COMMERCIAL ARBITRATION IN NIGERIA

CHAPTER ONE

GENERAL INTRODUCTION

• Background to the Research

Nigeria is blessed in terms of population¹ and material resources.² With a bristling economy that is twice the economy of many African countries put together. Nigeria remains number one destination for foreign direct investment (FDI) in Africa, with the highest inflow at $7.03bn³ as at 2012, but dipped by 21.4% to $5.5b in 2013.⁴ The size of the economy coupled with the scale of commercial, business and investment activities in various sectors including oil and gas, energy, banking and finance, development projects, construction, transportation, reconstruction of the railways, ports and airport concessions, aviation and international trade, and more recently the power sector, dictate the pace of growth and size of economic activities.

Since the return to democracy in 1999 it has been in the heart of the economic programs of successive administrations to encourage foreign direct investment (FDI). Nigerian business class is encouraged to also invest in other countries usually with direct support from the government. These investors compete for prime relevance in the Nigerian economy and are often faced with many obstacles in the conduct of their businesses. These obstacles include unforeseen change in

2 Nigeria has a land area of 923,773km2, with varied vegetation and soil types that are suitable for a variety of1 Last collected in 2012 by the Nigeria National Bureau of Statistics, the total population of citizens in Nigeria was around 166.2 million people. Retrieved from:http://worldpopulationreview.com/countries/nigeria-population/ on 11/7/2014. See also United Nations estimate on http://esa.un.org/wpp/.

agricultural purposes, with large reserves of solid minerals including bitumen, topaz, lignite, coal, tin, columbite, iron ore, gypsum, barite and talc, and metallic minerals are mostly found in the middle belt, coal is found in the South East and Middle Belt, and bitumen predominantly in the South West. Crude petroleum and natural gas are prevalent in the southern area of the country referred to as the Niger Delta region. The proven reserves of crude petroleum are well over 37 billion barrels, while reserves of natural gas stand at over 187 trillion standard cubic feet. Nigeria still remains a veritable source of raw materials for industries in Europe and other parts of the world. Retrieved from: http://nigerianstat.gov.ng/pages/download/61 on 11/7/2014

3Retrieved from: http://unctad.org/en/pages/DIAE/world%2520Report/World_Investment_Report.aspx  on 15/7/2013

4 Retrieved from: http://unctad.org/en/Publicationslibrary/webdiaeia2013d10_en.pdf&sa=u&ei=41yn on 7/1/2014 government policies, delay in the execution of contracts, inevitable variation of terms of commercial agreements occasioned by inflation and lack of performance by the parties, and in recent times insecurity, among others. These factors often result in breach of the terms of commercial agreements between parties. The breach in turn leads to dispute between the parties and consequent invocation of arbitration clauses.

Arbitration has been in the Nigerian legal system for over a century.⁵ Its relationship with the courts has fluctuated from time to time ranging from suspicion and opposition to open support for same.⁶ This mechanism for settling commercial disputes is growing fast⁷ due to the fact that, one would, today, rarely find any contract between domestic or international parties without an arbitration clause or agreement of some sort, whether ad hoc or institutional, to be conducted under the auspices of the world‘s leading arbitration institutions.⁸

International investment arbitration is an alternative means (to court room litigation) of settling disputes arising from breach of foreign investment agreements. These kinds of disputes can be settled under different platforms. Such as the International Centre for the Settlement of Investment Dispute Rules (ICSID), United Nations Commission on International Trade Law (UNCITRAL) Arbitration, International Chamber of Commerce (ICC) Rules, or under any of the

5 Through Arbitration Ordinance of 1914

6 Akeredolu, A.E. ―Attitude of the Nigerian Supreme Court to commercial arbitration in retrospect: 2001-2010‖.

Journal of Law and Conflict Resolution Vol. 4(5), pp. 77-84, November 2012. Retrieved from: http://www.academicjournals.org/JLCR 14/2/2013

7 This trend is replicated all over the world, particularly in the developing countries. See Document No. 14 on

―Alternative Dispute Resolution Methods‖ Paper written following a UNITAR Sub Regional Workshop on Arbitration and Dispute Resolution, Harare, Zimbabwe 11 to 15 September 2000. Retrieved from: http://www.unitar.org/dfm

8              Ufot,         D.U.         ―Nigeria:         Arbitration         Practice         Area         Review‖,         Retrieved         from: http://www.whoswholegal.com/news/features/article/29899/nigeria-arbitration-practice-area-review/ on 14/2/2013

international and regional rules contained or inserted by the parties in the Arbitration Agreement.⁹

