MADONNA UNIVERSITY, OKIJA, ANAMBRA STATE

SCHOOL OF POST-GRADUATE STUDIES

FACULTY OF LAW

A SEMINAR PAPER

BY

OGUGBUAJA KELECHI

REGISTRATION NUMBER: PG/LLM/2023/109

TOPIC: EVALUATING THE IMPACT OF INTERNATIONAL

ARBITRATION INSTITUTIONS ON DOMESTIC LEGAL SYSTEMS:
THE CASE OF NIGERIA.

COURSE: LAW OF ARBITRATION II

LECTURER: DR. IFUNANYA AMASIATU

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD

OF MSTERS OF LAWS (LLM) POST-GRADUATE SCHOOL OF LAW

NOVEMBER, 2024
Abstract

The impact of international arbitration institutions on domestic legal systems is a

topic of interest. Arbitration institutions play a significant role in contemporary
dispute resolution by providing standardized procedures and structured
frameworks that enhance the fairness of arbitration. In a globalized world with
increasing cross-border transactions, institutions like the ICC, LCIA, AAA, and
SIAC are essential in administering arbitration proceedings, ensuring impartiality,
and mitigating biases. Despite their impact, these institutions face challenges
related to the enforcement of awards, jurisdictional issues, procedural fairness, and
balancing confidentiality with transparency. It is important to tackle these
challenges for maintaining the credibility and effectiveness of arbitration as a
preferred method of resolving international disputes. This paper seeks to evaluate
the impact of international Arbitration institutions on domestic legal system by
highlighting the international Arbitration institutions, their impact to the
development of Nigerian Legal system.

KEYWORDS: International Arbitration Institutions, Dispute Resolution, Nigerian

Legal System, Enforcement Challenges, Procedural Fairness.

1.0 Introduction

Arbitration institutions play a pivotal role in the landscape of dispute resolution,

providing structured frameworks and standardized procedures that enhance the
efficacy and fairness of arbitration processes. In an increasingly globalized world
where cross-border transactions and international commercial relationships are
commonplace, these institutions serve as crucial pillars supporting the arbitration
mechanism. Their impact is profound, influencing not only the outcome of disputes
but also shaping the broader legal and commercial environments.

International arbitration has long been the most successful method for settling all
kinds of international commercial disputes, the leading method for settling disputes
between foreign investors and the host state. One of the characteristics of
international arbitration is that it to a large extent relies on an international or
transnational legal framework. The effects of arbitration agreements and of arbitral
awards, as well as the role of the courts regarding arbitration agreements and
awards, are regulated in international conventions such as the New York or the
ICSID Conventions.

Furthermore, although there is room for specificities of national law, commercial

arbitration acts are largely harmonised especially through the impact of the
UNCITRAL Model Law. Similarly, even if arbitral institutions try to distinguish
one from each other by providing for some specific tools, the essential content of
arbitration rules does not vary. It can be said, consequently, that the transnational
framework of arbitration is intended to create to the extent possible an autonomous
system of dispute resolution, which can be applied in a uniform way irrespective of
the country in which the proceedings take place or the award is sought enforced.

2.0 Overview of Impact of some International Arbitration Institutions

Arbitration institutions, such as the International Chamber of Commerce (ICC), the

London Court of International Arbitration (LCIA), and the American Arbitration
Association (AAA), among others, are tasked with administering arbitration
proceedings. They establish rules, appoint arbitrators, and ensure the proper
conduct of proceedings, thus maintaining the integrity and consistency of
arbitration. By offering a neutral forum for dispute resolution, these institutions
help mitigate the biases and uncertainties often associated with national courts.

2.1 The Icc International Court Of Arbitration

The ICC International Court of Arbitration stands out as a leading institution in the
field of international commercial dispute resolution. It operates under the
International Chamber of Commerce and comprises over 100 arbitrators from
approximately 90 countries, reflecting its extensive global reach and diversity.
Rather than issuing formal judgments, the ICC provides “judicial supervision of
arbitration proceedings,” ensuring fairness and impartiality throughout the
process1.

The ICC’s involvement spans the entire arbitration process, from confirming and
appointing arbitrators to scrutinizing and approving arbitral awards. This oversight
helps to maintain a high level of trust and confidence in the arbitration process,
mitigating potential biases.

2.2 The London Court Of International Arbitration (LCIA)

The London Court of International Arbitration (LCIA) stands as one of the

foremost global institutions for resolving commercial disputes. Renowned for its
efficiency, adaptability, and impartiality, the LCIA administers arbitration and
other alternative dispute resolution (ADR) processes with a commitment to
fairness, regardless of the parties’ locations or the legal systems involved. A
notable aspect of the LCIA’s international reach is that typically more than 80% of
the parties involved in its cases are from countries other than England, highlighting
its broad global engagement.

