How To Challenge And Set Aside An Arbitral Award In Nigeria: A Practical Guide

I. Introduction

Arbitration derives its legitimacy from the principle of party autonomy and the expectation that awards rendered by tribunals will be final, binding, and enforceable with minimal judicial interference. Yet, no system of dispute resolution can function without some mechanism for curial review, particularly where fundamental procedural or public policy concerns are at stake. The tension between finality and fairness is therefore at the heart of any modern arbitration statute.

This article analyses the statutory grounds upon which an award may be challenged, the strict timelines applicable to such applications, and the discretionary powers available to the courts in determining whether an award should be annulled or preserved. It also considers the procedural innovation permitting the suspension of setting aside proceedings to allow arbitral tribunals an opportunity to cure defects capable of remedy.

II. Application for Setting Aside an Arbitral Award

Setting aside an arbitral award is the primary and most direct form of judicial recourse against an arbitral award in the seat jurisdiction. It is a curial remedy available in the courts of the seat of arbitration, and its effect if granted is to annul the award entirely.¹ Section 55 of the AMA 2023 codifies this remedy, closely tracking Article 34 of the UNCITRAL Model Law.

The provision supplies an exhaustive list of grounds upon which an award may be set aside, ensuring that judicial oversight serves as a safety valve rather than an avenue for relitigating disputes.

• Grounds for Setting Aside an Arbitral Award

Section 55 of the AMA 2023 prescribes that an arbitral award may be set aside by a court only if the party making the application furnishes proof establishing one or more of the following grounds:

1. Incapacity of a Party or Invalidity of the Arbitration Agreement

This ground reflects the foundational requirement that consent to arbitrate must be given by parties who are legally capable of doing so and through an agreement that is legally enforceable under the law to which the parties have subjected it.

The concept of incapacity under this provision encompasses situations involving minors, persons of unsound mind, corporations acting ultra vires their constitutional documents, and sovereigns who lack the capacity to arbitrate under applicable law.²

2. Lack of Proper Notice or Inability to Present a Case

A party may seek to set aside an award on the ground that it was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case. “Inability to present a case” is interpreted broadly, it covers not only formal notice deficiencies but also substantive deprivations, such as situations where a party was denied the opportunity to respond to evidence or arguments upon which the tribunal relied in reaching its award, or where a party was prevented from calling witnesses without adequate explanation.³

3. Award beyond the Scope of Submission

An award may be set aside where it deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission.

The AMA 2023 recognises, in line with the Model Law, that where decisions on excess-of-mandate matters can be separated from those within the scope of the submission, only the excess portion of the award need be set aside.⁴

4. Irregular Composition of the Arbitral Tribunal or Irregular Arbitral Procedure

This ground allows for setting aside where the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties (unless such agreement was in conflict with a provision of the Act from which the parties cannot derogate) or, failing such agreement, was not in accordance with the Act itself.⁵

5. Non-Arbitrability of the Subject Matter

A court may set aside an award if it finds that the subject matter of the dispute is not capable of settlement by arbitration under Nigerian law. Certain categories of disputes including, generally, criminal matters, family status issues, and some regulatory determinations are considered non-arbitrable as a matter of public policy. ⁶

6. Conflict with Public Policy

The court may set aside an award if it finds that the award conflicts with the public policy of Nigeria. This is the broadest and most residual ground available under Section 55, and it is also the most frequently litigated. In line with international consensus reflected in decisions across common law jurisdictions, Nigerian courts have increasingly adopted a narrow and restrained interpretation of the public policy exception, limiting it to cases involving fraud, corruption, breach of natural justice, or awards that offend the most basic notions of morality and justice.⁷

IV. Time Limit for Filing Application to set aside an Arbitral Award

Section 55 prescribes a strict time limit within which an application to set aside an award must be made. A party must bring the application within three months from the date on which the party received the award or, where a request for interpretation, correction, or an additional award has been made, from the date on which that request was disposed of by the arbitral tribunal.⁸ The three-month period is generally treated as a limitation period and is not capable of being extended by the court except in the most exceptional circumstances.

V. Discretion of the Court

Even where a ground for setting aside is established, Section 55 does not mandate that the court must set aside the award. The use of the word “may” in the provision indicates that the court retains a residual discretion. A court may decline to set aside an award and instead remit it to the arbitral tribunal for reconsideration, where the circumstances make this appropriate. This discretion is particularly relevant in cases involving procedural defects that are technical in nature or capable of cure without compromising the fairness of the proceedings.⁹

VI. Suspension of Setting Aside Proceedings

In a notable procedural feature, Section 55 empowers the court, upon application by a party, to suspend the setting aside proceedings for a period of time to give the arbitral tribunal an opportunity to resume the arbitral proceedings or take such other action as in the tribunal’s opinion will eliminate the grounds for setting aside. This provision is designed to minimise the disruption to the arbitral process and to encourage the resolution of curial challenges through the arbitral mechanism itself where possible.¹⁰

Conclusion

The framework for setting aside arbitral awards under the Arbitration and Mediation Act 2023 reflects Nigeria’s commitment to a modern and arbitration-friendly legal regime. By limiting judicial intervention to narrowly defined grounds, the Act preserves the finality and efficiency of arbitration while ensuring that fundamental principles of fairness, due process, and public policy are protected. Section 55 therefore serves not as an avenue for rehearing disputes on the merits, but as a safeguard against serious procedural and jurisdictional defects capable of undermining the legitimacy of the arbitral process.

Footnotes

1. Section 55 of Arbitration and Mediation Act 2023

2. Section 55 (3)(a)(i) and (ii) of Arbitration and Mediation Act 2023

3. Section 55 (3)(a)(iii) of Arbitration and Mediation Act 2023

4. Section 55 (3)(a)(iv) and (v) of Arbitration and Mediation Act 2023

5. Section 55 (3)(a)(vi) of Arbitration and Mediation Act 2023

6. Section 55 (3)(b)(i) of Arbitration and Mediation Act 2023

7. Section 55 (3)(b)(ii) of Arbitration and Mediation Act 2023

8. Section 55 (4)of Arbitration and Mediation Act 2023

9. Section 55 (5) of Arbitration and Mediation Act 2023

10. Section 55 (6) of Arbitration and Mediation Act 2023

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.