ICSID, a multilateral treaty institution with a track record of adjudication and enforcement, has been a key mechanism for enforcing international investment law‘s substantive provisions.¹⁰ The great majority of countries around the world belong to ICSID, which serves as the forum for ad hoc arbitration panels that adjudicate treaty disputes between states and individual foreign investors. As at today, 159 countries are signatories to the ICSID Convention.¹¹ The ICSID Convention came into force on the 14^th October 1966,12 the same day Nigeria became a signatory to it.¹³

When a host country expropriates a factory, repudiates a utility concession agreement, gerrymanders regulations to shut down a business venture, or denies even-handed justice in its domestic court system, foreign investors can bring claims before an ICSID tribunal seeking redress for the violations of their rights under international law.¹⁴ Pursuant to the ICSID Convention, ICSID arbitration is an independent procedure not subject to control or supervision by a National Court.¹⁵  A  National Court  does  not have jurisdiction to review or  test an  award

10   This is known as the ―ICSID Convention‖ or the ―Washington Convention‖. It is a multilateral treaty that created ICSID, or ―the Centre,‖ as a forum for resolving investment disputes. ICSID is popular for investor-state arbitration.9 Nigeria has adopted the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

Bilateral Investment Treaties (―BITs‖) usually provide for ICSID as a mechanism for investment dispute settlement. Nigeria has also signed a couple of Bilateral Investment Treaties with the following countries: France, United Kingdom, Netherlands, Taiwan Province of China, Turkey, China, Republic of Korea.

11 Retrieved from: http://www.worldbank.org/icsid/contractingstates on 12/3/2013

12 Delaume, G. R., ICSID Arbitration in Practice, 2 Int’l Tax & Bus. Law. 58, 1984. Retrieved from : http://scholarship.law.berkeley.edu/bjil/vol2/iss1/3

13 Nigeria is in fact the first State to sign the treaty. See Asouzu, A.A. International Commercial Arbitration And African States: Practice, Participation And Institutional Development. Cambridge University Press, Cambridge (2001), p.4

14   Mortenson,  J.D.  (2010)―The  Meaning  of  ―Investment‖:  ICSID‘s  Travaux  and  the  Domain  of  International Investment Law‖. Harvard International Law Journal Vol. 51, No. 1, Winter.

15 This has been heavily criticised as going against the sovereignty of domestic courts. See Baldwin E, Kantor M. and Nolan M., Limits to Enforcement of ICSID Awards, Journal of International Arbitration 23(1): 1–24, 2006.

rendered in ICSID arbitration. This deals with the fear of the low confidence the investor might harbour in the host country‘s judicial system. The local courts cannot alter unjustly with the fruits of investors‘ arbitral awards.

The modest strides of ICSID nonetheless, the recent denunciation of the ICSID convention by three Latin American countries¹⁶ has raised many questions. This is a natural consequence considering the radical political and socio-economic gap between the mostly western investors, backed by their countries,¹⁷ and the third world countries at the receiving end. From this perspective, ICSID is seen to favour the foreign investors from inception.¹⁸ It is against this background that this dissertation seeks to appraise the recognition and enforcement of the ICSID arbitral awards in Nigeria.

1.2   Statement of the Research Problems

There is a growing dissatisfaction of many host-states with some of the outcomes of ICSID arbitral tribunals‘ decisions.¹⁹ In this context, existing shortcomings regarding the dispute settlement procedures of ICSID, for example, regarding the lack of transparency and lack of consistency of arbitral awards, add further weight to the growing call for alternative dispute settlement resolution tools.²⁰ Nigeria has been signatory to the ICSID Convention since 1966 but

16 These countries are Bolivia, Ecuador and Venezuela.

17 Furthermore, ICSID is seen as an appendage of the World Bank, in fact, it is one of the five Institutions forming the World Bank Group, perceived to be a tool in the hands of the modern drivers of capitalism in the West.

18  When  Asouzu  A.A.  remarked,  ―international  commercial  arbitration  highlights  not  only the  existence  of  many

controversies in international commercial transactions but also the conflicts of interest between the developed and the developing states‖ he was only lending credence to the inevitability of crisis as a result of this perception. See, Asouzu, A.A. International Commercial Arbitration and African States: Practice, Participation and Institutional Development. Cambridge University Press, Cambridge, (2001), p.1

19 In particular, South American states such as Venezuela, Bolivia and Argentina have lost faith with this system because they feel it is biased towards investors coming from capital exporting countries.