The LCIA’s strength lies in its access to a vast pool of distinguished and seasoned
arbitrators, mediators, and experts from various jurisdictions, bringing a wide array
of specialized knowledge and experience to its proceedings. This extensive

1
ICCWBO, https://iccwbo.org/dispute-resolution/dispute-resolution-services/icc-international-court-of-
arbitration/court-members/ , (July 24, 2024)
network ensures that the LCIA can provide high-caliber dispute resolution services
tailored to the specific needs of its clients, no matter the complexity or scope of the
dispute.

One of the LCIA’s key advantages is that its services are available to all
contracting parties without requiring membership, making it accessible to a wide
range of users. This inclusive approach allows parties from diverse backgrounds to
benefit from the LCIA’s expertise and services.

2.3 American Arbitration Association (AAA)

The American Arbitration Association (AAA) is a non-profit entity specializing in

alternative dispute resolution, offering services to individuals and organizations
seeking to resolve conflicts outside of court. It is one of several organizations that
oversee arbitration proceedings and also manages mediation and other ADR
processes. The AAA’s headquarters are located in the Equitable Building in New
York City.

Additionally, the AAA oversees the International Centre for Dispute Resolution
(ICDR), which was established in 1996 to handle international arbitration cases
under AAA rules. The ICDR operates offices in New York City, Mexico City,
Singapore, and Bahrain as of 20182.

2.4 Singapore International Arbitration Centre (SIAC)

Since its inception in 1991, the Singapore International Arbitration Centre (SIAC)
has built a reputation for delivering top-tier arbitration services to the international
business community. As a non-profit organization, SIAC has become renowned for
its efficiency and cost-effectiveness in managing arbitration cases, with its awards
being enforced in numerous jurisdictions worldwide, including Australia, China,
Hong Kong SAR, India, Indonesia, Jordan, Thailand, the UK, the USA, and
Vietnam, among other signatories of the New York Convention.

SIAC’s arbitration framework is governed by its comprehensive and modern

procedural rules, which facilitate the efficient and expert resolution of international
disputes involving parties from various legal systems and cultural backgrounds.
These rules are designed to ensure that cases are resolved promptly and
enforceably.

2
WIKIPEDIA, https://globalarbitrationreview.com/survey/the-guide-regional-arbitration/2019/organization-
profile/international-centre-of-dispute-resolution-icdramerican-arbitration-association-aaa , (July 24, 2024)
3.0 Arbitration Institutions In Nigeria

3.1 The Regional Centre for International Commercial Arbitration – Lagos

(RCICAL)

RCICAL was established in Lagos, Nigeria in 1989 under the auspices of the
Asian African Legal Consultative Organisation (AALCO). Ten years later, on 26
April 1999, the Federal Government of Nigeria executed a Head Quarters
Agreement with AALCO to secure the continued operations of RCICAL in
Nigeria. Subsequently, the Agreement was given legislative blessing by the
enactment of the Regional Centre for International Commercial Arbitration Act
No. 39 of 19993.

RCICAL is one of the four Regional Centres under the AALCO’s Scheme. The
first Centre was established in Kuala-Lumpur in 1978 to serve the Asian Countries,
second was Cairo Centre in 1979 to serve North African and Middle Eastern
Countries whilst Lagos Centre was established in 1989 to serve African Countries
South of the Sahara. The most recent, is the Tehran Centre established in 19974.

The Rules for arbitration under the auspices of RCICAL which took effect from 3 rd
October, 2019 were adopted from the United Nations Commission for International
Trade Law (UNCITRAL) Arbitration Rules of 1976 (as revised in 2013)5.
However, domestic arbitrations which are administered by RCICAL are statutorily
governed by the Arbitration and Conciliation Act6 (ACA)7. In any event, a party
who desires RCICAL to administer its dispute should adopt the following model
clause in its contract:

“Any dispute, controversy or claim arising out of or relating to this

contract, or the breach, termination or invalidity thereof, shall be
settled by arbitration in accordance with the Rules for Arbitration of
the Regional Centre for International Commercial Arbitration,
Lagos”8.

The RCICAL in consonance with its primary function provides facilities for
arbitration and other Alternative Dispute Resolution (ADR) methods. Some of
these facilities include suitable accommodation for sittings of the arbitral tribunal,
recording and interpretation facilities, secretarial assistance and custody of records

3
https://rcical.org/index.php/corporate-profile/ accessed 19 April 2021
4
Ibid n. 1
5
https://rcical.org/index.php/arbitration-rules/ accessed 19 April 2021
6
Chapter A18 LFN 2010
7
https://rcical.org/index.php/domestic-arbitrations/ accessed 19April 2021
8
https://rcical.org/index.php/model-arbitration-clause/ accessed 19 April 2021
as well as transcribing of recorded proceedings9. The RCICAL is located in
Victoria Island, Lagos.

