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The New Nigerian Bill on Arbitration & Mediation: Lessons For The Singapore Convention?

After several attempts over many years, on 10 May 2022 the Nigerian Parliament passed a new Commercial Arbitration and Mediation Bill (HB 91). The Bill is currently awaiting the signature of the President, at which time it will become law. If enacted, it is set to replace Nigeria’s Arbitration and Conciliation Act, originally enacted in 1988.

The Bill has many innovative sections dealing with cutting-edge arbitration issues such as electronic communication, emergency arbitrators, third-party funding, and consolidation/joinder. On the mediation side, the Bill is a vast improvement over the earlier A&C Act in that it replaces the term “conciliation” with “mediation” and brings the law more in line with the UNCITRAL Model Law on International Commercial Mediation, 2018. The drafters of the Bill have clearly invested a great deal of thought and expertise into it, and it is nice to see their efforts being rewarded as the Bill nears enactment.

There is one provision, however, that caught my eye and that I believe will need further consideration: Part II(C), which relates to the UN convention on International Settlement Agreements Resulting from Mediation (aka the “Singapore Convention”). I have underlined the potentially problematic text below:

Provisions Applicable to International Settlement Agreements only

  1. Without prejudice to Sections 81 and 83 of this Act, where the enforcement of any international settlement agreement made in a State other than the Federal Republic of Nigeria is sought, the Convention on International Settlement Agreements Resulting from Mediation set out in the Fourth Schedule to this Act (‘the Singapore Convention’) shall apply to any such international settlement agreement, provided that:

(a) the State is a party to the Singapore Convention; and

(b) that the difference arises out of a legal relationship, whether contractual or not, considered commercial under the laws of Nigeria.

There are at least two issues with this provision. First, it states that Nigeria will apply the Convention to international settlement agreements “made in a State other than the Federal Republic of Nigeria.” The problem is that the Singapore Convention does not contain such a territorial limitation. This is a crucial difference from the New York Convention, which applies only to foreign arbitral awards. By contrast, as long as the settlement agreement qualifies as “international” (see Singapore Convention, Art. 1(1)), the Singapore Convention would apply to it even if it were reached in Nigeria.

Second, it is not possible to limit Nigeria’s obligations under the Convention to settlement agreements reached in a State “party to the Singapore Convention.” This is something that few people understand about the Convention and it is also the subject of an article I am writing. To be sure, the New York Convention is similar to the Singapore Convention in this respect because it, too, does not limit enforcement to awards reached in a Contracting State (unlike, for example, the Geneva Convention). Nevertheless, it permits states to make a reciprocity reservation: ie, that they will enforce only foreign awards made in another contracting state. Nigeria has made such a reservation as to the NY Convention. The problem is that the Singapore Convention expressly forbids reciprocity reservations to be made. (The Vienna Convention’s default provisions re: reservations also don’t apply because of the way the Singapore Convention reservations provision is drafted. More to the point, a reciprocity reservation would be meaningless because of the lack of a concept of a seat (or of the territoriality of a mediated settlement agreement) in the Singapore Convention.)

This example highlights to me a few things, small and large, that we ought to consider. First, the Singapore Convention is still not well understood, even as many states have been quick to embrace it (such as by drafting or passing implementing legislation like the provision excerpted above). My own view, which I explain in greater detail in my forthcoming paper, is that this lack of understanding could come back to bite states that have rushed to ratify the Convention—particularly developing states, which have both signed and ratified the Convention at almost twice the rate of developed states. Because of the way the Convention is drafted and because of the skepticism towards the Convention shown my many developed states during the UNCITRAL Working Group II discussions, developing states would do better to wait for other developed states to ratify the Convention first.

Second, mediation law and rulemaking very often proceeds on the assumption that mediation and arbitration are more or less fungible—ie, that what worked for arbitration will work for mediation. I could give you many examples, like a Romanian law providing that “in any [agreement]…, the Parties may include a mediation clause, whose validity shall be independent from the validity of the contract it is included in” (Law No. 192/2006, art. 2), or an Argentinian law providing that mediators may be challenged for any reason affecting their impartiality, and that if the mediator refuses to step down “the issue would be decided in court.” (Law No. 26.589, section 14.) Likewise, people often assume that if the New York Convention worked for arbitration, something similar will work for mediation—even though mediation and arbitration are exceedingly different in so many ways. It’s no surprise, therefore, that drafters of mediation laws are often drawn from the arbitration rather than the mediation community, or they start from arbitration precedents and templates, which means the final result is invariably path-dependent.

The accomplished group of individuals who were involved in the drafting of the Nigerian Bill do not fit this mold by any stretch. Still, the fact that Part II(C) assumes that the Singapore Convention works just like the New York Convention presents a cautionary tale about how easy it can be—even for us experts—to cast mediation in arbitration’s image.

author

Hiro Aragaki

Hiro Aragaki joined the Loyola faculty in 2011. His scholarly interests cluster around the intersection of contract and procedure. He has written extensively on federal arbitration law and on interest-based dispute resolution in the public sphere. His work has appeared in the University of Pennsylvania Law Review, the UCLA Law… MORE

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