20  Lavranos, N.  ―Investment  Protection: Bilateral Investment  Treaties  and  EU Law‖. Being   a paper  presented  at

ESIL conference (2010). Retrieved from: http://www.esil-law.cam.ac.uk/media/draft-papers/agora/lavranos.pdf on 18/5/2013

only very few cases²¹ have been settled exploiting the ICSID mechanism. To what extent have these shortcomings reflected in these cases?

It is also contended that the costs involved for International Commercial Arbitration procedures are very high, while the proceedings typically drag on for several years.²² This is contrary to the impression that has been established. It is indeed the trend in Nigerian literature on commercial arbitration to conclude that the system is cheaper and way faster than reliance in Nigerian litigation system. This work will examine the truth in this assertion.

The Bilateral agreements are supposed to put the contracting parties at the same level, resulting in equal and determined benefits for both. But it has become clear by now that most bilateral investment treaties (BITs), in particular the older ones, are imbalanced by significantly favouring and protecting investors, while substantially restricting the policy space of host states. This imbalance is further amplified by the growing attention of host-states, Non Governmental Organisations (NGOs) and media for serious violations by investors of national and international binding standards for the protection of labour rights, fundamental rights, and the environment.²³

One of the problems that necessitated the resort to ICSID by foreign investors is that in adjudicating on bilateral investment treaties (BITs). That is to say, whether the judiciary cannot handle disputes arising from foreign investment disputes?

21 Three cases involving Nigerian party thus far made it to the Tribunal. The first if the celebrated case of Guadalupe Gas Products Corporation v. Nigeria (ICSID Case No. ARB/78/1) which settlement was reached by the parties and recorded at their request in the form of an award (Award embodying the parties’  settlement agreement rendered on July 22, 1980, pursuant to Arbitration Rule 43(2)). The second case is Shell Nigeria Ultra Deep Limited v. Federal Republic of Nigeria (ICSID case No. ARB/07/18) on which The Tribunal issues an order taking note of the discontinuance of the proceeding pursuant to ICSID Arbitration Rule 43(1) on August 1, 2011. Thirdly there is the case of Interocean Oil Development Company and Interocean Oil Exploration Company v. Federal republic of Nigeria (ICSID case No. ARB/13/20) which was registered in December 2013, and is pending before the Tribunal with a Notice of Preliminary Objection filed by the Respondent.

22 Lavranos, N., Op. Cit.

23 Reference can be made for example to the situation in the Ogoni area in Nigeria caused by Shell and its local partner companies: ‘Shell settlement with Ogoni people stops short of justice’, The Guardian, 10 June 2009,

available at: http://www.guardian.co.uk/environment/cif-green/2009/jun/09/saro-wiwa-shell.

In spite of the seeming popularity, ICSID²⁴ has come under serious attack recently, with several signatory-nations denouncing the ICSID Convention. Bolivia was the first country to notify ICSID of its denunciation in 2006, protesting the numerous arbitrations initiated by investors.²⁵ This was followed by the denunciation of the ICSID Convention by Ecuador²⁶ and the later calls for ICSID to be disbanded.²⁷ This was followed by Venezuela‘s withdrawal.²⁸ This led scholars to asking questions, whether the ICSID is not ideologically, structurally, procedurally, or functionally deficient.²⁹Are these deficiencies ascribed to the ICSID justified or there are cogent reasons to the contrary? Is it high time that an alternative to ICSID arbitration is resorted as another international investment alternative, or should domestic courts be relied upon to resolve investment disputes previously submitted to the ICSID? How effective are ICSID Awards?

1.3   Aim and Objectives of the Research

The main objective of this dissertation to examine the recognition and enforcement of ICSID awards within the Nigerian legal context and to attempt to determine the attitude of foreign

25Vincentelli, I. A. The Uncertain Future of ICSID in Latin America, 16 LAW and BUS. REV. AM. 409, 410 (2010), p.30.24          See       the       List       of       Contracting       States       and      Other       Signatories       of       the       Convention https://icsid.worldbank.org/apps/ICSIDWEB/about/Pages/Database-of-Member-States.aspx

26 In May of that year, the President of Ecuador, Raphael Correa, denounced the ICSID. He proclaimed that his

country‘s  withdrawal  from  the  ICSID  was  necessary  for  ―the  liberation  of  our  countries  because  (it)  signifies colonialism, slavery with respect to transnationals, with respect to Washington, with respect to the World Bank.‖. Vincentelli, I. A.,Op. Cit. President Hugo Chavez announced also that, ―we have to leave ICSID and I say it right away, we will not recognize ICSID decisions.‖ Retrieved from: http://www.bbc.co.uk/mundo/ultimas_noticias/2012/01/120108_ultnot_venezuela_chavez_petroleo_exxon_fp.shtml. on12/9/2013