3.2 The Lagos Court of Arbitration (LCA)

The Lagos Court of Arbitration (LCA) is an independent, private-sector driven,

International Centre for the resolution of Commercial disputes via Arbitration
and other forms of alternative dispute resolution (ADR)10. It was established
under the Lagos Court of Arbitration Law, No. 17, 2009 and launched officially
on the 9th of November 2012. The proceedings under LCA is conducted under
the 2018 LCA Arbitration Rules11.
The LCA is headquartered at the International Centre For Arbitration & ADR
(ICAA) located in Lekki Lagos Nigeria with over fifteen (15) meeting/hearing
rooms ready for hire.
To be able to conduct arbitration under the LCA parties must agree that their
dispute will be settled under the LCA Rules or Lagos State Arbitration Law,
2009. Parties can do this by simply incorporating the LCA’s arbitration clause
into their contract thus:
“All disputes arising out of or in connection with this agreement shall
be finally settled under the Lagos Court of Arbitration (“LCA”) rules,
by one or more arbitrators appointed in accordance with the said
rules.”
3.3 Chartered Institute of Arbitrators (CIArb) UK (Nigeria Branch)

CIArb (UK) Nigeria Branch is one of the 41 branches of The Chartered Institute
of Arbitrators founded in the United Kingdom in 1915. Arbitral proceedings
under CIArb Nigeria Branch is conducted under the guidance of the CIArb
Arbitration Rules of December, 201512. CIArb Nigeria Branch was granted
Branch status by the mother body in 1999 having fulfilled the requirements.
One of the highlights of facilities provided by the CIArb Nigeria Branch is The
Micro, Small and Medium Enterprises (MSME) Arbitration Scheme (the
‘Scheme’) which was launched in 2017. Arbitration under the Scheme is guided

9
https://rcical.org/index.php/provision-of-facilities-for-arbitration-and-other-adr-methods/ accessed 19 April
2021
10
https://www.lca.org.ng/about/ accessed on 18 April 2021.
11
https://www.lca.org.ng/arbitration/#what accessed on 18 April 2021.
12
https://www.ciarb.org/media/1552/ciarb-arbitration-rules.pdf accessed 19 April 2021
 by the MSME Arbitration Scheme Rules13. According to the Rules, the Scheme
is applicable for resolution of commercial disputes with monetary value from
N250,000.00K (Two Hundred And Fifty Thousand Naira) to N5,000,000.00K
(Five Million Naira)14. The Scheme is intended to provide simple, cost effective
and timely resolution of disputes by the final, legally binding decision of an
arbitrator within stipulated strict timelines with reduced costs.
To take advantage of this facility, parties are encouraged to adopt the
below
‘Recommended Arbitration Clause’:

‘Any dispute, controversy, or claim arising out of or in connection

with this contract, or the breach, termination or validity thereof, shall
be settled by final and binding arbitration, in accordance with MSME
Arbitration Scheme Rules, by a single arbitrator appointed by the
Chairman of the Nigeria Branch of the CHARTERED INSTITUTE
OF ARBITRATORS’15.
3.4 Lagos Chamber of Commerce International Arbitration Centre
(LACIAC)

The LACIAC is an independent full service alternative dispute resolution centre,

affiliated with the Lagos Chamber of Commerce and Industry16. It is not an
arbitral tribunal which resolves disputes, but it administers the resolution of
disputes by arbitral tribunals, mediators, and other dispute resolution
practitioners17. The proceedings under LACIAC are conducted pursuant to the
LACIAC Rules of Arbitration 2016. Interestingly, LACIAC Rules 2016 contains
bespoke rules for Fast Track Arbitration18, Emergency Arbitration19 and
Guidance for Online Dispute Resolution. Finally, the Rules also contain ‘Model
Arbitration Clauses’. The ‘Short Form Model Arbitration Clause’20 is as follows:
“Any dispute, controversy or claim arising out of or in relation to this
agreement, including any question regarding its breach, existence,
validity or termination or the legal relationships established by this
agreement, shall be finally resolved by arbitration under the LACIAC
Arbitration Rules, which Rules are deemed to be incorporated by

