clear that any challenge to a ruling on jurisdiction does not of itself act as a stay of proceedings.

2. During the proceedings – measures of interim relief;

The ability of a court to grant an injunction in aid of foreign proceedings has clearly been identified and provided for in Clause 17. The scope of interim measures which are conservatory in nature such as Mareva and Anton pillar orders are clearly covered. However although the clause gives parties the right to apply either to court or to the panel for interim relief, it does not indicate which venue one goes to first. What happens if the panel/court has refused relief? Can the party then apply to the other jurisdiction? §44 of the UK Arbitration Act deals with the problem of choice by making it plain that where the tribunal is in existence and has the necessary powers, application should first go to the tribunal. Furthermore Clause 17[6] indicates that a preliminary order is akin to an ex parte injunction. What is the effect of obtaining a preliminary order not enforceable by the court [clause 17[13]]?

3. Close of proceedings - enforcement and setting aside proceedings.

The discretionary powers of a court to set aside awards on the grounds of misconduct have been severely curtailed by the wordings of clause 42 of the Bill. This provides a measure of certainty to foreign investors who enquire as to the basis on which awards may be set aside.

General comments

Clause 48[1] of the bill delimits the extent of court intervention in arbitration proceedings and serves as a useful signpost to foreign clients, wary of excessive intervention in arbitration matters. Its retention is welcomed.

The Discussion Paper has shown that presently the conclusion of an arbitration process is the precursor of an average 9.3 years litigation process to either enforce or set aside the arbitration award. The provisions of clause 48[2] are an attempt to streamline the process by which judicial intervention is accessed.

The Arbitration Claims and Appeals [Procedure] Rules could have benefited from the 'frontloading' which some States have adopted into their Civil Procedure Rules. The present format, which is in line with the requirements of the Fundamental Human Rights Enforcement Rules does not go far enough. Rule 8[7] requires the Claimant to file a written brief of argument 'not later than 2 days before the hearing date' while the Respondent must serve 'a skeleton argument' not later than 'the day before' the hearing date [rule 8[8]. It is assumed the Respondent would await the Claimant's argument before filing its own brief.

A Claimant may be unfairly advantaged by being able to deliver argument 2 days before, and the Respondent may use the 1 day reply period to raise lack of fair hearing claims, especially as under the proposed Rules, it is possible to have the application heard on the basis of the parties written papers [would this then be the Respondent's 'skeleton' argument?].

It is suggested that the Claimant accessing the Claims procedure should file its written argument simultaneously with its papers, while the Respondent should submit its reply argument with or within the time allowed to file a counter affidavit. This would further hasten the process of judicial intervention.

The expansive definition of costs in Rule 15 is welcome, however determination of the reasonableness of the costs allows for the discretion of the trial judge. Taxing masters exist only in the statute books.