27 An instance is by the Presidents of Bolivia and Ecuador at a United Nations (UN) conference in June 2009. Retrieved from: http://www.un.org/press/en/2009/ga10840.doc.htm on 12/9/2014

28 Venezuela withdrew from ICSID by giving notification on January 24, 2012. See Venezuela Submits a Notice

Under                  Article                  71                  of                  the                  ICSID                  Convention,                  ICSID http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=OpenPage&PageType=Announc ementsFrame&FromPage=Announcements&pageName=Announcement100.

29 Trakman , L. E.,The ICSID Under Siege. Cornell International Law Journal Vol. 45 p.604. Retrieved from: http://www.lawschool.cornell.edu/research/ILJ/upload/Trakman-final.pdf on 2/9/2013

investors as to the level of confidence built as a result of the enforcement of the awards. The specific objectives of this dissertation are:

1. The dissertation also seeks to examine the provisions of the ICSID Rules, allied provisions in domestic arbitration laws in Nigeria, and cases relating to recognition and enforcement of ICSID awards in the context of international investment arbitration jurisprudence, in order to determine the efficacy of the
2. To examine the question of enforcement of ICSID arbitral awards under the Convention, with the goal of analysing the prospects of bilateral investment treaties and challenges faced in invoking arbitration clauses in ICSID arbitration
3. To attempt an analysis of the legal framework governing international commercial arbitration in Nigeria and the rules governing arbitral proceedings, with the goal of determining Nigeria‘s attitude towards the recognition of the outcomes of the proceedings.
4. To critically appraise the costs involved in international arbitration and the financial burden parties bear in ICSID arbitration, with a view to determining whether it is cost effective.
5. To propose ways through which Nigeria can re-affirm its commitment to ICSID and foreign

1.4   Justification of the Research

International investors have recently focussed attention not only on tax rules and incentives, but also the entire legal infrastructure of the target country. The reason for this is not farfetched, the domestic government might improperly interfere with the investment, and this might cause losses. Hence, a prudent investor, when considering where to place the investment and where to set up the structure for the foreign investment, should also consider whether the investment would be protected by an international investment arbitration treaty. As expected, ICSID, being an institution of the World Bank is a preferred choice by most investors.

The International Centre for the Settlement of Investment Disputes (ICSID) provides certain advantages to litigants. For example, the Centre has jurisdiction where a contracting state party and a national of another contracting state party (to the Convention) have a dispute, which the parties consent in writing to submit to the Centre. One of the advantages of ICSID arbitration is the structure for enforcement in Nigeria. The ICSID (Enforcement of Award) Act³⁰ provides that ―where a copy of an award made by the ICSID is filed at the Supreme Court of Nigeria, such award will have effect as if it were an award contained in a final judgment of the Supreme Court and shall be enforced accordingly.‖³¹ This will significantly obviate delays that could attend enforcement proceedings of regular arbitration awards at the High Court. At domestic level, the Nigerian Investments Promotion Commission Act³² allows settlement of investment disputes under the auspices of ICSID.

30 ICSID Arbitral Awards are enforced in Nigeria pursuant to the International Center for Settlement of Investment Disputes (Enforcement of Awards) Act, CAP I 20, Laws of the Federation of Nigeria, 2004.
It is hoped that this modest contribution to the field of arbitration should help shed some light on this fast growing and exciting field of dispute resolution in Nigeria. It is also useful to scholars interested in conducting further researches and aid in the drive for reforming investment arbitration laws in Nigeria. The study will be useful to judges also, in the application of the provisions of various arbitration laws progressively. Lawyers and other professionals in the field of arbitration will also benefit from this research in advising and guiding clients especially in drafting arbitration agreements. It would be of particular interest to individuals who are new to

31 S. 1 Ibid.

32 CAP. 117, LFN 2004.

investor-State arbitration and foreign investors in Nigeria. Organisations such as multi door court houses, Lagos Regional Centre for International Commercial Arbitration (LRCICA), Inter- Ministerial Committee on Investment Promotion and Protection Agreements, the Ministries of Finance, Justice, Industry/Investment, Foreign Affairs, National Planning Commission, Central Bank of Nigeria and National Investment Promotion Commission, will also find this research useful.