13
Available at https://ciarbnigeria.org/wp-content/uploads/2021/02/MSME-ARBITRATION-
SCHEME-BROCHURE.pdf accessed on 19 April 2021
14
Ibid n. 11
15
Ibid n. 11 page 2
16
https://www.laciac.org/ accessed 18 April 2021
17 15
Article 2 (3), LACIAC Rules of Arbitration 2016
20
https://nicarb.org/adr-service.php accessed 19 April 2021
18
Ibid Annex III
19
Ibid. Annex V
20
Ibid. Annex VI
 reference into this clause.”
LACIAC is one of the few arbitration institutions in Nigeria and indeed Africa
that offers Online Dispute Resolution (ODR) facility. It is located in Victoria
Island, Lagos Nigeria.
3.5 Nigerian Institute of Chartered Arbitrators (NICArb)

The NICArb was founded in 1979 and duly incorporated in 1988 under the
Companies Act as a legal entity Limited by Guarantee21. It provides Arbitration
and ADR referral services to interested companies, public sector agencies and
interested individuals within and outside the shores of Nigeria22. NCIArb is
located in Lekki, Lagos, Nigeria.
The NICArb’s model clause with which a party may be entitled to its services
is as
follows:

‘Any dispute, controversy or claim arising out of or relating to this

contract, or the breach, termination or invalidity thereof, shall be
settled by arbitration in Nigeria in accordance with the UNCITRAL
Arbitration Rules. The appointing authority shall be the
President/Chairman of the Nigerian Institute of Chartered Arbitrators
(NICArb). The number of arbitrators shall be [one or three]; The place
of arbitration shall be Lagos, Nigeria; The language to be used in the
arbitral proceedings shall be English’23
3.6 Multi-Door Courthouse (MDC) Initiative

MDC Initiative is the project of the Negotiation and Conflict Management Group
(NCMG) International aimed at establishing, replicating and developing court-
connected Multi-Door Courthouses anchored on Alternative Dispute
Resolution24.
Through its efforts, the NCMG has established Multi-Door Courthouses in Lagos,
Abuja, Kano, Enugu and other State High Courts in Nigeria. Recently, the
NCMG has also extended its concept to the Appellate Courts, hence the birth of
the Supreme Court Mediation Centre and Court of Appeal Mediation Centre25.
One unique feature of the Multi-Door Courthouses that sets them apart from the
other institutions is its ‘walk-in’ service. Under this feature, for instance, a party
desirous of having its arbitration administered by LMDC can simply do so by
21
https://nicarb.org/about.php accessed 19 April 2021
22
https://nicarb.org/about.php accessed 19 April 2021
23
https://nicarb.org/model-clauses.php accessed 19 April 2021
24
http://ncmginternational.org/projects/multi-door-courthouse-mdc-initiative/ accessed 19 April 2021
25
http://ncmginternational.org/about-ncmg-international/ accessed 19 April 2021
 providing proof of delivery of the Notice of Arbitration to the other party or by
submitting the arbitration agreement to them26. In any event, this does not mean
party should not have an arbitration clause inserted in its contract. The prominent
Multi-Door Court Houses are as follows:

a. The Lagos Multi-Door Courthouse (LMDC)

The LMDC is the first court-connected ADR Centre in Africa established
in June, 2002 by the Negotiation and Conflict Management Group
(NCMG) International27. The existence of the LMDC is backed up by the
Lagos Multi-Door Courthouse Law of 2007.
b. The Abuja Multi-Door Courthouse (AMDC)
The AMDC is a replication of LMDC by the judiciary of the Federal
Capital Territory, Abuja, in October 2003. It is also the project of the
NCMG.
c. The Kano Multi-Door Courthouse (KMDC)28
d. Enugu State Multi-Door Courthouse (ESMDC)29

4.0 Conclusion

Arbitration institutions are integral to modern dispute resolution,

offering structured and impartial frameworks that enhance efficiency and
fairness. By managing complex international disputes and providing
access to a diverse pool of experts, institutions like the ICC, LCIA, AAA,
SIAC, RCICAL, LCA ,CIArb , LACIAC, NICArb and MDC significantly
impact the global legal landscape. However, challenges such as
enforcement difficulties, jurisdictional disputes, and balancing
confidentiality with transparency highlight the need for ongoing
adaptation and reform. Addressing these challenges is crucial to
preserving the credibility and effectiveness of arbitration, ensuring it
remains a robust mechanism for resolving disputes in a rapidly evolving
global environment.

26
https://lagosmultidoor.org/lmdc-process/ accessed 19 April 2021
27
Ibid n. 19
28
The KMDC was established in January 2009
https://www.britishcouncil.org.ng/sites/default/files/multidoor_courthouse.pdf accessed 19 April 2021
29
Established by the Enugu State Multi-Door Courthouse Law of 2019 available at
https://enugustatemultidoorcourthouse.org/wp-content/uploads/2019/03/2018-MULTI-DOOR-COURT-LAW.pdf
accessed 19 April 2021