1.5   Scope and Limitations of the Research

ICSID is an international institution with its Convention signed by 150 signatory-nations.³³ This research only concerns itself with the recognition and enforcement of the ICSID awards within Nigerian legal regime. The dissertation examines the recognition and enforcement of international commercial arbitration in the light of ICSID Convention at international level and its application in Nigeria.

It also focuses on the domestic legal regimes enacted to deal with recognition and enforcement of arbitral awards by ICSID in Nigeria. Where necessary, and in order to illustrate issues arising from recognition, application and enforcement, recourse is made to other jurisdictions outside Nigeria.

The major limitation to this work is the dearth of cases decided by the Center involving Nigerian parties. The details of these cases are largely not available due to the principle of

33 There are currently 150 signatories with Canada as the 150th Member State, and the Republic of San Marino as the 159th signatory State to the ICSID Convention. See ICSID Annual Report 2 0 1 4 on: https://icsid.worldbank.org/apps/ICSIDWEB/resources/Documents/ICSID_AR14_ENG.pdf

confidentiality in arbitration.³⁴ This, the research will attempt to remedy by drawing from the experiences of other jurisdictions in like political and socio-economic contexts.

1.6     Research Methodology

This dissertation is doctrinal. This is chiefly because the work is to focus on the theoretical aspect of the recognition and enforcement of the ICSID awards in Nigeria based on both foreign and local literature. That is, the ISCID Convention and other allied treaties, the application of these Laws by ICSID as they relate to judicial interpretations in Nigeria; the theoretical viewpoint of various writers on solutions in books as well as researched articles.

The main sources for these materials are the primary and secondary sources of Law including statutory provisions and Case-Laws, written texts by scholars and reports from reputable institutions. In the process, the research has sought the aid of the Internet, particularly through the use of Google Scholar and other search engines. Reports as obtained from the data base of ICSID³⁵ are also heavily relied upon.

1.7   Literature Review

The growing relevance of arbitration as a reliable alternative to litigation has been met with equally corresponding surge in literary activities. Foreign literatures abound in this area. However, only about a decade ago Nigerian scholars started to give international investment

34 Three cases involving Nigerian party thus far made it to the Tribunal. The first is the celebrated case of Guadalupe Gas Products Corporation v. Nigeria (ICSID Case No. ARB/78/1) which settlement was reached by the parties and recorded at their request in the form of an award (Award embodying the parties’ settlement agreement rendered on July 22, 1980, pursuant to Arbitration Rule 43(2)). The second case is Shell Nigeria Ultra Deep Limited v. Federal Republic of Nigeria (ICSID case No. ARB/07/18) on which The Tribunal issued an order taking note of the discontinuance of the proceeding pursuant to ICSID Arbitration Rule 43(1) on August 1, 2011. Thirdly there is the case of Interocean Oil Development Company and Interocean Oil Exploration Company v. Federal republic of Nigeria (ICSID case No. ARB/13/20) which was registered in December 2013, and is pending before the Tribunal with a Notice of Preliminary Objection filed by the Respondent.

35 Can be accessed at: http://icsid.worldbank.org/ICSID/FrontServlet

arbitration the deserved attention. The following are the works of some scholars which proved invaluable to the substance of this research.

Asouzu‘s³⁶ book is a very insightful work. This book is one of the outstanding authorities on International Commercial Arbitration. Published in 2001: it focuses on whether arbitration as opposed to litigation in national courts in Africa, can contribute to the aspirations and needs of African states and their nationals, whilst satisfying the expectations of international investors and traders for profit, security and stability, and ensuring fairness and justice to both parties.

The learned author dealt with the experiences of the African states with arbitration under the ICSID convention. This analysis has been overtaken by time and events. He opined that ―despite the advantages of ADR processes they are little developed in Africa‖. This statement was very true in 2001. In spite of the huddles and difficulties, Nigeria in particular, is growing in its own way as a point of reference in the activities of ADR. Mostly, as the result of upsurge in commercial activities and growth in the number of professionals in the field of arbitration. So many cases have been decided by ICSID since 2001 and the decision by certain countries to denounce the Convention has radically influenced new debate as to the efficacy of the ICSID model. Volumes of literature have been written on this trend.³⁷ This research work will attempt to fill in this gap.

36 Asouzu, A.A. (2001). International Commercial Arbitration and African States: Practice, Participation and Institutional Development. Cambridge University Press, Cambridge.

37 See Gillman E., The End of Investor-State Arbitration in Ecuador? An Analysis of Article 422 of the Constitution of 2008, 19 American Review of International Arbitration, 269, 280-84 (2008); see also Vincentelli I., The

Uncertain Future of ICSID in Latin America, 16 LAW & BUS. REV. AM. 409, 410 (2010); and Diaz F. C., Bolivia Expounds on Reasons for Withdrawing From ICSID Arbitration System, Investment Treaty News (May 27, 2007), http://www.iisd.org/itn/wp-content/uploads/2010/10/itn_may27_

2007.pdf. visited on 10/4/2014

Akeredolu  in  an  article  entitled:  ―Attitude  of  the  Nigerian  Supreme  Court  to  Commercial Arbitration in Retrospect: 2001-2010‖,³⁸ examined the attitude of the Nigerian Supreme Court to arbitration by reviewing four cases that came up on appeal from 2001 to 2010. The work provided an insight into the application of local legislation and principles, and the general attitude of the Nigerian courts to arbitral awards. It is however of limited contribution to this dissertation, in that, there is no in-depth discussion of arbitration having international dimension, nor was any of the considered cases from ICSID.

A leading foreign literature under review is the work of Mortenson.³⁹ This work is no doubt calling  for  a  ―paradigm  shift  and  new  thinking  of  the  old‖.⁴⁰  The  contention  of  this  learned author is that tribunals have sharply curtailed the categories of investments eligible for protection under international investment the ICSID Convention. He urges that the trend be reversed to recognize that ICSID has jurisdiction over any plausibly economic assets or activities.

He posits that tribunals and writers alike have proceeded under a mistaken premise, capitalising on ICSID‘s omission of a definition for investment to adopt a case by case definition, thereby giving it a narrower and restrictive meaning. The work, therefore, suggests that international tribunals should respect the ICSID framework as it was originally established as ―an adaptable vehicle with the capacity to satisfy many states‘ preferences and the flexibility for individual states to change their investment policies over time‖.⁴¹With the rapid growth of

38Akeredolu, A.E. ―Attitude of the Nigerian Supreme Court to commercial arbitration in retrospect: 2001-2010‖. Journal of Law and Conflict Resolution Vol. 4(5), pp. 77-84, November 2012. Retrieved from: http://www.academicjournals.org/JLCR on 10/4/2014

39   Mortenson,  J.D.  (2010).  The  Meaning  of  ―Investment‖:  ICSID‘s  Travaux  and  the  Domain  of  International Investment Law. Harvard International Law Journal Vol. 51, No. 1.

40 Ibid

41 Ibid

bilateral investment treaties (BITs)⁴² between countries, it appears it is too late for ICSID to go back to its original philosophy because these BITs more or less shape up investment arbitration. The dissertation will analyse the role of BITs and how they have significantly influenced investment arbitration in the last three decades to prove the preceding point.

Ezejiofor‘s Law of Arbitration in Nigeria⁴³ is one of the early attempts by Nigerian scholars in the field of arbitration in Nigeria. The author dealt with the three types of arbitrations. As expected, so much water has passed under the bridge. The loads of changes that have taken place since this publication, no doubt alter some of the conclusions reached by the learned professor. For instance, he argued that ―arbitration under the general law is yet to take its proper place in the country‘s growing economy as a dispute settlement mechanism‖.⁴⁴ As much as this is true, if he were to review his book today his position would be more generous.

Another useful article published in the Annual Survey of International Comparative Law is the work of Nmehielle.⁴⁵ This work was published in 2001. The author addresses the broad question of enforcement of ICSID arbitral awards, while analysing the attendant issues. It also analyses the various steps of enforcement, recognition and the execution of awards adjudged enforceable. The work went as far as examining the jurisprudence that has been developed in some ICSID cases before domestic courts of member states to the ICSID convention, and the practical effects of these cases and analysis of the impact of the annulment provision and process under the convention on the ICSID mechanism.

42 The number of BITs exploded during the 1990s and into the new century. There are now about 2,265 such treaties in  existence.  See  UNCTAD,  ―Number  of  Bilateral  Investment  Treaties  Quintupled  During  the  1990s,‖  Media Release TAD/INF/2877, available at: http://r0.unctad.org/en/press/pr2877en.pdf; UNCTAD, World Investment Report 2003, p. 21. UNCTAD, World Investment Report 2004: The Shift Towards Services, 2004.

43 Ezejiofor, G. (1997). The Law of Arbitration in Nigeria. Longman, Lagos.

44 Ibid, p. 134

45  Nmehielle, O.V. ―Enforcing Arbitration Awards Under the ICSID Convention‖  Annual Survey of International and Comparative Law, vol. 7, Issue 2, Article 4. Retrieved from: http://www.digitalcommons.laaw.ggu..edu/annlsurvey/vol7/iss1/4/&sa on 10/4/2014

The work, for obvious reasons, is broad and does not analyse Nigerian cases and/or ICSID cases decided involving Nigeria. Indeed since 2001 such cases have been decided, and several legislations have come up, and appear to have varied some conclusions reached by the learned author. An attempt to examine these cases will put a cap on the jurisprudence examined by this great author.

Mustapha‘s work⁴⁶ proceeds under the premise of inadequacies of the national courts in Nigeria which include the adversarial nature of litigation, unnecessary delays and lack of confidentiality, which have led disputing parties to seek alternative means of dispute resolution. The work also delved into the misfortune that the potential advantages claimed for arbitration over litigation, are often not achieved in practice. Hence, the primary focus of the work is the identification and examination of some problems and challenges hindering the law, practice, institution and growth of domestic commercial arbitration in Nigeria. The book, however, does not take into account the overwhelming influence international arbitration has brought upon domestic arbitration, which is one of the focus areas of this research.

46 Mustapha, A.M. Domestic Commercial Arbitration in Nigeria: Problems and Challenges. Lambert Academic Publishing, (2012), retrieved from: http://www.iqrabooks.com.ng/details.php?code=1332261995
Commercial Arbitration and Conciliation in Nigeria: Law, Practice and Procedure,⁴⁷ is a combined efforts of three Nigerian authors published in 2012. This book attempted to demystify the law on commercial arbitration both at domestic and international contexts. The discussion centres on the decisions of the Nigerian Courts and the relevant judicial decisions of the English Courts under the Arbitration Act, 1996 which derives its source from the United Nations Commission on International Trade Law (UNCITRAL) Model Law on international commercial arbitration.

47 Ashaolu et. al. Commercial Arbitration and Conciliation in Nigeria: Law , Practice and Procedure. Velma Publishers, Abuja (2012), pp 325-335.

The authors also discussed in some detail arbitration under the Convention on the Settlement of Investment Disputes under the ICSID. The scope of the ICSID was, however, not discussed in detail as it could not be done in one chapter. Thus, in chapter 15 only an overview  of the subject matter was attempted with regard to its various aspects. Another limitation to this work is that no real issues were raised, nor any conclusions arrived at. It is more a guide than a critical scholarly work.

One reactionary work in this area is  ―The Counter-Productivity of ICSID Denunciation and Proposals for Change‖, by Wick.⁴⁸ Against the backdrop of the withdrawals of Bolivia, Venezuela and Ecuador in 2012 from ICSID, the author critically examined the whole of ICSID. The article argued that denunciation will not change the current international investment regime because most states‘ bilateral investment treaties (BITs) provide for alternative investor-state arbitration mechanisms. The work further examined the benefits and drawbacks to the investor and to the state under different fora.

However, the richness of this work is limited by the author‘s pro-World Bank-ICSID stand, barely taking into consideration the valid reasons for the discontent leading to ICSID‘s denunciation by certain signatories. This thesis will attempt an examination of some of the reasons behind the exit of the three South American nations from ICSID. Further, the research will argue, from Nigeria‘s experiences, it may not be in the best interest of Nigeria to uncritically take a position against ICSID in the circumstance.

48   Wick,  D.M.  ―The  Counter-Productivity  of  ICSID  Denunciation  and  Proposals  for  Change‖,  retrieved  from: http://www.lawarchive.hofstra.edu/pdf/academics/jpurnals/jibl/jibl_volxii_icsid_wick.pdf

Parra,⁴⁹  in  a  paper  titled  ―The  Enforcement  of  ICSID  Arbitral  Awards‖  examined  the regime for the enforcement of arbitral awards rendered under the auspices of the ICSID pursuant to its treaty, the convention on the settlement of investment disputes between states and nationals and other states – the ICSID convention. This, he accomplished by a cursory consideration of some articles of the convention and the application of such articles in the enforcement of such awards in certain jurisdictions. The work further extensively discussed the question of sovereign immunity. None of the jurisdictions considered is Nigeria. Therefore the thesis will attempt to fill this gap by drawing from the experiences in the jurisdictions covered by the author to see how far they can apply in the Nigerian context.

This brings us to the work of Gillies and Moems.⁵⁰These Australian professors exhausted a whole chapter on international commercial arbitration. Although, they did not comprehensively deal with the issue of arbitration infrastructure which involves the courts, their discussion was limited to three key aspects of arbitration. First, they dealt with the recognition and enforcement of arbitration agreements such that parties are not permitted to litigate in violation of such agreements. This is applicable in Australia and revolves at international level. The application of this conclusion in Nigeria will undoubtedly reveal that the trend is radically different. Secondly, they examined the limited judicial review of arbitral decisions which encourages the finality of arbitral awards while providing recourse against illegal decisions. Thirdly, the enforcement of arbitral awards.

50Gillies, P. and Moems, G.(2000) International Trade and Business: Law, Policy and Ethics. Cavendish publishing, Sydney.49  Parra, A.P. (2007) ―The Enforcement of ICSID Arbitral Awards‖ A paper Presented at the 24^th Joint Colloquium on International Arbitration, Paris, November.

Idornigie⁵¹ traced the origins of bilateral investment treaties (BITs) and gave historical overview of investment treaty arbitration. He also analysed the origin of the so-called Carlos- Doctrine, which fought for the newly independent states of South America, to the reforms and creation of the ICSID which ultimately led to investment laws enacted in various jurisdictions.

In this work, the qualitative use of data and statistics is commendable. It produced explicitly the geographical distribution of ICSID cases as well as BITs Nigeria has ratified. This work will no doubt be of great influence to this dissertation by providing a graphical analysis of the effect of arbitration clauses inserted in BITs on ICSID jurisprudence.

Burke-White and von-Starden⁵²attempted to substantiate the contention that elements of many contemporary investor-state disputes are best seen in the context of public law rather than private law. Further, the work addresses the shortcomings in the standards of review employed by many investment arbitral tribunals, especially in the context of arbitrations against Argentina relating to the country‘s economic and political crisis in 2001 to 2002, the growing perception of a legitimacy gap in investor-state arbitration, and the need for alternative standards for reviewing state public law regulation. The limitation of this work is that the authors adopt an overly restrictive approach to when deference to the standard of review may be appropriate.

Egli, in his article, ―Don’t Get Bit: Addressing ICSID’s Inconsistent Application of Most- Favored-Nation Clauses to Dispute Resolution Provisions,‖⁵³ examined the potential effects and problems associated with this set of most-favoured nation (MFN) decisions. He further discusses the importance and historical development of international investment law and practice, paying

51Idornigie, P.O.  (2011)―Investment Treaty Arbitration and  Emerging Markets: Issues, Prospects and  Challenges‖ NIALS Press, Abuja.

52  Burke-White, W.W. and  von-Starden,  A.  (2010)  ―The Standard  of Review in Investor-State  Arbitrations‖.  The Yale Journal of International Law, vol.5.

53  Egli, G. ―Don’t Get Bit: Addressing ICSID’s Inconsistent Application of Most-Favored-Nation Clauses to Dispute

Resolution Provisions,‖ Pepperdine Law Review vol. 34, issue 4, Art. 12 (2007). Retrieved from: http://digitalcommons.pepperdine.edu/plr/vol34/iss4/12 on 12/4/2013

particular attention to the rise of the bilateral investment treaty (BIT) and its effect on foreign direct investment. The work also discusses the effect of ICSID on international investment; after describing the reasons for creating ICSID, it explains its structure and emphasizes its ever- increasing importance. Part IV of the article discusses ICSID’s divergent approaches toward the effect of MFN clauses on dispute resolution provisions in BITs, while addressing the problems associated with these inconsistent approaches.

The above reviewed works are to be complemented with reports, cases and other materials in order to achieve the modest objectives the thesis sets out to achieve.

1.8   Organisational Layout

 This work is conveniently segmented into five chapters. The chapters are interrelated.

The first chapter provided a springboard upon which the research work is launched. It deals with the background of the subject matter, the aims and objectives of the research, statement of the research problems, justification, scope and limitations of the research, the methodology employed in the research work, the volumes of preceding literature reviewed and the organisational layout of the work.

The second chapter deals with the nature and scope of commercial arbitration in Nigeria. It provided for the opportunity to discuss other alternatives to arbitration and the various local legislations providing for commercial arbitration in Nigeria. The attitude of the Nigerian courts to arbitration is also in focus.

The theory and principles of the recognition and enforcement of international commercial arbitral awards is analysed in the third chapter, while also baring the legal regime of international arbitration in Nigeria. Chapter four focuses on the modes of recognition and enforcement of International Center for Settlement of Investment Disputes (ICSID) awards in Nigeria as the

main thrust of the research work. The analysis of Bilateral Investment Treaties (BITs) as the basis for arbitration under the ICSID was also delved into.

Finally, chapter five draws the curtain on the discussion. It determines the work with summary, findings and recommendations.

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